OPERATING LEASES

9 Months Ended

Sep. 30, 2022

Substantially 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 2024; all are operating leases.

Operating Lease Cost


	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2022		2021		2022		2021		Statement of Operations Classification
	(In thousands)
Lease costs	$	5,188	$	2,590	$	7,851	$	8,814	Occupancy and equipment
Variable lease costs	873		348		1,157		1,336		Occupancy and equipment
Short-term lease cost	448		414		730		560		Occupancy and equipment
Lease income	(128)		(110)		(181)		(342)		Occupancy and equipment
Total lease cost	$	6,380	$	3,242	$	9,557	$	10,368

Operating Lease Assets and Liabilities


	September 30,		December 31,
	2022		2021		Statement of Financial Condition Classification
	(In thousands)
Right-of-use assets	$	26,192	$	28,846	Operating lease right-of-use assets
Lease Liabilities	$	28,114	$	30,498	Operating leases liabilities


	September 30, 2022
	(In thousands)
Weighted-average remaining lease term	5.2 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 September 30, 2022 were as follows:


	Minimum Rent
As of September 30, 2022	(In thousands)
2022	$	2,385
2023	8,936
2024	6,665
2025	4,729
2026	3,034
Thereafter	7,997
Total lease payments	$	33,745
Less imputed interest	5,631
Present value of lease liabilities	$	28,114

OFG, as lessor, leases and subleases real property to lessee tenants under operating leases. As of September 30, 2022, no material lease concessions have been granted to lessees. As of September 30, 2022, OFG, as lessee, has not requested any lease concessions.