OFG BANCORP

The preparation of financial statements in accordance with GAAP requires management to make judgments, assumptions and estimates that affect the reported amount of assets, liabilities, income and expenses in the consolidated financial statements. Understanding our accounting policies and the extent to which we use judgment and estimates in applying these policies is integral to understanding our financial statements. We provide a summary of our significant accounting policies in “Note 1—Summary of Significant Accounting Policies” of our 2025 Form 10-K.

In the “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” section of our 2025 Form 10-K, we identified the Allowance for Credit Losses related to loans collectively evaluated for impairment as a critical accounting policy and estimate because it involves significant estimation uncertainty that has or is reasonably likely to have a material impact on our financial condition or results of operations.

We evaluate our critical accounting estimates and judgments on an ongoing basis and update them as necessary based on changing conditions. There have been no material changes in the methods that we used to formulate these critical accounting estimates from those discussed in our 2025 Form 10-K.

FINANCIAL HIGHLIGHTS

Business momentum and disciplined execution drove strong first quarter of 2026 results, supported by proactive balance sheet management and core deposit strength. Our operating model continued to deliver, with ongoing loan growth, high quality credit performance, and consistent execution across the Company. During the quarter ended March 31, 2026, we repurchased $44.5 million of common stock and increased our dividend by 17%, reinforcing our commitment to capital management and shareholder returns.

Our positioning as a digital bank that values personal connections continues to deliver tangible results. Increased use of Libre and Elite retail products, as well as My Biz commercial accounts, contributed to deposit expansion and greater customer engagement and growth. This progress has enabled us to further optimize our funding mix and reduce reliance on wholesale funding, even amid the normalization of government deposits.

Puerto Rico’s economy is stable, with federal reconstruction funds and private investment supporting continued activity, particularly in manufacturing and onshoring. This environment, combined with our focus on operational excellence, positions OFG to continue to deliver solid financial performance and to take advantage of long-term growth prospects.

First Quarter of 2026:

Earnings per share diluted was $1.26 compared to $1.27 in the fourth quarter of 2025 and $1.00 in the first quarter of 2025. Total core revenues of $185.8 million compared to $185.4 million in the fourth quarter of 2025 and $178.3 million in the first quarter of 2025.

Performance metrics: Net interest margin of 5.36%, return on average assets of 1.78%, return on average tangible common stockholders’ equity of 16.43%, and efficiency ratio of 50.97%.

Total Interest Income of $194.1 million compared to $197.2 million in the fourth quarter of 2025 and $189.2 million in the first quarter of 2025. Compared to the fourth quarter of 2025, total interest income in the first quarter of 2026 decreased $3.1 million, 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. The first quarter of 2026 included $3.3 million from a paid in full PCD loan. Compared to the fourth quarter of 2025, the first quarter of 2026 also reflected two fewer business days, which negatively affected interest income by approximately $3.1 million.

Total Interest Expense of $40.3 million compared to $44.5 million in the fourth quarter of 2025 and $40.2 million in the first quarter of 2025. Compared to the fourth quarter of 2025, total interest expense in the first quarter of 2026 decreased by $4.2 million, reflecting lower average balances of deposits at lower average rates, partially offset by higher average balances of borrowings at lower average rates. Compared to the fourth quarter of 2025, the first quarter of 2026 also reflected two fewer business days, which reduced interest expense by approximately $1.0 million.

Total Banking and Financial Service Revenuesof $32.0 million compared to $32.6 million in the fourth quarter of 2025 and $29.2 million in the first quarter of 2025. Compared to the fourth quarter of 2025, total banking and financial service revenue in the first quarter of 2026 included favorable MSR valuation of approximately $1.3 million, while the fourth quarter of 2025 included $2.3 million in annual insurance commission recognition.

Pre-Provision Net Revenuesof $91.3 million compared to $79.3 million in the fourth quarter of 2025 and $85.1 million in the first quarter of 2025.

Other Income reflected income of $0.2 million compared to a loss of $1.1 million in the fourth quarter of 2025 and income of $0.3 million in the first quarter of 2025. The first quarter of 2026 increased $1.3 million, reflecting the absence of $6.1 million accelerated amortization of technology related assets and gains of $3.9 million on the sale of non-performing loans and $1.1 million on the sale of a building in the fourth quarter of 2025.

Total Provision for Credit Losses of $22.5 million compared to $31.9 million in the fourth quarter of 2025 and $25.7 million in the first quarter of 2025. Total provision for credit losses in the first quarter of 2026 primarily reflected $17.5 million for increased loan volume and increased allowance of $3.7 million for a previously reserved commercial loan and $1.0 million mainly related to newly classified small commercial loans.

Credit Quality: Net charge-offs (“NCOs”) of $21.4 million (1.05% of average loans) compared to $26.9 million (1.32% of average loans) in the fourth quarter of 2025 and $20.4 million (1.05% of average loans) in the first quarter of 2025. NCOs decreased $5.5 million from the fourth quarter of 2025. The first quarter of 2026 reflected $3.9 million for a previously reserved commercial US loan and improved auto and 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%.

Total Non-Interest Expense of $94.7 million compared to $105.0 million in the fourth quarter of 2025 and $93.5 million in the first quarter of 2025. Total non-interest expense in the first quarter of 2026 included $1.0 million in merit raises, $0.7 million in seasonal FICA costs, $1.0 million costs related to a capital markets readiness and registration process, $3.6 million in business related volume incentive payment (compared to $3.1 million in the first quarter of 2025), and $2.5 million in planned cost-savings. The fourth quarter of 2025 included $3.3 million in professional service fees related to performance-based advisory costs as part of the renegotiation of a cost-saving technology services contract, $2.5 million for business rightsizing, and $1.0 million related to the accelerated amortization of technology related assets.

Income Tax Expensewas $14.9 million compared to a benefit of $8.5 million in the fourth quarter of 2025 and $13.9 million in the first quarter of 2025. The first quarter of 2026 ETR was 21.60%, reflecting an anticipated rate of 22.34% for the year, the benefit of some discrete items, and the absence of $16.8 million in previously reported tax benefits in the fourth quarter of 2025.

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

New Loan Productionof $608.9 million compared to $605.6 million in the fourth quarter of 2025 and $558.9 million in the first quarter of 2025. Compared to the fourth quarter of 2025, new loan production in the first quarter of 2026 increased marginally, mainly due to auto loans. Year-over-year new loan production increased 8.9%, primarily reflecting increases in commercial loans while auto loans moderated as anticipated.

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

Customer Depositsof $9.66 billion compared to $9.92 billion in the fourth quarter of 2025 and $9.76 billion in the first quarter of 2025. Deposits decreased $263.4 million sequentially, reflecting the previously announced $500 million transfer of a government demand deposit into a wealth management account during the quarter, which was partially offset by retail and commercial deposit growth.

Total Borrowings and Brokered Deposits of $746.6 million compared to $897.3 million in the fourth quarter of 2025 and $421.5 million in the first quarter of 2025. Compared to the fourth quarter of 2025, the first quarter of 2026 total borrowings and brokered deposits declined $150.7 million, reflecting maturities.

Cash and Cash Equivalentsof $636.5 million compared to $1.04 billion in the fourth quarter of 2025 and $710.6 million in the first quarter of 2025. Compared to the fourth quarter of 2025, the first quarter of 2026 declined $403.8 million primarily due to the previously mentioned government deposit transfer to wealth management.

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

Selected income statement and balance sheet data and key performance indicators are presented in the tables below:

ANALYSIS OF RESULTS OF OPERATIONS

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 ended March 31, 2026 and 2025.

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

C - CHANGES IN NET INTEREST INCOME DUE TO:

Net Interest Income

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 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 million increased $4.7 million from $149.1 million, reflecting higher loan interest income and lower deposit interest expense, partially offset by higher borrowing cost. On a tax equivalent basis net interest income increased $5.0 million or 3.3% to $157.7 million from $152.7 million.

The interest rate spread decreased six basis points to 5.21% from 5.27% and the net interest margin declined six basis points to 5.36% from 5.42%, primarily reflecting an eleven basis point decrease in the yield of interest-earning assets.

Net interest income was positively impacted by:

•A $5.1 million increase in loan interest income, driven by growth in average balances across multiple portfolios, including: (i) $5.5 million from commercial loans, mainly due to an increase of $392.4 million in average balances reflecting OFG’s strategy to grow commercial lending in Puerto Rico and the U.S. mainland, (ii) $0.7 million from auto loans, mainly due to a $61.7 million increase in the average balance and (iii) $0.3 million from consumer loans, mainly due to $11.3 million increase in the average balance. These increases were partially offset by $1.3 million lower interest income from residential mortgage loans, reflecting an $82.7 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 million decrease in deposit interest expense, reflecting lower average rates, reflecting the previously announced $500 million transfer of a government demand deposit into a wealth management account during the quarter, which was partially offset by retail and commercial deposit growth.

These increases were offset by higher interest paid on borrowings of $2.6 million from FHLB advances and securities under agreements to repurchase taken during the year 2025.

TABLE 2 - NON-INTEREST INCOME SUMMARY

Non-Interest Income

Non-interest income is affected by fees generated from loans and deposit accounts, the amount of assets under management of the Bank’s trust department, transactions generated by clients’ financial assets serviced by OFG’s securities broker-dealer, insurance agency and reinsurance subsidiaries, the level of mortgage banking activities, and gains or losses on sales of assets.

OFG reported non-interest income in the amount of $32.2 million, an increase of $2.7 million or 9.0%, compared to $29.5 million in the prior period. The increase in non-interest income was due to:

•An increase of $1.4 million in mortgage banking activities, mainly due to favorable variance in the valuation of the MSR of $2.0 million, partially offset by an unfavorable $429 thousand impact from lower-of-cost-or-market adjustments on mortgage loans held-for-sale;

•A $963 thousand increase in banking service revenue, driven by higher customer activity and transaction volumes. Electronic banking increased $1.4 million, mainly from higher: (i) interchange fees and increased merchant business activity of $1.1 million and (ii) cash management fees in commercial accounts of $249 thousand. These increases were partially offset by (i) lower deposit service 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 thousand in wealth management revenues, mainly due to: (i) a $547 thousand increase in broker-dealer fees from investment advisory and mutual fund retailer fees, partially offset by (ii) a $179 thousand decrease in insurance income reflecting lower annuity sales.

TABLE 3 - NON-INTEREST EXPENSES SUMMARY

Non-Interest Expense

Non-interest expense was $94.7 million, representing an increase of 1.3% or $1.3 million, compared to $93.5 million. The increase in non-interest expense was mainly due to:

•Increase of $1.4 million in compensation and employee benefits, as a result of higher salaries and benefits, including payroll taxes; and

•Increase of $1.1 million in professional and service fees mainly due to $1.0 million of costs associated to a capital markets readiness and registration process.

These increases in non-interest expense were partially offset by:

•A $1.4 million decrease in occupancy, equipment and infrastructure costs, driven by lower internet services expenses of $657 thousand, $445 thousand of insurance reimbursement related to equipment, and $99 thousand in reduced software maintenance expenses.

The efficiency ratio was 50.97% compared to 52.42%. The efficiency ratio measures how much of OFG’s revenues is used to pay operating expenses. OFG computes its efficiency ratio by dividing non-interest expenses by the sum of its net interest income and non-interest income, but excluding gains on the sale of investment securities, other gains and losses, and other income that may be considered volatile in nature. Management believes that the exclusion of those items permits consistent comparability. Amounts presented as part of non-interest income that were excluded from the adjusted efficiency ratio computation for the quarters ended March 31, 2026 and 2025, amounted to $179 thousand and $305 thousand, respectively.

Provision for Credit Losses

Provision for credit losses decreased by $3.2 million to $22.5 million from $25.7 million. The provision for credit losses for the quarter ended March 31, 2026, reflected $17.5 million for increased loan volume and increased allowance of $3.7 million for a previously reserved commercial US loan and $1.0 million related mainly to newly classified commercial loans. These downgrades are borrower specific and event driven and do not indicate a broad base deterioration in portfolio credit quality.

The provision for credit losses for the quarter ended March 31, 2025, reflected adjustments of $17.4 million related to loan volume, $4.8 million in specific reserves and $3.5 million to reflect auto current loss given default trends post pandemic.

Income Tax Expense

Income tax expense for the quarter ended March 31, 2026 increased by $1.0 million to $14.9 million from $13.9 million. OFG maintained an effective tax rate (“ETR”) lower than the statutory rate for the quarters ended March 31, 2026 and 2025 of 21.6% and 23.3%, respectively. The lower ETR is mainly related to exempt income and investments subject to preferential tax treatment under the PR Code. The expected ETR for 2026 is 22.3%.

Business Segments

OFG segregates its businesses into the following segments: Banking, Wealth Management, and Treasury. Management established the reportable segments based on the internal reporting used to evaluate performance and assess where to allocate resources. Other factors such as OFG’s organization, nature of its products, distribution channels and economic characteristics of its services were also considered in the determination of the reportable segments. OFG measures the performance of these reportable segments based on net income. OFG’s methodology for allocating expenses for corporate services among segments is based on several factors such as revenue, employee headcount, occupied space, and dedicated services or time, among others. Following are the results of operations and the selected financial information by operating segment for the quarters ended March 31, 2026 and 2025.

Eliminations include interest income and expense for a time deposit opened by the Bank in Oriental Overseas, the IBEunit, which operates within the Bank. The time deposit with a balance of $285.2 million and $279.6 million at March 31, 2026 and 2025, respectively, which is used to fund Oriental Overseas operations, is included in the Treasury Segment with its corresponding interest expense, the related interest income is included in the Banking Segment, all are eliminated in the consolidation. Interest income is accrued on the unpaid principal balance. The increase in interest income and interest expense from the prior year quarter was mainly as a result of higher average balance.

Banking

OFG’s banking segment net income before taxes increased by $13.8 million from $28.1 million to $41.9 million, mainly due to:

•Increase of $4.8 million in loan interest income, driven by higher average loan balances;

•Decrease of $3.5 million in interest expense, reflecting the $500 million government demand deposit transfer into a wealth management account during the quarter, partially offset by higher retail and commercial deposits.

•Decrease of $3.2 million in provision for credit losses, primarily driven by lower loss rate model and qualitative provisions. In addition, the economic model resulted in a net release in the current quarter, compared to the prior year, consistent with more favorable macroeconomic assumptions. These improvements were partially offset by relatively stable volume‑driven provisions and individual loan activity.

•Increase of $2.3 million in non-interest income primarily related to $1.4 million increase in mortgage banking activities, mainly from favorable variance in the valuation of the MSR, and $963 thousand increase in banking service revenue due to higher customer activity and transaction volumes.

Wealth Management

Wealth management segment revenue consists of commissions and fees from fiduciary activities, securities brokerage and investment advisory services, and insurance and reinsurance activities. Net income before taxes from this segment increased to $4.1 million from $3.6 million, mainly from higher non-interest income of $327 thousand related to higher broker-dealer fees from investment advisory service fees and mutual funds retailer fees, partially offset by lower insurance income.

Treasury

Treasury segment net income before taxes decreased by $4.9 million from $27.7 million to $22.8 million. The decrease was mainly due to higher: (i) interest expense of $3.7 million, including $2.6 million from higher borrowings and $1.0 million from brokered deposits, which were utilized to enhance liquidity and support strategic growth in the commercial loan portfolio, and (ii) non-interest expense of $1.4 million, mainly related to costs incurred in capital markets readiness and registration process amounting to $1.1 million.

ANALYSIS OF FINANCIAL CONDITION

Assets Owned

At March 31, 2026, OFG’s total assets amounted to $12.048 billion, a decrease of $417.8 million, when compared to $12.466 billion at December 31, 2025.

Cash and due from banks decreased by $404.4 million to $631.7 million, reflecting the $500 million transfer of a government demand deposit into a wealth management account during the quarter.

The investment portfolio decreased $54.7 million or 1.9% primarily reflecting principal paydowns and maturities, as well as $20.1 million in unfavorable market value adjustments, partially offset by $51.3 million of new available-for-sale mortgage-backed securities and US Treasury securities, and $23.5 million related to mortgage loan securitizations. OFG’s investment strategy focuses on liquidity and highly liquid securities, considering their investment and the current market environment.

OFG’s loan portfolio is comprised of Puerto Rico residential mortgage loans, consumer loans, auto loans, commercial loans secured by real estate, other commercial and industrial loans, and commercial US loans. At March 31, 2026, OFG’s net loan portfolio increased by $25.8 million or 0.3% reflecting increases in US and Puerto Rico commercial loans, partially offset by auto and consumer loans, mortgage securitizations, and portfolio run-off.

Financial Assets Managed

At March 31, 2026, OFG’s financial assets include assets managed by its trust division and by its securities broker-dealer and insurance agency subsidiaries. OFG’s trust division offers various types of IRAs and manages retirement plans and custodian and corporate trust accounts. At March 31, 2026 and December 31, 2025, total assets managed by OFG’s trust division amounted to $2.283 billion and $2.490 billion, respectively. The $207.6 million decrease reflects changes in market conditions, as well as the discontinuance of Keogh plan services during the quarter. OFG’s broker-dealer subsidiary offers a wide array of investment alternatives to its client base, such as tax-advantaged fixed income securities, mutual funds, stocks, bonds and money management wrap-fee programs. At March 31, 2026, total assets managed by the securities broker-dealer and insurance agency subsidiaries from their customers’ investment accounts amounted to $3.073 billion, compared to $2.613 billion at December 31, 2025. The $460.8 million increase in broker-dealer related assets is mainly due to the transfer of $500 million government demand deposit from the Bank into a wealth management account during the quarter, as well as changes in market conditions.

Goodwill

OFG’s goodwill is not amortized to expense but is tested at least annually for impairment. A quantitative annual impairment test is not required if, based on a qualitative analysis, OFG determines that the existence of events and circumstances indicate that it is more likely than not that goodwill is not impaired. OFG completes its annual goodwill impairment test as of October 31 of each year. OFG tests for impairment by first allocating its goodwill and other assets and liabilities, as necessary, to defined reporting units. A fair value is then determined for each reporting unit. If the fair values of the reporting units exceed their book values, no write-down of the recorded goodwill is necessary. If the fair values are less than the book values, an additional valuation procedure is necessary to assess the proper carrying value of the goodwill. During the quarter ended March 31, 2026, OFG performed an assessment of events or circumstances that could trigger reductions in the book value of the goodwill. Based on this assessment, no impairments were identified at March 31, 2026.

As of both March 31, 2026 and December 31, 2025, OFG had $84.2 million of goodwill allocated as follows: $84.1 million to the banking segment and $178 thousand to the wealth management segment. Please refer to “Note 8 – Goodwill and Other Intangible Assets” to our consolidated financial statements for more information on the annual goodwill impairment test.

TABLE 5 - ASSETS SUMMARY AND COMPOSITION

TABLE 6 - LOAN PORTFOLIO COMPOSITION

OFG’s loan portfolio is composed of commercial, mortgage, consumer, and auto loans. As shown in Table 6 above, total loans, net, amounted to $8.040 billion at March 31, 2026, a 0.3% increase when compared to $8.014 billion at December 31, 2025. The composition and trends of OFG’s loans held-for-investment portfolio were as follows:

•Commercial loan portfolio amounted to $3.553 billion (43.1% of the gross loan portfolio) compared to $3.490 billion (42.6% of the gross loan portfolio) at December 31, 2025, a 1.8% increase as a result of originations and credit lines usage during the first quarter of 2026. Commercial loans secured by non-owner occupied commercial real estate amounted to $766.6 million and $774.1 million at March 31, 2026 and December 31, 2025, respectively, which represented 9.3% of our total gross loan portfolio held-for-investment. Commercial US loans amounted to $871.6 million and $830.0 million at March 31, 2026 and December 31, 2025, respectively, which represented 10.6% and 10.1% of our total gross loan portfolio held-for-investment.

During the quarter ended March 31, 2026, OFG sold commercial loans held-for-sale with a reporting balance of $3.1 million and recognized a $28 thousand loss, included in other non-interest income in the consolidated statements of operations.

Commercial loan production increased 37.1% or $82.0 million to $303.2 million in the quarter ended March 31, 2026 from $221.2 million in the prior year quarter, mainly in the commercial US loan portfolio. Commercial US loans activities include the purchase of middle market senior secured cash flow loan participations and the purchase of participations of loans to small and medium sized businesses. Excluding commercial US loans activities, commercial PR loan production increased by 22.8% to $200.4 million in the quarter ended March 31, 2026 from $163.2 million in the prior year quarter.

•Mortgage loan portfolio amounted to $1.374 billion (16.7% of the gross loan portfolio) compared to $1.390 billion (17.0% of the gross originated loan portfolio) at December 31, 2025, a 1.2% decrease resulting from securitization of conforming loans into mortgage-backed securities and regular paydowns. Mortgage loans included delinquent loans in the GNMA buy-back option program amounting to $54.4 million and $56.5 million at March 31, 2026 and December 31, 2025, respectively. Under the GNMA program, issuers such as OFG have the option but not the obligation to repurchase loans that are 90 days or more past due. For accounting purposes, these loans subject to the repurchase option are required to be reflected (rebooked) on our financial statements with an offsetting liability.

Mortgage loan production totaled $41.9 million in the quarter ended March 31, 2026, which represents an increase of 13.3% from $37.0 million in the prior year quarter.

OFG follows a conservative residential mortgage lending policy with more than 90% of its residential mortgage portfolio consisting of fixed-rate, fully amortizing, fully documented loans that do not have the level of risk associated with subprime loans offered by certain major U.S. mortgage loan originators. Furthermore, OFG has never been active in negative amortization loans or offered adjustable-rate mortgage loans with teaser rates.

•Consumer loan portfolio amounted to $677.8 million (8.2% of the gross loan portfolio) compared to $683.5 million (8.3% of the gross loan portfolio) at December 31, 2025. Consumer loan production increased by 0.9% or $622 thousand to $68.5 million in the quarter ended March 31, 2026 from $67.9 million in the prior year quarter.

•Auto loans portfolio amounted to $2.630 billion (32.0% of the gross loan portfolio) compared to $2.637 billion (32.1% of the gross originated loan portfolio) at December 31, 2025. Auto loans production decreased by 16.2% or $37.6 million to $195.3 million in the quarter ended March 31, 2026 from $232.9 million in the prior year quarter, as expected.

The following table includes the maturities of OFG’s lending exposure to the Puerto Rico government.

TABLE 7 - PUERTO RICO GOVERNMENT RELATED LOANS

At March 31, 2026, OFG has $77.1 million of direct credit exposure to the Puerto Rico government, a $161 thousand decrease from $77.3 million at December 31, 2025. The Bank’s loans to the Puerto Rico government are general obligations of municipalities secured by ad valorem taxation, without limitation as to rate or amount, on all taxable property within the issuing municipalities in current status. The good faith, credit and unlimited taxing power of each issuing municipality are pledged for the payment of its general obligations. Deposits from the Puerto Rico government totaled $1.261 billion at March 31, 2026.

Allowance for Credit Losses

OFG measures its ACL based on management’s best estimate of expected credit losses inherent in OFG’s relevant financial assets. Tables 8 through 11 set forth an analysis of activity in the ACL and present selected credit loss statistics for the quarters ended March 31, 2026 and 2025 and as of March 31, 2026 and December 31, 2025. In addition, Table 6 sets forth the composition of the loan portfolio.

Please refer to the “Provision for Credit Losses” and “Critical Accounting Policies and Estimates” sections in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this quarterly report on Form 10-Q and “Note 5 – Allowance for Credit Losses” of the accompanying consolidated financial statements for a more detailed analysis of provisions and ACL.

Non-performing Assets

OFG’s non-performing assets include non-performing loans, foreclosed real estate, and other repossessed assets (see Tables 12 and 14). At March 31, 2026, OFG had $115.4 million of non-accrual loans held-for-investment, including $248 thousand PCD loans, compared to $124.6 million at December 31, 2025. The decrease is mainly related to a decrease of $3.3 million in commercial loan portfolio from $87.3 million at December 31, 2025 and a decrease of $5.8 million in auto loan portfolio from $20.8 million at December 31, 2025.

As of December 31, 2025, OFG had $3.1 million in non-accrual commercial US loans held-for-sale. There were no past due or non-accrual commercial loans held-for-sale as of March 31, 2026.

Delinquent residential mortgage loans insured or guaranteed under applicable FHA and VA programs are classified as non-performing loans when they become 90 days or more past due but are not placed in non-accrual status until they become 12 months or more past due, since they are insured loans. Therefore, those loans are included as non-performing loans but excluded from non-accrual loans. As of March 31, 2026 and December 31, 2025, the outstanding balance of these residential mortgage loans was $5.6 million and $5.5 million, respectively.

At March 31, 2026, OFG’s non-performing assets decreased by 6.4% to $127.3 million (1.06% of total assets) from $136.0 million (1.09% of total assets) at December 31, 2025.

Foreclosed real estate decreased from $2.5 million at December 31, 2025 to $2.0 million at March 31, 2026 and other repossessed assets increased from $3.5 million at December 31, 2025 to $4.3 million at March 31, 2026, both recorded at fair value. OFG does not expect non-performing loans to result in significantly higher losses. At March 31, 2026, the allowance coverage ratio to non-performing loans was 168.6% (155.6% at December 31, 2025).

Upon adoption of CECL, OFG elected to maintain pools of loans that were previously accounted for under ASC 310-30 and will continue to account for these pools as a unit of account. As such, the determination of non-accrual or accrual status for PCD loans is made at the pool level, not the individual loan level. The ACL was determined for each pool and added to the pool’s carrying amount to establish a new amortized cost basis. The difference between the unpaid principal balance of the pool and the new amortized cost basis is the non-credit premium or discount which is amortized as interest income over the remaining life of the pool. On a quarterly basis, management monitors the composition and behavior of the pools to assess the ability for cash flow estimation and timing. If based on the analysis performed the pool is classified as non-accrual, the accretion/amortization of the non-credit (discount) premium ceases.

The following items comprise non-performing loans held-for-investment, including non-PCD and PCDs:

Commercial loans - At March 31, 2026, OFG’s non-performing commercial loans amounted to $84.0 million (69.5% of OFG’s non-performing loans), a 3.8% decrease from $87.3 million at December 31, 2025 (67.1% of OFG’s non-performing loans). This balance includes a Puerto Rico telecommunications commercial loan moved to non-accrual classification during 2025 amounting to $44.1 million and $45.0 million at March 31, 2026 and December 31, 2025, respectively. Non-PCD commercial loans are placed on non-accrual status when they become 90 days or more past due and are written down, if necessary, based on the specific evaluation of the underlying collateral, if any.

Mortgage loans - At March 31, 2026, OFG’s non-performing mortgage loans totaled $18.1 million (15.0% of OFG’s non-performing loans), a 2.9% increase from $17.6 million (13.6% of OFG’s non-performing loans) at December 31, 2025. Non-PCD mortgage loans are placed on non-accrual status when they become 90 days or more past due and are written-down, if necessary, based on the specific evaluation of the collateral underlying the loan, except for FHA and VA insured mortgage loans which are placed in non-accrual when they become 12 months or more past due.

Consumer loans - At March 31, 2026, OFG’s non-performing consumer loans amounted to $3.8 million (3.2% of OFG’s non-performing loans), a 12.4% decrease from $4.4 million at December 31, 2025 (3.4% of OFG’s non-performing loans). Non-PCD consumer loans are placed on non-accrual status when they become 90 days past due and written-off when payments are delinquent 120 days in personal loans and 180 days in credit cards and personal lines of credit.

Auto loans - At March 31, 2026, OFG’s non-performing auto loans amounted to $14.9 million (12.3% of OFG’s total non-performing loans), a 28.0% decrease from $20.8 million at December 31, 2025 (15.9% of OFG’s total non-performing loans). Non-PCD auto loans are placed on non-accrual status when they become 90 days past due, partially written-off to collateral value when payments are delinquent 120 days and fully written-off when payments are delinquent 180 days.

OFG has two mortgage loan modification programs. These are the Loss Mitigation Program and the Non-Conforming Mortgage Loan Program. Both programs are intended to help responsible homeowners to remain in their homes and avoid foreclosure, while also reducing OFG’s losses on non-performing mortgage loans. The Loss Mitigation Program helps mortgage borrowers who are or will become financially unable to meet the current or scheduled mortgage payments. Loans that qualify under this program are those guaranteed by FHA, VA, Rural Housing Service (RHS), Puerto Rico Housing Finance Authority (PRHFA), conventional loans guaranteed by Mortgage Guaranty Insurance Corporation (MGIC), conventional loans sold to FNMA and FHLMC, and conventional loans retained by OFG. The program offers diversified alternatives such as regular or reduced payment plans, payment moratorium, mortgage loan modification, partial claims (only FHA), short sale, and deed in lieu of foreclosure. The Non-Conforming Mortgage Loan Program is for non-conforming mortgages, including balloon payment, interest-only/interest first, variable interest rate, adjustable interest rate and other qualified loans. Non-conforming mortgage loan portfolios are segregated into the following categories: performing loans that meet secondary market requirement and are refinanced under the credit underwriting guidelines of FHA, VA, FNMA, or FHLMC, as applicable, and performing loans not meeting secondary market guidelines processed pursuant OFG’s current credit and underwriting guidelines. OFG achieved an affordable and sustainable monthly payment by taking specific, sequential, and necessary steps such as reducing the interest rate, extending the loan term, capitalizing arrearages, deferring the payment of principal or, if the borrower qualifies, refinancing the loan. In order to apply for any of our loan modification programs, if the borrower is active in Chapter 13 bankruptcy, it must request an authorization from the bankruptcy trustee to allow the loan modification. Borrowers with discharged Chapter 7 bankruptcies may also apply. Loans in these programs are evaluated by designated credit underwriters for financial difficulty modification if OFG grants a concession for legal or economic reasons due to the debtor’s financial difficulties.

TABLE 8 - ALLOWANCE FOR CREDIT LOSSES BREAKDOWN

TABLE 9 - ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES

TABLE 10 - ALLOWANCE FOR CREDIT LOSSES SUMMARY

TABLE 11 — NET CREDIT LOSSES STATISTICS ON LOANS

TABLE 11 — NET CREDIT LOSSES STATISTICS ON LOANS (CONTINUED)

Net charge-offs for the quarter ended March 31, 2026 amounted to $21.4 million (1.05% of average loans), increasing by $1.0 million when compared to $20.4 million (1.05% of average loans) in the prior year quarter.

Net charge-offs variances were as follows:

•Residential mortgage loans net recoveries for the quarter ended March 31, 2026 amounted to $288 thousand, decreasing by $216 thousand when compared to prior year quarter.

•Commercial loans net charge-offs for the quarter ended March 31, 2026 amounted to $3.9 million, increasing by $1.1 million when compared to $2.9 million in the first quarter of 2025. The quarters ended March 31, 2026 and 2025 included partial charge-offs of previously reserved commercial US loans for $3.9 million and $2.9 million, respectively.

•Consumer loans net charge-offs in the quarter ended March 31, 2026 amounted to $7.7 million, increasing by $224 thousand when compared to net charge-offs of $7.5 million in the prior year quarter.

•Auto loans net charge-offs for the quarter ended March 31, 2026 amounted to $10.0 million, decreasing by $514 thousand when compared to net charge-offs of $10.5 million in the prior year quarter.

TABLE 12 — NON-PERFORMING ASSETS

TABLE 13 — NON-ACCRUAL LOANS

TABLE 14 - NON-PERFORMING LOANS

TABLE 15 - LIABILITIES SUMMARY AND COMPOSITION

Liabilities and Funding Sources

As shown in Table 15 above, at March 31, 2026, OFG’s total liabilities were $10.681 billion, representing a 3.6% decrease from $11.076 billion at December 31, 2025. Deposits and borrowings, OFG’s primary funding sources, amounted to $10.406 billion at March 31, 2026 compared to $10.820 billion at December 31, 2025. Deposits, excluding accrued interest payable, decreased by $413.5 million or 4.0%, driven primarily by declines in demand deposits of $452.0 million and time deposits of $69.0 million. These decreases were partially offset by growth of $107.5 million in savings and money market accounts.

At March 31, 2026 and December 31, 2025, total public fund deposits from various Puerto Rico government municipalities, agencies and corporations amounted to $1.261 billion and $1.676 billion, respectively, of which $500 million moved to our wealth management business as an advisory account in January 2026. Public funds were collateralized with securities and commercial loans amounting to $1.277 billion and $1.691 billion at March 31, 2026 and December 31, 2025, respectively.

As of March 31, 2026, borrowings amounted to $556.7 million, consisting of short and long-term FHLB advances and short-term repurchase agreements. This balance decreased by $0.6 million or 0.1% compared to December 31, 2025.

Stockholders’ Equity

At March 31, 2026, OFG’s total stockholders’ equity was $1.367 billion, representing a 1.7% decrease from $1.390 billion at December 31, 2025. The decrease primarily reflected a $43.1 million increase in treasury stock resulting from repurchases of common stock under the approved stock repurchase programs totaling $44.5 million during the quarter ended March 31, 2026 as well as a $16.7 million increase in accumulated other comprehensive loss, net of tax, from unfavorable market value adjustments in available-for-sale investment securities. These variances were partially offset by a$33.7 million increase in retained earnings, mainly due to net income of $53.9 million, partially offset by dividends declared on common stock of $14.9 million and transfers to legal surplus of $5.3 million.

Regulatory Capital

OFG and the Bank are subject to regulatory capital requirements established by the Federal Reserve Board and the FDIC. The current risk-based capital standards applicable to OFG and the Bank are based on the final capital framework for strengthening international capital standards, known as Basel III, of the Basel Committee on Banking Supervision. As of March 31, 2026, the capital ratios of OFG and the Bank continue to exceed the minimum requirements for being “well-capitalized” under the Basel III capital rules.

The risk-based capital ratios presented in Table 16 include CET1, tier 1 capital, total capital and leverage capital as of March 31, 2026 and December 31, 2025, and are calculated based on the Basel III capital rules related to the measurement of capital, risk-weighted assets and average assets. The following are OFG’s consolidated capital, dividends, and stock data, including capital ratios under the Basel III capital rules at March 31, 2026 and December 31, 2025:

TABLE 16 — CAPITAL, DIVIDENDS AND STOCK DATA

The following table presents OFG’s capital adequacy information under the Basel III capital rules:

From December 31, 2025 to March 31, 2026, the leverage capital ratio increased from 10.71% to 10.88%, the tier 1 risk-based and common equity tier 1 capital ratios decreased from 13.97% to 13.75%, and the total risk-based capital ratio decreased from 15.24% to 15.01%. The decreases in regulatory capital ratios reflected an increase in risk-weighted assets of $114.9 million, and a decrease in regulatory capital of $4.3 million. Risk-weighted assets increased mainly from higher loan balances, as a result of originations, and an increase in deferred tax assets, primarily related to an investment in OBPEF, our private equity fund, during the quarter. Regulatory capital decreased mainly due to dividends and treasury stock repurchases, partially offset by net income.

The Bank is considered “well capitalized” under the regulatory framework for prompt corrective action. The table below shows the Bank’s regulatory capital ratios at March 31, 2026 and December 31, 2025:

Non-GAAP financial measures

OFG reports certain financial measures that are not in accordance with GAAP. These non-GAAP financial measures are provided as supplemental information to the financial measures in this report that are calculated and presented in accordance with GAAP.

Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. To mitigate these limitations, OFG has procedures in place to calculate these measures using the appropriate GAAP or regulatory components. Although these non-GAAP financial measures are frequently used by stakeholders in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP.

TABLE 17 — RECONCILIATION OF TANGIBLE COMMON EQUITY AND TANGIBLE ASSETS

The following table presents a reconciliation of OFG’s total stockholders’ equity to tangible common equity and total assets to tangible assets at March 31, 2026 and December 31, 2025:

The tangible common equity to tangible assets ratio and tangible book value per common share are non-GAAP measures and, unlike tier 1 capital and common equity tier 1 capital, are not codified in the federal banking regulations. Management and many stock analysts use the tangible common equity to tangible assets ratio and tangible book value per common share in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations. Neither tangible common equity nor tangible assets or related measures should be considered in isolation or as a substitute for stockholders’ equity, total assets or any other measure calculated in accordance with GAAP. Moreover, the manner in which OFG calculates its tangible common equity, tangible assets and any other related measures may differ from that of other companies reporting measures with similar names.

Tangible common equity to tangible total assets increased from 10.47% to 10.66%, reflecting a decrease in total assets, mainly related to the decrease in cash from the $500 million Puerto Rico government deposit moved to our wealth management business as an advisory account.

OFG’s common stock is traded on the NYSE under the symbol “OFG”. At March 31, 2026 and December 31, 2025, OFG’s market capitalization for its outstanding common stock was $1.710 billion ($40.46 per share) and $1.773 billion ($40.98 per share), respectively. The following table provides the high and low prices and dividends per share of OFG’s common stock for each quarter of the last three calendar years:

In January 2026, the Board approved a new $200.0 million stock repurchase program in addition to the $100.0 million stock repurchase program approved in April 2025. The shares of common stock repurchased are held by OFG as treasury shares. OFG records treasury stock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock.

OFG did not repurchase any shares of its common stock during the quarters ended March 31, 2026 and 2025, other than through its publicly announced stock repurchase programs.

At March 31, 2026, the estimated remaining number of shares that may be purchased under the Existing Repurchase Programs is 4,785,159 and was calculated by dividing the remaining balance of $193.6 million by $40.46 (closing price of OFG’s common stock at March 31, 2026).