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Investment Securities

12 Months Ended

Dec. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Investment Securities

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 December 31, 2021 and 2020, money market instruments included as part of cash and cash equivalents amounted to $9.0 million and $11.9 million, respectively.

Investment Securities

The amortized cost, gross unrealized gains and losses, fair value, weighted average yield and contractual maturities of the securities owned by OFG at December 31, 2021 and 2020 were as follows:

			December 31, 2021
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						Weighted Average Yield
			(In thousands)
Available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates
Due from 5 to 10 years			$	90,560					$	2,502					$	—					$	93,062					1.94		%
Due after 10 years			93,440						—						3,200						$	90,240					1.37		%
Total FNMA and FHLMC certificates			184,000						2,502						3,200						183,302						1.65		%
GNMA Securities
Due from 1 to 5 years			10,536						233						1						10,768						1.66		%
Due from 5 to 10 years			26,419						556						—						26,975						1.80		%
Due after 10 years			244,106						6,927						198						250,835						2.40		%
Total GNMA certificates			281,061						7,716						199						288,578						2.32		%
CMOs issued by US government-sponsored agencies
Due from 1 to 5 years			1,788						22						—						1,810						1.70		%
Due from 5 to 10 years			20,705						299						—						21,004						1.81		%
Due after 10 years			1,601						16						1						1,616						4.24		%
Total CMOs issued by US government-sponsored agencies			24,094						337						1						24,430						1.96		%
Total mortgage-backed securities			489,155						10,555						3,400						496,310						2.05		%
Investment securities
US Treasury securities
Due less than 1 year			10,737						88						—						10,825						1.48		%
Total US Treasury Securities			10,737						88						—						10,825						1.48		%
Obligations of US government-sponsored agencies
Due less than 1 year			1,182						1						—						1,183						1.40		%
Total Obligations of US government-sponsored agencies			1,182						1						—						1,183						1.40		%
Other debt securities
Due less than 1 year			500						—						—						500						0.57		%
Due from 1 to 5 years			1,847						48						—						1,895						5.43		%
Total Other debt securities			2,347						48						—						2,395						4.39		%
Total investment securities			14,266						137						—						14,403						1.95		%
Total securities available for sale			$	503,421					$	10,692					$	3,400					$	510,713					2.05		%
			December 31, 2021
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						Weighted Average Yield
			(In thousands)
Held-to-maturity
Mortgage-backed securities
FNMA and FHLMC certificates
Due after 10 years			$	367,507					$	—					$	3,854					$	363,653					1.71		%

			December 31, 2020
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						Weighted Average Yield
			(In thousands)
Available-for-sale
Mortgage-backed securities
FNMA and FHLMC certificates
Due less than 1 year			$	348					$	16					$	—					$	364					1.77		%
Due from 5 to 10 years			96,902						3,741						—						100,643						2.00		%
Due after 10 years			108,945						1,029						32						109,942						1.58		%
Total FNMA and FHLMC certificates			206,195						4,786						32						210,949						1.78		%
GNMA Securities
Due from 1 to 5 years			469						3						—						472						1.83		%
Due from 5 to 10 years			58,615						1,466						—						60,081						1.80		%
Due after 10 years			115,388						7,009						178						122,219						2.42		%
Total GNMA certificates			174,472						8,478						178						182,772						2.21		%
CMOs issued by US government-sponsored agencies
Due from 5 to 10 years			32,220						793						—						33,013						1.78		%
Due after 10 years			6,089						112						—						6,201						2.95		%
Total 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
Due less than 1 year			735						—						—						735						0.10		%
Due from 1 to 5 years			10,005						243						—						10,248						1.59		%
Total US Treasury Securities			10,740						243						—						10,983						1.49		%
Obligations of US government-sponsored agencies
Due from 1 to 5 years			1,585						21						—						1,606						1.39		%
Total Obligations of US government-sponsored agencies			1,585						21						—						1,606						1.39		%
Other debt securities
Due less than 1 year			251						—						—						251						0.65		%
Due from 5 to 10 years			624						39						—						663						2.97		%
Total 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		%

Investment securities as of December 31, 2021 include $145.6 million pledged to secure government deposits, derivatives and regulatory collateral that the secured parties are not permitted to sell or repledge the collateral, of which $143.8 million serve as collateral for public funds. Investment securities as of December 31, 2020 include $148.8 million pledged to secure government deposits, derivatives and regulatory collateral that the secured parties are not permitted to sell or repledge the collateral, of which $146.4 million serve as collateral for public funds. At December 31, 2020 OFG did not have securities held to maturity.

The weighted average yield on debt securities available-for-sale is based on amortized cost and does not give effect to changes in fair value. Weighted average yields on tax-exempt obligations have been computed on a on a fully taxable equivalent basis.

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.

At December 31, 2021 and 2020, most securities held by OFG are issued by U.S. government entities and agencies that have a zero-credit loss assumption.

At both December 31, 2021 and 2020, the Bank’s international banking entities held short-term US Treasury securities in the amount of $305 thousand and $325 thousand, respectively, 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.

During the years ended December 31, 2021, 2020, and 2019, OFG retained securitized GNMA pools totaling $149.1 million, $90.1 million, and $62.8 million amortized cost, respectively, at a yield of 2.45%, 2.48%, and 3.23%, from its own originations.

During the year ended December 31, 2021, OFG sold $2.2 million available-for-sale mortgage-backed securities and recognized a $19 thousand gain in the sale. During the year ended December 31, 2020, OFG sold $316.3 million available-for-sale mortgage-backed securities and recognized a $4.7 million gain in the sale. During the year ended December 31, 2019, OFG sold $672.2 million available-for-sale mortgage-backed securities and recognized a $8.3 million gain in the sale.

						Year Ended December 31, 2021
Description						Sale Price						Book Value at Sale						Gross Gains						Gross Losses
						(In thousands)
Sale of securities available-for-sale
Mortgage-backed securities
GNMA certificates						2,175						2,156						19						—
Total						$	2,175					$	2,156					$	19					$	—

						Year Ended December 31, 2020
Description						Sale Price						Book Value 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					$	—

						Year Ended December 31, 2019
Description						Sale Price						Book Value at Sale						Gross Gains						Gross Losses
						(In thousands)
Sale of securities available-for-sale
FNMA and FHLMC certificates						451,081						447,305						3,776						—
GNMA certificates						229,385						224,887						4,498						—
Total mortgage-backed securities						$	680,466					$	672,192					$	8,274					$	—

The following table show OFG’s gross unrealized losses and fair value of investment securities available-for-sale and held-to-maturity at December 31, 2021 and 2020, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position:

			December 31, 2021
			Less than 12 months
			Amortized Cost						Unrealized Loss						Fair Value
			(In thousands)
Securities available-for-sale
CMOs issued by US Government-sponsored agencies			500						1						499
FNMA and FHLMC certificates			93,440						3,200						90,240
GNMA certificates			5,022						199						4,823
			$	98,962					$	3,400					$	95,562
Held-to-maturity
FNMA and FHLMC certificates			$	367,507					$	3,854					$	363,653

			December 31, 2020
			Less than 12 months
			Amortized Cost						Unrealized Loss						Fair 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 December 31, 2021 and 2020.

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- References

No definition available.

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- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 320
-URI http://asc.fasb.org/subtopic&trid=2209399

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 946
-SubTopic 320
-URI http://asc.fasb.org/subtopic&trid=2324412

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-URI http://asc.fasb.org/topic&trid=2196928

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 940
-SubTopic 320
-URI http://asc.fasb.org/subtopic&trid=2176304

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1403
-Paragraph (b)

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