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

With year-over-year increases of 20.9% in EPS and 4.5% in core revenues, second quarter results reflected continued momentum across all our businesses, supported by disciplined execution, excellent customer engagement, and our differentiated operating model. OFG continues to show core deposit strength, consistent loan growth, stable credit trends, and effective balance sheet management.

During the second quarter of 2026, OFG launched a branding-marketing campaign reflecting our evolution to a digital bank with a human touch. The campaign highlights our market-leading banking and customer communication technologies in Puerto Rico combined with our people and intensely customer-focused culture. This sets us apart and reinforces our mission to help customers achieve progress. They are the point of everything we do.

On a macro level, the Puerto Rico economy remains stable, with federal reconstruction funds continuing to flow, a strong labor market, and private sector manufacturing and onshoring investment. With the economy as a tailwind, our operational strength, disciplined execution, and focus on the customer experience positions us well to capitalize on long-term growth opportunities.

Second Quarter of 2026:

Earnings per common share diluted was $1.39 compared to $1.26 in the first quarter of 2026 and $1.15 in the second quarter of 2025. Net income available to common shareholders was $58.8 million compared to $53.9 million in the first quarter of 2026 and $51.8 million in the second quarter of 2025. Total core revenues (non-GAAP) of $190.3 million compared to $185.8 million in the first quarter of 2026 and $182.2 million in the second quarter of 2025. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP financial measures” section in this quarterly report on Form 10-Q.

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%.

Total Interest Income of $197.2 million compared to $194.1 million in the first quarter of 2026 and $194.3 million in the second quarter of 2025. The second quarter of 2026 increased $3.0 million sequentially, primarily reflecting higher average balances of loans at higher average rate, $4.1 million from paid in full commercial loans compared to $3.3 million from another paid in full commercial loan in the first quarter of 2026, and one additional business day, which increased interest income by $1.6 million.

Total Interest Expense of $39.9 million compared to $40.3 million in the first quarter of 2026 and $42.4 million in the second quarter of 2025. The second quarter of 2026 decreased $462 thousand sequentially, primarily reflecting lower average balances of borrowings and brokered deposits, which more than offset the additional expense of higher average balances of core deposits, and one additional business day, which increased interest expense by $440 thousand.

Total Banking and Financial Service Revenuesof $33.0 million compared to $32.0 million in the first quarter of 2026 and $30.2 million in the second quarter of 2025. The second quarter of 2026 increased $1.0 million sequentially, reflecting higher banking service and wealth management revenues, which included $1.1 million in insurance and annuity fees, and lower mortgage banking revenues.

Pre-Provision Net Revenues (Non-GAAP)of $87.5 million compared to $91.3 million in the first quarter of 2026 and $87.6 million in the second quarter of 2025. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP financial measures” section in this quarterly report on Form 10-Q.

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.

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.

Total Non-Interest Expense of $102.8 million compared to $94.7 million in the first quarter of 2026 and $94.8 million in the second quarter of 2025. The second quarter of 2026 included $5.8 million in business related operational charges, while the first quarter of 2026 included $1.0 million in capital markets readiness and registration expenses and the benefit of $3.6 million in a business related volume incentive payment.

Income Tax Expensewas $15.7 million compared to $14.9 million in the first quarter of 2026 and $14.1 million in the second quarter of 2025.

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.

New loan production of $755.0 million compared to $608.9 million in the first quarter of 2026 and $783.7 million in the second quarter of 2025. The second quarter of 2026 production grew $146.2 million or 24.0% sequentially, reflecting increases in Puerto Rico commercial, residential mortgage, and consumer loans. Production in the second quarter of 2026 declined 3.7% year-over-year, reflecting unusually strong auto sales in the second quarter of 2025 due to the threat of tariffs.

Total Investmentsof $2.70 billion compared to $2.79 billion in the first quarter of 2026 and $2.78 billion in the second quarter of 2025 primarily reflected principal paydowns in mortgage-backed securities.

Customer Depositsof $9.74 billion compared to $9.66 billion in the first quarter of 2026 and $9.90 billion in the second quarter of 2025. The second quarter of 2026 deposits increased $84.9 million or 0.9% sequentially, reflecting government, commercial and retail deposit growth.

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.

Cash and Cash Equivalentsof $745.7 million compared to $636.5 million in the first quarter of 2026 and $851.8 million in the second quarter of 2025. The second quarter of 2026 cash increased $109.2 million sequentially primarily due to deposit growth and repayments from the investment portfolio.

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.

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

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

C - CHANGES IN NET INTEREST INCOME DUE TO:

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

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 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 $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.

The interest rate spread and net interest margin each increased 14 basis points, to 5.31% and 5.45%, respectively, from 5.17% and 5.31%.

Net interest income was positively impacted by:

•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

•A $3.8 million decrease in deposit interest expense, reflecting lower average rates and the previously mentioned $500 million government demand deposit transfer into a wealth management account in January 2026, partially offset by growth in retail and commercial deposits.

These increases were offset by:

•A $2.6 million decrease in interest income on interest bearing cash and money market investments due to the decrease of $131.0 million in average balances and a 76 basis points decrease in interest rates, and

•A $1.2 million increase on interest paid of borrowings related to securities sold under agreements to repurchase and FHLB advances, mainly from higher average balances by $112.2 million and $22.7 million, respectively.

Net interest income of $311.1 million increased by $10.1 million from $301.0 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. Tax equivalent basis net interest income of $319.1 million increased by $10.7 million, or 3.5%, from $308.4 million.

Interest rate spread increased by 4 basis points to 5.26% from 5.22% and net interest margin increased by 3 basis points to 5.40% from 5.37%.

Net interest income was positively impacted by:

•A $10.6 million increase in interest income from loans mainly driven by growth in average balances across multiple portfolios, including: (i) $12.4 million from commercial loans, mainly due to an increase of $373.0 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) $344 thousand from consumer loans mainly due to an increase of $7.6 million in the average balance. These increases were partially offset by a $1.8 million decrease from mortgage loans, mainly due to a reduction of $74.8 million in average balances from the securitization and sale of conforming loans and regular paydowns, including the extinguishment of the PCD portfolio; and $374 thousand from Non‑PCD auto loans, reflecting a 12 basis point decline in yield, which reduced interest income by $1.5 million, offset by a $26.3 million increase in average balances, which contributed to $1.1 million to interest income; and

•A $6.2 million decrease in deposit interest expense, reflecting lower average rates and the previously mentioned $500 million government demand deposit transfer into a wealth management account in January 2026, partially offset by growth in retail and commercial deposits.

These increases were partially offset by a $3.0 million decrease in interest income on cash and money market investments, reflecting lower market rates, and a $3.8 million increase in interest paid on borrowings related to higher volume of securities under agreements to repurchase and FHLB advances from liquidity management strategies.

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.

Non-interest income increased $2.6 million or 8.5% to $33.0 million from $30.4 million. The increase in non-interest income was due to:

•A $1.4 million increase in banking service revenue, primarily reflecting a $1.8 million increase in electronic banking revenue driven by higher debit card interchange income and merchant business activity. These increases were partially offset by a $290 thousand decrease in loan prepayments and servicing fees and commissions;

•An $809 thousand increase in wealth management revenues, mainly due to a $379 thousand increase in broker fees related to investment advisory services fees and securities sales commissions, and a $394 thousand increase in insurance income due to higher annuities and contingency commissions; and

•An increase of $513 thousand in mortgage banking activities, mainly due to $1.3 million increase in servicing fees, including a $1.5 million favorable variance in the valuation of mortgage servicing rights, partially offset by a $400 thousand decrease in gains on sale of loans and securitization and $370 thousand decrease in gains on sale of repurchased loans.

Non-interest income increased $5.3 million to $65.2 million from $59.9 million. The increase was mainly due to:

•A $2.4 million increase in banking service revenues, reflecting a $3.1 million increase in electronic banking revenues driven by higher debit card interchange income, merchant business activity, and cash management and account analysis fees. These increases were partially offset by a $468 thousand decrease in loan prepayments and servicing fees and commissions, and a $288 thousand decrease in deposit account fees due to lower checking account service charges;

•A $1.9 million increase in mortgage banking activities, mainly due to $3.1 million in servicing fees, including a $3.4 million favorable variance in the valuation of mortgage servicing rights, partially offset by an $899 thousand decrease in gains on sale of loans and securitization and a $315 thousand decrease in gains on sale of repurchased loans.

•A $1.3 million increase in wealth management revenue primarily reflecting a $926 thousand increase in broker fees related to investment advisory service fees, securities sales commissions and mutual funds retailer fees, and a $215 thousand increase in insurance income due to higher premiums and contingency commissions.

TABLE 3 - NON-INTEREST EXPENSES SUMMARY

Non-Interest Expense

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:

•A $5.6 million increase in operational losses and related loss provisions, which includes a provision of $5.8 million in the second quarter of 2026;

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

•A $643 thousand increase in advertising, business promotion, and strategic initiatives driven by a new branding-marketing campaign during 2026.

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

•A $786 thousand decrease in foreclosed real estate and other repossessed assets expenses, net, primarily reflecting a $470 thousand decrease in credit related expenses, which includes $421 thousand in escrow recoveries related to acquired residential loans, and a $319 thousand favorable variance in gains on sales of other repossessed assets due to improved pricing.

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.

Non-interest expense was $197.5 million, representing an increase of 4.9% or $9.3 million, compared to $188.3 million. The increase in non-interest expense was mainly due to:

•A $6.2 million increase in operational losses and related loss provisions, which includes a provision of $5.8 million in the second quarter of 2026;

•A $3.0 million increase in compensation and employee benefits from higher salaries and benefits, including payroll taxes;

•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

•A $1.0 million increase in advertising, business promotion, and strategic initiatives driven by a new branding-marketing campaign during 2026.

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

•A $1.9 million decrease in foreclosed real estate and other repossessed assets expenses, net. This reduction primarily reflects a $1.4 million increase in gains from the sale of other repossessed assets driven by improved pricing and a $647 thousand decrease in credit related expenses, which includes $421 thousand in escrow recoveries related to acquired residential loans during 2026.

•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

•A $1.1 million decrease in electronic banking charges mainly due to the benefit recognized from a $3.6 million business-related volume incentive payment in the first quarter of 2026.

The efficiency ratio was 52.52% compared to 52.23%. Amounts presented as part of non-interest income that were excluded from the efficiency ratio computation for 2026 and 2025 amounted to $218 thousand and $489 thousand, respectively.

Provision for Credit Losses

Provision for credit losses decreased by $8.7 million to $13.0 million from $21.7 million. The provision for credit losses for the second quarter of 2026, reflected $14.7 million dollars for increased loan volume and $1.9 million dollars in commercial loan recoveries. The provision for credit losses for the second quarter of 2025, reflected adjustments of $17.2 million for increased loan volume, $3.7 million in specific reserves and $677 thousand due to alignment of model assumptions and risk weighting factors mainly in Puerto Rico.

Provision for credit losses decreased by $11.9 million to $35.5 million from $47.4 million. The provision for credit losses for the six-month period ended June 30, 2026, reflected $32.2 million related to loan volume and $4.3 million related to specific commercial loan reserves. The provision for credit losses for the six-month period ended June 30, 2025, reflected $34.6 million related to loan volume, $8.5 million in commercial loans specific reserves and $6.0 million due to alignment of model assumptions and risk weighting factors mainly in Puerto Rico.

Income Tax Expense

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.

Income tax expense increased by $2.6 million to $30.6 million from $28.0 million, primarily due to higher income before taxes and fewer favorable discrete tax benefits. OFG maintained an ETR lower than the statutory rate for the six-month periods ended June 30, 2026 and 2025 of 21.3% and 22.3%, reflecting exempt income, investments subject to preferential tax treatment under the PR Code, a discrete tax windfall on stock options, and benefits related to the purchase of tax credits at a discount.

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 and six-month periods ended June 30, 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 $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.

Banking

OFG’s banking segment income before income taxes increased $11.6 million to $45.5 million from $33.9 million, mainly due to:

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

•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;

•An $8.7 million decrease in provision for credit losses, mainly due to lower specific reserves and changes in loan growth; and

•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.

These increases in banking segment income were partially offset by a $7.3 million increase in non-interest expenses reflecting

$5.8 million in business-related operational charges and a $1.4 million increase in compensation and employee benefits from higher salaries and benefits.

Wealth Management

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.

Treasury

Treasury segment income before income taxes decreased $3.3 million to $24.3 million from $27.6 million, mainly due to a $2.1 million decrease in interest income on interest-bearing cash and money market investments reflecting lower average balances and interest rates, and a $1.1 million increase in interest expense reflecting $1.2 million from interest paid on borrowings, which were utilized to enhance liquidity and support strategic growth in the commercial loan portfolio.

Comparison of six-month periods ended June 30, 2026 and 2025

Banking

OFG’s banking segment income before income taxes increased $25.4 million to $87.4 million from $62.0 million, mainly due to:

•A $10.6 million increase in interest income from loans, driven by higher loan balances;

•A $7.1 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;

•A $11.9 million decrease in provision for credit losses, mainly due to lower specific reserves and the alignment in prior period of economic and loss rate model assumptions; and

•A $4.0 million increase in non-interest income, related to $2.4 million increase in banking service revenue due to higher customer activity and transaction volumes and a $1.9 million increase in mortgage banking activities, mainly from favorable variance in the valuation of the mortgage servicing rights.

These increases in banking segment income were partially offset by a $7.3 million increase in non-interest expenses, reflecting $5.8 million in business-related operational charges, $3.0 million higher salaries and benefits, and $1.0 million from new branding-marketing campaign during 2026.

Wealth Management

Income before income taxes for this segment increased to $8.8 million from $8.0 million, reflecting a $1.2 million increase in non-interest income from higher broker-dealer fees related to investment advisory service fees, securities sales commissions, and mutual funds retailer fees, partially offset by a $205 thousand increase in professional and service fees related to consulting and advisory services.

Treasury

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.

ANALYSIS OF FINANCIAL CONDITION

Assets Owned

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.

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.

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.

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.

Financial Assets Managed

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.

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 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.

As of both June 30, 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 $8.117 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:

•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.

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.

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.

•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.

Mortgage loan production remained stable at $55.6 million in the second quarters of 2026 and 2025 and increased by 5.3% or $4.9 million to $97.5 million in the six-month period ended June 30, 2026, from $92.6 million for the same period of 2025.

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 $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.

•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.

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

TABLE 7 - PUERTO RICO GOVERNMENT RELATED LOANS

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.

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 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.

The decline in the allowance for credit losses reflected, in part, the impact of the sale of two non-performing loans during the period, which reduced specific credit exposure and contributed to improved asset-quality metrics. However, management continued to retain qualitative reserves for areas of uncertainty not fully captured by the quantitative model, including trends in the auto portfolio. As a result, the reserve release reflected the improved risk profile following the non-performing loan sale, while the remaining qualitative reserves demonstrate continued prudence in light of portfolio-specific risk profile.

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 to 14). At June 30, 2026, OFG had $62.2 million of non-accrual loans held-for-investment, a $62.4 million decrease compared to $124.6 million at December 31, 2025. The decrease is mainly related to the sale of two previously reserved non-performing commercial loans during the second quarter of 2026 with an aggregate reporting balance of $49.6 million, recognizing $15.6 million in charge-offs.

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 June 30, 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 June 30, 2026, and December 31, 2025, the outstanding balance of these residential mortgage loans was $5.1 million and $5.5 million, respectively.

At June 30, 2026, OFG’s non-performing assets decreased by 46.2% to $73.2 million (0.60% of total assets) from $136.0 million (1.09% of total assets) at December 31, 2025, mainly related to the previously mentioned sale of non-performing loans during the second quarter of 2026.

Foreclosed real estate decreased from $2.5 million at December 31, 2025, to $1.7 million at June 30, 2026, and other repossessed assets increased from $3.5 million at December 31, 2025, to $4.2 million at June 30, 2026, both recorded at fair value. OFG does not expect non-performing loans to result in significantly higher losses. At June 30, 2026, the allowance coverage ratio to non-performing loans was 279.7% (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 June 30, 2026, OFG’s non-performing commercial loans amounted to $32.5 million (48.2% of OFG’s non-performing loans), a $54.8 million or 62.8% decrease from $87.3 million at December 31, 2025 (67.1% of OFG’s non-performing loans). During the second quarter of 2026, OFG sold two non-performing commercial loans held-for-investment with an aggregate reporting balance of $49.6 million. 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 June 30, 2026, OFG’s non-performing mortgage loans totaled $16.5 million (24.5% of OFG’s non-performing loans), a 6.6% decrease 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 June 30, 2026, OFG’s non-performing consumer loans amounted to $3.8 million (5.6% of OFG’s non-performing loans), a 13.2% 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 June 30, 2026, OFG’s non-performing auto loans amounted to $14.6 million (21.7% of OFG’s total non-performing loans), a 29.7% 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. 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 June 30, 2026, amounted to $28.8 million (1.40% of average loans), increasing by $16.0 million when compared to $12.8 million (0.64% of average loans) in prior year quarter. Net charge-offs for the six-month period ended June 30, 2026, amounted to $50.2 million (1.22% of average loans), increasing by $17.0 million when compared to $33.2 million (0.84% of average loans) in prior year period.

Net charge-offs variances were as follows:

•Residential mortgage loans net recoveries in the second quarter of 2026 amounted to $343 thousand, decreasing by $423 thousand when compared to $766 thousand in prior year quarter. Residential mortgage loans net recoveries for the six-month period ended June 30, 2026, amounted to $632 thousand, decreasing by $638 thousand when compared to $1.3 million in prior year period.

•Commercial loans net charge-offs in the second quarter of 2026 amounted to $15.2 million, increasing by $15.1 million when compared to $153 thousand in prior year quarter. The charge-offs for the six-month period ended June 30, 2026, amounted to $19.2 million, increasing by $16.2 million when compared to $3.0 million in prior year period. The charge-offs for the quarter and six-month period ended June 30, 2026, included $15.6 million charge-offs recognized from the sale of two non-performing commercial loans during the period. Net charge-offs for the six-month period ended June 30, 2025, included a $2.9 million partial charge-off related to a previously reserved U.S. commercial loan.

•Consumer loans net charge-offs in the second quarter of 2026 amounted to $6.6 million, increasing by $529 thousand when compared to net charge-offs of $6.1 million in the prior year quarter. The charge-offs for the six-month period ended June 30, 2026, amounted to $14.4 million, increasing by $754 thousand when compared to net charge-offs of $13.6 million in prior year period.

•Auto loans net charge-offs for the second quarters of 2026 and 2025 remained stable at $7.3 million. The charge-offs for the six-month period ended June 30, 2026, amounted to $17.3 million, decreasing by $531 thousand when compared to net charge-offs of $17.8 million in prior year period.

TABLE 12 — NON-PERFORMING ASSETS

The decrease in non-performing assets and related percentages is mainly due to the sale of two non-performing commercial loans during the second quarter of 2026 with a reporting balance of $49.6 million.

TABLE 13 — NON-ACCRUAL LOANS

The decrease in non-accrual loans and related percentages is mainly due to the sale of two non-performing commercial loans during the second quarter of 2026 with a reporting balance of $49.6 million.

TABLE 14 - NON-PERFORMING LOANS

The decrease in non-performing loans and related percentages is mainly due to the sale of two non-performing commercial loans during the second quarter of 2026 with an aggregate reporting balance of $49.6 million.

TABLE 15 - LIABILITIES SUMMARY AND COMPOSITION

Liabilities and Funding Sources

As shown in Table 15 above, at June 30, 2026, OFG’s total liabilities were $10.747 billion, representing a 3.0% decrease from $11.076 billion at December 31, 2025. Deposits and borrowings, OFG’s primary funding sources, amounted to $10.540 billion at June 30, 2026, compared to $10.820 billion at December 31, 2025. Deposits, excluding accrued interest payable, decreased by $279.0 million or 2.7%, driven primarily by a decline in demand deposits of $912.6 million, partially offset by the growth of $535.5 million in time deposits and $98.1 million in savings and money market accounts.

At June 30, 2026, and December 31, 2025, total public fund deposits from various Puerto Rico government municipalities, agencies and corporations amounted to $1.301 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 $1.302 billion and $1.691 billion at June 30, 2026, and December 31, 2025, respectively.

As of June 30, 2026, borrowings amounted to $556.6 million, consisting of short-term FHLB advances and repurchase agreements. This balance decreased by $689 thousand or 0.1% compared to December 31, 2025.

Stockholders’ Equity

At June 30, 2026, OFG’s total stockholders’ equity was $1.407 billion, representing a 1.2% increase from $1.390 billion at December 31, 2025. The increase primarily reflected a $72.3 million increase in retained earnings, mainly due to net income of $112.7 million, partially offset by dividends declared on common stock of $29.5 million and transfers to legal surplus of $10.9 million. These variances were partially offset by a $43.0 million increase in treasury stock resulting from repurchases of common stock under the approved stock repurchase programs totaling $44.5 million during the six-months ended June 30, 2026, as well as a $22.0 million increase in accumulated other comprehensive loss, net of tax, from unfavorable market value adjustments in available-for-sale investment securities.

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 June 30, 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 June 30, 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 June 30, 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 June 30, 2026, the leverage capital ratio increased from 10.71% to 11.23%, the tier 1 risk-based and common equity tier 1 capital ratios increased from 13.97% to 14.07%, and the total risk-based capital ratio increased from 15.24% to 15.33%. The increases in regulatory capital ratios reflected a $43.9 million increase in regulatory capital, partially offset by an increase in risk-weighted assets of $230.8 million. Regulatory capital increased mainly due to net income, partially offset by dividends and treasury stock repurchases. Risk-weighted assets increased mainly from higher loan balances from originations, and an increase in deferred tax assets, primarily related to an investment in OBPEF, our private equity fund, during the period.

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 June 30, 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. Below is a reconciliation of non-GAAP financial measures:

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 June 30, 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 10.90%, 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.

Common Stock

OFG’s common stock is traded on the NYSE under the symbol “OFG”. At June 30, 2026, and December 31, 2025, OFG’s market capitalization for its outstanding common stock was $2.074 billion ($49.07 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 $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 common stock during the six-month periods ended June 30, 2026 and 2025, other than through its publicly announced stock repurchase programs.

At June 30, 2026, the estimated remaining number of shares that may be purchased under the repurchase programs is 3,945,538 and was calculated by dividing the remaining balance of $193.6 million by $49.07 (closing price of OFG’s common stock June 30, 2026).