OPERATING LEASES

9 Months Ended

Sep. 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 September 30,				Nine-Month Period Ended September 30,
	2023		2022		2023		2022		Statement of Operations Classification
	(In thousands)
Lease costs	$	5,130	$	5,188	$	7,738	$	7,851	Occupancy and equipment
Variable lease costs	674		873		1,021		1,157		Occupancy and equipment
Short-term lease cost	335		448		483		730		Occupancy and equipment
Lease income	(62)		(129)		(79)		(181)		Occupancy and equipment
Total lease cost	$	6,077	$	6,380	$	9,163	$	9,557

Operating Lease Assets and Liabilities


	September 30,		December 31,
	2023		2022		Statement of Financial Condition Classification
	(In thousands)
Right-of-use assets	$	20,011	$	25,363	Operating lease right-of-use assets
Lease Liabilities	$	22,269	$	27,370	Operating leases liabilities


	September 30,		December 31,
	2023		2022
	(In thousands)
Weighted-average remaining lease term	4.8 years		5.1 years
Weighted-average discount rate	7.0	%	6.8	%

Future minimum payments for operating leases with initial or remaining terms of one year or more as of September 30, 2023 were as follows:


	Minimum Rent
As of September 30, 2023	(In thousands)
2024	$	2,331
2025	7,512
2026	5,324
2027	3,227
2028	2,377
Thereafter	5,772
Total lease payments	$	26,543
Less imputed interest	4,274
Present value of lease liabilities	$	22,269

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