Operating Leases

12 Months Ended

Dec. 31, 2021

OPERATING LEASESSubstantially all leases in which OFG is the lessee are comprised of real estate property for branches, ATM locations, and office space with terms extending through 2038. OFG’s leases do not contain residual value guarantees or material variable lease payments. All leases are classified as operating leases and are included on the consolidated statements of financial condition as a right-of-use asset and a corresponding lease liability. OFG leases to others certain space in its principal offices for terms extending through 2022; all are operating leases.

Operating Lease Cost


	Year Ended December 31,
	2021		2020		Statement of Operations Classification
	(In thousands)
Lease costs	$	11,417	$	13,233	Occupancy and equipment
Variable lease costs	1,881		2,133		Occupancy and equipment
Short-term lease cost	859		800		Occupancy and equipment
Lease income	(442)		(499)		Occupancy and equipment
Total lease cost	$	13,715	$	15,667

Operating Lease Assets and Liabilities


	December 31,
	2021		2020		Statement of Financial Condition Classification
	(In thousands)
Right-of-use assets	$	28,846	$	31,383	Operating lease right-of-use assets
Lease Liabilities	$	30,498	$	32,566	Operating leases liabilities


	December 31, 2021
	(In thousands)
Weighted-average remaining lease term	5.6 years
Weighted-average discount rate	6.6	%

Future minimum payments for operating leases with initial or remaining terms of one year or more as of December 31, 2021 were as follows:


	Minimum Rent
Year Ending December 31,	(In thousands)
2022	$	9,227
2023	8,104
2024	5,775
2025	4,218
2026	2,662
Thereafter	7,620
Total lease payments	$	37,605
Less imputed interest	7,106
Present value of lease liabilities	$	30,498

OFG, as lessor, leases and subleases real property to lessee tenants under operating leases. As of December 31, 2021, no material lease concessions have been granted to lessees. OFG, as lessee, also leases real estate property for branch locations, ATM locations, and office space. As of December 31, 2021, OFG has not requested any lease concessions.

During the years ended December 31, 2021 and 2020, OFG decided to consolidate several branches as a result of the Scotiabank Acquisition and modified certain lease contracts. These contracts were evaluated under Topic 842 lease modification guidance and removed from books, as they were considered short-term at December 31, 2021 and 2020, respectively.