EX-99 2 ofg-20214qxexx99.htm EX-99 Document

Exhibit 99
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OFG Bancorp Reports 4Q21 & 2021 Results
SAN JUAN, Puerto Rico, January 19, 2022 – OFG Bancorp (NYSE: OFG), the financial holding company for Oriental Bank, reported results for the fourth quarter and year ended Dec. 31, 2021.

Summary
4Q21: EPS diluted was $0.66 compared to $0.81 in 3Q21 and $0.42 in 4Q20. 4Q21 results were impacted by the strategic decision to sell $65.5 million of past due loans, which had been partially reserved, but required $9.7 million in additional provision. Total core revenues were $141.0 million compared to $134.7 million in 3Q21 and $132.8 million in 4Q20.
2021: EPS diluted was $2.81 compared to $1.32 in 2020. Total core revenues were $536.6 million compared to $519.3 million. OFG completed the $92.0 million redemption of its outstanding preferred stock and its $50.0 million common stock repurchase plan. Tangible Book Value per share of $19.08 grew 12.4% year over year.

CEO Comment
José Rafael Fernández, Chief Executive Officer, said: “Our core business demonstrated strong momentum as we ended 2021 and enter 2022. Results for the fourth quarter and year underscore our opportunities for the future. We are extremely proud of our accomplishments in 2021 and look forward to continuing to invest in improving the customer experience and growing together with our clients and the communities we serve.”
4Q21 Highlights

Net Interest Income of $104.2 million compared to $102.7 million in 3Q21 and $98.7 million in 4Q20. Compared to 3Q21, 4Q21 NII reflected level interest income from loans and cash, increased income from investment securities, and lower cost of deposits and borrowings.

Loans Held for Investment totaled $6.40 billion at 12/31/21 compared to $6.41 billion at 9/30/21 and $6.66 billion at 12/31/20. The 4Q21 net decrease of $8.3 million included a reduction of $65.5 million from the previously mentioned decision to sell past due loans.
New Loan Origination totaled $632.7 million compared to $556.2 million in 3Q21 and $485.3 million in 4Q20. 4Q21 reflected continued high levels of auto, commercial, and mortgage lending, and increased demand for consumer loans.
Total Interest Expense was $8.4 million compared to $9.4 million in 3Q21 and $14.3 million in 4Q20. 4Q21 reflected lower cost of core deposits (26 bps vs. 30 bps in 3Q21 and 53 bps in 4Q20) due to generally lower rates and CD maturities. 4Q21 also reflected lower borrowings with the early termination of $33.3 million in 2.98% FHLB advances.



Customer Deposits totaled $8.59 billion at 12/31/21 compared to $9.23 billion at 9/30/21 and $8.37 billion at 12/31/20. The $641.3 million sequential decline from 3Q21 reflected withdrawals at year-end by government-related and institutional commercial clients, partially offset by increased retail deposits.
Provision for Credit Losses of $7.2 million included $9.7 million for the previously mentioned decision to sell past due loans and $2.7 million in net reserve releases. This compares to a net benefit of $5.0 million in 3Q21 and a net expense of $14.2 million in 4Q20. 4Q21’s net charge-offs of $32.5 million primarily related to the decision to sell past due loans. Total non-performing loan rate fell to 1.75% from 2.08% in 3Q21 and 2.28% in 4Q20.
Banking and Financial Service Revenues were $36.7 million compared to $32.0 million in 3Q21 and $34.0 million in 4Q20. 4Q21 reflected higher levels of banking service, mortgage banking activity, and wealth management, which included $4.3 million in annual insurance commissions.
Non-Interest Expenses were $86.5 million compared to $78.9 million in 3Q21 and $89.0 million in 4Q20. 4Q21 included increased compensation related investment in people, $2.4 million for a legal reserve and to cover operational losses, $2.0 million in technology enhancements, $1.0 million lower gains on sales of real estate owned compared to 3Q21, and costs related to higher levels of business activity.
Pre-Provision Net Revenues were $55.8 million compared to $56.3 million in 3Q21 and $44.1 million in 4Q20.
Capital: CET1 ratio was 13.77% compared to 13.52% in 3Q21 and 13.08% in 4Q20.
Conference Call, Financial Supplement & Presentation
A conference call to discuss 4Q21 results, outlook and related matters will be held today at 10:00 AM ET. Phone (800) 459-5346 or (203) 518-9544. Conference ID: OFGQ421. The call can also be accessed live on www.ofgbancorp.com with webcast replay shortly thereafter.
OFG’s Financial Supplement, with full financial tables for the quarter and year ended December 31, 2021, and the 4Q21 Conference Call Presentation, can be found on the Quarterly Results page on OFG’s Investor Relations website at www.ofgbancorp.com.

Non-GAAP Financial Measures
In addition to our financial information presented in accordance with GAAP, management uses certain “non-GAAP financial measures” within the meaning of SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Please refer to Tables 8-1 and 8-2 in OFG’s above-mentioned Financial Supplement for a reconciliation of GAAP to non-GAAP measures and calculations.
Forward Looking Statements
The information included in this document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and involve certain risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements.


Factors that might cause such a difference include but are not limited to (i) general business and economic conditions, including changes in interest rates; (ii) cybersecurity breaches; (iii) hurricanes, earthquakes, and other natural disasters in Puerto Rico; (iv) competition in the financial services industry; and (v) the severity, magnitude and duration of the COVID-19 pandemic, and its impact on our operations, personnel, and customers.
For a discussion of such factors and certain risks and uncertainties to which OFG is subject, please refer to OFG’s annual report on Form 10-K for the year ended December 31, 2020, as well as its other filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, OFG assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.
About OFG Bancorp
Now in its 58th year in business, OFG Bancorp is a diversified financial holding company that operates under U.S., Puerto Rico and U.S. Virgin Islands banking laws and regulations. Its three principal subsidiaries, Oriental Bank, Oriental Financial Services and Oriental Insurance, provide a wide range of retail and commercial banking, lending and wealth management products, services, and technology, primarily in Puerto Rico and U.S. Virgin Islands. Visit us at www.ofgbancorp.com. 
# # #
Contacts
Puerto Rico & USVI: Idalis Montalvo (idalis.montalvo@orientalbank.com) at (787) 777-2847
US: Gary Fishman (gfishman@ofgbancorp.com) and Steven Anreder (sanreder@ofgbancorp.com) at (212) 532-3232


OFG Bancorp
Financial Supplement
The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our December 31, 2021 Annual Report on Form 10-K once it is filed with the Securities and Exchange Commission.


OFG Bancorp (NYSE: OFG)
Table 1-1: Financial and Statistical Summary - Consolidated

2021
2021
2021
2021
2020
(Dollars in thousands, except per share data) (unaudited)
Q4
Q3
Q2
Q1
Q4
Statement of Operations
Net interest income $104,204 $102,705 $102,257 $98,204 $98,738 
Non-interest income, net (core)(2)36,746 32,012 31,048 29,452 34,047 
Total core revenues 140,950 134,717 133,305 127,656 132,785 
Non-interest expense 86,490 78,924 (b)82,676 77,666 89,039 
Pre-provision net revenues(22)55,809 56,298  51,772 50,945 44,123 
Total provision for (recapture of) credit losses 7,199 (a)(4,997) (8,305)6,324 14,176 
Net income before income taxes 48,610 61,295  60,077  44,621 29,947 
Income tax expense 15,330 19,624  19,250  14,248 6,646 
Net income available to common stockholders 33,280 41,671  40,827  29,118 21,673 
Common Share Statistics        
Earnings per common share - basic(3)$0.67 $0.82  $0.79  $0.57 $0.42 
Earnings per common share - diluted(4)$0.66 $0.81  $0.78  $0.56 $0.42 
Average common shares outstanding 49,746 51,063 (c)51,636  51,397 51,350 
Average common shares outstanding and equivalents 50,299 51,516 (c)52,048  51,752 51,618 
Cash dividends per common share $0.12 $0.12 (c)$0.08  $0.08 $0.07 
Book value per common share (period end) $21.54 $21.08  $20.59  $19.90 $19.54 
Tangible book value per common share (period end)(5)$19.08 $18.59 $18.13 $17.39 $16.97 
Balance Sheet (Average Balances)        
Loans(6)$6,452,128 $6,465,874  $6,598,569  $6,635,908 $6,708,284 
Interest-earning assets 9,897,073 9,879,687  9,726,905  9,358,377 9,270,739 
Total assets 10,484,125 10,492,502  10,356,879  10,004,047 9,921,254 
Core deposits 9,084,282 9,103,221  8,963,336  8,535,678 8,451,308 
Total deposits 9,095,648 9,114,587  8,997,842  8,581,633 8,515,646 
Interest-bearing deposits 6,435,246 6,474,977  6,392,219  6,223,419 6,199,929 
Borrowings 75,970 98,943  99,950  100,951 101,930 
Stockholders' equity 1,066,764 1,068,618 (c)(d)1,083,452 (d)1,101,046 1,083,423 
Common stockholders' equity 1,066,764 1,066,361  1,046,835  1,019,176 1,001,553 
Performance Metrics        
Net interest margin(7)4.18 %4.12 % 4.22 % 4.26 %4.24 %
Return on average assets(8)1.27 %1.59 % 1.58 % 1.21 %0.94 %
Return on average tangible common stockholders' equity(9)14.11 %17.72 % 17.78 % 13.11 %9.99 %
Efficiency ratio(10)61.36 %58.59 % 62.02 % 60.84 %67.06 %
Full-time equivalent employees, period end 2,269 2,274  2,231  2,238 2,275 
Credit Quality Metrics(1)(21)       
Allowance for credit losses$155,937 (a)$180,872 $191,717 $201,973 $204,809 
Allowance as a % of loans held for investment2.44 %2.82 % 2.95 %3.06 %3.07 %
Net charge-offs$32,482 (a)$6,051 (e)$2,118 $9,105 $44,814 (e)
Net charge-off rate(11)2.01 %(a)0.37 %(e)0.13 %0.55 %2.67 %(e)
Early delinquency rate (30 - 89 days past due)2.34 %2.06 %1.86 %2.15 %2.68 %
Total delinquency rate (30 days and over)3.71 %3.82 %3.90 %4.65 %5.74 %
Capital Ratios (period end) (Non-GAAP)(12)(20)
Leverage ratio9.63 %9.33 %(c)(d)9.84 %(d)10.48 %10.30 %
Common equity Tier 1 capital ratio13.77 %13.52 %(c)13.95 % 13.56 %13.08 %
Tier 1 risk-based capital ratio14.27 %14.03 %(c)(d)14.70 %(d)15.28 %14.78 %
Total risk-based capital ratio15.52 %15.28 %(c)(d)15.95 %(d)16.54 %16.04 %
Tangible common equity ("TCE") ratio9.69 %8.86 %(c)9.06 %8.95 %9.00 %
(a)During 4Q 2021, the Company decided to sell $65.5 million of past due loans. The Company transferred to held for sale past due residential mortgage loans with reporting balance of $39.8 million and a PCD commercial loan with reporting balance of $20.9 million. As a result of the decision to sell loans, the Company recognized $30.1 million in net charge-offs and an additional provision of $9.7 million, decreasing the allowance for credit losses by $20.4 million.
(b)During 3Q 2021, foreclosed real estate and other repossessed assets (income) expenses benefited from a gain in real estate owned sales.
(c)During 3Q 2021, the Company repurchased $40.2 million common stock from its $50.0 million share buyback program and increased its common stock dividend to $0.12 per share. During 4Q 2021, the Company repurchased $9.7 million common stock from its $50.0 million share buyback program.
(d)During 3Q 2021, the Company redeemed Series D Preferred Stock. During 2Q 2021, the Company redeemed Series A and B Preferred Stock.
(e)During 3Q 2021, the Company charged-off $6.5 million for a previously reserved amount on a commercial loan. During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.
2

OFG Bancorp (NYSE: OFG)
Table 1-2: Financial and Statistical Summary - Consolidated (Continued)
2021
2020
(Dollars in thousands, except per share data) (unaudited)YTDYTD
Statement of Operations
Net interest income$407,370 $408,432 
Non-interest income, net (core)(2)129,258 110,872 (e)
Total core revenues536,628 519,304 
Non-interest expense325,756 345,286 
Pre-provision net revenues(22)214,824 187,498 
Total (recapture of) provision for credit losses221 (a)92,672 (e)
Net income before income taxes214,603 94,826 
Income tax expense68,452 20,499 
Net income available to common stockholders144,896 67,815 
Common Share Statistics
Earnings per common share - basic(3)$2.85 $1.32 
Earnings per common share - diluted(4)$2.81 $1.32 
Average common shares outstanding50,956 (b)(c)51,358 
Average common shares outstanding and equivalents51,370 (b)(c)51,555 
Cash dividends per common share$0.40 (d)$0.28 
Book value per common share (period end)$21.54 $19.54 
Tangible book value per common share (period end)(5)$19.08 $16.97 
Balance Sheet (Average Balances)
Loans(6)$6,537,488 $6,748,510 
Interest-earning assets9,717,506 8,966,989 
Total assets10,336,137 9,670,969 
Core deposits8,923,563 8,051,208 
Total deposits8,949,227 8,219,936 
Interest-bearing deposits6,382,303 6,150,150 
Borrowings93,899 158,271 
Stockholders' equity1,079,845 1,056,729 
Common stockholders' equity1,049,960 974,859 
Performance Metrics
Net interest margin(7)4.19 %4.55 %
Return on average assets(8)1.41 %0.77 %
Return on average tangible common stockholders' equity(9)15.70 %8.10 %
Efficiency ratio(10)60.70 %66.49 %
Full-time equivalent employees, period end2,269 2,275 
Credit Quality Metrics(1)(21)
Allowance for credit losses$155,937 $204,809 
Allowance as a % of loans held for investment2.44 %3.07 %
Net charge-offs$49,756 $95,168 
Net charge-off rate(11)0.76 %1.41 %
Early delinquency rate (30 - 89 days past due)2.34 %2.68 %
Total delinquency rate (30 days and over)3.71 %5.74 %
(a)During 2021 asset quality trends improved consistently compared to prior year.
(b)During 2021, the Company repurchased $49.9 million common stock from of its $50.0 million share buyback program.
(c)During 2021, the Company redeemed all of its outstanding Series A, Series B and Series D Preferred Stock.
(d)During 3Q 2021, the Company increased its common stock quarterly dividend to $0.12 per share, from $0.08 in 2Q 2021 and 1Q 2021, and $0.07 in 2020.
(e)During 2020, the Company increased its provision for credit losses by $39.1 million, as a result of the Covid-19 pandemic. Core revenues were also negatively impacted by the pandemic as a result of lockdown measures by the local Government.
3

OFG Bancorp (NYSE: OFG)
Table 2-1: Consolidated Statements of Operations
Quarter Ended
(Dollars in thousands, except per share data) (unaudited) December 31, 2021September 30, 2021June 30,
2021		March 31,
2021		December 31,
2020
Interest income: 
Loans(1)
Non-PCD loans $84,919 $85,032 $85,181 $82,936 $81,171 
PCD loans 22,660 22,905 24,880 25,275 29,250 
Total interest income from loans 107,579 107,937 110,061 108,211 110,421 
Investment securities 5,036 4,202 3,402 2,771 2,600 
Total interest income 112,615 112,139 113,463 110,982 113,021 
Interest expense:
Deposits
Core deposits 7,830 8,681 10,436 11,861 13,225 
Brokered deposits 9 10 24 163 288 
Total deposits 7,839 8,691 10,460 12,024 13,513 
Borrowings 572 743 746 754 770 
Total interest expense 8,411 9,434 11,206 12,778 14,283 
Net interest income 104,204 102,705 102,257 98,204 98,738 
(Recapture of) provision for credit losses, excluding PCD loans(1)(461)(2,351)(7,726)2,998 15,464 
Provision for (recapture of) credit losses on PCD loans(1)7,660 (2,646)(579)3,326 (1,288)
Total provision for (recapture of) credit losses 7,199 (a)(4,997)(8,305)6,324 14,176 
Net interest income after provision for credit losses 97,005 107,702 110,562 91,880 84,562 
Non-interest income:      
Banking service revenues 18,767 18,198 18,248 16,493 16,901 
Wealth management revenues 11,774 (b)7,619 8,263 7,388 10,865 (b)
Mortgage banking activities 6,205 6,195 4,537 5,571 6,281 
Total banking and financial service revenues 36,746 32,012 31,048 29,452 34,047 
Other income, net 1,349 (c)505 1,143 955 377 
Total non-interest income, net 38,095 32,517 32,191 30,407 34,424 
Non-interest expense:
Compensation and employee benefits 34,160 33,745 32,919 32,618 30,921 
Occupancy, equipment and infrastructure costs 12,424 12,078 12,528 13,128 12,064 
General and administrative expenses 39,920 (d)34,041 35,370 (f)30,201 33,454 
Foreclosed real estate and other repossessed assets (income) expenses (1,122)(e)(2,163)(e)328 (50)1,004 
Merger and restructuring charges — — — — 10,092 (g)
COVID 19 expenses 1,108 1,223 1,531 1,769 1,504 
Total non-interest expense 86,490 78,924 82,676 77,666 89,039 
Income before income taxes 48,610 61,295 60,077 44,621 29,947 
Income tax expense 15,330 19,624 19,250 14,248 6,646 
Net income 33,280 41,671 40,827 30,373 23,301 
Less:  dividends on preferred stock — — — (1,255)(1,628)
Net income available to common shareholders $33,280 $41,671 $40,827 $29,118 $21,673 
(a)During 4Q 2021, the Company decided to sell $65.5 million of past due loans. As a result of the decision to sell loans, the Company recognized $30.1 million in net charge-offs and an additional provision of $9.7 million, decreasing the allowance for credit losses by $20.4 million.
(b)During 4Q 2020 and 4Q 2021, the Company recognized annual insurance contingent commissions amounting to $4.3 million and $4.0 million, respectively.
(c)During 4Q 2021, the Company recognized $2.3 million in other income from a warrant payment, partially offset by $1.5 million loss on early extinguishment of $33.3 million FHLB advances.
(d)During 4Q 2021, the Company recognized $2.4 million for a legal reserve and to cover operational losses, $2.0 million in technology enhancements, and costs related to higher levels of business activity.
(e)During 4Q2021 and 3Q 2021, foreclosed real estate and other repossessed assets (income) expenses benefited from gain in real estate owned sales.
(f)During 2Q 2021, includes a technology project write-down amounting $2.2 million.
(g)On December 31, 2019, the Company acquired Scotiabank's operations, incurring in merger and restructuring charges of $10.1 million during 4Q 2020.
4

OFG Bancorp (NYSE: OFG)
Table 2-2: Consolidated Statements of Operations (Continued)
(Dollars in thousands, except per share data) (unaudited)
Year Ended
December 31, 2021
December 31, 2020
Interest income:
Loans(1)
Non-PCD loans$338,068 $335,514 
PCD loans95,720 121,921 (e)
Total interest income from loans433,788 457,435 
Investment securities15,411 15,912 
Total interest income449,199 473,347 
Interest expense:
Deposits
Core deposits38,808 (a)56,066 
Brokered deposits206 4,132 
Total deposits39,014 60,198 
Borrowings2,815 4,717 
Total interest expense41,829 64,915 
Net interest income407,370 408,432 
(Recapture of) provision for credit losses, excluding PCD loans(1)(7,540)85,487 
Provision for credit losses on PCD loans(1)7,761 7,185 
Total provision for credit losses221 (b)92,672 (f)
Net interest income after provision for credit losses407,149 315,760 
Non-interest income:  
Banking service revenues71,706 62,579 
Wealth management revenues35,044 31,789 
Mortgage banking activities22,508 16,504 
Total banking and financial service revenues129,258 110,872 (f)
Bargain purchase from Scotiabank Acquisition— 7,336 (g)
Other income, net3,952 6,144 (h)
Total non-interest income, net133,210 124,352 
Non-interest expense:
Compensation and employee benefits133,442 132,926 
Occupancy, equipment and infrastructure costs50,158 47,283 
General and administrative expenses139,532 135,432 
Foreclosed real estate and other repossessed assets (income) expenses(3,007)(c)7,767 
Merger and restructuring charges— 16,083 (i)
COVID 19 expenses5,631 5,795 
Total non-interest expense325,756 345,286 
Income before income taxes214,603 94,826 
Income tax expense68,452 20,499 
Net income146,151 74,327 
Less:  dividends on preferred stock(1,255)(d)(6,512)
Net income available to common shareholders$144,896 $67,815 
(a)During 2021, the Company had lower cost of core deposits, mainly from lower interest rates and time deposit maturities.
(b)During 2021, asset quality trends improved consistently, compared to prior year.
(c)During 2021, foreclosed real estate and other repossessed assets (income) expenses benefited from gain in real estate owned sales.
(d)During 2021, the Company redeemed all of its outstanding Series A, Series B, and Series D Preferred Stock.
(e)During 2020, the Company recognized interest recoveries on SOP loans acquired in the Scotiabank Acquisition collected subsequently to the acquisition date amounting to $6.5 million.
(f)During 2020, the Company increased its provision for credit losses by $39.1 million, as a result of the Covid-19 pandemic. Core revenues were also negatively impacted by the pandemic as a result of lockdown measures by the local Government.
(g)During 2020, the Company increased the Bargain purchase from Scotiabank Acquisition by $7.3 million, as part of remeasurement period adjustments.
(h)During 2020, the Company sold $316 million available for sale mortgage-backed securities and recognized a gain in the sale of $4.7 million.
(i)On December 31, 2019, the Company acquired Scotiabank's operations, incurring in merger and restructuring charges of $16.1 million during 2020.
5

OFG Bancorp (NYSE: OFG)
Table 3: Consolidated Statements of Financial Condition
(Dollars in thousands) (unaudited)
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
Cash and cash equivalents$2,023,650 $2,755,691 $2,767,693 $2,409,416 $2,155,577 
Investments:
Trading securities20 22 29 23 22 
Investment securities available-for-sale, at fair value, no allowance for credit losses for any period)
Mortgage-backed securities496,310 494,727 487,014 457,673 432,935 
US treasury notes10,825 10,875 10,910 10,946 10,983 
Other investment securities3,578 3,505 3,695 2,390 2,520 
Total investment securities available-for-sale510,713 509,107 501,619 471,009 446,438 
Mortgage-backed securities held-to-maturity, at amortized cost, no allowance for credit losses for any period367,507 375,214 125,138 126,767 — 
Federal Home Loan Bank (FHLB) stock, at cost5,966 7,496 7,541 8,233 8,278 
Other investments11,612 10,434 9,168 5,557 3,962 
Total investments895,818 902,273 643,495 611,589 458,700 
Loans, net6,329,311 6,282,485 6,354,040 6,432,079 6,501,259 
Other assets:
Prepaid expenses60,856 65,003 61,678 58,348 61,416 
Deferred tax asset, net99,063 128,663 144,799 154,540 162,478 
Foreclosed real estate and repossessed properties16,984 15,433 16,818 18,366 13,412 
Premises and equipment, net92,124 86,981 85,993 83,756 83,786 
Goodwill86,069 86,069 86,069 86,069 86,069 
Right of use assets28,846 30,625 32,621 32,714 31,383 
Core deposit, customer relationship intangible and other intangibles36,093 38,545 40,995 43,445 45,896 
Servicing asset48,973 48,227 47,712 47,911 47,295 
Accounts receivable and other assets181,933 (b)166,870 179,900 175,109 178,740 
Total assets$9,899,720 $10,606,865  $10,461,813 $10,153,342 $9,826,011 
Deposits:
Demand deposits$5,204,340 $5,531,124  $5,337,691 $4,889,759 $4,619,395 
Savings accounts2,177,780 2,378,211 2,277,296 2,138,125 1,914,239 
Time deposits1,209,627 1,323,688  1,464,134 1,693,924 1,832,891 
Brokered deposits11,371 11,366 11,371 34,954 49,115 
Total deposits8,603,118 9,244,389 9,090,492 8,756,762 8,415,640 
Borrowings:     
Advances from FHLB and other borrowings28,488 (a)62,934 63,867 65,013 66,268 
Subordinated capital notes36,083 (b)36,083 36,083 36,083 36,083 
Total borrowings64,571 99,017 99,950 101,096 102,351 
Other liabilities:     
Securities purchased but not yet received— 31,565 — — — 
Derivative liabilities804 1,136 1,293 1,465 1,712 
Acceptances outstanding35,329 24,371 27,703 24,389 33,349 
Lease liability30,498 32,167 34,052 34,017 32,566 
Accrued expenses and other liabilities96,240 120,555 128,326 127,190 154,418 
Total liabilities8,830,560 9,553,200 9,381,816 9,044,919 8,740,036 
Stockholders' equity:
Preferred stock— — (d)24,000 (d)92,000 92,000 
Common stock59,885 59,885  59,885 59,885 59,885 
Additional paid-in capital637,061 635,808 626,995 622,935 622,652 
Legal surplus117,677 114,485 110,235 106,165 103,269 
Retained earnings 399,949 375,729 352,001 322,202 300,096 
Treasury stock, at cost(150,572)(c)(140,862)(c)(100,719)(100,994)(102,949)
Accumulated other comprehensive income, net5,160 8,620 7,600 6,230 11,022 
Total stockholders' equity1,069,160 1,053,665 1,079,997 1,108,423 1,085,975 
Total liabilities and stockholders' equity$9,899,720 $10,606,865 $10,461,813 $10,153,342 $9,826,011 
(a)During 4Q2021, the Company early terminated $33.3 million FHLB advances.
(b)On January 3, 2022, the Company early terminated $17.3 million of its subordinated capital notes. At December 31, 2021, the payment was already in process and therefore included in other assets.
(c)During 3Q 2021 and 4Q 2021, the Company repurchased $40.2 million and $9.7 million common stock, respectively, from its $50.0 million share buyback program.
(d)During 2Q 2021 and 3Q 2021, the Company redeemed Series A and B Preferred Stock, and Series D Preferred Stock, respectively.
6

OFG Bancorp (NYSE: OFG)
Table 4-1: Information on Loan Portfolio and Production
(Dollars in thousands) (unaudited)
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
Non-PCD:(1)
Mortgage$718,848 (a)$751,389 $775,606 $814,433 $847,101 
Commercial2,088,106 1,954,804 1,903,866 1,827,102 1,836,137 
Commercial Paycheck Protection Program (PPP Loans)(23)86,889 136,698 228,677 311,823 282,713 
Consumer408,759 373,672 366,037 371,702 389,894 
Auto1,693,029 1,667,113 1,618,788 1,565,473 1,534,269 
4,995,631 4,883,676 4,892,974 4,890,533 4,890,114 
Less:  Allowance for credit losses(132,065)(a)(138,874)(148,314)(156,978)(161,015)
Total non- PCD loans held for investment, net4,863,566 4,744,802 4,744,660 4,733,555 4,729,099 
PCD:(1)
Mortgage1,188,423 (a)1,270,854 1,324,274 1,406,044 1,459,932 
Commercial204,335 (a)239,554 260,627 272,793 283,160 
Consumer916 959 981 1,120 1,394 
Auto13,281 15,820 19,236 23,036 27,533 
1,406,955 1,527,187 1,605,118 1,702,993 1,772,019 
Less:  Allowance for credit losses(1)(23,872)(a)(41,998)(43,403)(44,995)(43,794)
Total PCD loans held for investment, net1,383,083 1,485,189 1,561,715 1,657,998 1,728,225 
Total loans held for investment6,246,649 6,229,991 6,306,375 6,391,553 6,457,324 
Mortgage loans held for sale51,096 (b)35,031 37,885 38,220 41,654 
Other loans held for sale31,566 (b)17,463 9,780 2,306 2,281 
Total loans, net$6,329,311 $6,282,485 $6,354,040 $6,432,079 $6,501,259 
Loan Portfolio Summary:
Loans held for investment:
Mortgage$1,907,271 $2,022,243 $2,099,880 $2,220,477 $2,307,033 
Commercial2,292,441 2,194,358 2,164,493 2,099,895 2,119,297 
Commercial Paycheck Protection Program (PPP Loans)(23)86,889 136,698 228,677 311,823 282,713 
Consumer409,675 374,631 367,018 372,822 391,288 
Auto1,706,310 1,682,933 1,638,024 1,588,509 1,561,802 
6,402,586 6,410,863 6,498,092 6,593,526 6,662,133 
Less:  Allowance for credit losses(155,937)(a)(180,872)(191,717)(201,973)(204,809)
Total loans held for investment, net6,246,649 6,229,991 6,306,375 6,391,553 6,457,324 
Mortgage loans held for sale51,096 (b)35,031 37,885 38,220 41,654 
Other loans held for sale31,566 (b)17,463 9,780 2,306 2,281 
Total loans, net$6,329,311 $6,282,485 $6,354,040 $6,432,079 $6,501,259 
(a)During 4Q 2021, the Company decided to sell $65.5 million of past due loans. The Company transferred to held for sale past due residential mortgage loans with reporting balance of $39.8 million and a PCD commercial loan with reporting balance of $20.9 million. As a result of the decision to sell loans, the Company recognized $30.1 million in net charge-offs and an additional provision of $9.7 million, decreasing the allowance for credit losses by $20.4 million.
(b)At December 31, 2021, the mortgage loans transferred to held for sale referred in (a) had a reporting balance of $22.3 million and the commercial loan had a reporting balance of $9.7 million.


7

OFG Bancorp (NYSE: OFG)
Table 4-2: Information on Loan Portfolio and Production
  Quarter Ended
Year Ended
(Dollars in thousands) (unaudited)
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
Loan production(13)
Mortgage 78,991 $85,535 $103,837 $95,851 $97,656 $364,214 $246,038 
Commercial 238,356 154,146 218,425 83,820 174,894 694,747 411,153 
Commercial PPP Loans — 16 32,712 126,266 — 158,994 296,738 
Commercial US Loans 79,264 100,066 109,522 44,841 49,221 333,693 222,935 
Consumer 80,688 50,630 38,038 27,492 25,984 196,848 102,954 
Auto 155,390 165,854 171,104 149,357 137,545 641,705 450,143 
Total $632,689 $556,247 $673,638 $527,627 $485,300 $2,390,201 $1,729,961 
8

OFG Bancorp (NYSE: OFG)
Table 5-1: Average Balances, Net Interest Income and Net Interest Margin
2021 Q4
2021 Q3
2021 Q2
2021 Q1
2020 Q4
(Dollars in thousands) (unaudited)Average
Balance		Interest
Income/
Expense		Yield/
Rate		Average
Balance		Interest
Income/
Expense		Yield/
Rate		Average
Balance		Interest
Income/
Expense		Yield/
Rate		Average
Balance		Interest
Income/
Expense		Yield/
Rate		Average
Balance		Interest
Income/
Expense		Yield/
Rate
Interest earning assets:
Cash equivalents$2,553,118 $944 0.15 %$2,699,144 $986 0.14 %$2,519,406 $706 0.11 %$2,204,431 $595 0.11 %$2,091,458 $613 0.12 %
Investment securities891,827 4,092 1.84 %714,669 3,216 1.80 %608,930 2,696 1.77 %518,038 2,176 1.68 %470,997 1,986 1.69 %
Loans held for investment
(1)
               
Non-PCD loans4,953,279 84,919 6.80 %4,899,312 85,032 6.89 %4,937,602 85,181 6.92 %4,893,874 82,936 6.87 %4,863,902 81,171 6.64 %
PCD loans1,498,849 22,660 6.05 %1,566,562 22,905 5.85 %1,660,967 24,880 5.99 %1,742,034 25,275 5.80 %1,844,382 29,250 6.34 %
Total loans6,452,128 107,579 6.62 %6,465,874 107,937 6.62 %6,598,569 110,061 6.69 %6,635,908 108,211 6.61 %6,708,284 110,421 6.55 %
Total interest-earning assets$9,897,073 $112,615 4.51 %$9,879,687 $112,139 4.50 %$9,726,905 $113,463 4.68 %$9,358,377 $110,982 4.81 %$9,270,739 $113,020 4.85 %
Interest bearing liabilities:               
Deposits               
NOW accounts$2,792,966 $2,239 0.32 %$2,754,985 $2,288 0.33 %$2,542,018 $2,259 0.36 %$2,397,673 $2,393 0.40 %$2,344,903 $2,258 0.38 %
Savings accounts2,359,959 1,289 0.22 %2,330,121 1,639 0.28 %2,236,281 2,097 0.38 %2,003,963 2,124 0.43 %1,897,618 1,954 0.41 %
Time deposits1,270,955 2,464 0.77 %1,378,505 2,916 0.84 %1,579,414 4,243 1.07 %1,775,828 5,507 1.24 %1,893,070 6,975 1.47 %
Brokered deposits11,366 9 0.30 %11,366 10 0.34 %34,506 24 0.28 %45,955 163 1.44 %64,338 289 1.78 %
 6,435,246 6,001 0.37 %6,474,977 6,853 0.42 %6,392,219 8,623 0.54 %6,223,419 10,187 0.66 %6,199,929 11,476 0.74 %
Non-interest bearing deposit accounts2,660,402 — — 2,639,610 — — 2,605,623 — — 2,358,214 — — 2,315,717 — — 
Fair value premium and core deposit intangible amortization— 1,838 — — 1,838 — — 1,837 — — 1,837 — — 2,037 — 
Total deposits9,095,648 7,839 0.34 %9,114,587 8,691 0.38 %8,997,842 10,460 4.46 %8,581,633 12,024 0.56 %8,515,646 13,513 0.63 %
Borrowings
Advances from FHLB and other borrowings39,887 279 2.78 %62,860 450 2.84 %63,867 452 2.84 %64,868 459 2.87 %65,847 468 2.83 %
Subordinated capital notes36,083 293 3.23 %36,083 293 3.21 %36,083 294 3.27 %36,083 295 3.31 %36,083 301 3.34 %
Total borrowings75,970 572 2.99 %98,943 743 2.98 %99,950 746 2.99 %100,951 754 3.03 %101,930 769 3.01 %
Total interest-bearing liabilities$9,171,618 $8,411 0.36 %$9,213,530 $9,434 0.41 %$9,097,792 $11,206 0.49 %$8,682,584 $12,778 0.60 %$8,617,576 $14,282 0.66 %
Interest rate spread $104,204 4.15 % $102,705 4.09 % $102,257 4.19 % $98,204 4.21 % $98,738 4.19 %
Net interest margin  4.18 %  4.12 %  4.22 %  4.26 %  4.24 %
Core deposits: (Non-GAAP)               
Deposits               
NOW accounts$2,792,966 $2,239 0.32 %$2,754,985 $2,288 0.33 %$2,542,018 $2,259 0.36 %$2,397,673 $2,393 0.40 %$2,344,903 $2,258 0.38 %
Savings accounts2,359,959 1,289 0.22 %2,330,121 1,639 0.28 %2,236,281 2,097 0.38 %2,003,963 2,124 0.43 %1,897,618 1,954 0.41 %
Time deposits1,270,955 2,464 0.77 %1,378,505 2,916 0.84 %1,579,414 4,243 1.07 %1,775,828 5,507 1.24 %1,893,070 6,975 1.47 %
 6,423,880 5,992 0.37 %6,463,611 6,843 0.42 %6,357,713 8,599 0.54 %6,177,464 10,024 0.66 %6,135,591 11,187 0.73 %
Non-interest bearing deposit accounts2,660,402 — — 2,639,610 — — 2,605,623 — — 2,358,214 — — 2,315,717 — — 
Total core deposits$9,084,282 $5,992 0.26 %$9,103,221 $6,843 0.30 %$8,963,336 $8,599 0.38 %$8,535,678 $10,024 0.47 %$8,451,308 $11,187 0.53 %
9

OFG Bancorp (NYSE: OFG)
Table 5-2: Average Balances, Net Interest Income and Net Interest Margin (Continued)
2021 YTD2020 YTD
(Dollars in thousands) (unaudited)Average
Balance		Interest
Income/
Expense		Yield/
Rate		Average
Balance		Interest
Income/
Expense		Yield/
Rate
Interest earning assets:
Cash equivalents$2,495,542 $3,231 0.13 %$1,591,613 $4,373 0.27 %
Investment securities684,476 12,180 1.78 %626,866 11,539 1.84 %
Loans held for investment(1)
Non-PCD loans4,921,186 338,068 6.87 %4,801,813 335,514 6.99 %
PCD loans1,616,302 95,720 5.92 %1,946,697 121,921 6.26 %
Total loans6,537,488 433,788 6.64 %6,748,510 457,435 6.78 %
Total interest-earning assets$9,717,506 $449,199 4.62 %$8,966,989 $473,347 5.28 %
Interest bearing liabilities:
Deposits
NOW accounts$2,623,358 $9,179 0.35 %$2,156,300 $9,029 0.42 %
Savings accounts2,233,824 7,149 0.32 %1,858,416 8,380 0.45 %
Time deposits1,499,457 15,130 1.01 %1,966,706 30,455 1.55 %
Brokered deposits25,664 206 0.80 %168,728 4,132 2.45 %
6,382,303 31,664 0.50 %6,150,150 51,996 0.85 %
Non-interest bearing deposit accounts2,566,924 — — 2,069,786 — — %
Fair value premium and core deposit intangible amortization— 7,350 — — 8,202 — 
Total deposits8,949,227 39,014 0.44 %8,219,936 60,198 0.73 %
Borrowings
Securities sold under agreements to repurchase— — — %50,874 1,335 2.63 %
Advances from FHLB and other borrowings57,816 1,641 2.84 %71,314 1,988 2.79 %
Subordinated capital notes36,083 1,174 3.25 %36,083 1,394 3.86 %
Total borrowings93,899 2,815 3.00 %158,271 4,717 2.98 %
Total interest-bearing liabilities$9,043,126 $41,829 0.46 %$8,378,207 $64,915 0.77 %
Interest rate spread$407,370 4.16 %$408,432 4.51 %
Net interest margin 4.19 %4.55 %
Core deposits: (Non-GAAP)
Deposits
NOW accounts$2,623,358 $9,179 0.35 %$2,156,300 $9,029 0.42 %
Savings accounts2,233,824 7,149 0.32 %1,858,416 8,380 0.45 %
Time deposits1,499,457 15,130 1.01 %1,966,706 30,455 1.55 %
6,356,639 31,458 0.49 %5,981,422 47,864 0.80 %
Non-interest bearing deposit accounts2,566,924 — — %2,069,786 — — %
Total core deposits$8,923,563 $31,458 0.35 %$8,051,208 $47,864 0.59 %
10

OFG Bancorp (NYSE: OFG)
Table 6-1: Loan Information and Performance Statistics (1)
20212021202120212020
(Dollars in thousands) (unaudited)Q4Q3Q2Q1Q4
Net Charge-offs(21)
Non-PCD
Mortgage:
Charge-offs$4,573 (a)$160 $268 $787  $225 
Recoveries(416)(419)(193)(615) (79)
Total mortgage4,157 (259)75 172  146 
Commercial:
Charge-offs550 7,518 (b)653 68  413 
Recoveries(418)(558)(996)(430) (334)
Total commercial132 6,960 (343)(362) 79 
Consumer:      
Charge-offs2,144 2,370 2,897 4,469  6,456 
Recoveries(743)(894)(697)(565) (1,832)
Total consumer1,401 1,476 2,200 3,904  4,624 
Auto:      
Charge-offs7,288 4,989 5,170 9,083  12,071 
Recoveries(6,282)(5,874)(5,997)(5,817) (5,928)
Total auto1,006 (885)(827)3,266  6,143 
Total$6,696 $7,292 $1,105 $6,980  $10,992 
PCD
Mortgage:
Charge-offs$15,010 (a)$1,008 $1,742 $2,590  $1,344 
Recoveries(452)(641)(184)(146) (63)
Total mortgage14,558 367 1,558 2,444  1,281 
Commercial:      
Charge-offs12,123 (a)68 6 43 33,061 (b)
Recoveries(746)(1,316)(430)(436) (234)
Total commercial11,377 (1,248)(424)(393) 32,827 
Consumer:      
Charge-offs— — — 22  21 
Recoveries(42)(219)(33)(21) (200)
Total consumer(42)(219)(33)1  (179)
Auto:      
Charge-offs140 124 226 456  574 
Recoveries(247)(265)(314)(383) (681)
Total auto(107)(141)(88)73  (107)
Total$25,786 $(1,241)$1,013 $2,125  $33,822 
Total Net Charge-offs$32,482 $6,051 $2,118 $9,105  $44,814 
Net Charge-off Rates(21)      
Mortgage3.79 %(a)0.02 %0.30 %0.47 % 0.25 %
Commercial1.95 %(a)0.97 %(b)-0.13 %-0.13 %5.45 %(b)
Consumer1.29 %1.26 %2.17 %3.78 %4.09 %
Auto0.21 %-0.25 %-0.23 %0.85 %1.56 %
Total2.01 %(a)0.37 %(b)0.13 %0.55 %2.67 %(b)
Average Loans Held For Investment(21)      
Mortgage$1,972,889 $2,047,272 $2,147,927 $2,243,303  $2,305,495 
Commercial2,362,120 2,360,642 2,443,407 2,405,419  2,416,703 
Consumer421,824 400,582 400,365 413,191  434,565 
Auto1,695,295 1,657,378 1,606,870 1,573,995  1,551,521 
Total$6,452,128 $6,465,874 $6,598,569 $6,635,908  $6,708,284 
(a)During 4Q 2021, the Company decided to sell $65.5 million of past due loans. As a result of the decision to sell loans, the Company recognized $30.1 million in net charge-offs and an additional provision of $9.7 million, decreasing the allowance for credit losses by $20.4 million.
(b)During 3Q 2021, the Company charged-off $6.5 million for a previously reserved amount on a commercial loan. During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.
11

OFG Bancorp (NYSE: OFG)
Table 6-2: Loan Information and Performance Statistics (Excludes PCD Loans) (1)
20212021202120212020
(Dollars in thousands) (unaudited)Q4Q3Q2Q1Q4
Early Delinquency (30 - 89 days past due)     
Mortgage$16,565 $15,233 $16,556 $17,541 $23,575 
Commercial4,736 4,150 3,715 3,911 8,043 
Consumer5,273 4,985 4,885 8,059 10,994 
Auto90,272 76,262 66,068 75,449 88,357 
Total $116,846 $100,630 $91,224 $104,960 $130,969 
Early Delinquency Rates (30 - 89 days past due)     
Mortgage2.30 %2.03 %2.13 %2.15 %2.78 %
Commercial0.23 %0.21 %0.20 %0.21 %0.44 %
Consumer1.29 %1.33 %1.33 %2.17 %2.82 %
Auto5.33 %4.57 %4.08 %4.82 %5.76 %
Total2.34 %2.06 %1.86 %2.15 %2.68 %
Total Delinquency (30 days and over past due)
Mortgage:
Traditional, Non traditional, and Loans under Loss Mitigation$45,521 $58,146 $60,892 $63,057 $69,670 
GNMA's buy-back option program14,511 19,944 28,118 40,777 56,193 
Total mortgage60,032 78,090 89,010 103,834 125,863 
Commercial14,129 13,742 21,549 26,065 30,604 
Consumer7,246 6,987 7,200 10,812 15,148 
Auto103,733 87,672 73,259 86,918 108,842 
Total$185,140 $186,491 $191,018 $227,629 $280,457 
Total Delinquency Rates (30 days and over past due)
Mortgage:
Traditional, Non traditional, and Loans under Loss Mitigation6.33 %7.74 %7.85 %7.74 %8.22 %
GNMA's buy-back option program2.02 %2.65 %3.63 %5.01 %6.63 %
Total mortgage8.35 %10.39 %11.48 %12.75 %14.86 %
Commercial0.68 %0.70 %1.13 %1.43 %1.67 %
Consumer1.77 %1.87 %1.97 %2.91 %3.89 %
Auto6.13 %5.26 %4.53 %5.55 %7.09 %
Total3.71 %3.82 %3.90 %4.65 %5.74 %
Nonperforming Assets(14)
Mortgage$39,394 $51,612 $52,773 $50,998 $47,731 
Commercial37,603 28,472 37,858 42,778 41,999 
Consumer2,303 2,203 2,466 2,835 4,223 
Auto19,829 12,055 7,606 11,842 20,766 
Total nonperforming loans99,129 94,342 100,703 108,453 114,719 
Foreclosed real estate15,039 13,904 15,093 15,598 11,596 
Other repossessed assets1,945 1,528 1,725 2,768 1,816 
Total nonperforming assets$116,113 $109,774 $117,521 $126,819 $128,131 
Nonperforming Loan Rates     
Mortgage5.48 %6.87 %6.80 %6.26 %5.63 %
Commercial1.80 %1.46 %1.99 %2.34 %2.29 %
Consumer0.56 %0.59 %0.67 %0.76 %1.08 %
Auto1.17 %0.72 %0.47 %0.76 %1.35 %
Total loans1.98 %1.93 %2.06 %2.22 %2.35 %
12

OFG Bancorp (NYSE: OFG)
Table 6-3: Loan Information and Performance Statistics (1)
 20212021202120212020
(Dollars in thousands) (unaudited) Q4Q3Q2Q1Q4
Nonperforming PCD Loans(14)
Mortgage $334 $2,030 $2,067 $958 $1,003 
Commercial 12,545 (a)36,798 34,502 34,906 36,470 
Consumer — — — — 1 
Total nonperforming loans $12,879 $38,828 $36,569 $35,864 $37,474 
Nonperforming PCD Loan Rates      
Mortgage 0.03 %0.16 %0.16 %0.07 %0.07 %
Commercial 6.14 %(a)15.36 %13.24 %12.80 %12.88 %
Consumer 0.00 %0.00 %0.00 %0.00 %0.07 %
Total 0.92 %(a)2.54 %2.28 %2.11 %2.11 %
Total PCD Loans Held for Investment(21)     
Mortgage $1,188,423 $1,270,854 $1,324,274 $1,406,044 $1,459,932 
Commercial 204,335 239,554 260,627 272,793 283,160 
Consumer 916 959 981 1,120 1,394 
Total loans $1,393,674 $1,511,367 $1,585,882 $1,679,957 $1,744,486 
 20212021202120212020
(Dollars in thousands) (unaudited) Q4Q3Q2Q1Q4
Total Nonperforming Loans(14)     
Mortgage $39,728 (b)$53,642 $54,840 $51,891 $47,970 
Commercial 50,148 (a)65,270 (c)72,360 77,684 78,469 
Consumer 2,303 2,203 2,466 2,900 4,988 
Auto 19,829 12,055 7,606 11,842 20,766 
Total nonperforming loans $112,008 $133,170 $137,272 $144,317 $152,193 
Total Nonperforming Loan Rates 
Mortgage 2.08 %(b)2.65 %2.63 %2.36 %2.10 %
Commercial 2.11 %(a)2.80 %(c)3.02 %3.22 %3.27 %
Consumer 0.56 %0.59 %0.64 %0.73 %1.20 %
Auto 1.16 %0.72 %0.46 %0.75 %1.33 %
Total 1.75 %2.08 %2.11 %2.19 %2.28 %
Total Loans Held for Investment(21)     
Mortgage $1,907,271 $2,022,243 $2,084,442 $2,197,106 $2,283,375 
Commercial 2,379,330 2,331,056 2,393,170 2,411,718 2,402,010 
Consumer 409,675 374,631 382,456 396,193 414,946 
Auto 1,706,310 1,682,933 1,638,024 1,588,509 1,561,802 
Total loans $6,402,586 $6,410,863 $6,498,092 $6,593,526 $6,662,133 
(a)During 4Q 2021, the Company decided to sell $65.5 million of past due loans. The Company transferred to held for sale past due residential mortgage loans with reporting balance of $39.8 million and a PCD commercial loan with reporting balance of $20.9 million.
(b)During 3Q 2021, the Company charged-off $6.5 million for a previously reserved amount on a commercial loan. During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.

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OFG Bancorp (NYSE: OFG)
Table 7: Allowance for Credit Losses (1)
Quarter Ended December 31, 2021
(Dollars in thousands) (unaudited)MortgageCommercialConsumerAutoTotal
Allowance for credit losses Non-PCD:     
Balance at beginning of period$16,867 $33,240 $17,848 $70,919 $138,874 
Provision for (recapture of) credit losses2,589 (a)(846)2,694 (4,550)(113)
Charge-offs(4,573)(a)(550)(2,144)(7,288)(14,555)
Recoveries416 418 743 6,282 7,859 
Balance at end of period$15,299 $32,262 $19,141 $65,363 $132,065 
Allowance for credit losses PCD:
Balance at beginning of period$30,390 $11,166 $37 $405 $41,998 
Provision for (recapture of) credit losses3,186 (a)4,719 (a)(45)(200)7,660 
Charge-offs(15,010)(a)(12,123)(a)— (140)(27,273)
Recoveries452 746 42 247 1,487 
Balance at end of period$19,018 $4,508 $34 $312 $23,872 
Allowance for credit losses summary:
Balance at beginning of period$47,257 $44,406 $17,885 $71,324 $180,872 
Provision for (recapture of) credit losses5,775 (a)3,873 (a)2,649 (4,750)7,547 
Charge-offs(19,583)(a)(12,673)(a)(2,144)(7,428)(41,828)
Recoveries868 1,164 785 6,529 9,346 
Balance at end of period$34,317 $36,770 $19,175 $65,675 $155,937 
Allowance coverage ratio1.80 %1.55 %4.68 %3.85 %2.44 %
Allowance coverage ratio excluding PPP loans (Non-GAAP)1.80 %1.60 %4.68 %3.85 %2.47 %
(a)During 4Q 2021, the Company decided to sell $65.5 million of past due loans. As a result of the decision to sell loans, the Company recognized $30.1 million in net charge-offs and an additional provision of $9.7 million, decreasing the allowance for credit losses by $20.4 million.
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OFG Bancorp (NYSE: OFG)
Table 8-1: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital
In addition to disclosing required regulatory capital measures, we also report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity ("TCE") and TCE ratio. The table below provides the details of the calculation of our regulatory capital and non-GAAP capital measures. While our non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.
20212021202120212020
(Dollars in thousands) (unaudited)Q4Q3Q2Q1Q4
Stockholders' Equity to Non-GAAP Tangible Common Equity
Total stockholders' equity$1,069,160 (a)$1,053,665 (a)(b)$1,079,997 (b)$1,108,423 $1,085,975 
Less:  Intangible assets(122,162)(124,614)(127,064)(129,514)(131,965)
Noncumulative perpetual preferred stock— — (24,000)(b)(92,000)(92,000)
Noncumulative perpetual preferred stock issuance costs— — 7,453 (b)10,130 10,130 
Tangible common equity$946,998 $929,051 $936,386 $897,039 $872,140 
     
Common shares outstanding at end of period49,636 (a)49,977 (a)51,661 51,579 51,387 
Tangible book value per common share (Non-GAAP)$19.08 (a)$18.59 (a)$18.13 $17.39 $16.97 
Total Assets to Tangible Assets     
Total assets  $9,899,720 $10,606,865 $10,461,813 $10,153,342 $9,826,011 
Less:  Intangible assets(122,162)(124,614)(127,064)(129,514)(131,965)
Tangible assets (Non-GAAP)$9,777,558 $10,482,251 $10,334,749 $10,023,828 $9,694,046 
Non-GAAP TCE Ratio     
Tangible common equity$946,998 (a)$929,051 (a)$936,386 $897,039 $872,140 
Tangible assets9,777,558 10,482,251 10,334,749 10,023,828 9,694,046 
TCE ratio9.69 %8.86 %9.06 %8.95 %9.00 %
Average Equity to Non-GAAP Average Tangible Common Equity
Average total stockholders' equity$1,066,764 (a)$1,068,618 (a)(b)$1,083,452 (b)$1,101,046 $1,083,423 
Less: Average noncumulative perpetual preferred stock— (3,391)(b)(44,923)(b)(92,000)(92,000)
Average noncumulative perpetual preferred stock issuance costs— 1,134 (b)8,306 (b)10,130 10,130 
Average total common stockholders' equity$1,066,764 $1,066,361 $1,046,835 $1,019,176 $1,001,553 
Less:  Average intangible assets(123,201)(125,723)(128,311)(130,767)(133,542)
Average tangible common equity$943,563 $940,638 $918,524 $888,409 $868,011 
(a)During 3Q 2021 and 4Q 2021, the Company repurchased $40.2 million and $9.7 million common stock, respectively, from its $50.0 million share buyback program.
(b)During 2Q 2021 and 3Q 2021, the Company redeemed Series A and B Preferred Stock, and Series D Preferred Stock, respectively.
15

OFG Bancorp (NYSE: OFG)
Table 8-2: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued)
BASEL III
Standardized
2021 2021 202120212020
(Dollars in thousands) (unaudited)Q4 Q3 Q2Q1Q4
Regulatory Capital Metrics       
Common equity Tier 1 capital$964,286 (a)$931,884 (a)$957,238 $919,856 $894,074 
Tier 1 capital999,286 (a)966,884 (a)(b)1,008,785 (b)1,036,726 1,010,944 
Total risk-based capital(15)1,086,899 (a)1,053,184 (a)(b)1,094,786 (b)1,121,830 1,096,764 
Risk-weighted assets7,004,876  6,893,254  6,861,890 6,782,685 6,837,846 
Regulatory Capital Ratios
Common equity Tier 1 capital ratio(16)13.77 % 13.52 % 13.95 %13.56 %13.08 %
Tier 1 risk-based capital ratio(17)14.27 % 14.03 % 14.70 %15.28 %14.78 %
Total risk-based capital ratio(18)15.52 % 15.28 % 15.95 %16.54 %16.04 %
Leverage ratio(19)9.63 % 9.33 % 9.84 %10.48 %10.30 %
 
Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach
Total stockholders' equity(1)$1,069,160 (a)$1,053,665 (a)(b)$1,079,997 (b)$1,108,423 $1,085,975 
Plus:CECL transition adjustment(20)27,409 29,111  31,471 33,637 34,646 
Less:Noncumulative perpetual preferred stock— — (b)(24,000)(b)(92,000)(92,000)
Noncumulative perpetual preferred stock issuance costs— — (b)7,453 (b)10,130 10,130 
Unrealized gains on available-for-sale securities, net of income tax(5,663)(9,330) (8,408)(7,146)(12,091)
Unrealized losses on cash flow hedges, net of income tax503 710  808 916 1,069 
1,091,409 1,074,156  1,087,321 1,053,960 1,027,729 
Less:Disallowed goodwill(86,069)(86,069) (86,069)(86,069)(86,069)
Disallowed other intangible assets, net(25,769)(26,938) (28,555)(30,172)(32,073)
Disallowed deferred tax assets, net(15,285)(29,265) (15,459)(17,863)(15,513)
Common equity Tier 1 capital964,286 931,884  957,238 919,856 894,074 
Plus:Qualifying noncumulative perpetual preferred stock— — (b)24,000 (b)92,000 92,000 
Qualifying noncumulative perpetual preferred stock issuance costs— — (b)(7,453)(b)(10,130)(10,130)
Subordinated capital notes35,000  35,000  35,000 35,000 35,000 
Tier 1 capital999,286  966,884  1,008,785 1,036,726 1,010,944 
Plus tier 2 capital:  Qualifying allowance for loan and lease losses87,613  86,300  86,001 85,104 85,820 
Total risk-based capital$1,086,899  $1,053,184  $1,094,786 $1,121,830 $1,096,764 
(a)During 3Q 2021 and 4Q 2021, the Company repurchased $40.2 million and $9.7 million common stock, respectively, from its $50.0 million share buyback program.
(b)During 2Q 2021 and 3Q 2021, the Company redeemed Series A and B Preferred Stock, and Series D Preferred Stock, respectively.
16

OFG Bancorp (NYSE: OFG)
Table 9: Notes to Financial Summary, Selected Metrics, Loans, and Consolidated Financial Statements (Tables 1 - 8)
(1)We used the term "PCI" to refer to loans acquired with credit deterioration from the Scotiabank Acquisition (December 31, 2019), the BBVAPR Acquisition (December 18, 2012) and the Eurobank FDIC-Assisted Acquisition (April 30, 2010), recorded at fair value at acquisition. On January 1, 2020, the Company implemented ASU No. 2016-13: Measurement of Credit Losses on Financial Instruments "(CECL)" using the modified retrospective approach. CECL replaces the concept of purchased credit impaired loans (PCI) with the concept of purchased financial assets with credit deterioration (PCD). PCD accounting is called ‘gross-up accounting’ because, at acquisition, an entity grosses up the amortized cost basis of the PCD asset for the initial estimate of credit losses. This Day 1 allowance for credit losses is established without an income statement effect. The Company elected to maintain previously existing pools on adoption, therefore the pool continues to be the unit of account, and the allowance and non-credit discount or premium is not allocated to the individual assets. These loans are not classified as delinquent or nonperforming even though the customer may be contractually past due because we expect that we will fully collect the carrying value of these loans.
(2)Total banking and financial service revenues.
(3)Calculated based on net income available to common shareholders divided by average common shares outstanding for the period.
(4)Calculated based on net income available to common shareholders divided by total average common shares outstanding and equivalents for the period as if converted.
(5)Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
(6)Information includes all loans held for investment, including PCD loans.
(7)Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
(8)Calculated based on annualized income, net of tax, for the period divided by average total assets for the period.
(9)Calculated based on annualized income available to common shareholders for the period divided by average tangible common equity for the period.
(10)Calculated based on non-interest expense for the period divided by total net interest income and total banking and financial services revenues for the period.
(11)Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(12)Non-GAAP ratios. See "Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.
(13)Production of new loans (excluding renewals).
(14)Most PCD loans are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses. Therefore, they are not included as non-performing loans. PCD loan pools that are not accreting interest income are deemed to be non-performing loans and presented separately.
(15)Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.
(16)Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets.
(17)Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(18)Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk-weighted assets.
(19)Leverage capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.
(20)In March 2020, in light of recent strains on the U.S. economy as a result of the coronavirus disease 2019 (COVID-19), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency issued an interim final rule that provided the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period. In addition, for the first two years, a uniform 25% “scaling factor” is introduced to approximate the portion of the post day-one allowance attributable to CECL relative to the incurred loss methodology. The 25% scaling factor is calibrated to approximate an overall after-tax impact of differences in allowances under CECL vs the incurred loss methodology.
(21)CECL replaced the concept of purchased credit impaired loans (PCI assets) with the concept of purchased financial assets with credit deterioration (PCD assets). An entity records a PCD asset at the purchase price plus the allowance for credit losses expected at the time of acquisition. Under this method, there is no credit loss expense affecting net income on acquisition. Changes in estimates of expected credit losses after acquisition are recognized as credit loss expense (or reversal of credit loss expense) in subsequent periods as they arise.
(22)Pre-provision net revenues is a non-GAAP measure calculated based on net interest income plus total non-interest income, net, less total non-interest expenses for the period.
(23)PPP loans are fully guaranteed by the SBA and risk-weighted at 0%.
17