OFG BANCORP

Previous wording

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, “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, 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.

Current wording

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 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, 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.

Previous wording

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.

Current wording

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 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.

Previous wording

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. Employment data published by such government agency indicates continued gains across multiple industries. As of January 2026, total non-farm payroll employment averaged approximately 951,600 jobs, reflecting a 1.7% increase from the previous month and a slight decrease of 0.1% year over year. Economic activity has benefited from public sector reconstruction funding, private investment, and onshoring initiatives. However, OFG continues to monitor global economic and geopolitical conditions, related uncertainties, and their possible impact on Puerto Rico's economy, which could influence OFG’s business and operational results.

Current wording

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, employment data indicates continued gains across multiple industries. As of May 2026, total non-farm payroll employment averaged approximately 962,600 jobs, reflecting a 0.3% increase from the previous month and a 1.0% 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 infrastructure 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’s economy, which could influence OFG’s business and operational results.

Previous wording

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%.

Current wording

Performance metrics: Net interest margin of 5.45%, return on average assets of 1.93%, return on average tangible common stockholders’ equity of 17.94%, and efficiency ratio of 54.04%.

Previous wording

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.

Current wording

Total Provision for Credit Losses of $13.0 million compared to $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 second 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 for newly classified small commercial loans.

Previous wording

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.

Current wording

Credit Quality: Net charge-offs (“NCOs”) of $28.8 million (1.40% of average loans) compared to $21.4 million (1.05% of average loans) in the first quarter of 2026 and $12.8 million (0.64% of average loans) in the second 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 changes in second quarter of 2026 NCOs and NPLs primarily reflected the sales of the above-mentioned telecom loan and a U.S. commercial loan.

Previous wording

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.

Current wording

Loans Held-for-Investmentof $8.30 billion compared to $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 second quarter of 2026 grew $62.4 million or 0.8% sequentially, reflecting increases in Puerto Rico commercial and consumer loans.

Previous wording

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.

Current wording

Total Borrowings and Brokered Deposits of $795.5 million compared to $746.6 million in the first quarter of 2026 and $732.3 million in the second quarter of 2025. The second quarter of 2026 total borrowings and brokered deposits increased $48.9 million sequentially for liquidity management purposes.

Previous wording

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.

Current wording

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

Previous wording

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.

Current wording

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 June 30, 2026 and 2025.

Previous wording

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.

Current wording

Net interest income of $157.3 million increased $5.4 million from $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 $5.7 million or 3.7% to $161.4 million from $155.7 million.

Previous wording

•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

Current wording

•A $5.4 million increase in loan interest income, driven by growth in average balances across multiple portfolios, including: (i) $6.9 million from commercial loans, mainly due to the effect of increase of $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; and (ii) $49 thousand from consumer loans reflecting a $3.9 million increase in the average balance. These increases were partially offset by a $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 a $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

Previous wording

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:

Current wording

Non-interest expense was $102.8 million, representing an increase of 8.5% or $8.0 million, compared to $94.8 million. The increase in non-interest expense was mainly due to:

Previous wording

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

Current wording

•A $1.6 million increase in compensation and employee benefits, as a result of higher salaries and benefits, including payroll taxes; and

Previous wording

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.

Current wording

The efficiency ratio was 54.04% compared to 52.04%. 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 June 30, 2026 and 2025, amounted to $39 thousand and $184 thousand, respectively.

Previous wording

•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.

Current wording

•A $1.1 million increase in professional and service fees mainly due to $1.0 million of costs associated with a capital markets readiness and registration process; and

Previous wording

•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.

Current wording

•A $1.8 million decrease in occupancy, equipment and infrastructure costs, driven by lower internet services expenses of $965 thousand, $445 thousand of insurance reimbursement related to equipment, and $112 thousand in reduced software maintenance expenses; and

Previous wording

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%.

Current wording

Income tax expense for the second quarter of 2026 increased by $1.6 million to $15.7 million from $14.1 million, primarily due to higher income before taxes. OFG maintained an ETR lower than the statutory rate for the second quarters of 2026 and 2025 of 21.1% and 21.4%, respectively. The lower ETR is mainly related to exempt income and investments subject to preferential tax treatment under the PR Code.

Previous wording

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.

Current wording

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 and six-month periods ended June 30, 2026 and 2025.

Previous wording

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.

Current wording

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 $286.6 million and $281.0 million at June 30, 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 the result of higher average balance.

Previous wording

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

Current wording

•A $5.0 million increase in loan interest income, driven by higher average loan balances;

Previous wording

•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.

Current wording

•A $3.6 million decrease in interest expense, reflecting the $500 million government demand deposit transfer into a wealth management account in January 2026 and lower interest rates, partially offset by higher retail and commercial deposit balances;

Previous wording

•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.

Current wording

•A $1.7 million increase in non-interest income primarily related to $1.4 million increase in banking service revenue due to higher customer activity and transaction volumes and a $513 thousand increase in mortgage banking activities, mainly from favorable variance in the valuation of the mortgage servicing rights.

Previous wording

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.

Current wording

Wealth management segment revenue consists of commissions and fees earned from fiduciary activities, securities brokerage and investment advisory services, and insurance and reinsurance activities. Income before income taxes for this segment increased to $4.7 million from $4.4 million, mainly from higher non-interest income of $825 thousand reflecting higher broker-dealer fees related to investment advisory service fees, securities sales commissions, and mutual funds retailer fees.

Previous wording

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.

Current wording

Treasury segment income before income taxes decreased $8.2 million to $47.1 million from $55.3 million. The decrease was mainly due to a $4.8 million increase in interest expense, reflecting $3.8 million from interest paid on borrowings and $839 thousand from brokered deposits, which were utilized to enhance liquidity and support strategic growth in the commercial loan portfolio, a $1.9 million decrease in interest income on interest-bearing cash and money market investments due to lower average balances and interest rates, and a $1.1 million increase in professional and service fees, related to $1.0 million of costs associated to a capital markets readiness and registration process.

Previous wording

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.

Current wording

At June 30, 2026, OFG’s total assets amounted to $12.155 billion, a decrease of $311.1 million, when compared to $12.466 billion at December 31, 2025.

Previous wording

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.

Current wording

Cash and due from banks decreased by $295.6 million to $740.5 million, reflecting the $500 million transfer of a government demand deposit into a wealth management account in January 2026.

Previous wording

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.

Current wording

The investment portfolio decreased $146.5 million or 5.15% primarily reflecting $216.1 million principal paydowns, as well as $26.5 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 $44.9 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.

Previous wording

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.

Current wording

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 June 30, 2026, OFG’s net loan portfolio increased by $102.8 million or 1.3% reflecting increases in US and Puerto Rico commercial loans and consumer loans, partially offset by a decrease in auto loans, mortgage securitizations, and portfolio run-off.

Previous wording

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.

Current wording

At June 30, 2026, OFG’s financial assets include assets managed by its trust division and 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 June 30, 2026, and December 31, 2025, total assets managed by OFG’s trust division amounted to $2.484 billion and $2.490 billion, respectively. The $6.0 million decrease reflected the discontinuance of Keogh plan services during the period, partially offset by favorable market conditions. 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 June 30, 2026, total assets managed by the securities broker-dealer and insurance agency subsidiaries from their customers’ investment accounts amounted to $3.336 billion, compared to $2.613 billion at December 31, 2025. The $723.2 million increase in broker-dealer related assets is mainly due to the transfer of a $500 million government demand deposit from the Bank into a wealth management account during the period, as well as favorable changes in market conditions.

Previous wording

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.

Current wording

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 second quarter of 2026, OFG performed an assessment of events or circumstances that could trigger reductions in the book value of goodwill. Based on this assessment, no impairments were identified at June 30, 2026.

Previous wording

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:

Current wording

OFG’s loan portfolio is composed of commercial, mortgage, consumer, and auto loans. As shown in Table 6 above, total loans, net, amounted to $8.117 billion at June 30, 2026, a 1.3% 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:

Previous wording

•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.

Current wording

•Commercial loan portfolio amounted to $3.619 billion (43.6% of the gross loan portfolio) compared to $3.490 billion (42.6% of the gross loan portfolio) at December 31, 2025, a 3.7% increase resulting from originations and credit lines usage in the six-month period ended June 30, 2026. Commercial loans secured by non-owner-occupied commercial real estate amounted to $761.9 million and $774.1 million at June 30, 2026, and December 31, 2025, respectively, which represented 9.2% and 9.4% of our total gross loan portfolio held-for-investment. Commercial US loans amounted to $871.5 million and $830.0 million at June 30, 2026, and December 31, 2025, respectively, which represented 10.5% and 10.1% of our total gross loan portfolio held-for-investment.

Previous wording

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.

Current wording

During the six-month period ended June 30, 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. Additionally, during the second quarter of 2026, OFG sold two previously reserved non-performing commercial loans held-for-investment with an aggregate reporting balance of $49.6 million and recognized $15.6 million in related charge-offs.

Previous wording

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.

Current wording

Commercial loan production increased by 6.9% or $27.7 million to $428.7 million in the second quarter of 2026 from $401.1 million in the prior year quarter and increased by 18% or $109.7 million to $731.9 million in the six-month period ended June 30, 2026 from $622.2 million for the same period of 2025, resulting from the commercial PR loan portfolio, while commercial US loan production decreased slightly. Commercial US loans activities include the purchase of middle-market senior secured cash flow loan participations and the purchase of participations in loans to small and medium sized businesses.

Previous wording

•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.

Current wording

•Mortgage loan portfolio amounted to $1.367 billion (16.5% of the gross loan portfolio) compared to $1.390 billion (17.0% of the gross originated loan portfolio) at December 31, 2025, a 1.7% 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 $52.9 million and $56.5 million at June 30, 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.

Previous wording

•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.

Current wording

•Consumer loan portfolio amounted to $687.2 million (8.3% of the gross loan portfolio) compared to $683.5 million (8.3% of the gross loan portfolio) at December 31, 2025, a 0.5% increase resulting from originations. Consumer loan production increased by 7.2% to $82.3 million in the second quarter of 2026 from $76.8 million in the prior year quarter, and increased by 4.3% or $6.2 million to $150.8 million in the six-month period ended June 30, 2026 from $144.6 million for the same period in 2025.

Previous wording

•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.

Current wording

•Auto loans portfolio amounted to $2.624 billion (31.6% 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 24.7% or $61.8 million to $188.4 million in the second quarter of 2026 compared to $250.3 million in the prior year quarter, and decreased by 20.6% or $99.5 million to $383.7 million in the six-month period ended June 30, 2026, from $483.2 million for the same period of 2025. Production in the year-ago periods reflected unusually strong auto sales from the threat of tariffs in the second quarter of 2025.

Previous wording

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.

Current wording

At June 30, 2026, OFG has $94.0 million of direct credit exposure to the Puerto Rico government, a $16.7 million increase 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 and are in current status. The good faith, credit and unlimited taxing power of each issuing municipality are pledged for the payment of its general obligations.

Previous wording

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.

Current wording

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 and six-month period ended June 30, 2026, and 2025 and as of June 30, 2026 and December 31, 2025. In addition, Table 6 sets forth the composition of the loan portfolio.