• OFG Bancorp recently announced that its Board of Directors approved a new open-ended US$200 million stock repurchase authorization and raised the regular quarterly cash dividend by 17% to US$0.35 per share, payable on April 15, 2026, to shareholders of record on March 31, 2026.
• These capital actions, coming alongside the completion of a prior buyback program and higher quarterly earnings, highlight management’s current focus on returning excess capital to shareholders.
• Against this backdrop, we’ll explore how OFG Bancorp’s larger buyback authorization shapes its investment narrative for income- and capital-focused investors.

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What Is OFG Bancorp's Investment Narrative?

For OFG Bancorp, the big-picture thesis still rests on a bank that has historically turned solid net interest income into high-quality earnings, while trading on a lower multiple than many peers. To be comfortable as a shareholder, you need to believe management can keep balancing growth, credit quality and capital returns without eroding that earnings base. The new US$200 million open-ended buyback and another 17% dividend hike clearly tilt the story toward capital return, especially after the stock’s recent pullback and completion of the prior repurchase plan. In the short term, that could support per-share metrics and income appeal, but it also raises the stakes around rising net charge-offs and pressure on forward earnings. If credit costs or auto loan issues worsen, this more aggressive capital return stance could amplify the downside.

However, investors should also be aware of how rising net charge-offs may pressure future earnings. Despite retreating, OFG Bancorp's shares might still be trading above their fair value and there could be some more downside. Discover how much.

Exploring Other Perspectives

The Simply Wall St Community’s two fair value views span roughly US$47.60 to just over US$99, reflecting very different expectations. Set that against rising charge-offs and a more aggressive buyback, and you can see why opinions on OFG’s performance potential diverge so widely.

Explore 2 other fair value estimates on OFG Bancorp - why the stock might be worth just $47.60!

Build Your Own OFG Bancorp Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your OFG Bancorp research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free OFG Bancorp research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate OFG Bancorp's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.