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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities on Recurring and Non-Recurring Basis

Assets and liabilities measured at fair value on a recurring and non-recurring basis are summarized below:

			March 31, 2022
			Fair Value Measurements
			Level 1						Level 2						Level 3						Total
			(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale			$	10,763					$	868,021					$	1,554					$	880,338
Trading securities			—						18						—						18
Money market investments			5,648						—						—						5,648
Derivative assets			—						6						—						6
Servicing assets			—						—						49,446						49,446
Derivative liabilities			—						(191)						—						(191)
			$	16,411					$	867,854					$	51,000					$	935,265
Non-recurring fair value measurements:
Collateral dependent loans			—						—						21,279						21,279
Foreclosed real estate			—						—						15,297						15,297
Other repossessed assets			—						—						2,625						2,625
			$	—					$	—					$	39,201					$	39,201

			December 31, 2021
			Fair Value Measurements
			Level 1						Level 2						Level 3						Total
			(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale			$	10,825					$	498,358					$	1,530					$	510,713
Trading securities			—						20						—						20
Money market investments			8,952						—						—						8,952
Derivative assets			—						1						—						1
Servicing assets			—						—						48,973						48,973
Derivative liabilities			—						(804)						—						(804)
			$	19,777					$	497,575					$	50,503					$	567,855
Non-recurring fair value measurements:
Collateral dependent loans			$	—					$	—					$	10,233					$	10,233
Foreclosed real estate			—						—						15,039						15,039
Other repossessed assets			—						—						1,945						1,945
			$	—					$	—					$	27,217					$	27,217

Schedule of Reconciliation of Assets and Liabilities Using Significant Unobservable Inputs (Level 3)

The table below presents a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the quarters ended March 31, 2022 and 2021:

Level 3 Instruments Only

			Quarter Ended March 31,
			2022												2021
			Other debt securities available for sale			Servicing Assets			Total						Servicing Assets
			(In thousands)
Balance at beginning period			$	1,530		$	48,973		$	50,503					$	47,295
New instruments acquired			—			1,119			1,119						1,420
Principal repayments and amortization			—			(1,499)			(1,499)						(1,507)
Gains included in earnings			—			853			853						703
Gains included in other comprehensive income			24			—			24						—
Balance at end of period			$	1,554		$	49,446		$	51,000					$	47,911

Schedule of Qualitative Information for Assets and Liabilities

The table below presents quantitative information for all assets and liabilities measured at fair value on a recurring and non-recurring basis using significant unobservable inputs (Level 3) at March 31, 2022:

			March 31, 2022
			Fair Value						Valuation Technique						Unobservable Input						Range						Weighted Average
			(In thousands)
Other debt securities available-for-sale			$	1,554					Cash flow valuation						Credit Rating						Baa1 - Baa3						Baa2
															Probability of Default Rate						0.16% - 2.28%						0.33		%
															Recovery Rate						34.73		%				34.73		%
Servicing assets			$	49,446					Cash flow valuation						Constant prepayment rate						3.88% - 24.30%						5.97		%
															Discount rate						10.00% - 15.50%						11.46		%
Collateral dependent loans			$	21,279					Fair value of property or collateral						Appraised value less disposition costs						10.20% - 30.20%						17.20		%
Foreclosed real estate			$	15,297					Fair value of property or collateral						Appraised value less disposition costs						10.20% - 30.20%						11.79		%
Other repossessed assets			$	2,625					Fair value of property or collateral						Estimated net realizable value less disposition costs						26.00% - 82.00%						56.16		%

Schedule of Estimated Fair Value and Carrying Value

The estimated fair value and carrying value of OFG’s financial instruments at March 31, 2022 and 2021 is as follows:

			March 31,												December 31,
			2022												2021
			Fair Value						Carrying Value						Fair Value						Carrying Value
			(In thousands)
Level 1
Financial Assets:
Cash and cash equivalents			$	1,855,554					$	1,855,554					$	2,023,475					$	2,023,475
Restricted cash			$	175					$	175					$	175					$	175
Investment securities available-for-sale			$	10,763					$	10,763					$	10,825					$	10,825
Level 2
Financial Assets:
Trading securities			$	18					$	18					$	20					$	20
Investment securities available-for-sale			$	868,021					$	868,021					$	498,358					$	498,358
Investment securities held-to-maturity			$	329,969					$	359,806					$	363,653					$	367,507
Federal Home Loan Bank (FHLB) stock			$	5,946					$	5,946					$	5,966					$	5,966
Equity securities			$	12,610					$	12,610					$	11,612					$	11,612
Derivative assets			$	6					$	6					$	1					$	1
Financial Liabilities:
Derivative liabilities			$	191					$	191					$	804					$	804
Level 3
Financial Assets:
Investment securities available for sale			$	1,554					$	1,554					$	1,530					$	1,530
Total loans (including loans held-for-sale)			$	6,360,479					$	6,449,130					$	6,197,347					$	6,329,311
Accrued interest receivable			$	56,097					$	56,097					$	56,560					$	56,560
Servicing assets			$	49,446					$	49,446					$	48,973					$	48,973
Accounts receivable and other assets			$	82,686					$	82,686					$	88,756					$	88,756
Financial Liabilities:
Deposits			$	8,987,296					$	8,978,222					$	8,614,073					$	8,603,118
Advances from FHLB			$	28,022					$	28,035					$	28,480					$	28,488
Subordinated capital notes			$	—					$	—					$	36,084					$	36,083
Accrued expenses and other liabilities			$	83,492					$	83,492					$	96,240					$	96,240

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- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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