EX-99 2 ofg-20224qxexx99.htm EX-99

Document

Exhibit 99

OFG Bancorp Reports 4Q22 & 2022 Results

SAN JUAN, Puerto Rico, January 26, 2023 – OFG Bancorp (NYSE: OFG), the financial holding company for Oriental Bank, reported results for the fourth quarter and year ended December 31, 2022.

Summary

4Q22: EPS diluted of $0.97 compared to $0.87 in 3Q22 and $0.66 in 4Q21. Total core revenues of $168.3 million compared to $156.8 million in 3Q22 and $141.0 million in 4Q21.

Full Year 2022: EPS diluted of $3.44 compared to $2.81 in 2021. Total Core Revenues of $607.8 million compared to $536.6 million.

CEO Comment

José Rafael Fernández, Chief Executive Officer, said: “The fourth quarter reflected total core revenue growth of 7.3% quarter-over-quarter. Key performance metrics improved, with return on average assets of 1.86%, return on average tangible common stockholders’ equity of 20.36%, and an efficiency ratio of 54.45%. Tangible Book Value per share increased to $19.56.”

“Puerto Rico businesses and consumers remain in good financial shape. We look forward to a year of continued progress in 2023, keeping a watchful eye to uncertainties from Federal Reserve Bank rate actions, inflation, and the forecasted mainland recession. We owe a debt of thanks to our team members for their continued dedication, tireless commitment to sales and service, and purposeful drive to bring financial progress to our customers and the communities we serve every day.”

4Q22 Highlights

Net Interest Income of $135.3 million compared to $126.5 million in 3Q22 and $104.2 million in 4Q21. Net interest margin expanded to 5.69% from 5.23% in 3Q22 reflecting FRB rate increases, along with increased investments and loan balances.

Interest Income of $145.7 million compared to $134.7 million in 3Q22 and $112.6 million in 4Q21. Compared to the previous quarter, 4Q22 benefited from higher yields on increased average balances of loans and investment securities.

Total Interest Expense of $10.4 million compared to $8.2 million in 3Q22 and $8.4 million in 4Q21. Compared to 3Q22, 4Q22 interest expense reflected an 11 basis point cost increase, partially offset by a 1.8% balance decline.

Banking & Financial Service Revenues of $33.0 million compared to $30.3 million in 3Q22 and $36.8 million in 4Q21. 4Q22 reflected higher electronic banking activity and higher gain on sale of mortgages compared to 3Q22, which was impacted by business interruptions from Hurricane

Fiona. 4Q22 annual insurance commission recognition of $1.0 million was $1.2 million lower than a year ago due to Fiona related claims.

Pre-Provision Net Revenues of $76.9 million compared to $69.6 million in 3Q22 and $55.8 million in 4Q21.

Provision for Credit Losses of $8.8 million compared to $7.1 million in 3Q22 and $7.2 million in 4Q21. 4Q22 reflected $9.2 million in higher provision due to increased loan volume and a net release of $0.4 million mainly related to reduction in the qualitative adjustment due to the improved macro-economic environment in Puerto Rico as well as stable delinquency trends.

Credit Quality: Net charge offs of $11.2 million compared to $11.3 million in 3Q22 and $32.5 million in 4Q21. 4Q22 reflected $5.4 million for auto loans, $4.0 million for consumer loans, and $3.3 million for a commercial loan previously reserved. 4Q22 early and total delinquency rates and the non-performing loan rate fell from the previous quarter. 4Q21 net charge-offs reflected the decision to sell $65.5 million of past due loans.

Non-Interest Expense of $91.6 million compared to $87.5 million in 3Q22 and $86.5 million in 4Q21. Compared to 3Q22, 4Q22 reflected higher compensation expense due to hourly salary increases implemented in the previous quarter, increases in year-end performance bonuses, and added technology staffing; increased amortization related to new digital projects; and reduced hurricane Fiona related expenses.

Loans Held for Investment (EOP) of $6.84 billion compared to $6.68 billion in 3Q22 and $6.40 billion in 4Q21. Loans increased 2.3% from the previous quarter and 6.8% year-over-year. Compared to 3Q22, 4Q22 loan growth reflected increased balances of commercial, auto, and consumer loans.

New Loan Origination of $616.4 million compared to $511.3 million in 3Q22 and $632.7 million in 4Q21. Compared to 3Q22, 4Q22 originations increased 20.5%, reflecting strong production of commercial loans in Puerto Rico and the mainland, and continued high levels of auto loans at a record $221.4 million.

Total Investments (EOP) of $1.97 billion compared to $2.04 billion in 3Q22 and $895.8 million in 4Q21. Investments declined 3.5% from 3Q22 due to sales of Treasury Bills and paydowns of mortgage backed securities.

Customer Deposits (EOP) of $8.56 billion compared to $8.84 billion in 3Q22 and $8.59 billion in 4Q21. 4Q22 core deposits declined $286.8 million from 3Q22, reflecting lower account balances of approximately $115 million in retail and of $172 million in commercial, including $59 million in public funds.

Total Assets (EOP) of $9.82 billion compared to $10.06 billion in 3Q22 and $9.90 billion in 4Q21.

Capital: CET1 ratio of 13.64% compared to 13.38% in 3Q22 and 13.77% in 4Q21. The change from 3Q22 reflected increased retained earnings and other comprehensive income. Tangible Book Value per share of $19.56 compared to $18.46 in 3Q22 and $19.08 in 4Q21.

Conference Call, Financial Supplement & Presentation

A conference call to discuss 4Q22 results, outlook and related matters will be held today at 10:00 AM ET. Phone (800) 579-2543 or (203) 518-9708. Conference ID: OFGQ422. The call can also be accessed live on  www.ofgbancorp.com with webcast replay shortly thereafter.

OFG’s Financial Supplement, with full financial tables for the quarter and year ended December 31, 2022, and the 4Q22 Conference Call Presentation, can be found on the Quarterly Results page on OFG’s Investor Relations website at www.ofgbancorp.com.

Non-GAAP Financial Measures

In addition to our financial information presented in accordance with GAAP, management uses certain “non-GAAP financial measures” within the meaning of SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Please refer to Tables 8-1 and 8-2 in OFG’s above-mentioned Financial Supplement for a reconciliation of GAAP to non-GAAP measures and calculations.

Forward Looking Statements

The information included in this document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and involve certain risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements.

Factors that might cause such a difference include but are not limited to (i) general business and economic conditions, including changes in interest rates; (ii) cybersecurity breaches; (iii) hurricanes, earthquakes, and other natural disasters; (iv) competition in the financial services industry; and (v) the severity, magnitude and duration of the COVID-19 pandemic, and its impact on our operations, personnel, and customers.

For a discussion of such factors and certain risks and uncertainties to which OFG is subject, please refer to OFG’s annual report on Form 10-K for the year ended December 31, 2021, as well as its other filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, OFG assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

About OFG Bancorp

Now in its 59th year in business, OFG Bancorp is a diversified financial holding company that operates under U.S., Puerto Rico and U.S. Virgin Islands banking laws and regulations. Its three principal subsidiaries, Oriental Bank, Oriental Financial Services, and Oriental Insurance, provide a wide range of retail and commercial banking, lending and wealth management products, services, and technology, primarily in Puerto Rico and U.S. Virgin Islands. Visit us at www.ofgbancorp.com. 

# # #

Contacts

Puerto Rico & USVI: Idalis Montalvo (idalis.montalvo@orientalbank.com) at (787) 777-2847

US: Gary Fishman (gfishman@ofgbancorp.com) and Steven Anreder (sanreder@ofgbancorp.com) at (212) 532-3232

OFG Bancorp

Financial Supplement

The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our December 31, 2022 Annual Report on Form 10-K once it is filed with the Securities and Exchange Commission.

			Table of Contents
						Pages
OFG Bancorp (Consolidated Financial Information)
Table  1:			Financial and Statistical Summary - Consolidated			2-3
Table  2:			Consolidated Statements of Operations			4-5
Table  3:			Consolidated Statements of Financial Condition			6
Table  4:			Information on Loan Portfolio and Production			7-8
Table  5:			Average Balances, Net Interest Income and Net Interest Margin			9-10
Table  6:			Loan Information and Performance Statistics			11-13
Table  7:			Allowance for Credit Losses			14
Table  8:			Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital			15-16
Table  9:			Notes to Financial Summary, Selected Metrics, Loans, and Consolidated Financial Statements (Tables 1-8)			17

OFG Bancorp (NYSE: OFG)

Table 1-1: Financial and Statistical Summary - Consolidated

									2022						2022						2022						2022						2021
(Dollars in thousands, except per share data) (unaudited)									Q4						Q3						Q2						Q1						Q4
Statement of Operations
Net interest income									$	135,282		(a)			$	126,510					$	115,094					$	105,194					$	104,199
Non-interest income, net (core)			(1)						33,012						30,298						31,214						31,201						36,751
Total core revenues			(2)						168,294						156,808						146,308						136,395						140,950
Non-interest expense									91,641						87,492						85,258						81,155						86,490
Pre-provision net revenues			(21)						76,895						69,638						66,046						55,645						55,809
Total provision for credit losses									8,757						7,120						6,691						1,551						7,199
Net income before income taxes									68,138						62,518						59,355						54,094						48,610
Income tax expense									21,771						20,599						18,923						16,573						15,330
Net income available to common stockholders									46,367						41,919						40,432						37,521						33,280
Common Share Statistics
Earnings per common share - basic			(3)						$	0.97					$	0.88					$	0.84					$	0.77					$	0.67
Earnings per common share - diluted			(4)						$	0.97					$	0.87					$	0.84					$	0.76					$	0.66
Average common shares outstanding									47,572						47,558						48,053						48,968						49,746
Average common shares outstanding and equivalents									47,964						47,926						48,389						49,484						50,299
Cash dividends per common share									$	0.20					$	0.20					$	0.15					$	0.15					$	0.12
Book value per common share (period end)									$	21.91					$	20.90					$	21.34					$	21.37					$	21.54
Tangible book value per common share (period end)			(5)						$	19.56					$	18.46					$	18.86					$	18.90					$	19.08
Balance Sheet (Average Balances)
Loans			(6)						$	6,770,341					$	6,697,900					$	6,640,440					$	6,519,119					$	6,452,128
Interest-earning assets									9,425,590						9,597,670						9,613,327						9,540,266						9,897,073
Total assets									9,989,293						10,181,000						10,207,579						10,113,750						10,418,274
Core deposits									8,759,080						8,924,089						8,946,517						8,808,547						9,084,282
Total deposits									8,770,446						8,935,455						8,957,883						8,819,913						9,095,648
Interest-bearing deposits									6,059,643						6,296,142						6,266,187						6,271,936						6,435,246
Borrowings									26,820						27,275						27,726						44,262						75,970
Stockholders' equity									1,025,132						1,045,792						1,032,270						1,066,278						1,066,764
Common stockholders' equity									1,025,132						1,045,792						1,032,270						1,066,278						1,066,764
Performance Metrics
Net interest margin			(7)						5.69		%	(a)			5.23		%				4.80		%				4.47		%				4.18		%
Return on average assets			(8)						1.86		%				1.65		%				1.58		%				1.48		%				1.28		%
Return on average tangible common stockholders' equity			(9)						20.36		%				18.05		%				17.70		%				15.88		%				14.11		%
Efficiency ratio			(10)						54.45		%				55.80		%				58.27		%				59.50		%				61.36		%
Full-time equivalent employees, period end									2,253						2,247						2,230						2,244						2,269
Credit Quality Metrics
Allowance for credit losses									$	152,673					$	155,162					$	159,039					$	157,075					$	155,937
Allowance as a % of loans held for investment									2.23		%				2.32		%				2.37		%				2.40		%				2.44		%
Net charge-offs									$	11,205		(b)			$	11,347					$	4,543					$	577					$	32,482
Net charge-off rate			(11)						0.66		%	(b)			0.68		%				0.27		%				0.04		%				2.01		%
Early delinquency rate (30 - 89 days past due)									2.46		%				2.75		%				2.20		%				1.97		%				2.34		%
Total delinquency rate (30 days and over)									4.04		%				4.35		%				3.68		%				3.17		%				3.71		%
Capital Ratios (period end) (Non-GAAP)			(12)(20)
Leverage ratio									10.36		%				9.82		%				9.46		%				9.54		%				9.69		%
Common equity Tier 1 capital ratio									13.64		%				13.38		%				12.80		%				13.24		%				13.77		%
Tier 1 risk-based capital ratio									13.64		%				13.38		%				12.80		%				13.24		%				14.27		%
Total risk-based capital ratio									14.89		%				14.63		%				14.05		%				14.49		%				15.52		%
Tangible common equity ("TCE") ratio									9.59		%				8.83		%				8.85		%				9.14		%				9.69		%

(a)During 4Q 2022, the Federal Reserve System (“FRB”) increased the federal funds rate 125 basis points.

(b)During 4Q 2022, the Company charged-off $3.3 million for a commercial loan previously reserved. At December 31, 2022, this loan was included as held for sale and amounted $6.4 million.

the Company c

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OFG Bancorp (NYSE: OFG)

Table 1-2: Financial and Statistical Summary - Consolidated (Continued)

									2022						2021
(Dollars in thousands, except per share data) (unaudited)									YTD						YTD
Statement of Operations
Net interest income									$	482,080		(a)(b)			$	407,349
Non-interest income, net (core)			(1)						125,725						129,279
Total core revenues			(2)						607,805			(a)(b)			536,628
Non-interest expense									345,546						325,756
Pre-provision net revenues			(21)						268,224						214,824
Total provision for (recapture of) credit losses									24,119						221
Net income before income taxes									244,105						214,603
Income tax expense									77,866						68,452
Net income available to common stockholders									166,239						144,896
Common Share Statistics
Earnings per common share - basic			(3)						$	3.46					$	2.85
Earnings per common share - diluted			(4)						$	3.44					$	2.81
Average common shares outstanding									48,033			(c)			50,956
Average common shares outstanding and equivalents									48,436			(c)			51,370
Cash dividends per common share									$	0.70		(d)			$	0.40
Book value per common share (period end)									$	21.91					$	21.54
Tangible book value per common share (period end)			(5)						$	19.56					$	19.08
Balance Sheet (Average Balances)
Loans			(6)						$	6,657,760					$	6,537,488
Interest-earning assets									9,544,055						9,688,890
Total assets									10,119,505						10,307,369
Core deposits									8,859,600						8,923,563
Total deposits									8,870,966						8,949,227
Interest-bearing deposits									6,223,095						6,382,303
Borrowings									31,461			(e)			93,899
Stockholders' equity									1,042,202			(c)			1,079,845
Common stockholders' equity									1,042,202			(c)			1,049,960
Performance Metrics
Net interest margin			(7)						5.05		%	(b)			4.20		%
Return on average assets			(8)						1.64		%				1.42		%
Return on average tangible common stockholders' equity			(9)						17.98		%				15.70		%
Efficiency ratio			(10)						56.85		%				60.70		%
Full-time equivalent employees, period end									2,253						2,269
Credit Quality Metrics
Allowance for credit losses									$	152,673					$	155,937
Allowance as a % of loans held for investment									2.23		%				2.44		%
Net charge-offs									$	27,672					$	49,755
Net charge-off rate			(11)						0.42		%				0.76		%
Early delinquency rate (30 - 89 days past due)									2.46		%				2.34		%
Total delinquency rate (30 days and over)									4.04		%				3.71		%

(a)During the year ended December 31, 2022, the Company purchased $843 million mortgage backed securities available for sale, $550 million US Treasury Notes available for sale and $200 million US Treasury Notes held to maturity, net of $245 million US Treasury Notes sold.

(b)During the year ended December 31, 2022, the FRB increased the federal funds rate 425 basis points.

(c)During the year ended December 31, 2022, the Company repurchased $64.1 million of shares pursuant to its $100.0 million share buyback program.

(d)During the year ended December 31, 2022, the Company increased its common stock quarterly dividend from $0.12 per share to $0.20 per share.

(e)During the year ended December 31, 2022, the Company redeemed all outstanding $36.1 million subordinated capital notes prior to maturity.

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OFG Bancorp (NYSE: OFG)

Table 2-1: Consolidated Statements of Operations

									Quarter Ended
(Dollars in thousands, except per share data) (unaudited)									December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
Interest income:
Loans
Non-PCD loans									$	105,238					$	97,677					$	91,788					$	86,631					$	84,914
PCD loans									19,762						18,563						19,569						20,934						22,660
Total interest income from loans									125,000						116,240						111,357						107,565						107,574
Investment securities									20,727						18,435						10,865						5,384						5,036
Total interest income									145,727			(a)			134,675						122,222						112,949						112,610
Interest expense:
Deposits
Core deposits									10,258						7,978						6,935						7,033						7,830
Brokered deposits									9						9						9						8						9
Total deposits									10,267						7,987						6,944						7,041						7,839
Borrowings									178						178						184						714						572
Total interest expense									10,445			(a)			8,165						7,128						7,755						8,411
Net interest income									135,282						126,510						115,094						105,194						104,199
Provision for (recapture of) credit losses, excluding PCD loans									11,347						9,897						12,486						8,399						(461)
(Recapture of) provision for credit losses on PCD loans									(2,590)						(2,777)						(5,795)						(6,848)						7,660
Total provision for credit losses									8,757						7,120						6,691						1,551						7,199
Net interest income after provision for credit losses									126,525						119,390						108,403						103,643						97,000
Non-interest income:
Banking service revenues									18,224						17,234						18,141						17,562						18,770
Wealth management revenues									8,335			(b)			8,173						8,270						7,857						11,774
Mortgage banking activities									6,453						4,891						4,803						5,782						6,207
Total banking and financial service revenues									33,012						30,298						31,214						31,201						36,751
Other income, net									242						322						4,996						405						1,349
Total non-interest income, net									33,254						30,620						36,210						31,606						38,100
Non-interest expense:
Compensation and employee benefits									38,100			(c)			35,332						34,730						34,768						34,160
Occupancy, equipment and infrastructure costs									13,893			(d)			12,638						12,861						11,916						12,424
General and administrative expenses									39,261			(e)			37,523						39,071						35,953						41,028
Foreclosed real estate and other repossessed assets expenses (income)									239						573						(1,404)						(1,482)						(1,122)
Climate events expenses									148						1,426						—						—						—
Total non-interest expense									91,641						87,492						85,258						81,155						86,490
Income before income taxes									68,138						62,518						59,355						54,094						48,610
Income tax expense									21,771						20,599						18,923						16,573						15,330
Net income available to common shareholders									$	46,367					$	41,919					$	40,432					$	37,521					$	33,280

(a)Refer to “(a)” in Table 1-1.

(b)During 4Q 2022, annual insurance contingent commissions amounted to $1.0 million, $1.2 million lower than a year ago due to Hurricane Fiona’s related claims.

(c)During 4Q 2022, the Company recognized higher compensation expense due to increases in minimum wages for hourly compensated employees and to the accumulation of higher bonuses due to better overall financial performance in 2022.

(d)During 4Q 2022, the Company recognized higher infrastructure costs as a result of $1.4 million amortization of digital projects placed in production.

(e)During 4Q 2022, the Company accrued $750 thousand for the termination of a mortgage servicing contract for loans in portfolio with an unpaid principal balance of $473.7 million.

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OFG Bancorp (NYSE: OFG)

Table 2-2: Consolidated Statements of Operations (Continued)

(Dollars in thousands, except per share data) (unaudited)									Year Ended
									December 31, 2022						December 31, 2021
Interest income:
Loans
Non-PCD loans									$	381,334					$	338,047
PCD loans									78,828						95,720
Total interest income from loans									460,162						433,767
Investment securities									55,411						15,411
Total interest income									515,573			(a)			449,178
Interest expense:
Deposits
Core deposits									32,204						38,808
Brokered deposits									35						206
Total deposits									32,239						39,014
Borrowings									1,254						2,815
Total interest expense									33,493						41,829
Net interest income									482,080						407,349
Provision for (recapture of) credit losses, excluding PCD loans									42,129						(7,540)
(Recapture of) provision for credit losses on PCD loans									(18,010)						7,761
Total provision for credit losses									24,119			(b)			221
Net interest income after provision for credit losses									457,961						407,128
Non-interest income:
Banking service revenues									71,161						71,718
Wealth management revenues									32,635			(c)			35,044
Mortgage banking activities									21,929						22,517
Total banking and financial service revenues									125,725						129,279
Other income, net									5,965			(d)			3,952
Total non-interest income, net									131,690						133,231
Non-interest expense:
Compensation and employee benefits									142,930			(e)			133,442
Occupancy, equipment and infrastructure costs									51,308						50,158
General and administrative expenses									151,808			(f)			145,163
Foreclosed real estate and other repossessed assets income									(2,074)						(3,007)
Climate events expenses									1,574						—
Total non-interest expense									345,546						325,756
Income before income taxes									244,105						214,603
Income tax expense									77,866						68,452
Net income									166,239						146,151
Less:  dividends on preferred stock									—						(1,255)
Net income available to common shareholders									$	166,239					$	144,896

(a)Refer to “(a)” in Table 1-2.

(b)During the year ended December 31, 2022, the Company grew its loan portfolio balances, requiring higher provision for credit losses, among other factors evaluated.

(c)Refer to “(b)” in Table 2-1.

(d)During the year ended December 31, 2022, the Company recognized $4.6 million in other income from the sale of a legacy branch building.

(e)Refer to “(c)” in Table 2-1.

(f)During the year ended December 31, 2022, the Company recognized $2.9 million higher costs in electronic banking and $4.2 million higher compliance-related professional expenses due to greater levels of business activity.

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OFG Bancorp (NYSE: OFG)

Table 3: Consolidated Statements of Financial Condition

(Dollars in thousands) (unaudited)									December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
Cash and cash equivalents									$	550,464					$	815,433					$	1,307,281					$	1,855,729					$	2,023,650
Investments:
Trading securities									9						11						13						18						20
Investment securities available-for-sale, at fair value, no allowance for credit losses for any period
Mortgage-backed securities									1,102,501						1,075,838						1,146,459						867,191						496,310
US treasury notes									309,133						401,414						10,733						10,763						10,825
Other investment securities									1,142						1,157						2,378						2,384						3,578
Total investment securities available-for-sale									1,412,776						1,478,409						1,159,570						880,338						510,713
Investment securities held-to-maturity, at amortized cost, no allowance for credit losses for any period
Mortgage-backed securities									337,435						343,549						351,016						359,806						367,507
US treasury notes									197,635						197,225						196,816						—						—
Total investment securities held-to-maturity									535,070						540,774						547,832						359,806						367,507
Equity securities									23,667						23,372						19,848						18,556						17,578
Total investments									1,971,522						2,042,566						1,727,263						1,258,718						895,818
Loans, net									6,723,236						6,591,028						6,585,210						6,449,130						6,329,311
Other assets:
Prepaid expenses									54,641						69,535						65,327						56,513						60,856
Deferred tax asset, net									55,485						66,121						76,101						87,608						99,063
Foreclosed real estate and repossessed properties									15,831						17,868						17,594						17,922						16,984
Premises and equipment, net									106,820						106,025						101,848						97,403						92,124
Goodwill									84,241			(a)			86,069						86,069						86,069						86,069
Other intangibles									27,593						29,662						31,800						33,947						36,093
Right of use assets									25,363						26,192						27,699						28,576						28,846
Servicing asset									50,921						50,061						49,280						49,446						48,973
Accounts receivable and other assets									152,663						157,619						172,302						169,059						181,933
Total assets									$	9,818,780					$	10,058,179					$	10,247,774					$	10,190,120					$	9,899,720
Deposits:
Demand deposits									$	5,176,758					$	5,416,309					$	5,459,104					$	5,504,640					$	5,204,340
Savings accounts									2,227,965						2,345,673						2,433,819						2,295,113						2,177,780
Time deposits									1,152,270						1,081,769						1,125,276						1,167,103						1,209,627
Brokered deposits									11,371						11,366						11,371						11,366						11,371
Total deposits									8,568,364						8,855,117						9,029,570						8,978,222						8,603,118
Borrowings:
Advances from FHLB and other borrowings									27,034						27,263						27,618						28,035						28,488
Subordinated capital notes									—						—						—						—						36,083
Total borrowings									27,034						27,263						27,618						28,035						64,571
Other liabilities:
Acceptances outstanding									28,607						29,245						27,150						29,858						35,329
Lease liability									27,370						28,114						29,538						30,287						30,498
GNMA buy-back option program liability			(22)						32,590						29,050						33,431						9,664						14,511
Accrued expenses and other liabilities									92,409						95,523						85,655						74,019						82,533
Total liabilities									8,776,374						9,064,312						9,232,962						9,150,085						8,830,560
Stockholders' equity:
Common stock									59,885						59,885						59,885						59,885						59,885
Additional paid-in capital									636,793						635,523						634,612						633,796						637,061
Legal surplus									133,901						129,429						125,365						121,389						117,677
Retained earnings									516,371						484,057						455,590						426,320						399,949
Treasury stock, at cost									(211,135)						(211,138)						(211,138)						(180,717)						(150,572)
Accumulated other comprehensive income, net									(93,409)						(103,889)						(49,502)						(20,638)						5,160
Total stockholders' equity									1,042,406						993,867						1,014,812						1,040,035						1,069,160
Total liabilities and stockholders' equity									$	9,818,780					$	10,058,179					$	10,247,774					$	10,190,120					$	9,899,720

(a)During 4Q 2022, the Company sold its pension plan administration operations for a gain of $179 thousand, reducing its corresponding goodwill by $1.8 million.

6

OFG Bancorp (NYSE: OFG)

Table 4-1: Information on Loan Portfolio and Production

(Dollars in thousands) (unaudited)									December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
Non-PCD:
Mortgage									$	643,203					$	650,781					$	675,324					$	694,613					$	704,337
Mortgage GNMA buy-back option program			(22)						32,590						29,050						33,431						9,664						14,511
Commercial									2,464,075						2,363,299						2,388,281						2,256,011						2,088,106
Commercial Paycheck Protection Program (PPP Loans)			(23)						6,702						14,082						33,304						53,277						86,889
Consumer									536,619						520,183						498,404						454,959						408,759
Auto									1,958,257						1,877,945						1,791,052						1,732,859						1,693,029
									5,641,446						5,455,340						5,419,796						5,201,383						4,995,631
Less:  Allowance for credit losses									(141,841)						(142,417)						(143,896)						(137,344)						(132,065)
Total non- PCD loans held for investment, net									5,499,605						5,312,923						5,275,900						5,064,039						4,863,566
PCD:
Mortgage									1,028,428						1,059,448						1,099,097						1,144,364						1,188,423
Commercial									159,152						162,287						174,282						190,626						204,335
Consumer									638						738						698						833						916
Auto									5,658						7,152						8,788						10,765						13,281
									1,193,876						1,229,625						1,282,865						1,346,588						1,406,955
Less:  Allowance for credit losses									(10,832)						(12,745)						(15,143)						(19,731)						(23,872)
Total PCD loans held for investment, net									1,183,044						1,216,880						1,267,722						1,326,857						1,383,083
Total loans held for investment									6,682,649						6,529,803						6,543,622						6,390,896						6,246,649
Mortgage loans held for sale									19,499						43,262						26,947						26,761						51,096
Other loans held for sale									21,088			(a)			17,963						14,641						31,473						31,566
Total loans, net									$	6,723,236					$	6,591,028					$	6,585,210					$	6,449,130					$	6,329,311
Loan Portfolio Summary:
Loans held for investment:
Mortgage									$	1,671,631					$	1,710,229					$	1,774,421					$	1,838,977					$	1,892,760
Mortgage GNMA buy-back option program			(22)						32,590						29,050						33,431						9,664						14,511
Commercial									2,623,227						2,525,586						2,562,563						2,446,637						2,292,441
Commercial Paycheck Protection Program (PPP Loans)			(23)						6,702						14,082						33,304						53,277						86,889
Consumer									537,257						520,921						499,102						455,792						409,675
Auto									1,963,915						1,885,097						1,799,840						1,743,624						1,706,310
									6,835,322						6,684,965						6,702,661						6,547,971						6,402,586
Less:  Allowance for credit losses									(152,673)						(155,162)						(159,039)						(157,075)						(155,937)
Total loans held for investment, net									6,682,649						6,529,803						6,543,622						6,390,896						6,246,649
Mortgage loans held for sale									19,499						43,262						26,947						26,761						51,096
Other loans held for sale									21,088			(a)			17,963						14,641						31,473						31,566
Total loans, net									$	6,723,236					$	6,591,028					$	6,585,210					$	6,449,130					$	6,329,311

(a)Refer to “(b)” in Table 1-1.

7

OFG Bancorp (NYSE: OFG)

Table 4-2: Information on Loan Portfolio and Production

									Quarter Ended																														Year Ended
(Dollars in thousands) (unaudited)									December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021						December 31, 2022						December 31, 2021
Loan production			(13)
Mortgage									$	35,242					$	38,945					$	62,835					$	63,883					$	78,991					$	200,905					$	364,214
Commercial									209,078						123,429						143,796						175,531						238,356						651,834						694,747
Commercial PPP Loans									—						—						—						—						—						—						158,994
Commercial US Loans									83,162						55,984						90,952						108,390						79,264						338,488						333,693
Consumer									67,515						73,045						96,571						97,108						80,688						334,239						196,848
Auto									221,369						219,910						193,031						178,288						155,390						812,598						641,705
Total									$	616,366					$	511,313					$	587,185					$	623,200					$	632,689					$	2,338,064					$	2,390,201

8

OFG Bancorp (NYSE: OFG)

Table 5-1: Average Balances, Net Interest Income and Net Interest Margin

									2022 Q4																		2022 Q3																		2022 Q2																		2022 Q1																		2021 Q4
(Dollars in thousands) (unaudited)									Average Balance						Interest Income/ Expense						Yield/ Rate						Average Balance						Interest Income/ Expense						Yield/ Rate						Average Balance						Interest Income/ Expense						Yield/ Rate						Average Balance						Interest Income/ Expense						Yield/ Rate						Average Balance						Interest Income/ Expense						Yield/ Rate
Interest earning assets:
Cash equivalents									$	551,555					$	5,115					3.68		%				$	1,016,561					$	5,661					2.21		%				$	1,546,036					$	2,984					0.77		%				$	2,072,112					$	929					0.18		%				$	2,553,118					$	944					0.15		%
Investment securities									2,103,694						15,612						2.97		%				1,883,209						12,774						2.71		%				1,426,851						7,881						2.21		%				949,035						4,455						1.88		%				891,827						4,092						1.84		%
Loans held for investment
Non-PCD loans									5,542,986						105,238						7.53		%				5,428,852						97,677						7.14		%				5,315,401						91,788						6.93		%				5,113,715						86,631						6.87		%				4,953,279						84,914						6.80		%
PCD loans									1,227,355						19,762						6.44		%				1,269,048						18,563						5.85		%				1,325,039						19,569						5.91		%				1,405,404						20,934						5.96		%				1,498,849						22,660						6.05		%
Total loans									6,770,341						125,000						7.32		%				6,697,900						116,240						6.89		%				6,640,440						111,357						6.73		%				6,519,119						107,565						6.69		%				6,452,128						107,574						6.62		%
Total interest-earning assets									$	9,425,590					$	145,727					6.13		%				$	9,597,670					$	134,675					5.57		%				$	9,613,327					$	122,222					5.10		%				$	9,540,266					$	112,949					4.80		%				$	9,897,073					$	112,610					4.51		%
Interest bearing liabilities:
Deposits
NOW accounts									$	2,624,602					$	4,050					0.61		%				$	2,799,234					$	2,927					0.41		%				$	2,811,396					$	2,174					0.31		%				$	2,813,037					$	2,140					0.31		%				$	2,792,966					$	2,239					0.32		%
Savings accounts									2,291,884						2,250						0.39		%				2,388,072						1,733						0.29		%				2,296,903						1,289						0.23		%				2,248,193						1,198						0.22		%				2,359,959						1,289						0.22		%
Time deposits									1,131,791						2,373						0.83		%				1,097,470						1,679						0.61		%				1,146,522						1,834						0.64		%				1,199,340						2,057						0.70		%				1,270,955						2,464						0.77		%
Brokered deposits									11,366						9						0.30		%				11,366						9						0.30		%				11,366						9						0.30		%				11,366						8						0.30		%				11,366						9						0.30		%
									6,059,643						8,682						0.57		%				6,296,142						6,348						0.40		%				6,266,187						5,306						0.34		%				6,271,936						5,403						0.35		%				6,435,246						6,001						0.37		%
Non-interest bearing deposit accounts									2,710,803						—						—						2,639,313						—						—						2,691,696						—						—						2,547,977						—						—						2,660,402						—						—
Fair value premium and core deposit intangible amortization									—						1,585						—						—						1,639						—						—						1,638						—						—						1,638						—						—						1,838						—
Total deposits									8,770,446						10,267						0.46		%				8,935,455						7,987						0.35		%				8,957,883						6,944						0.31		%				8,819,913						7,041						0.32		%				9,095,648						7,839						0.34		%
Borrowings
Advances from FHLB and other borrowings									26,820						178						2.64		%				27,275						178						2.59		%				27,726						184						2.66		%				28,184						193						2.77		%				39,887						279						2.78		%
Subordinated capital notes									—						—						—		%				—						—						—		%				—						—						—		%				16,078						521						13.15		%				36,083						293						3.23		%
Total borrowings									26,820						178						2.64		%				27,275						178						2.59		%				27,726						184						2.66		%				44,262						714						6.54		%				75,970						572						2.99		%
Total interest-bearing liabilities									$	8,797,266					$	10,445					0.47		%				$	8,962,730					$	8,165					0.36		%				$	8,985,609					$	7,128					0.32		%				$	8,864,175					$	7,755					0.35		%				$	9,171,618					$	8,411					0.36		%
Interest rate spread															$	135,282					5.66		%										$	126,510					5.21		%										$	115,094					4.78		%										$	105,194					4.45		%										$	104,199					4.15		%
Net interest margin																					5.69		%																5.23		%																4.80		%																4.47		%																4.18		%
Core deposits: (Non-GAAP)
Deposits
NOW accounts									$	2,624,602					$	4,050					0.61		%				$	2,799,234					$	2,927					0.41		%				$	2,811,396					$	2,174					0.31		%				$	2,813,037					$	2,140					0.31		%				$	2,792,966					$	2,239					0.32		%
Savings accounts									2,291,884						2,250						0.39		%				2,388,072						1,733						0.29		%				2,296,903						1,289						0.23		%				2,248,193						1,198						0.22		%				2,359,959						1,289						0.22		%
Time deposits									1,131,791						2,373						0.83		%				1,097,470						1,679						0.61		%				1,146,522						1,834						0.64		%				1,199,340						2,057						0.70		%				1,270,955						2,464						0.77		%
									6,048,277						8,673						0.57		%				6,284,776						6,339						0.40		%				6,254,821						5,297						0.34		%				6,260,570						5,395						0.35		%				6,423,880						5,992						0.37		%
Non-interest bearing deposit accounts									2,710,803						—						—						2,639,313						—						—						2,691,696						—						—						2,547,977						—						—						2,660,402						—						—
Total core deposits									$	8,759,080					$	8,673					0.39		%				$	8,924,089					$	6,339					0.28		%				$	8,946,517					$	5,297					0.24		%				$	8,808,547					$	5,395					0.25		%				$	9,084,282					$	5,992					0.26		%

9

OFG Bancorp (NYSE: OFG)

Table 5-2: Average Balances, Net Interest Income and Net Interest Margin (Continued)

									2022 YTD																		2021 YTD
(Dollars in thousands) (unaudited)									Average Balance						Interest Income/ Expense						Yield/ Rate						Average Balance						Interest Income/ Expense						Yield/ Rate
Interest earning assets:
Cash equivalents									$	1,291,633					$	14,689					1.14		%				$	2,466,926					$	3,231					0.13		%
Investment securities									1,594,662						40,722						2.55		%				684,476						12,180						1.78		%
Loans held for investment
Non-PCD loans									5,351,639						381,334						7.13		%				4,921,186						338,047						6.87		%
PCD loans									1,306,121						78,828						6.04		%				1,616,302						95,720						5.92		%
Total loans									6,657,760						460,162						6.91		%				6,537,488						433,767						6.64		%
Total interest-earning assets									$	9,544,055					$	515,573					5.40		%				$	9,688,890					$	449,178					4.64		%
Interest bearing liabilities:
Deposits
NOW accounts									$	2,761,653					$	11,291					0.41		%				$	2,623,358					$	9,179					0.35		%
Savings accounts									2,306,607						6,470						0.28		%				2,233,824						7,149						0.32		%
Time deposits									1,143,469						7,943						0.69		%				1,499,457						15,130						1.01		%
Brokered deposits									11,366						35						0.30		%				25,664						206						0.80		%
									6,223,095						25,739						0.41		%				6,382,303						31,664						0.50		%
Non-interest bearing deposit accounts									2,647,871						—						—						2,566,924						—						—		%
Fair value premium and core deposit intangible amortization									—						6,500						—						—						7,350						—
Total deposits									8,870,966						32,239						0.36		%				8,949,227						39,014						0.44		%
Borrowings
Advances from FHLB and other borrowings									27,497						733						2.67		%				57,816						1,641						2.84		%
Subordinated capital notes									3,964						521						13.15		%				36,083						1,174						3.25		%
Total borrowings									31,461						1,254						3.99		%				93,899						2,815						3.00		%
Total interest-bearing liabilities									$	8,902,427					$	33,493					0.38		%				$	9,043,126					$	41,829					0.46		%
Interest rate spread															$	482,080					5.02		%										$	407,349					4.18		%
Net interest margin																					5.05		%																4.20		%
Core deposits: (Non-GAAP)
Deposits
NOW accounts									$	2,761,653					$	11,291					0.41		%				$	2,623,358					$	9,179					0.35		%
Savings accounts									2,306,607						6,470						0.28		%				2,233,824						7,149						0.32		%
Time deposits									1,143,469						7,943						0.69		%				1,499,457						15,130						1.01		%
									6,211,729						25,704						0.41		%				6,356,639						31,458						0.49		%
Non-interest bearing deposit accounts									2,647,871						—						—		%				2,566,924						—						—		%
Total core deposits									$	8,859,600					$	25,704					0.29		%				$	8,923,563					$	31,458					0.35		%

10

OFG Bancorp (NYSE: OFG)

Table 6-1: Loan Information and Performance Statistics

									2022						2022						2022						2022						2021
(Dollars in thousands) (unaudited)									Q4						Q3						Q2						Q1						Q4
Net Charge-offs
Non-PCD
Mortgage:
Charge-offs									$	8					$	14					$	259					$	3					$	4,573
Recoveries									(625)						(280)						(335)						(2,074)						(416)
Total mortgage									(617)						(266)						(76)						(2,071)						4,157
Commercial:
Charge-offs									3,444			(b)			6,485						2,907						544						550
Recoveries									(338)						(214)						(456)						(192)						(418)
Total commercial									3,106						6,271						2,451						352						132
Consumer:
Charge-offs									5,069						4,163						3,307						2,659						2,144
Recoveries									(1,055)						(732)						(795)						(655)						(743)
Total consumer									4,014						3,431						2,512						2,004						1,401
Auto:
Charge-offs									10,380						7,964						6,428						7,890						7,288
Recoveries									(5,001)						(5,674)						(5,565)						(4,891)						(6,282)
Total auto									5,379						2,290						863						2,999						1,006
Total									$	11,882					$	11,726					$	5,750					$	3,284					$	6,696
PCD
Mortgage:
Charge-offs									$	108					$	270					$	183					$	1,134					$	15,010
Recoveries									(603)						(191)						(1,026)						(845)						(452)
Total mortgage									(495)						79						(843)						289						14,558
Commercial:
Charge-offs									12						23						—						34						12,123
Recoveries									(264)						(268)						(249)						(3,023)						(746)
Total commercial									(252)						(245)						(249)						(2,989)						11,377
Consumer:
Charge-offs									120						9						8						39						—
Recoveries									(11)						(47)						(13)						(23)						(42)
Total consumer									109						(38)						(5)						16						(42)
Auto:
Charge-offs									65						56						75						114						140
Recoveries									(104)						(231)						(185)						(137)						(247)
Total auto									(39)						(175)						(110)						(23)						(107)
Total									$	(677)					$	(379)					$	(1,207)					$	(2,707)					$	25,786
Total Net Charge-offs									$	11,205					$	11,347					$	4,543					$	577					$	32,482
Net Charge-off Rates
Mortgage									-0.26		%				-0.04		%				-0.20		%				-0.38		%				3.79		%
Commercial									0.44		%				0.94		%				0.34		%				-0.43		%				1.95		%
Consumer									2.95		%				2.52		%				1.98		%				1.75		%				1.29		%
Auto									1.11		%				0.46		%				0.17		%				0.69		%				0.21		%
Total									0.66		%				0.68		%				0.27		%				0.04		%				2.01		%
Average Loans Held For Investment
Mortgage									$	1,699,923					$	1,757,897					$	1,809,228					$	1,885,159					$	1,972,889
Commercial									2,586,536						2,560,849						2,555,575						2,450,177						2,362,120
Consumer									558,809						538,898						506,588						461,890						421,824
Auto									1,925,073						1,840,256						1,769,049						1,721,893						1,695,295
Total									$	6,770,341					$	6,697,900					$	6,640,440					$	6,519,119					$	6,452,128

(a)Refer to “(b)” in Table 1-1.

11

OFG Bancorp (NYSE: OFG)

Table 6-2: Loan Information and Performance Statistics (Excludes PCD Loans)

									2022						2022						2022						2022						2021
(Dollars in thousands) (unaudited)									Q4						Q3						Q2						Q1						Q4
Early Delinquency (30 - 89 days past due)
Mortgage									$	15,115					$	15,769					$	13,941					$	13,788					$	16,565
Commercial									2,750						13,223						6,001						2,600						4,736
Consumer									8,895						9,280						7,766						6,485						5,273
Auto									112,191						111,637						91,407						79,491						90,272
Total									$	138,951					$	149,909					$	119,115					$	102,364					$	116,846
Early Delinquency Rates (30 - 89 days past due)
Mortgage									2.24		%				2.32		%				1.97		%				1.96		%				2.30		%
Commercial									0.11		%				0.56		%				0.25		%				0.12		%				0.23		%
Consumer									1.66		%				1.78		%				1.56		%				1.43		%				1.29		%
Auto									5.73		%				5.94		%				5.10		%				4.59		%				5.33		%
Total									2.46		%				2.75		%				2.20		%				1.97		%				2.34		%
Total Delinquency (30 days and over past due)
Mortgage:
Traditional, Non traditional, and Loans under Loss Mitigation									$	39,237					$	39,577					$	36,178					$	39,004					$	45,521
GNMA's buy-back option program			(22)						32,590						29,050						33,431						9,664						14,511
Total mortgage									71,827						68,627						69,609						48,668						60,032
Commercial									12,121						24,343						13,243						16,061						14,129
Consumer									12,009						11,956						9,744						8,446						7,246
Auto									131,804						132,507						106,637						91,855						103,733
Total									$	227,761					$	237,433					$	199,233					$	165,030					$	185,140
Total Delinquency Rates (30 days and over past due)
Mortgage:
Traditional, Non traditional, and Loans under Loss Mitigation									5.81		%				5.82		%				5.10		%				5.54		%				6.33		%
GNMA's buy-back option program			(22)						4.82		%				4.27		%				4.72		%				1.37		%				2.02		%
Total mortgage									10.63		%				10.09		%				9.82		%				6.91		%				8.35		%
Commercial									0.49		%				1.03		%				0.55		%				0.71		%				0.68		%
Consumer									2.24		%				2.30		%				1.96		%				1.86		%				1.77		%
Auto									6.73		%				7.06		%				5.95		%				5.30		%				6.13		%
Total									4.04		%				4.35		%				3.68		%				3.17		%				3.71		%
Nonperforming Assets			(14)
Mortgage									$	33,512					$	33,225					$	33,344					$	36,775					$	39,394
Commercial									34,432						36,612						47,206						34,892						37,603
Consumer									3,128						2,725						1,987						2,030						2,303
Auto									19,613						20,870						15,329						12,495						19,829
Total nonperforming loans									90,685						93,432						97,866						86,192						99,129
Foreclosed real estate									11,214						14,561						15,061						15,297						15,039
Other repossessed assets									4,617						3,307						2,533						2,625						1,945
Total nonperforming assets									$	106,516					$	111,300					$	115,460					$	104,114					$	116,113
Nonperforming Loan Rates
Mortgage									4.96		%				4.89		%				4.70		%				5.22		%				5.48		%
Commercial									1.40		%				1.55		%				1.98		%				1.55		%				1.80		%
Consumer									0.58		%				0.52		%				0.40		%				0.45		%				0.56		%
Auto									1.00		%				1.11		%				0.86		%				0.72		%				1.17		%
Total loans									1.61		%				1.71		%				1.81		%				1.66		%				1.98		%

12

OFG Bancorp (NYSE: OFG)

Table 6-3: Loan Information and Performance Statistics

									2022						2022						2022						2022						2021
(Dollars in thousands) (unaudited)									Q4						Q3						Q2						Q1						Q4
Nonperforming PCD Loans			(14)
Mortgage									$	259					$	260					$	261					$	310					$	334
Commercial									8,927						9,746						10,057						10,877						12,545
Total nonperforming loans									$	9,186					$	10,006					$	10,318					$	11,187					$	12,879
Nonperforming PCD Loan Rates
Mortgage									0.03		%				0.02		%				0.02		%				0.03		%				0.03		%
Commercial									5.61		%				6.01		%				5.77		%				5.71		%				6.14		%
Total									0.77		%				0.81		%				0.80		%				0.83		%				0.92		%
Total PCD Loans Held for Investment
Mortgage									$	1,028,428					$	1,059,448					$	1,099,097					$	1,144,364					$	1,188,423
Commercial									159,152						162,287						174,282						190,626						204,335
Consumer									638						738						698						833						916
Auto									5,658						7,152						8,788						10,765						13,281
Total loans									$	1,193,876					$	1,229,625					$	1,282,865					$	1,346,588					$	1,406,955

									2022						2022						2022						2022						2021
(Dollars in thousands) (unaudited)									Q4						Q3						Q2						Q1						Q4
Total Nonperforming Loans			(14)
Mortgage									$	33,771					$	33,485					$	33,605					$	37,085					$	39,728
Commercial									43,359						46,358						57,263						45,769						50,148
Consumer									3,128						2,725						1,987						2,030						2,303
Auto									19,613						20,870						15,329						12,495						19,829
Total nonperforming loans									$	99,871					$	103,438					$	108,184					$	97,379					$	112,008
Total Nonperforming Loan Rates
Mortgage									1.98		%				1.93		%				1.86		%				2.01		%				2.08		%
Commercial									1.65		%				1.83		%				2.21		%				1.83		%				2.11		%
Consumer									0.58		%				0.52		%				0.40		%				0.45		%				0.56		%
Auto									1.00		%				1.11		%				0.85		%				0.72		%				1.16		%
Total									1.46		%				1.55		%				1.61		%				1.49		%				1.75		%
Total Loans Held for Investment
Mortgage									$	1,704,221					$	1,739,279					$	1,807,852					$	1,848,641					$	1,907,271
Commercial									2,629,929						2,539,668						2,595,867						2,499,914						2,379,330
Consumer									537,257						520,921						499,102						455,792						409,675
Auto									1,963,915						1,885,097						1,799,840						1,743,624						1,706,310
Total loans									$	6,835,322					$	6,684,965					$	6,702,661					$	6,547,971					$	6,402,586

13

OFG Bancorp (NYSE: OFG)

Table 7: Allowance for Credit Losses

						Quarter Ended December 31, 2022
(Dollars in thousands) (unaudited)						Mortgage						Commercial						Consumer						Auto						Total
Allowance for credit losses Non-PCD:
Balance at beginning of period						$	10,431					$	38,851					$	24,233					$	68,902					$	142,417
(Recapture of) provision for credit losses						(1,477)						3,413						3,045						6,325						11,306
Charge-offs						(8)						(3,444)			(a)			(5,069)						(10,380)						(18,901)
Recoveries						625						338						1,055						5,001						7,019
Balance at end of period						$	9,571					$	39,158					$	23,264					$	69,848					$	141,841
Allowance for credit losses PCD:
Balance at beginning of period						$	10,727					$	1,886					$	18					$	114					$	12,745
(Recapture of) provision for credit losses						(1,863)						(750)						105						(82)						(2,590)
Charge-offs						(108)						(12)						(120)						(65)						(305)
Recoveries						603						264						11						104						982
Balance at end of period						$	9,359					$	1,388					$	14					$	71					$	10,832
Allowance for credit losses summary:
Balance at beginning of period						$	21,158					$	40,737					$	24,251					$	69,016					$	155,162
(Recapture of) provision for credit losses						(3,340)						2,663						3,150						6,243						8,716
Charge-offs						(116)						(3,456)						(5,189)						(10,445)						(19,206)
Recoveries						1,228						602						1,066						5,105						8,001
Balance at end of period						$	18,930					$	40,546					$	23,278					$	69,919					$	152,673
Allowance coverage ratio						1.11		%				1.54		%				4.33		%				3.56		%				2.23		%

(a)Refer to “(b)” in Table 1-1.

14

OFG Bancorp (NYSE: OFG)

Table 8-1: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital

In addition to disclosing required regulatory capital measures, we also report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity ("TCE") and TCE ratio. The table below provides the details of the calculation of our regulatory capital and non-GAAP capital measures. While our non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.

						2022						2022						2022						2022						2021
(Dollars in thousands) (unaudited)						Q4						Q3						Q2						Q1						Q4
Stockholders' Equity to Non-GAAP Tangible Common Equity
Total stockholders' equity						$	1,042,406					$	993,867					$	1,014,812					$	1,040,035					$	1,069,160
Less:  Intangible assets						(111,834)						(115,731)						(117,869)						(120,016)						(122,162)
Noncumulative perpetual preferred stock						—						—						—						—						—
Noncumulative perpetual preferred stock issuance costs						—						—						—						—						—
Tangible common equity						$	930,572					$	878,136					$	896,943					$	920,019					$	946,998
Common shares outstanding at end of period						47,581						47,563						47,554						48,673						49,636
Tangible book value per common share (Non-GAAP)						$	19.56					$	18.46					$	18.86					$	18.90					$	19.08
Total Assets to Tangible Assets
Total assets						$	9,818,780					$	10,058,179					$	10,247,774					$	10,190,120					$	9,899,720
Less:  Intangible assets						(111,834)						(115,731)						(117,869)						(120,016)						(122,162)
Tangible assets (Non-GAAP)						$	9,706,946					$	9,942,448					$	10,129,905					$	10,070,104					$	9,777,558
Non-GAAP TCE Ratio
Tangible common equity						$	930,572					$	878,136					$	896,943					$	920,019					$	946,998
Tangible assets						9,706,946						9,942,448						10,129,905						10,070,104						9,777,558
TCE ratio						9.59		%				8.83		%				8.85		%				9.14		%				9.69		%
Average Equity to Non-GAAP Average Tangible Common Equity
Average total stockholders' equity						$	1,025,132					$	1,045,792					$	1,032,270					$	1,066,278					$	1,066,764
Less:  Average intangible assets						(114,412)						(116,612)						(118,750)						(120,874)						(123,201)
Average tangible common equity						$	910,720					$	929,180					$	913,520					$	945,404					$	943,563

15

OFG Bancorp (NYSE: OFG)

Table 8-2: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued)

									BASEL III
									Standardized
									2022						2022						2022						2022						2021
(Dollars in thousands) (unaudited)									Q4						Q3						Q2						Q1						Q4
Regulatory Capital Metrics
Common equity Tier 1 capital									$	1,037,385					$	995,342					$	960,015					$	955,221					$	964,284
Tier 1 capital									1,037,385						995,342						960,015						955,221						999,284
Total risk-based capital			(15)						1,132,658						1,088,584						1,053,766						1,045,437						1,086,897
Risk-weighted assets									7,605,466						7,440,482						7,499,171						7,214,692						7,004,876
Regulatory Capital Ratios
Common equity Tier 1 capital ratio			(16)						13.64		%				13.38		%				12.80		%				13.24		%				13.77		%
Tier 1 risk-based capital ratio			(17)						13.64		%				13.38		%				12.80		%				13.24		%				14.27		%
Total risk-based capital ratio			(18)						14.89		%				14.63		%				14.05		%				14.49		%				15.52		%
Leverage ratio			(19)						10.36		%				9.82		%				9.46		%				9.54		%				9.69		%
Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach
Total stockholders' equity									$	1,042,406					$	993,867					$	1,014,812		(a)			$	1,040,035					$	1,069,160
Plus: CECL transition adjustment			(20)						20,557						20,557						20,557						20,557						27,409
Less: Unrealized losses (gains) on available-for-sale securities, net of income tax									93,663						104,145						49,606						20,522						(5,663)
Unrealized (gains) losses on cash flow hedges, net of income tax									(254)						(256)						(104)						116						503
									1,156,372						1,118,313						1,084,871						1,081,230						1,091,409
Less: Disallowed goodwill									(84,241)			(a)			(86,069)						(86,069)						(86,069)						(86,069)
Disallowed other intangible assets, net									(20,279)						(21,617)						(22,997)						(24,384)						(25,771)
Disallowed deferred tax assets, net									(14,467)						(15,285)						(15,790)						(15,556)						(15,285)
Common equity Tier 1 capital									1,037,385						995,342						960,015						955,221						964,284
Plus: Subordinated capital notes									—						—						—						—						35,000
Tier 1 capital									1,037,385						995,342						960,015						955,221						999,284
Plus tier 2 capital:  Qualifying allowance for credit losses									95,273						93,242						93,751						90,216						87,613
Total risk-based capital									$	1,132,658					$	1,088,584					$	1,053,766					$	1,045,437					$	1,086,897

(a)Refer to “(a)” in Table 3.

16

OFG Bancorp (NYSE: OFG)

Table 9: Notes to Financial Summary, Selected Metrics, Loans, and Consolidated Financial Statements (Tables 1 - 8)

(1)			Total banking and financial service revenues.
(2)			Net interest income plus non-interest income, net (core)
(3)			Calculated based on net income available to common shareholders divided by average common shares outstanding for the period.
(4)			Calculated based on net income available to common shareholders divided by total average common shares outstanding and equivalents for the period as if converted.
(5)			Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Tables 8-1 and 8-2: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
(6)			Information includes all loans held for investment, including PCD loans.
(7)			Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
(8)			Calculated based on annualized income, net of tax, for the period divided by average total assets for the period.
(9)			Calculated based on annualized income available to common shareholders for the period divided by average tangible common equity for the period.
(10)			Calculated based on non-interest expense for the period divided by total net interest income and total banking and financial services revenues for the period.
(11)			Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(12)			Non-GAAP ratios. See "Tables 8-1 and 8-2: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.
(13)			Production of new loans (excluding renewals).
(14)			Most PCD loans are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses. Therefore, they are not included as non-performing loans. PCD loan pools that are not accreting interest income are deemed to be non-performing loans and presented separately.
(15)			Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.
(16)			Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets.
(17)			Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(18)			Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk-weighted assets.
(19)			Leverage capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.
(20)			In March 2020, in light of recent strains on the U.S. economy as a result of the coronavirus disease 2019 (COVID-19), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency issued an interim final rule that provided the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period. In addition, for the first two years, a uniform 25% “scaling factor” is introduced to approximate the portion of the post day-one allowance attributable to CECL relative to the incurred loss methodology. The 25% scaling factor is calibrated to approximate an overall after-tax impact of differences in allowances under CECL versus the incurred loss methodology.
(21)			Pre-provision net revenues is a non-GAAP measure calculated based on net interest income plus total non-interest income, net, less total non-interest expenses for the period.
(22)			Under the GNMA program, issuers such as OFG Bancorp have the option but not the obligation to repurchase loans that are 90 days or more past due. For accounting purposes, these loans subject to the repurchase option are required to be reflected (rebooked) on the financial statements of the Company with an offsetting liability.
(23)			PPP loans are fully guaranteed by the SBA and risk-weighted at 0%.

17