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v3.23.1

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended
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Mar. 31, 2023
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, 2023
| Fair Value Measurements
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (In thousands)
Recurring fair value measurements: |  |  |  |  |  |  |
Investment securities available-for-sale | $ | 242,098 |  |  | $ | 1,110,595 |  |  | $ | 413 |  |  | $ | 1,353,106 |
Trading securities | — |  |  | 10 |  |  | — |  |  | 10 |
Money market investments | 3,172 |  |  | — |  |  | — |  |  | 3,172 |
Derivative assets | — |  |  | 275 |  |  | — |  |  | 275 |
Servicing assets | — |  |  | — |  |  | 49,345 |  |  | 49,345 |
| $ | 245,270 |  |  | $ | 1,110,880 |  |  | $ | 49,758 |  |  | $ | 1,405,908 |
Non-recurring fair value measurements: |  |  |  |  |  |  |
Collateral dependent loans | $ | — |  |  | $ | — |  |  | $ | 9,117 |  |  | $ | 9,117 |
Foreclosed real estate | — |  |  | — |  |  | 9,250 |  |  | 9,250 |
Other repossessed assets | — |  |  | — |  |  | 4,563 |  |  | 4,563 |
Mortgage loans held for sale | — |  |  | — |  |  | 13,616 |  |  | 13,616 |
Other loans held for sale | $ | — |  |  | $ | — |  |  | $ | 19,069 |  |  | 19,069 |
| $ | — |  |  | $ | — |  |  | $ | 55,615 |  |  | $ | 55,615 |
| December 31, 2022
| Fair Value Measurements
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (In thousands)
Recurring fair value measurements: |  |  |  |  |  |  |
Investment securities available-for-sale | $ | 309,133 |  |  | $ | 1,103,237 |  |  | $ | 406 |  |  | $ | 1,412,776 |
Trading securities | — |  |  | 9 |  |  | — |  |  | 9 |
Money market investments | 4,161 |  |  | — |  |  | — |  |  | 4,161 |
Derivative assets | — |  |  | 406 |  |  | — |  |  | 406 |
Servicing assets | — |  |  | — |  |  | 50,921 |  |  | 50,921 |
| $ | 313,294 |  |  | $ | 1,103,652 |  |  | $ | 51,327 |  |  | $ | 1,468,273 |
Non-recurring fair value measurements: |  |  |  |  |  |  |
Collateral dependent loans | $ | — |  |  | $ | — |  |  | $ | 8,805 |  |  | $ | 8,805 |
Foreclosed real estate | — |  |  | — |  |  | 11,214 |  |  | 11,214 |
Other repossessed assets | — |  |  | — |  |  | 4,617 |  |  | 4,617 |
Mortgage loans held for sale | — |  |  | — |  |  | 19,499 |  |  | 19,499 |
Other loans held for sale | $ | — |  |  | $ | — |  |  | $ | 21,088 |  |  | 21,088 |
| $ | — |  |  | $ | — |  |  | $ | 65,223 |  |  | $ | 65,223 |
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 ended March 31, 2023 and 2022: Level 3 Instruments Only
| Quarter Ended March 31,
| 2023 |  | 2022 |  |
| Other debt securities available for sale | Servicing Assets | Total |  | Other debt securities available for sale | Servicing Assets | Total |  |
| (In thousands) |  |
Balance at beginning period | $ | 406 |  | $ | 50,921 |  | $ | 51,327 |  |  | $ | 1,530 |  | $ | 48,973 |  | $ | 50,503 |  |  |
New instruments acquired | — |  | 575 |  | 575 |  |  | — |  | 1,119 |  | 1,119 |  |  |
Principal repayments and amortization | — |  | (1,065) |  | (1,065) |  |  | — |  | (1,499) |  | (1,499) |  |  |
(Losses) gains included in earnings | — |  | (1,086) |  | (1,086) |  |  | — |  | 853 |  | 853 |  |  |
Gains included in other comprehensive income | 7 |  | — |  | 7 |  |  | 24 |  | — |  | 24 |  |  |
Balance at end of period | $ | 413 |  | $ | 49,345 |  | $ | 49,758 |  |  | $ | 1,554 |  | $ | 49,446 |  | $ | 51,000 |  |  |
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, 2023 and December 31, 2022:
| March 31, 2023
| Fair Value |  | Valuation Technique |  | Unobservable Input |  | Range |  | Weighted Average
| (In thousands) |  |  |  |  |  |  |  |
Other debt securities available-for-sale | $ | 413 |  |  | 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 | $ | 49,345 |  |  | Cash flow valuation |  | Constant prepayment rate |  | 3.59% - 23.26% |  | 6.06 | %
|  |  |  |  | Discount rate |  | 10.00% - 15.50% |  | 11.45 | %
Collateral dependent loans | $ | 9,117 |  |  | Fair value of property or collateral |  | Appraised value less disposition costs |  | 10.20% - 33.20% |  | 17.12 | %
Foreclosed real estate | $ | 9,250 |  |  | Fair value of property or collateral |  | Appraised value less disposition costs |  | 10.20% - 33.20% |  | 12.15 | %
Other repossessed assets | $ | 4,563 |  |  | Fair value of property or collateral |  | Estimated net realizable value less disposition costs |  | 25.00% - 78.00% |  | 61.37 | %
Mortgage loans held for sale | $ | 13,616 |  |  | Fair value of property |  | Estimated net realizable value |  | 96.43% - 102.57% |  | 99.88 | %
Other loans held for sale | $ | 19,069 |  |  | Bids or sales contract prices |  | Estimated market value |  | 100.00% - 133.64% |  | 101.01 | %
| December 31, 2022
| Fair Value |  | Valuation Technique |  | Unobservable Input |  | Range |  | Weighted Average
| (In thousands) |  |  |  |  |  |  |  |
Other debt securities available-for-sale | $ | 406 |  |  | 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 | $ | 50,921 |  |  | Cash flow valuation |  | Constant prepayment rate |  | 3.43% - 21.20% |  | 5.66 | %
|  |  |  |  | Discount rate |  | 10.00% - 15.50% |  | 11.45 | %
Collateral dependent loans | $ | 8,805 |  |  | Fair value of property or collateral |  | Appraised value less disposition costs |  | 10.20% - 51.20% |  | 17.11 | %
Foreclosed real estate | $ | 11,214 |  |  | Fair value of property or collateral |  | Appraised value less disposition costs |  | 10.20% - 33.20% |  | 11.81 | %
Other repossessed assets | $ | 4,617 |  |  | Fair value of property or collateral |  | Estimated net realizable value less disposition costs |  | 22.00% - 80.00% |  | 58.49 | %
Mortgage loans held for sale | $ | 19,499 |  |  | Fair value of property |  | Estimated net realizable value |  | 83.25% - 102.43% |  | 71.86%
Other loans held for sale | $ | 21,088 |  |  | Bids or sales contract prices |  | Estimated market value |  | 100.00% - 103.20% |  | 74.65%
Schedule of Estimated Fair Value and Carrying Value | The estimated fair value and carrying value of OFG’s financial instruments at March 31, 2023 and December 31, 2022 was as follows:
| March 31, |  | December 31,
| 2023 |  | 2022
| Fair Value |  | Carrying Value |  | Fair Value |  | Carrying Value
| (In thousands)
Financial Assets: |  |  |  |  |  |  |
Level 1 |  |  |  |  |  |  |
Cash and cash equivalents | $ | 847,352 |  |  | $ | 847,352 |  |  | $ | 550,307 |  |  | $ | 550,307 |
Restricted cash | $ | 142 |  |  | $ | 142 |  |  | $ | 157 |  |  | $ | 157 |
Investment securities available-for-sale | $ | 242,098 |  |  | $ | 242,098 |  |  | $ | 309,133 |  |  | $ | 309,133 |
Level 2 |  |  |  |  |  |  |
Financial Assets: |  |  |  |  |  |  |
Trading securities | $ | 10 |  |  | $ | 10 |  |  | $ | 9 |  |  | $ | 9 |
Investment securities available-for-sale | $ | 1,110,595 |  |  | $ | 1,110,595 |  |  | $ | 1,103,237 |  |  | $ | 1,103,237 |
Investment securities held-to-maturity | $ | 471,615 |  |  | $ | 530,880 |  |  | $ | 469,186 |  |  | $ | 535,070 |
Federal Home Loan Bank (FHLB) stock | $ | 14,983 |  |  | $ | 14,983 |  |  | $ | 6,005 |  |  | $ | 6,005 |
Equity securities | $ | 18,235 |  |  | $ | 18,235 |  |  | $ | 17,662 |  |  | $ | 17,662 |
Derivative assets | $ | 275 |  |  | $ | 275 |  |  | $ | 406 |  |  | $ | 406 |
Level 3 |  |  |  |  |  |  |
Financial Assets: |  |  |  |  |  |  |
Investment securities available for sale | $ | 413 |  |  | $ | 413 |  |  | $ | 406 |  |  | $ | 406 |
Total loans (including loans held-for-sale) | $ | 6,471,463 |  |  | $ | 6,735,281 |  |  | $ | 6,467,878 |  |  | $ | 6,723,236 |
Accrued interest receivable | $ | 62,140 |  |  | $ | 62,140 |  |  | $ | 62,402 |  |  | $ | 62,402 |
Servicing assets | $ | 49,345 |  |  | $ | 49,345 |  |  | $ | 50,921 |  |  | $ | 50,921 |
Accounts receivable and other assets | $ | 66,196 |  |  | $ | 66,196 |  |  | $ | 61,014 |  |  | $ | 61,014 |
Financial Liabilities: |  |  |  |  |  |  |
Deposits | $ | 8,558,961 |  |  | $ | 8,565,421 |  |  | $ | 8,556,300 |  |  | $ | 8,568,364 |
Advances from FHLB | $ | 225,612 |  |  | $ | 226,661 |  |  | $ | 26,716 |  |  | $ | 26,716 |
Other borrowings | $ | 128 |  |  | $ | 128 |  |  | $ | 318 |  |  | $ | 318 |
Accrued expenses and other liabilities | $ | 119,777 |  |  | $ | 119,777 |  |  | $ | 124,999 |  |  | $ | 124,999 |

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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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 50 -Paragraph 2C -SubTopic 10 -Topic 820 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2C Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-3 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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- Definition Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb) -SubTopic 10 -Topic 820 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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- Definition 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c) -SubTopic 10 -Topic 820 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-3 + Details
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