OFG Bancorp (NYSE:OFG) Q3 2025 Earnings: Revenue Beats, EPS Misses Estimates

OFG Bancorp (NYSE:OFG), the financial holding company for Oriental Bank, has reported its financial results for the third quarter of 2025, presenting a performance that surpassed revenue expectations while earnings per share came in slightly below analyst forecasts. The market's immediate reaction appears cautiously positive, with the stock showing a pre-market gain of approximately 2.6%.

Earnings and Revenue Versus Estimates

The company's top-line performance demonstrated considerable strength during the quarter, significantly exceeding what analysts had projected.

• Reported Revenue: $184.0 million
• Analyst Estimated Revenue: $158.3 million
• Variance: Beat estimates by approximately 16.2%

On the bottom line, the results were more nuanced, with the company reporting a figure just shy of consensus estimates.

• Reported EPS (Diluted): $1.16
• Analyst Estimated EPS: $1.18
• Variance: Missed estimates by $0.02

The market's positive pre-market reaction suggests investors may be focusing more on the substantial revenue beat and the underlying operational strength detailed in the report, rather than the minor EPS miss.

Quarterly Performance Summary

The third quarter results reflect a bank experiencing steady, profitable growth amid a dynamic economic environment. Key performance indicators showed improvement both sequentially and year-over-year.

• Profitability: Diluted EPS of $1.16 increased from $1.15 in the previous quarter and $1.00 in the same quarter last year. Pre-provision net revenues also climbed to $89.6 million.
• Net Interest Margin: Remained robust at 5.24%, a key driver of profitability.
• Loan Portfolio: Total loans held for investment stood at $8.12 billion, a 4.73% increase year-over-year, though down slightly from the second quarter due to repayments on commercial lines of credit. The company noted a moderation in auto loan originations, which was anticipated.
• Credit Quality: The quarter saw an increase in provision for credit losses to $28.3 million, driven by loan growth, specific reserves on two commercial loans, and updated economic assumptions. Net charge-offs were 1.00% of average loans, up from 0.64% in the prior quarter.
• Capital and Returns: The company demonstrated strong capital generation, with a return on average tangible common equity of 16.39%. OFG also returned capital to shareholders, repurchasing $20.4 million of common stock during the quarter.

Strategic Initiatives and Economic Context

CEO José Rafael Fernández highlighted the progress of the bank's "Digital First" strategy, which is centered around its Libre and Elite digital accounts. The initiative is now expanding to include AI-driven predictive insights for customers, aimed at enhancing financial management. Internally, the bank is also applying AI to improve operational efficiency.

Fernández also expressed optimism about the Puerto Rican economy, citing a summer tourism surge and continued on-shoring investments in manufacturing, particularly for medical devices and pharmaceuticals. This positive local economic backdrop provides a favorable tailwind for the bank's core operations.

Looking Ahead

The press release did not provide a specific quantitative financial outlook for the coming quarters. Analysts, however, have established estimates for OFG Bancorp's future performance. For the fourth quarter of 2025, the consensus estimates are for EPS of $1.16 and revenue of $158.4 million. For the full 2025 year, analysts are projecting EPS of $4.50 and sales of $620.4 million. Investors will be keen to see if the company's momentum, particularly in commercial lending and digital banking, can continue to drive results that meet or exceed these expectations.

For a detailed history of OFG Bancorp's earnings and a comprehensive view of analyst estimates, you can review the data available on its earnings and estimates page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, nor does it recommend buying or selling any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.