OPERATING LEASES

6 Months Ended

Jun. 30, 2023

Substantially 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 June 30,				Six-Month Period Ended June 30,
	2023		2022		2023		2022		Statement of Operations Classification
	(In thousands)
Lease costs	$	2,608	$	2,663	$	5,208	$	5,218	Occupancy and equipment
Variable lease costs	347		285		687		832		Occupancy and equipment
Short-term lease cost	148		282		305		537		Occupancy and equipment
Lease income	(17)		(53)		(54)		(129)		Occupancy and equipment
Total lease cost	$	3,086	$	3,177	$	6,146	$	6,458

Operating Lease Assets and Liabilities


	June 30,		December 31,
	2023		2022		Statement of Financial Condition Classification
	(In thousands)
Right-of-use assets	$	21,840	$	25,363	Operating lease right-of-use assets
Lease Liabilities	$	24,031	$	27,370	Operating leases liabilities


	June 30,		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 June 30, 2023 were as follows:


	Minimum Rent
As of June 30, 2023	(In thousands)
2024	$	4,676
2025	7,402
2026	5,244
2027	3,199
2028	2,377
Thereafter	5,773
Total lease payments	$	28,671
Less imputed interest	4,640
Present value of lease liabilities	$	24,031

OFG, as lessor, leases and subleases real property to tenants under operating leases. As of June 30, 2023, no material lease concessions have been granted to tenants. As of June 30, 2023, OFG, as lessee, has not requested any lease concessions.