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Restricted Cash

9 Months Ended

Sep. 30, 2021

NOTE 2 – RESTRICTED CASH

The following table includes the composition of OFG’s restricted cash:

	September 30,		December 31,
	2021		2020
	(In thousands)
Cash pledged as collateral to other financial institutions to secure:
Regulatory requirements	$	-	$	325
Obligations under agreement of loans sold with recourse		179		1,050
	$	179	$	1,375

As of December 31, 2020, cash of $325 thousand was held as the legal reserve required by the Puerto Rico’s Office of the Commissioner of Financial Institutions (“OCFI”) in connection with an international banking entity (“IBE”) unit license acquired in the Scotiabank Acquisition. This cash was released during the nine-month period ended September 30, 2021, as a result of the cancellation of this IBE license.

OFG has a contract with FNMA which requires collateral to guarantee the repurchase, if necessary, of loans sold with recourse. At September 30, 2021 and December 31, 2020, OFG delivered as collateral cash amounting to approximately $179 thousand and $1.1 million, respectively.

The Bank is required by Puerto Rico law to maintain average weekly reserve balances to cover demand deposits. The amount of those minimum average reserve balances for the week that covered September 30, 2021 was $480.2 million (December 31, 2020 - $408.5 million). At September 30, 2021 and December 31, 2020, the Bank complied with this requirement. Cash and due from bank as well as other short-term, highly liquid securities, are used to cover the required average reserve balances.