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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

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

X

- 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 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.

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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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Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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