OPERATING LEASES

3 Months Ended

Mar. 31, 2023

OPERATING LEASESSubstantially 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 March 31,
	2023		2022		Statement of Operations Classification
	(In thousands)
Lease costs	$	2,600	$	2,555	Occupancy and equipment
Variable lease costs	341		547		Occupancy and equipment
Short-term lease cost	157		255		Occupancy and equipment
Lease income	(38)		(77)		Occupancy and equipment
Total lease cost	$	3,060	$	3,280

Operating Lease Assets and Liabilities


	March 31,		December 31,
	2023		2022		Statement of Financial Condition Classification
	(In thousands)
Right-of-use assets	$	23,897	$	25,363	Operating lease right-of-use assets
Lease Liabilities	$	25,990	$	27,370	Operating leases liabilities


	March 31,		December 31,
	2023		2022
	(In thousands)
Weighted-average remaining lease term	4.9 years		5.1 years
Weighted-average discount rate	6.9	%	6.8	%

Future minimum payments for operating leases with initial or remaining terms of one year or more as of March 31, 2023 were as follows:


	Minimum Rent
As of March 31, 2023	(In thousands)
2024	$	7,099
2025	7,376
2026	5,227
2027	3,193
2028	2,377
Thereafter	5,773
Total lease payments	$	31,045
Less imputed interest	5,055
Present value of lease liabilities	$	25,990

OFG, as lessor, leases and subleases real property to tenants under operating leases. As of March 31, 2023, no material lease concessions have been granted to tenants. As of March 31, 2023, OFG, as lessee, has not requested any lease concessions.