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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 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:

			September 30, 2022
			Fair Value Measurements
			Level 1						Level 2						Level 3						Total
			(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale			$	401,414					$	1,076,596					$	399					$	1,478,409
Trading securities			—						11						—						11
Money market investments			4,988						—						—						4,988
Derivative assets			—						438						—						438
Servicing assets			—						—						50,061						50,061
Derivative liabilities			—						(28)						—						(28)
			$	406,402					$	1,077,017					$	50,460					$	1,533,879
Non-recurring fair value measurements:
Collateral dependent loans			$	—					$	—					$	19,977					$	19,977
Foreclosed real estate			—						—						14,561						14,561
Other repossessed assets			—						—						3,307						3,307
			$	—					$	—					$	37,845					$	37,845

			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 tables below present a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the quarters and nine-month periods ended September 30, 2022 and 2021:

Level 3 Instruments Only

			Quarter Ended September 30,
			2022												2021
			Other debt securities available for sale			Servicing Assets			Total						Other debt securities available for sale			Servicing Assets			Total
			(In thousands)
Balance at beginning period			$	1,581		$	49,280		$	50,861					$	—		$	47,712		$	47,712
New instruments acquired			376			666			1,042						—			1,339			1,339
Transfer from Level 2			—			—			—						1,500			—			1,500
Principal repayments and amortization			—			(1,191)			(1,191)						—			(1,740)			(1,740)
Instrument converted to equity security			(1,581)			—			(1,581)						—			—			—
Gains included in earnings			—			1,306			1,306						—			916			916
Gains included in other comprehensive income			23			—			23						7			—			7
Balance at end of period			$	399		$	50,061		$	50,460					$	1,507		$	48,227		$	49,734
			Other debt securities available for sale			Servicing Assets			Total						Other debt securities available for sale			Servicing Assets			Total
			Nine-Month Period Ended September 30,
			2022												2021
			(In thousands)
Balance at beginning period			$	1,530		$	48,973		$	50,503					$	—		$	47,295		$	47,295
New instruments acquired			376			2,935			3,311						—			4,782			$	4,782
Transfer from Level 2			—			—			—						1,500			—			$	1,500
Principal repayments and amortization			—			(4,168)			(4,168)						—			(5,109)			$	(5,109)
Instrument converted to equity security			(1,581)			—			(1,581)						—			—			$	—
Gains included in earnings			—			2,321			2,321						—			1,259			$	1,259
Gains included in other comprehensive income			74			—			74						7			—			$	7
Balance at end of period			$	399		$	50,061		$	50,460					$	1,507		$	48,227		$	49,734

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 September 30, 2022:

			September 30, 2022
			Fair Value						Valuation Technique						Unobservable Input						Range						Weighted Average
			(In thousands)
Other debt securities available-for-sale			$	399					Cash flow valuation						Credit Rating						Baa1 - Baa3						Baa2
															Probability of Default Rate						0.15% - 2.12%						0.15		%
															Recovery Rate						34.73		%				34.73		%
Servicing assets			$	50,061					Cash flow valuation						Constant prepayment rate						3.38% - 20.36%						5.69		%
															Discount rate						10.00% - 15.50%						11.45		%
Collateral dependent loans			$	19,977					Fair value of property or collateral						Appraised value less disposition costs						10.20% - 33.20%						17.16		%
Foreclosed real estate			$	14,561					Fair value of property or collateral						Appraised value less disposition costs						10.20% - 33.20%						11.71		%
Other repossessed assets			$	3,307					Fair value of property or collateral						Estimated net realizable value less disposition costs						22.00% - 80.00%						62.96		%

Schedule of Estimated Fair Value and Carrying Value

The estimated fair value and carrying value of OFG’s financial instruments at September 30, 2022 and December 31, 2021 is as follows:

			September 30,												December 31,
			2022												2021
			Fair Value						Carrying Value						Fair Value						Carrying Value
			(In thousands)
Financial Assets:
Level 1
Cash and cash equivalents			$	815,269					$	815,269					$	2,023,475					$	2,023,475
Restricted cash			$	164					$	164					$	175					$	175
Investment securities available-for-sale			$	401,414					$	401,414					$	10,825					$	10,825
Level 2
Financial Assets:
Trading securities			$	11					$	11					$	20					$	20
Investment securities available-for-sale			$	1,076,596					$	1,076,596					$	498,358					$	498,358
Investment securities held-to-maturity			$	471,718					$	540,774					$	363,653					$	367,507
Federal Home Loan Bank (FHLB) stock			$	6,026					$	6,026					$	5,966					$	5,966
Equity securities			$	17,346					$	17,346					$	11,612					$	11,612
Derivative assets			$	438					$	438					$	1					$	1
Financial Liabilities:
Derivative liabilities			$	28					$	28					$	804					$	804
Level 3
Financial Assets:
Investment securities available for sale			$	399					$	399					$	1,530					$	1,530
Total loans (including loans held-for-sale)			$	6,516,221					$	6,591,028					$	6,197,347					$	6,329,311
Accrued interest receivable			$	59,400					$	59,400					$	56,560					$	56,560
Servicing assets			$	50,061					$	50,061					$	48,973					$	48,973
Accounts receivable and other assets			$	68,329					$	68,329					$	88,756					$	88,756
Financial Liabilities:
Deposits			$	8,846,913					$	8,855,117					$	8,614,073					$	8,603,118
Advances from FHLB			$	27,152					$	27,153					$	28,480					$	28,488
Other borrowings			$	110					$	110					$	—					$	—
Subordinated capital notes			$	—					$	—					$	36,084					$	36,083
Accrued expenses and other liabilities			$	124,545					$	124,545					$	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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