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BUSINESS SEGMENTS
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
BUSINESS SEGMENTS BUSINESS SEGMENTS
OFG segregates its businesses into the following segments of business: Banking, Wealth Management, and Treasury. Management established the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources. Other factors such as OFG’s organization, nature of its products, distribution channels and economic characteristics of the products were also considered in the determination of the reportable segments. OFG measures the performance of these segments based on pre-established goals of different financial parameters such as net income, net interest income, loan production, and fees generated. OFG’s methodology for allocating non-interest expenses among segments is based on several factors such as revenue, employee headcount, occupied space, dedicated services or time, among others. These factors are reviewed on a periodical basis and may change if the conditions warrant.

Banking includes the Bank’s branches and traditional banking products such as deposits and commercial, consumer, auto loans and leases, and mortgage loans. Mortgage banking activities are carried out by the Bank’s mortgage banking division, whose principal activity is to originate mortgage loans for OFG’s own portfolio. As part of its mortgage banking activities, OFG may sell loans directly into the secondary market or securitize conforming loans into mortgage-backed securities.

Wealth Management is comprised of the Bank’s trust division, Oriental Financial Services, Oriental Insurance, OFG Reinsurance and OPC. The core operations of this segment are financial planning, money management and investment banking, securities brokerage services, investment advisory services, insurance, corporate and individual trust and retirement services, as well as retirement plan administration services up to December 31, 2022, when OPC sold its retirement plan administration business.

The Treasury segment encompasses all of OFG’s asset/liability management activities, such as purchases and sales of investment securities, interest rate risk management, derivatives, and borrowings. Intersegment sales and transfers, if any, are accounted for as if the sales or transfers were to third parties, that is, at current market prices.
Following are the results of operations and the selected financial information by operating segment for the quarters and six month periods ended June 30, 2023 and 2022:
Quarter Ended June 30, 2023
BankingWealth
Management		TreasuryTotal Major
Segments		EliminationsConsolidated
Total
(In thousands)
Interest income$139,999 $6 $22,841 $162,846 $(4,858)$157,988 
Interest expense(15,824)— (7,378)(23,202)4,858 (18,344)
Net interest income124,175 6 15,463 139,644 — 139,644 
Provision for (recapture of) credit losses15,052 — (8)15,044 — 15,044 
Non-interest income 23,354 7,868 (1,149)30,073 — 30,073 
Non-interest expenses(83,876)(4,138)(874)(88,888)— (88,888)
Intersegment revenue575 — — 575 (575)— 
Intersegment expenses— (380)(195)(575)575 — 
Income before income taxes49,176 3,356 13,253 65,785 — 65,785 
Income tax expense21,577 20 15 21,612 — 21,612 
Net income$27,599 $3,336 $13,238 $44,173 $— $44,173 
Total assets$8,720,156 $33,946 $2,338,820 $11,092,922 $(1,061,375)$10,031,547 
Six-Month Period Ended June 30, 2023
BankingWealth
Management		TreasuryTotalEliminationsConsolidated
Total
(In thousands)
Interest income$272,424 $11 $43,967 $316,402 $(9,429)$306,973 
Interest expense(28,205)— (12,656)(40,861)9,429 (31,432)
Net interest income244,219 11 31,311 275,541 — 275,541 
Provision for credit losses24,457 — 32 24,489 — 24,489 
Non-interest income44,979 15,144 (1,149)58,974 — 58,974 
Non-interest expenses(169,241)(8,093)(1,774)(179,108)— (179,108)
Intersegment revenue1,122 — — 1,122 (1,122)— 
Intersegment expenses— (758)(364)(1,122)1,122 — 
Income before income taxes$96,622 $6,304 $27,992 $130,918 $— $130,918 
Income tax expense40,469 20 27 40,516 — 40,516 
Net income$56,153 $6,284 $27,965 $90,402 $— $90,402 
Total assets$8,720,156 $33,946 $2,338,820 $11,092,922 $(1,061,375)$10,031,547 

Eliminations include interest income and expense for a borrowing by Oriental Overseas, an international banking entity
organized in Puerto Rico pursuant to the Puerto Rico International Banking Center Regulatory Act, as amended,
which operates as a unit within the Bank. It is included in the Treasury Segment with its corresponding interest expense, to fund its operations, from the Bank, which is included in the Banking Segment with its corresponding interest income, with an unpaid principal balance of $364.2 million and $465.3 million at June 30, 2023 and 2022, respectively, and is eliminated in the consolidation. Interest income is accrued on the unpaid principal balance. The increase in interest income and interest expense from the prior year period was mainly as a result of Federal Open Market Committee of the Board of Governors of the Federal Reserve System (“FRB”) federal funds rate increases and higher average borrowing balance.
Quarter Ended June 30, 2022
BankingWealth
Management		TreasuryTotal Major
Segments		EliminationsConsolidated
Total
(In thousands)
Interest income$111,653 $5 $11,228 $122,886 $(664)$122,222 
Interest expense(6,893)— (899)(7,792)664 (7,128)
Net interest income104,760 5 10,329 115,094 — 115,094 
Provision for credit losses6,634 — 57 6,691 — 6,691 
Non-interest income27,802 8,408 — 36,210 — 36,210 
Non-interest expenses(79,656)(4,795)(807)(85,258)— (85,258)
Intersegment revenue543 — — 543 (543)— 
Intersegment expenses— (376)(167)(543)543 — 
Income before income taxes46,815 3,242 9,298 59,355 — 59,355 
Income tax expense18,580 — 343 18,923 — 18,923 
Net income$28,235 $3,242 $8,955 $40,432 $— $40,432 
Total assets$8,235,814 $28,240 $2,997,323 $11,261,377 $(1,013,603)$10,247,774 
Six-Month Period Ended June 30, 2022
BankingWealth
Management		TreasuryTotalEliminationsConsolidated
Total
(In thousands)
Interest income$219,078 $10 $16,958 $236,046 $(875)$235,171 
Interest expense(13,904)— (1,854)(15,758)875 (14,883)
Net interest income205,174 10 15,104 220,288 — 220,288 
Provision for (recapture of) credit losses8,344 — (102)8,242 — 8,242 
Non-interest income51,352 16,414 50 67,816 — 67,816 
Non-interest expenses(155,447)(9,380)(1,586)(166,413)— (166,413)
Intersegment revenue1,057 — — 1,057 (1,057)— 
Intersegment expenses— (719)(338)(1,057)1,057 — 
Income before income taxes$93,792 $6,325 $13,332 $113,449 $— $113,449 
Income tax expense35,062 — 434 35,496 — 35,496 
Net income$58,730 $6,325 $12,898 $77,953 $— $77,953 
Total assets$8,235,814 $28,240 $2,997,323 $11,261,377 $(1,013,603)$10,247,774