What Happened?
Shares of puerto Rican financial services company OFG Bancorp (NYSE:OFG) jumped 4.6% in the afternoon session after the company announced an increase in its quarterly dividend and a new $200 million stock repurchase plan.
OFG Bancorp declared a dividend of $0.35 per share, representing a $0.05 increase from the prior dividend paid. In addition, the company's Board of Directors approved the new stock repurchase authorization. These actions are typically seen as positive signs by investors, as they demonstrate a company's commitment to returning capital to shareholders.
An increased dividend provides a larger direct cash payment, while a stock buyback reduces the number of shares available, which can increase the value of the remaining shares. Such moves often suggest that management is confident in the company's financial stability and future earnings potential.
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What Is The Market Telling Us
OFG Bancorp’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 8.9% on the news that the company reported mixed fourth-quarter 2025 results, where a beat on earnings per share was overshadowed by misses on key profitability and efficiency metrics. While the bank's earnings per share of $1.27 beat analyst estimates and its revenue of $185.4 million was in line, investors appeared to focus on the weaker underlying details. The company's net interest income, a core measure of bank profitability from lending, came in slightly below expectations. More significantly, OFG's efficiency ratio was 56.7%, missing the consensus estimate by 4.17 percentage points. A higher efficiency ratio indicates that a bank's expenses are consuming a larger portion of its revenue, signaling weaker operational performance than anticipated and weighing on investor sentiment.
OFG Bancorp is down 3.4% since the beginning of the year, and at $39.63 per share, it is trading 12.9% below its 52-week high of $45.47 from July 2025. Investors who bought $1,000 worth of OFG Bancorp’s shares 5 years ago would now be looking at an investment worth $2,306.
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