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Regulatory Capital Requirements

9 Months Ended

Sep. 30, 2021

Regulatory Capital Requirements [Abstract]

NOTE 15 — REGULATORY CAPITAL REQUIREMENTS

Regulatory Capital Requirements

OFG (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by federal and Puerto Rico banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on OFG’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, OFG and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

As of September 30, 2021 and December 31, 2020, OFG and the Bank met all capital adequacy requirements to which they are subject. As of September 30, 2021 and December 31, 2020, OFG and the Bank are “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized,” an institution must maintain minimum CET1 risk-based, Tier 1 risk-based, total risk-based, and Tier 1 leverage ratios as set forth in the tables presented below.

OFG’s and the Bank’s actual capital amounts and ratios as of September 30, 2021 and December 31, 2020 are as follows:

				Minimum Capital
				Requirement (including			Minimum to be Well
	Actual			capital conservation buffer)			Capitalized
	Amount		Ratio	Amount		Ratio		Amount	Ratio
	(Dollars in thousands)
OFG Bancorp Ratios
As of September 30, 2021
Total capital to risk-weighted assets	$	1,053,185	15.28%	$	723,792	10.50%	$	689,325	10.00%
Tier 1 capital to risk-weighted assets	$	966,885	14.03%	$	585,927	8.50%	$	551,460	8.00%
Common equity tier 1 capital to risk-weighted assets	$	931,885	13.52%	$	482,528	7.00%	$	448,062	6.50%
Tier 1 capital to average total assets	$	966,885	9.33%	$	414,708	4.00%	$	518,384	5.00%
As of December 31, 2020
Total capital to risk-weighted assets	$	1,096,766	16.04%	$	717,974	10.50%	$	683,785	10.00%
Tier 1 capital to risk-weighted assets	$	1,010,945	14.78%	$	581,217	8.50%	$	547,028	8.00%
Common equity tier 1 capital to risk-weighted assets	$	894,075	13.08%	$	478,649	7.00%	$	444,460	6.50%
Tier 1 capital to average total assets	$	1,010,945	10.30%	$	392,424	4.00%	$	490,530	5.00%


				Minimum Capital
				Requirement (including			Minimum to be Well
	Actual			capital conservation buffer)			Capitalized
	Amount		Ratio	Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
Bank Ratios
As of September 30, 2021
Total capital to risk-weighted assets	$	1,007,817	14.70%	$	719,898	10.50%	$	685,617	10.00%
Tier 1 capital to risk-weighted assets	$	921,975	13.45%	$	582,774	8.50%	$	548,493	8.00%
Common equity tier 1 capital to risk-weighted assets	$	921,975	13.45%	$	479,932	7.00%	$	445,651	6.50%
Tier 1 capital to average total assets	$	921,975	8.96%	$	411,478	4.00%	$	514,348	5.00%
As of December 31, 2020
Total capital to risk-weighted assets	$	1,044,275	15.32%	$	714,480	10.50%	$	680,457	10.00%
Tier 1 capital to risk-weighted assets	$	786,731	14.06%	$	578,388	8.50%	$	544,366	8.00%
Common equity tier 1 capital to risk-weighted assets	$	956,845	14.06%	$	476,320	7.00%	$	442,297	6.50%
Tier 1 capital to average total assets	$	956,845	9.81%	$	390,304	4.00%	$	487,879	5.00%

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References + Details