OFG 10-K & 10-Q changes, risk factors and insider trading

Our branch network and business are concentrated in Puerto Rico and the USVI, which are susceptible to earthquakes, hurricanes and major storms that affect the local economy and the demand for our loans and financial services, as well as the ability of our customers to repay their loans. Any such natural disasters may further adversely affect Puerto Rico’s and the USVI’s critical infrastructure, which are generally weak and necessitating capital investment. This makes us vulnerable to downturns in Puerto Rico’s and the USVI’s economy as a result of natural disasters, the severity of which could increase as a result of the effects of climate change. Any subsequent earthquakes, hurricanes, major storms or other natural disasters could negatively affect or disrupt our operations and customer base and materially impact our business.

Climate change presents both immediate and long-term risks to OFGus and itsour clients, and these risks are expected to increase over time. Climate change presents multi-faceted risks, including: operational risk from the physical effects of climate events on OFGus and itsour clients’ facilities and other assets; credit risk from borrowers with significant exposure to climate risk; transition risks associated with the transition to a less carbon-dependent economy; and reputational risk from stakeholder concerns about our practices related to climate change, OFG’sour carbon footprint, and its business relationships with clients who operate in carbon-intensive industries.

OFG’sOur earnings depend substantially on OFG’sour interest rate spread, which is the difference between (i) the rates earned on loans, securities, and other earning-assets and (ii) the interest rates paid on deposits and other borrowings. These rates are highly sensitive to many factors beyond OFG’sour control, including general economic conditions, inflation, unemployment, money supply, fiscal policies of the U.S. government and regulatory authorities, domestic and international events, as act of war, and events in U.S. and other financial markets. In an effort to address inflation, the Federal Open Market Committee of the Board of Governors of the Federal Reserve System (“FRB”)Board tightened monetary policy back in 2022 and 2023. DuringIn 2024, monetary policy changed, and interest rate cuts were implemented.implemented However,and thesethey interestcontinued ratein cuts were not as frequent as expected, causing market volatility.2025. Actions taken by the Federal Reserve and other central banks are beyond our control and difficult to predict and can affect the value of financial instruments and other assets, such as debt securities and mortgage servicing rights (MSRs), and impact our borrowers, potentially increasing delinquency rates. Furthermore, if market interest rates decline, we could experience lower interest income from our variable rate commercial loans and prepayments or refinancing of higher fixed-rate loans. If market interest rates increase, OFGwe could have competitive pressure to increase the rates on itsour deposits, which could result in a decrease of itsour net interest income and borrowers of variable rate commercial loans may experience difficulties paying their heightened debt service. If market interest rates decline, OFG could experience lower interest income from its variable rate commercial loans and prepayments or refinancing of higher fixed-rate loans. OFG’sOur earnings can also be impacted by the spread between short-term and long-term market interest rates.

Geopolitical and macroeconomic uncertainty, including military actions and terrorist attacks, have negatively impacted and will continue to have a significant negative impact on the global and United StatesU.S. economies. The uncertainty caused by such events has resulted in considerable volatility in the financial and commodity markets, including through significant increases in the price of oil, natural gas and food and continue putting additional inflationary pressures on central banks, including the FRB. In addition, shifts in political priorities and public policy in key global markets can influence economic conditions in the U.S. and Puerto Rico. In addition, changes in foreign policy, economic sanctions, and regulatory frameworks can alter trade dynamics and investment flows, which could adversely impact the markets in which we operate.

We must maintain adequate liquidity and funding sources to support our operations, comply with our financial obligations, finance our digitalization initiatives, fund planned capital distributions and meet regulatory requirements. We rely primarily on core deposits as a low cost and stable source of funding for our lending activities and the operation of our business. Therefore, our funding costs are largely dependent on our ability to maintain and grow our core deposits. As we face substantial competition in attracting and retaining deposits, we have increased our cost of funds by increasing the rates we pay to our depositors to avoid losing deposits. We may also need to rely on more expensive sources of funding if deposits decrease. Furthermore, we have a significant amount of collateralized deposits from the Puerto Rico government, its instrumentalities and municipalities ($1.445$1.676 billion, or approximately 15.0%16.3% of our total deposits, as of December 31, 20242025), of which a $1.2$1.1 billion consist of a deposit that had $500 million moved to our wealth management business as an advisory account in January 2026 and the remaining $638 million will reprice inon May 15, 2025,2026. and theThe amount of these deposits may fluctuate depending on the financial condition and liquidity of these entities, as well as on our ability to maintain these customer relationships. No assurance can be given that any such deposit will be available in the future. If we are unable to maintain or grow our deposits for any reason, we may be subject to paying higher funding costs and our net interest income may decrease.

Failure to keep pace with technological changechange, including developments in artificial intelligence, could adversely affect OFG’s results of operations and financial condition.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, such asincluding artificial intelligence (“AI”) technologies. The effective use of technology increases efficiency and enables financial institutions to better serve clients and to reduce costs. OFG’sOur future success depends, in part, upon itsour ability to address client needs by using technology to provide products and services that will satisfy client demands, as well as to create additional efficiencies in OFG’sour operations. OFGWe may not be able to effectively implement new technology-driven products and servicesservices, including AI-based solutions, or be successful in marketing these products and services to itsour clients. The rapid evolution of AI technologies presents risks from competitors that more effectively leverage AI capabilities and thus may gain significant advantages in operational efficiency, customer service, risk management, and product development. Additionally, the integration of AI into our operations may require substantial investment in technology infrastructure, talent acquisition, and ongoing training, and there can be no assurance that such investments will yield the anticipated benefits. Regulatory frameworks governing AI in financial services are also evolving, and future regulations may impose compliance burdens or restrict certain AI applications, which could limit our ability to fully realize the potential benefits of these technologies. Failure to successfully keep pace with technological change affecting the financial services industry could negatively affect OFG’sour growth, revenue, and profit.

We face substantial competition in originating loans and inloans, attracting deposits and growing assets tounder manage.management. The competition in originating loans and attracting assets comes principally from other Puerto Rico, U.S., and foreign banks, investment advisors, securities broker-dealers, mortgage banking companies, consumer finance companies, credit unions, insurance companies, fintech companies and other institutional lenders and purchasers of loans. WeAs willwe seek to grow our business and operations, we expect to encounter greater competition asfrom weboth expandtraditional ourfinancial operations.institutions and non-bank competitors. Increased competition may require us to increase the rates paid on deposits or lower the rates charged on loans, which could adversely affect our profitability. In addition, technological advancements and the emergence of digital banking platforms have lowered barriers to entry, enabling new market participants to compete for our customers. Our failure to effectively compete for customers could result in a loss of market share and have a material adverse effect on our business, financial condition, or results of operations.

We are required to test our goodwill, core deposit intangible, customer relationship intangible and other intangible assets for impairment on a periodic basis. The impairment testing process considers a variety of factors, including the current market price of our common shares, the estimated net present value of our assets and liabilities, and information concerning the terminal valuation of similarly situated insured depository institutions. If an impairment determination is made in a future reporting period, our earnings and the book value of these intangible assets will be reduced by the amount of the impairment. If an impairment loss is recorded, it will have little or no impact on the tangible book value of our common shares or our regulatory capital levels, but such an impairment loss could significantly restrict OFG’sour ability to make dividend payments without prior regulatory approval.

We operate an IBE unit and an IBE subsidiary pursuant to the IBE Act which provides significant tax advantages, and a wholly owned subsidiary that engages in certain Puerto Rico qualified investing activities that have certain tax advantages under the Incentives Code. The IBEs have an exemption from Puerto Rico income taxes on interest earned on, or gain realized from the sale of, non-Puerto Rico assets, including U.S. government obligations and certain mortgage-backed securities. These qualified activities have allowed us to have an effective tax rate (“ETR”) below the maximum statutory tax rate. In the past, the Legislature of Puerto Rico has considered proposals to curb the tax benefits afforded to IBEs. For example, Puerto Rico enacted legislation in 2012 under which no new IBEs may be organized and newly organized “international financial entities” are generally subject to a 4% Puerto Rico income tax rate. In the event other legislation is enacted by the Puerto Rico government to eliminate or modify the tax exemption provided to IBEs, the consequences could have a materially adverse impact on our financial results, including an increase in income tax expense and consequently our effective tax rate,ETR, adversely affecting our financial condition, results of operations and cash flows.

In January 2024,2025, OFG announced that its Board of Directors (the “Board”) approved the increase of its regular quarterly cash dividend to $0.25$0.30 per common share from $0.22$0.25 per share, beginning in the quarter endingended March 31, 2024.2025. TheIn April 2025, the Board of Directors also approved a new $50.0$100 million stock repurchase program. TheThis newnew, open-ended program is in addition to the $50 million stock repurchase program replaced the prior stock repurchase program, which had been approved by the Board of Directors in January 2022 and had $17.2 million remaining of its $100.0 million repurchase parameters. In October 2024,2024 OFG announced that its Board of Directors approved a new $50.0 million stock repurchase program, in addition to(collectively, the stock“Existing repurchaseRepurchase programPrograms”). approvedUnder inthe JanuaryExisting 2024.Repurchase The October stock repurchase program is also open-ended. During 2024,Programs, OFG repurchased 1,791,4142,253,819 shares during 2025 for a total of $70.3$91.6 million at an average price of $39.26$40.64 per share. At December 31, 2025, the estimated remaining amount that may be purchased under the Existing Repurchase Programs is $38.1 million.

In January 2025,2026, OFG announced that its Board of Directors approved the increase of its regular quarterly cash dividend to $0.30$0.35 per common share from $0.25$0.30 per share, beginning in the quarter ending March 31, 2025.2026. The Board also approved a new $200 million stock repurchase program. This new, open-ended program is in addition to the Existing Repurchase Programs.

Year Ended 20242025:

Earnings per share diluted wasof $4.23$4.58 compared to $3.83$4.23 in 2023.2024. Total netcore incomerevenues of $198.2$729.8 million compared to $181.9$709.6 million in 2023.2024.

Earnings per share diluted was $1.09$1.27 compared to $1.00$1.16 in the third quarter of 20242025 and $0.98$1.09 in the fourth quarter of 2023.2024. NetTotal incomecore revenues of $50.3$185.4 million compared to $47.0$184.0 million in the third quarter of 20242025 and $46.6$181.9 million in the fourth quarter of 2023.2024.

Performance metrics: Net interest margin of 5.40%,5.12%, return on average assets of 1.75%,1.81%, return on average tangible common stockholders’ equity of 15.43%,17.20%, and efficiency ratio of 54.82%.56.65%.

Total Interest Income of $190.2$197.2 million compared to $189.0$200.1 million in the third quarter of 20242025 and $176.2$190.2 million in the fourth quarter of 2023.2024. Compared to the third quarter of 2024,2025, total interest income in the fourth quarter of 20242025 increaseddecreased $1.1$2.9 million, primarily reflecting higher average balances of loans and cash at lower average yields, partially offset by higher yieldsaverage onbalances of investment securities,securities at slightly higher loan balances, $0.7 million accretion for commercial loan prepayments, and reduced interest income from cash.yields.

Total Interest Expense of $41.0$44.5 million compared to $41.2$45.4 million in the third quarter of 20242025 and $32.7$41.0 million in the fourth quarter of 2023.2024. Compared to the third quarter of 2024,2025, total interest expense in the fourth quarter of 20242025 decreased $0.1by $0.9 million, primarily reflecting slightly lower average balances and costs of core deposits and higher average balances of borrowingsdeposits and brokeredborrowings deposits.at lower average rates.

Total Banking and Financial Service Revenues of $32.8$32.6 million compared to $26.3$29.3 million in the third quarter of 20242025 and $32.1$32.8 million in the fourth quarter of 2023.2024. Compared to the third quarter of 2024,2025, total banking and financial service revenue in the fourth quarter of 20242025 includedreflected $2.1increased wealth management revenues due to $2.3 million in annual insurance commission recognition, $4.8 million favorable MSR valuation, and $0.8 million from the August 2024 acquisition of a Puerto Rico residential mortgage servicing portfolio.recognition.

CashPre-Provision andNet Cash EquivalentsRevenues of $591.1$79.3 million compared to $680.6$89.6 million in the third quarter of 20242025 and $748.2$83.0 million in the fourth quarter of 2023.2024.

Capital: CET1 ratio was 14.26%13.97% compared to 14.37%14.13% in the third quarter of 20242025 and 14.12%14.26% in the fourth quarter of 2023. The2024. Tangible Common Equity ratio was 10.13%10.47% compared to 10.72%10.55% in the third quarter of 20242025 and 9.68%10.13% in the fourth quarter of 2023.2024. Tangible Book Value per share was $25.43$29.96 compared to $26.15$28.92 in the third quarter of 20242025 and $23.13$25.43 in the fourth quarter of 2023. Tangible Book Value per share reflected the above-mentioned share buybacks and lower other comprehensive income.2024.

TABLE 1A1 - ANALYSIS OF NET INTEREST INCOME AND CHANGES DUE TO VOLUME/RATE

Net interest income of $588.4$608.5 million increased by $27.5$20.1 million from $560.9$588.4 million reflecting higher loans and investment securities income. This increase was partially offset by an increase in borrowings expense and the impact of one fewer day than the prior year, which reduced net interest income by $1.1 million. Tax equivalent basis net interest income of $605.2$623.8 million increased $28.3by $18.6 million, or 4.9%,3.1%, from $576.9$605.2 million.

Interest rate spread decreased by 4217 basis points to 5.29%5.12% from 5.71%5.29% and net interest margin decreased 36by 16 basis points to 5.43%5.27% from 5.79%.5.43%. This reflects ana increasedecrease of 23 and 6516 basis points, respectively,points in the total average yield of interest-earning assets and the average cost of interest-bearing liabilities.assets.

•A $42.4$15.1 million increase in interest income from investment securities, primarily due to the acquisition of higher-yield investment securities in 20232024 and 2024.2025. PurchasesThese purchases contributed to higher average volume of $650.3$226.8 million, contributing $10.6 million to interest income, and higher yield by 20 basis points, which resultedcontributed into an increase in interest income of $22.9approximately million, and higher yield by 83 basis points, which contributed to the increase in net interest income of $19.4$4.5 million.

These increases were partially offset by higher interest expense of $73.8$10.6 millionmillion, mainly from interest paid on: (i) deposits of $74.3 million due to higher average cost of total deposits of 68 basis point and (ii) borrowings of $0.5$8.2 million reflectingfrom FHLB advances taken in late 2023 and during 2024 and new securities under agreements to repurchase taken in late2024 2024.and 2025, and lower interest income on interest bearing cash and money market investments of $0.7 million, reflecting the impact of lower market rates.

OFG'sOFG’s non-interest income of $123.2$123.0 million decreased by $5.2$0.2 million from $128.4$123.2 million. The decrease in non-interest income was mainly due to:

•A $3.2$2.5 million decrease in banking service revenues relatedas toa result of: (i) $3.6 million in reduced interchange fees mainlyof due$4.6 tomillion reflecting the implementationapplication of the Durbin Amendment thatto took effectOFG in July 1, 2024; and (ii) lower servicing and other loan fees on deposits of $923$704 thousandthousand, mainly from lower maintenancecommercial and overdrawnauto fees,loans, partially offset by an increase of $1.9 million in higher merchant income of $1.2 million resulting from a higher volume of transactions and migration of USVI merchantbusiness activity; and

TheseDecrease decreases werewas offset by:

•A $2.6$2.1 million increase in wealth management revenue primarily reflecting higher revenues from: (i) $1.4 million in broker-dealer fees of $1.3 million related to higher investment advisory service fees and mutual funds retailer fees, and (ii) $813 thousand in insurance income relatedby to$873 higherthousand incomereflecting fromincreases in annuities and (iii) an increase in trust fees of $449 thousand due to higher trustee-only feespremiums; and

•Increase of $4.3 million in electronic banking charges of $1.5 million mainly due to debitthe recognition of a $2.3 million rebate recorded during the prior year and creditincreased cardtransaction expensesvolumes;

Please read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included under Item I,1, “Financial Statements” of this quarterly report on Form 10-Q. This discussion and analysis section contains forward-looking statements. Please see “Forward-Looking Statements,” “Risk Factors,” and “Quantitative and Qualitative Disclosures about Market Risk” in this quarterly report on Form 10-Q for the quarter ended March 31, 2026,10-Q, and set forth in OFG’s annual report on our 2025 Form 10-K, as supplemented and amended by any subsequent quarterly reports on Form 10-Q, for a discussion of the uncertainties, risks and assumptions associated with these statements.

OFG is a publicly-ownedpublicly owned financial holding company that provides a wide range of banking and financial services such as commercial, consumer, auto, and mortgage lending, financial planning, insurance sales, investment advisory and securities brokerage services, as well as corporate trust services. It operates through three business segments: Banking, Wealth Management, and Treasury, and distinguishes itself based on quality service. OFG conducts its business through its main office in San Juan, Puerto Rico, forty-two branches in Puerto Rico and two branches in the USVI. It has five subsidiaries with operations in Puerto Rico: the Bank, Oriental Financial Services, Oriental Insurance, OIB and OBPEF; two subsidiaries in the United States, OFG USA and OFG Ventures; and one subsidiary in the Cayman Islands, OFG Reinsurance. OFG’s long-term goal is to strengthen its banking and financial services franchise by expanding its lending businesses, increasing the level of integration in the marketing and delivery of banking and financial services, continuously improving our already effective asset-liability management, growing non-interest revenue from banking and financial services, as well as achieving greater operating efficiencies.

OFG’s diversified mix of businesses and products generates both the interest income traditionally associated with a banking institution and non-interest income traditionally associated with a financial services institution (generated by such businesses as securities brokerage, fiduciary services, investment advisory, insurance agency and reinsurance). Although all of these businesses, to varying degrees, are affected by interest rate and financial market fluctuations and other external factors, OFG’s commitment is to continue producing a balanced and growing revenue stream.

Puerto Rico’s economy has continued to show stable performance, supported by favorable labor market conditions and adequate system liquidity. According to the Puerto Rico Department of Economic Development and Commerce, the Puerto Rico Economic Activity Index stood at 127.2 points in January 2026, representing a 0.3% increase compared to January 2025 and a consistent upward month-to-month trend in recent periods. Employmentemployment data published by such government agency indicates continued gains across multiple industries. As of JanuaryMay 2026, total non-farm payroll employment averaged approximately 951,600962,600 jobs, reflecting a 1.7%0.3% increase from the previous month and a slight1.0% decrease of 0.1%growth year over year. Electric power generation and cement sales have also increased 2.4% and 1.2% year over year, respectively. Economic activity has benefited from public sector reconstruction funding, private investment, and onshoringinfrastructure initiatives.projects. Manufacturing expansion and new on-shoring initiatives reinforce long-term growth outlook. However, OFG continues to monitor global economic and geopolitical conditions, including interest rate outlook, related uncertainties, and their possible impact on Puerto Rico'sRico’s economy, which could influence OFG’s business and operational results.

On a macro level, the Puerto Rico’sRico economy isremains stable, with federal reconstruction funds continuing to flow, a strong labor market, and private investment supporting continued activity, particularly insector manufacturing and onshoring.onshoring Thisinvestment. environment,With combinedthe witheconomy as a tailwind, our operational strength, disciplined execution, and focus on operationalthe excellence,customer experience positions OFGus well to continuecapitalize to deliver solid financial performance and to take advantage ofon long-term growth prospects.opportunities.

FirstSecond Quarter of 2026:

Total Interest Income of $194.1$197.2 million compared to $197.2 million in the fourth quarter of 2025 and $189.2$194.1 million in the first quarter of 2025.2026 Comparedand to$194.3 million in the fourthsecond quarter of 2025,2025. totalThe interest income in the firstsecond quarter of 2026 decreasedincreased $3.1$3.0 million,million sequentially, primarily reflecting lower average balances of cash and investment securities at lower average rates, partially offset by higher average balances of loans at higher average rates.rate, The$4.1 firstmillion quarterfrom ofpaid 2026in includedfull commercial loans compared to $3.3 million from aanother paid in full PCDcommercial loan.loan Compared to the fourth quarter of 2025,in the first quarter of 20262026, alsoand reflectedone two feweradditional business days,day, which negatively affectedincreased interest income by approximately $3.1$1.6 million.

Total Interest Expense of $40.3$39.9 million compared to $44.5 million in the fourth quarter of 2025 and $40.2$40.3 million in the first quarter of 2025.2026 Comparedand to$42.4 million in the fourthsecond quarter of 2025,2025. totalThe interest expense in the firstsecond quarter of 2026 decreased by$462 $4.2thousand million,sequentially, primarily reflecting lower average balances of depositsborrowings atand lowerbrokered averagedeposits, rates,which partiallymore than offset bythe additional expense of higher average balances of borrowingscore atdeposits, lowerand averageone rates. Compared to the fourth quarter of 2025, the first quarter of 2026 also reflected two feweradditional business days,day, which reducedincreased interest expense by approximately$440 $1.0 million.thousand.

Total Banking and Financial Service Revenues of $32.0$33.0 million compared to $32.6 million in the fourth quarter of 2025 and $29.2$32.0 million in the first quarter of 2025.2026 Comparedand to$30.2 million in the fourthsecond quarter of 2025,2025. totalThe banking and financial service revenue in the firstsecond quarter of 2026 includedincreased favorable$1.0 MSRmillion valuationsequentially, ofreflecting approximatelyhigher $1.3banking million,service whileand thewealth fourthmanagement quarterrevenues, of 2025which included $2.3$1.1 million in annual insurance commissionand recognition.annuity fees, and lower mortgage banking revenues.

Total Provision for Credit Losses of $22.5$13.0 million compared to $31.9 million in the fourth quarter of 2025 and $25.7$22.5 million in the first quarter of 2026 and $21.7 million in the second quarter of 2025. Total provision for credit losses in the firstsecond quarter of 2026 primarily reflected $14.7 million for increased loan volume and $1.9 million in commercial loan recoveries, while the first quarter of 2026 included $17.5 million for increased loan volume and increased allowance of $3.7 million for a previously reserved telecom commercial loan and $1.0 million mainly related tofor newly classified small commercial loans.

Credit Quality: Net charge-offs (“NCOs”) of $21.4$28.8 million (1.05%1.40% of average loans) compared to $26.9 million (1.32% of average loans) in the fourth quarter of 2025 and $20.4$21.4 million (1.05% of average loans) in the first quarter of 2025.2026 NCOsand decreased $5.5$12.8 million from(0.64% of average loans) in the fourthsecond quarter of 2025, and non-performing loans (“NPLs”) of $67.3 million (0.81% of average loans) compared to $120.9 million (1.47% of average loans) in the first quarter of 2026 and $97.4 million (1.19% of average loans) in the second quarter of 2025. The firstchanges in second quarter of 2026 NCOs and NPLs primarily reflected $3.9the millionsales forof athe previouslyabove-mentioned reserved commercial UStelecom loan and improveda auto andU.S. commercial NCOs, while the fourth quarter of 2025 included $4.8 million from a sale of non-performing loans. The first quarter of 2026 early and total delinquency rates at 2.21% and 3.40%, respectively, declined from the fourth quarter of 2025, as well as the nonperforming loan rate at 1.47%.loan.

Loans Held-for-Investment of $8.24$8.30 billion compared to $8.20 billion in the fourth quarter of 2025 and $7.85$8.24 billion in the first quarter of 2026 and $8.18 billion in the second quarter of 2025. Loans held-for-investment in the firstsecond quarter of 2026 increasedgrew $34.0$62.4 million or 0.4%0.8% sequentially, reflecting increases in U.S. and Puerto Rico commercial loans, partially offset by lower balances in residential mortgage, auto and consumer loans.

Total Investments of $2.79$2.70 billion compared to $2.84 billion in the fourth quarter of 2025 and $2.79 billion in the first quarter of 2025.2026 Comparedand to$2.78 billion in the fourthsecond quarter of 2025,2025 total investments in the first quarter of 2026primarily reflected principal paydowns and maturities, partially offset by purchases of $49.2 million ofin mortgage-backed securities and residential mortgage securitizations of $23.5 million.securities.

Total Borrowings and BrokeredCustomer Deposits of $746.6$9.74 millionbillion compared to $897.3$9.66 million in the fourth quarter of 2025 and $421.5 millionbillion in the first quarter of 2025.2026 Comparedand to$9.90 billion in the fourthsecond quarter of 2025,2025. theThe firstsecond quarter of 2026 totaldeposits borrowingsincreased $84.9 million or 0.9% sequentially, reflecting government, commercial and brokeredretail depositsdeposit declined $150.7 million, reflecting maturities.growth.

CashTotal Borrowings and CashBrokered EquivalentsDeposits of $636.5$795.5 million compared to $1.04 billion in the fourth quarter of 2025 and $710.6$746.6 million in the first quarter of 2025.2026 Comparedand to$732.3 million in the fourthsecond quarter of 2025,2025. theThe firstsecond quarter of 2026 declinedtotal $403.8borrowings and brokered deposits increased $48.9 million primarilysequentially duefor toliquidity themanagement previously mentioned government deposit transfer to wealth management.purposes.

Capital: CET1 ratio was 13.75%14.07% compared to 13.97% in the fourth quarter of 2025 and 14.27%13.75% in the first quarter of 2026 and 13.99% in the second quarter of 2025. Tangible Common Equity ratio was 10.66%10.90% compared to 10.47% in the fourth quarter of 2025 and 10.30%10.66% in the first quarter of 2026 and 10.20% in the second quarter of 2025. Tangible Book Value per share was $30.14$31.12 compared to $29.96 in the fourth quarter of 2025 and $26.66$30.14 in the first quarter of 2026 and $27.67 in the second quarter of 2025.

The following tables show major categories of interest-earning assets and interest-bearing liabilities, their respective interest income, expenses, yields and costs, and their impact on net interest income due to changes in volume and rates for the quarters and six-month periods ended MarchJune 31,30, 2026 and 2025.

TABLE 1 - ANALYSIS OF NET INTEREST INCOME AND CHANGES DUE TO VOLUME/RATE FOR THE QUARTERS ENDED MARCHJUNE 31,30, 2026 AND 2025

Net interest income is a function of the difference between rates earned on OFG’s interest-earning assets and rates paid on its interest-bearing liabilities (interest rate spread) and the relative amounts of its interest earninginterest-earning assets and interest-bearing liabilities (interest rate margin). OFG constantly monitors the composition and re-pricing of its assets and liabilities to maintain its net interest income at adequate levels.

Net interest income of $153.8$157.3 million increased $4.7$5.4 million from $149.1$151.9 million, reflecting higher loan interest income and lower deposit interest expense, partially offset by lower cash and money market investments interest income and higher borrowing cost. On a tax equivalent basis net interest income increased $5.0$5.7 million or 3.3%3.7% to $157.7$161.4 million from $152.7$155.7 million.

•A $5.1$5.4 million increase in loan interest income, driven by growth in average balances across multiple portfolios, including: (i) $5.5$6.9 million from commercial loans, mainly due to anthe effect of increase of $392.4$353.9 million in average balances and repricing of variable-rate loans reflecting OFG’s strategy to grow commercial lending in Puerto Rico and the U.S. mainland,mainland; and (ii) $0.7$49 million from auto loans, mainly due to a $61.7 million increase in the average balance and (iii) $0.3 millionthousand from consumer loans,loans mainlyreflecting duea to $11.3$3.9 million increase in the average balance. These increases were partially offset by $1.3a $1.0 million decrease from auto loans, mainly due to a $9.2 million decrease in the average balance; and $525 thousand lower interest income from residential mortgage loans, reflecting ana $82.7$66.9 million decrease in average balances primarily due to the securitization and sale of conforming loans, normal paydowns, and the extinguishment of the PCD portfolio; and

•A $2.4$3.8 million decrease in deposit interest expense, reflecting lower average rates,rates reflectingand the previously announcedmentioned $500 million transfer of a government demand deposit transfer into a wealth management account duringin theJanuary quarter, which was2026, partially offset by growth in retail and commercial deposit growth.deposits.

OFG reported non-interestNon-interest income inincreased the amount of $32.2 million, an increase of $2.7$2.6 million or 9.0%, compared8.5% to $29.5$33.0 million infrom the$30.4 prior period.million. The increase in non-interest income was due to:

•A $963$1.4 thousandmillion increase in banking service revenue, primarily reflecting a $1.8 million increase in electronic banking revenue driven by higher customerdebit activity and transaction volumes. Electronic banking increased $1.4 million, mainly from higher: (i)card interchange feesincome and increased merchant business activity of $1.1 million and (ii) cash management fees in commercial accounts of $249 thousand.activity. These increases were partially offset by (i)a lower$290 depositthousand servicedecrease in loan prepayments and servicing fees of $214 thousand, reflecting reduced checking and savings accounts service charges, and (ii) a $159 thousand decline in servicing and other loan fees, mainly from auto care commissions and administration fees; and

•An increase of $458$809 thousand increase in wealth management revenues, mainly due to: (i) a $547$379 thousand increase in broker-dealerbroker fees fromrelated to investment advisory services fees and mutualsecurities fundsales retailercommissions, fees, partially offset by (ii)and a $179$394 thousand decreaseincrease in insurance income reflectingdue lowerto annuityhigher sales.annuities and contingency commissions; and