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Investment Securities | 6 Months Ended
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Jun. 30, 2021
Investment Securities [Abstract] |
Investment Securities | NOTE 3 – INVESTMENT SECURITIES Money Market Investments OFG considers as cash equivalents all money market instruments that are not pledged and that have maturities of three months or less at the date of acquisition. At June 30, 2021 and December 31, 2020, money market instruments included as part of cash and cash equivalents amounted to $11.2 million and $11.9 million, respectively. Investment Securities The amortized cost, gross unrealized gains and losses, fair value, and weighted average yield of the securities owned by OFG at June 30, 2021 and December 31, 2020, were as follows:
| June 30, 2021
|  |  | Gross |  | Gross |  |  |  | Weighted
| Amortized |  | Unrealized |  | Unrealized |  | Fair |  | Average
| Cost |  | Gains |  | Losses |  | Value |  | Yield
| (In thousands)
Available-for-sale |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 208,840 |  | $ | 3,481 |  | $ | 2,242 |  | $ | 210,079 |  | 1.71%
GNMA certificates |  | 237,547 |  |  | 8,256 |  |  | 176 |  |  | 245,627 |  | 2.35%
CMOs issued by US government-sponsored agencies |  | 30,546 |  |  | 762 |  |  | - |  |  | 31,308 |  | 1.96%
Total mortgage-backed securities |  | 476,933 |  |  | 12,499 |  |  | 2,418 |  |  | 487,014 |  | 2.05%
Investment securities |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury securities |  | 10,739 |  |  | 171 |  |  | - |  |  | 10,910 |  | 1.48%
Obligations of US government-sponsored agencies |  | 1,396 |  |  | 11 |  |  | - |  |  | 1,407 |  | 1.39%
Other debt securities |  | 2,253 |  |  | 35 |  |  | - |  |  | 2,288 |  | 4.73%
Total investment securities |  | 14,388 |  |  | 217 |  |  | - |  |  | 14,605 |  | 1.98%
Total securities available for sale | $ | 491,321 |  | $ | 12,716 |  | $ | 2,418 |  | $ | 501,619 |  | 2.05%
Held-to-maturity |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 125,138 |  | $ | 63 |  | $ | 444 |  | $ | 124,757 |  | 1.70%
| December 31, 2020
|  |  | Gross |  | Gross |  |  |  | Weighted
| Amortized |  | Unrealized |  | Unrealized |  | Fair |  | Average
| Cost |  | Gains |  | Losses |  | Value |  | Yield
| (In thousands)
Available-for-sale |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 206,195 |  | $ | 4,786 |  | $ | 32 |  | $ | 210,949 |  | 1.78%
GNMA certificates |  | 174,472 |  |  | 8,478 |  |  | 178 |  |  | 182,772 |  | 2.21%
CMOs issued by US government-sponsored agencies |  | 38,309 |  |  | 905 |  |  | - |  |  | 39,214 |  | 1.96%
Total mortgage-backed securities |  | 418,976 |  |  | 14,169 |  |  | 210 |  |  | 432,935 |  | 1.97%
Investment securities |  |  |  |  |  |  |  |  |  |  |  |  |
US Treasury securities |  | 10,740 |  |  | 243 |  |  | - |  |  | 10,983 |  | 1.49%
Obligations of US government-sponsored agencies |  | 1,585 |  |  | 21 |  |  | - |  |  | 1,606 |  | 1.39%
Other debt securities |  | 875 |  |  | 39 |  |  | - |  |  | 914 |  | 2.31%
Total investment securities |  | 13,200 |  |  | 303 |  |  | - |  |  | 13,503 |  | 1.53%
Total securities available-for-sale | $ | 432,176 |  | $ | 14,472 |  | $ | 210 |  | $ | 446,438 |  | 1.96%
At June 30, 2021 and December 31, 2020, all securities held by OFG are issued by U.S. government entities and agencies that have a zero-credit loss assumption. At both June 30, 2021 and December 31, 2020, the Bank’s international banking entities held short-term US Treasury securities in the amount of $305 thousand and $325 thousand as the legal reserve required for international banking entities under Puerto Rico law. These instruments cannot be withdrawn or transferred without the prior written approval of the OCFI. The amortized cost and fair value of OFG’s investment securities at June 30, 2021, by contractual maturity, are shown in the next table. Securities not due on a single contractual maturity date, such as collateralized mortgage obligations, are classified in the period of final contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
| June 30, 2021
| Available-for-sale |  | Held-to-maturity
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
| (In thousands)
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |
Due less than one year |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 6 |  | $ | 6 |  | $ | - |  | $ | -
Total due in less than one year |  | 6 |  |  | 6 |  |  | - |  |  | -
Due from 1 to 5 years |  |  |  |  |  |  |  |  |  |  |
GNMA certificates |  | 2,203 |  |  | 2,274 |  |  | - |  |  | -
Total due from 1 to 5 years |  | 2,203 |  |  | 2,274 |  |  | - |  |  | -
Due after 5 to 10 years |  |  |  |  |  |  |  |  |  |  |
CMOs issued by US government-sponsored agencies | $ | 28,246 |  | $ | 28,976 |  | $ | - |  | $ | -
FNMA and FHLMC certificates |  | 90,140 |  |  | 93,172 |  |  | - |  |  | -
GNMA certificates |  | 45,513 |  |  | 46,827 |  |  | - |  |  | -
Total due after 5 to 10 years |  | 163,899 |  |  | 168,975 |  |  | - |  |  | -
Due after 10 years |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 118,694 |  | $ | 116,901 |  | $ | 125,138 |  | $ | 124,757
GNMA certificates |  | 189,831 |  |  | 196,526 |  |  | - |  |  | -
CMOs issued by US government-sponsored agencies |  | 2,300 |  |  | 2,332 |  |  | - |  |  | -
Total due after 10 years |  | 310,825 |  |  | 315,759 |  |  | 125,138 |  |  | 124,757
Total mortgage-backed securities |  | 476,933 |  |  | 487,014 |  |  | 125,138 |  |  | 124,757
Investment securities |  |  |  |  |  |  |  |  |  |  |
Due less than one year |  |  |  |  |  |  |  |  |  |  |
Obligations of US government-sponsored agencies | $ | 1,396 |  | $ | 1,407 |  | $ | - |  | $ | -
US Treasury securities |  | 735 |  |  | 735 |  |  | - |  |  | -
Other debt securities |  | 250 |  |  | 250 |  |  | - |  |  | -
Total due in less than one year |  | 2,381 |  |  | 2,392 |  |  | - |  |  | -
Due from 1 to 5 years |  |  |  |  |  |  |  |  |  |  |
US Treasury securities | $ | 10,004 |  | $ | 10,175 |  | $ | - |  | $ | -
Other debt securities |  | 2,003 |  |  | 2,038 |  |  | - |  |  | -
Total due from 1 to 5 years |  | 12,007 |  |  | 12,213 |  |  | - |  |  | -
Due from 5 to 10 years |  |  |  |  |  |  |  |  |  |  |
Total investment securities |  | 14,388 |  |  | 14,605 |  |  | - |  |  | -
Total | $ | 491,321 |  | $ | 501,619 |  | $ | 125,138 |  | $ | 124,757
During the six-month period ended June 30, 2020, OFG sold $316.3 million available-for-sale mortgage-backed securities and recognized a $4.7 million gain in the sale. There were no sales of securities during the six-month period ended on June 30, 2021. During the six-month periods ended June 30, 2021 and 2020, OFG retained securitized GNMA pools totaling $84.0 million and $31.1 million amortized cost, respectively, at a yield of 2.66% and 2.81%, from its own originations.
| Six-Month Period Ended June 30, 2020
|  |  | Book Value |  |  |  |
Description | Sale Price |  | at Sale |  | Gross Gains |  | Gross Losses
| (In thousands)
Sale of securities available-for-sale |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 229,571 |  | $ | 227,213 |  | $ | 2,358 |  | $ | -
GNMA certificates |  | 91,413 |  |  | 89,043 |  |  | 2,370 |  |  | -
Total | $ | 320,984 |  | $ | 316,256 |  | $ | 4,728 |  | $ | -
The following tables show OFG’s gross unrealized losses and fair value of investment securities available-for-sale and held-to-maturity at June 30, 2021 and December 31, 2020, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position:
| June 30, 2021
| Less than 12 months
| Amortized |  | Unrealized |  | Fair
| Cost |  | Loss |  | Value
| (In thousands)
Securities available-for-sale |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 106,318 |  | $ | 2,242 |  | $ | 104,076
GNMA certificates |  | 967 |  |  | 176 |  |  | 791
| $ | 107,285 |  | $ | 2,418 |  | $ | 104,867
Held-to-maturity |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 100,180 |  | $ | 444 |  | $ | 99,736
| December 31, 2020
| Less than 12 months
| Amortized |  | Unrealized |  | Fair
| Cost |  | Loss |  | Value
| (In thousands)
Securities available-for-sale |  |  |  |  |  |  |  |
FNMA and FHLMC certificates | $ | 34,628 |  | $ | 32 |  | $ | 34,596
GNMA certificates |  | 5,104 |  |  | 178 |  |  | 4,926
| $ | 39,732 |  | $ | 210 |  | $ | 39,522
OFG had no investment securities in a continuous loss position for 12 months or more at June 30, 2021 or December 31, 2020.

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