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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense for 2023, 2022, and 2021 were as follows:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (In thousands)
Current income tax expense | $ | 16,027 |  |  | $ | 16,740 |  |  | $ | 4,836 |
Deferred income tax expense | 67,349 |  |  | 61,126 |  |  | 63,616 |
Total income tax expense | $ | 83,376 |  |  | $ | 77,866 |  |  | $ | 68,452 |
Schedule of Effective Income Tax Rate Reconciliation | OFG’s income tax expense differs from amounts computed by applying the applicable statutory rate to income before income taxes as follows:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| Amount |  | Rate |  | Amount |  | Rate |  | Amount |  | Rate
| (Dollars in thousands)
Income tax expense at statutory rates | $ | 99,468 |  |  | 37.50 | % |  | $ | 91,539 |  |  | 37.50 | % |  | $ | 80,476 |  |  | 37.50 | %
Tax of exempt income, net | (12,201) |  |  | -4.60 | % |  | (11,523) |  |  | -4.72 | % |  | (9,489) |  |  | -4.42 | %
Disallowed net operating loss carryover | (350) |  |  | -0.13 | % |  | (267) |  |  | (0.11) | % |  | (179) |  |  | (0.08) | %
Change in valuation allowance | (1,554) |  |  | -0.59 | % |  | (502) |  |  | (0.21) | % |  | 803 |  |  | 0.37 | %
Unrecognized tax benefits, net | 69 |  |  | 0.03 | % |  | 69 |  |  | 0.03 | % |  | 70 |  |  | 0.03 | %
Capital gain at preferential rate | 472 |  |  | 0.18 | % |  | (787) |  |  | -0.32 | % |  | (3) |  |  | — | %
Tax rate difference (ordinary vs capital) | (817) |  |  | -0.31 | % |  | (247) |  |  | -0.10 | % |  | (480) |  |  | -0.22 | %
Return to provision adjustments | (721) |  |  | -0.27 | % |  | (407) |  |  | -0.17 | % |  | (933) |  |  | -0.43 | %
Difference in tax rates due to multiple jurisdictions | (963) |  |  | -0.36 | % |  | — |  |  | — | % |  | 187 |  |  | 0.09 | %
Other items, net | (27) |  |  | -0.02 | % |  | (9) |  |  | — | % |  | (2,000) |  |  | -0.94 | %
Income tax expense | $ | 83,376 |  |  | 31.43 | % |  | $ | 77,866 |  |  | 31.90 | % |  | $ | 68,452 |  |  | 31.90 | %
Schedule of Income Tax Contingencies | The following table presents a reconciliation of unrecognized tax benefits:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (In thousands)
Balance at beginning of year | $ | 867 |  |  | $ | 798 |  |  | $ | 728 |
Additions for tax positions of prior years | 69 |  |  | 69 |  |  | 70 |
Balance at end of year | $ | 936 |  |  | $ | 867 |  |  | $ | 798 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of OFG’s deferred tax assets and liabilities as of December 31, 2023, and 2022 were as follows:
|  |  |  | December 31,
|  |  |  | 2023 |  | 2022
|  |  |  | (In thousands)
Deferred tax assets: |  |  |  |  |  |  |
Allowance for credit losses and other reserves |  |  |  |  | $ | 58,612 |  |  | $ | 57,273 |
Scotiabank PR discount |  |  |  |  | 463 |  |  | 1,453 |
Loans and other real estate valuation adjustment |  |  |  |  | 1,905 |  |  | 2,313 |
Deferred loan charge-offs |  |  |  |  | 16,147 |  |  | 72,376 |
Net operating loss carry forwards |  |  |  |  | 6,548 |  |  | 9,022 |
Alternative minimum tax |  |  |  |  | 13,553 |  |  | 14,467 |
Unrealized net loss on available-for-sale securities |  |  |  |  | 11,525 |  |  | 16,422 |
Goodwill |  |  |  |  | 3,542 |  |  | 10,252 |
Acquired portfolio |  |  |  |  | 37,374 |  |  | 45,761 |
Other assets allowances |  |  |  |  | 1,692 |  |  | 1,538 |
Other deferred tax assets |  |  |  |  | 16,344 |  |  | 16,570 |
Total gross deferred tax asset |  |  |  |  | 167,705 |  |  | 247,447 |
Less: valuation allowance |  |  |  |  | (7,589) |  |  | (9,143) |
Net gross deferred tax assets |  |  |  |  | 160,116 |  |  | 238,304 |
Deferred tax liabilities: |  |  |  |  |  |  |
Acquired loans tax basis |  |  |  |  | (137,143) |  |  | (137,195) |
FDIC-assisted Eurobank acquisition, net |  |  |  |  | (5,481) |  |  | (5,760) |
Customer deposit and customer relationship intangibles |  |  |  |  | (4,943) |  |  | (7,314) |
Building valuation adjustment |  |  |  |  | (6,104) |  |  | (6,540) |
Unrealized net gain included in other comprehensive income |  |  |  |  | — |  |  | (152) |
Servicing asset |  |  |  |  | (15,516) |  |  | (16,041) |
Other deferred tax liabilities |  |  |  |  | (8,450) |  |  | (9,817) |
Total gross deferred tax liabilities |  |  |  |  | (177,637) |  |  | (182,819) |
Net deferred tax (liability) asset |  |  |  |  | $ | (17,521) |  |  | $ | 55,485 |

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