OFG Bancorp Raises 2026 NIM to 5.1%-5.2%, Loans Grow 5%
OFG Bancorp updated its full-year net interest margin guidance to 5.1%-5.2% and expects non-interest expenses of $380M–$385M, planning to replace a $600M government deposit exit with core retail and commercial growth. In Q1, core revenues rose 4%, loans grew 5%, and core deposits excluding a $500M transfer increased 4%.
1. Operational Efficiency and Digital Strategy
OFG Bancorp is realizing operational efficiency gains through omnichannel technology, enabling reinvestment into new digital products and value-added services. The 'Digital First' strategy is gaining traction with targeted offerings: Libre for mass market, Elite for mass affluent, and MyBiz for small businesses.
2. Q1 Revenue, Loan, and Deposit Growth
In the first quarter, core revenues increased by 4% and total loans grew by 5%, driven by high-quality credit and disciplined expense management. Core deposits rose over 4% year-over-year when excluding a $500 million government deposit transfer to wealth management.
3. Improved Credit Metrics
Management credits improved credit metrics to underwriting adjustments made in 2022, which elevated the auto loan portfolio to 99% prime quality. This high-quality credit profile has supported stable performance amid broader market uncertainty.
4. Financial Outlook and Guidance
OFG Bancorp updated its net interest margin guidance to 5.1%–5.2% for the full year, assuming no rate cuts in 2026. The outlook accounts for the planned exit of a $600 million government deposit, with anticipated loan growth in the low single digits and non-interest expenses forecast at $380M–$385M.