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INVESTMENT SECURITIES | 12 Months Ended
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Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract] |
INVESTMENT SECURITIES | INVESTMENT SECURITIES Money Market Investments OFG considers as cash equivalents all money market instruments that are not pledged and that have maturities of three months or less at the date of acquisition. At December 31, 2023 and 2022, money market instruments included as part of cash and cash equivalents amounted to $4.6 million and $4.2 million, respectively. Investment Securities The amortized cost, gross unrealized gains and losses, fair value, weighted average yield and contractual maturities of the securities owned by OFG at December 31, 2023 and 2022 were as follows:
| December 31, 2023
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Weighted Average Yield
| (In thousands)
Available-for-sale |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates |  |  |  |  |  |  |  |  |
Due from 1 to 5 years | $ | 6,972 |  |  | $ | — |  |  | $ | 311 |  |  | $ | 6,661 |  |  | 1.76 | %
Due from 5 to 10 years | 45,835 |  |  | — |  |  | 2,767 |  |  | 43,068 |  |  | 2.00 | %
Due after 10 years | 1,411,327 |  |  | 8,989 |  |  | 54,100 |  |  | 1,366,216 |  |  | 4.11 | %
Total FNMA and FHLMC certificates | 1,464,134 |  |  | 8,989 |  |  | 57,178 |  |  | 1,415,945 |  |  | 4.03 | %
GNMA certificates |  |  |  |  |  |  |  |  |
Due less than 1 year | 5 |  |  | — |  |  | — |  |  | 5 |  |  | 1.31 | %
Due from 1 to 5 years | $ | 8,851 |  |  | $ | — |  |  | $ | 351 |  |  | $ | 8,500 |  |  | 1.71 | %
Due from 5 to 10 years | 17,113 |  |  | 16 |  |  | 955 |  |  | 16,174 |  |  | 2.19 | %
Due after 10 years | 380,306 |  |  | 4,419 |  |  | 33,110 |  |  | 351,615 |  |  | 3.38 | %
Total GNMA certificates | 406,275 |  |  | 4,435 |  |  | 34,416 |  |  | 376,294 |  |  | 3.30 | %
CMOs issued by US government-sponsored agencies |  |  |  |  |  |  |  |  |
Due from 1 to 5 years | 9,071 |  |  | — |  |  | 364 |  |  | 8,707 |  |  | 1.78 | %
Due from 5 to 10 years | 54 |  |  | — |  |  | — |  |  | 54 |  |  | 2.14 | %
Due after 10 years | 861 |  |  | — |  |  | 12 |  |  | 849 |  |  | 5.07 | %
Total CMOs issued by US government-sponsored agencies | 9,986 |  |  | — |  |  | 376 |  |  | 9,610 |  |  | 2.06 | %
Total mortgage-backed securities | 1,880,395 |  |  | 13,424 |  |  | 91,970 |  |  | 1,801,849 |  |  | 3.86 | %
Investment securities |  |  |  |  |  |  |  |  |
US Treasury securities |  |  |  |  |  |  |  |  |
Due less than 1 year | 296,747 |  |  | 52 |  |  | — |  |  | 296,799 |  |  | 5.40 | %
Other debt securities |  |  |  |  |  |  |  |  |
Due less than 1 year | 500 |  |  | — |  |  | — |  |  | 500 |  |  | 3.25 | %
Due from 1 to 5 years | 119 |  |  | — |  |  | 3 |  |  | 116 |  |  | 2.97 | %
Total investment securities | 297,366 |  |  | 52 |  |  | 3 |  |  | 297,415 |  |  | 5.39 | %
Total securities available for sale | $ | 2,177,761 |  |  | $ | 13,476 |  |  | $ | 91,973 |  |  | $ | 2,099,264 |  |  | 4.07 | %
| December 31, 2023
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Weighted Average Yield
| (In thousands)
Held-to-maturity |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates |  |  |  |  |  |  |  |  |
Due after 10 years | $ | 314,710 |  |  | $ | — |  |  | $ | 56,767 |  |  | $ | 257,943 |  |  | 1.72 | %
Investment securities |  |  |  |  |  |  |  |  |
US Treasury securities |  |  |  |  |  |  |  |  |
Due less than 1 year | 199,314 |  |  | — |  |  | 1,548 |  |  | 197,766 |  |  | 3.33 | %
Other debt securities |  |  |  |  |  |  |  |  |
Due from 1 to 5 years | 35,000 |  |  | 55 |  |  | — |  |  | 35,055 |  |  | 6.36 | %
Total securities held to maturity | $ | 549,024 |  |  | $ | 55 |  |  | $ | 58,315 |  |  | $ | 490,764 |  |  | 2.60 | %
| December 31, 2022
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Weighted Average Yield
| (In thousands)
Available-for-sale |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates |  |  |  |  |  |  |  |  |
Due from 1 to 5 years | $ | 10,155 |  |  | — |  |  | $ | 550 |  |  | $ | 9,605 |  |  | 1.76 | %
Due from 5 to 10 years | 59,167 |  |  | — |  |  | 3,764 |  |  | 55,403 |  |  | 2.00 | %
Due after 10 years | 768,381 |  |  | 59 |  |  | 65,332 |  |  | 703,108 |  |  | 2.87 | %
Total FNMA and FHLMC certificates | 837,703 |  |  | 59 |  |  | 69,646 |  |  | 768,116 |  |  | 2.79 | %
GNMA certificates |  |  |  |  |  |  |  |  |
Due from 1 to 5 years | 12,505 |  |  | — |  |  | 632 |  |  | 11,873 |  |  | 1.66 | %
Due from 5 to 10 years | 24,575 |  |  | 14 |  |  | 1,585 |  |  | 23,004 |  |  | 2.13 | %
Due after 10 years | 320,417 |  |  | 892 |  |  | 36,652 |  |  | 284,657 |  |  | 2.90 | %
Total GNMA certificates | 357,497 |  |  | 906 |  |  | 38,869 |  |  | 319,534 |  |  | 2.80 | %
CMOs issued by US government-sponsored agencies |  |  |  |  |  |  |  |  |
Due from 1 to 5 years | 14,190 |  |  | — |  |  | 755 |  |  | 13,435 |  |  | 1.78 | %
Due from 5 to 10 years | 485 |  |  | — |  |  | 10 |  |  | 475 |  |  | 2.14 | %
Due after 10 years | 959 |  |  | — |  |  | 18 |  |  | 941 |  |  | 5.06 | %
Total CMOs issued by US government-sponsored agencies | 15,634 |  |  | — |  |  | 783 |  |  | 14,851 |  |  | 1.99 | %
Total mortgage-backed securities | 1,210,834 |  |  | 965 |  |  | 109,298 |  |  | 1,102,501 |  |  | 2.79 | %
Investment securities |  |  |  |  |  |  |  |  |
US Treasury securities |  |  |  |  |  |  |  |  |
Due less than 1 year | 310,862 |  |  | — |  |  | 1,729 |  |  | 309,133 |  |  | 3.34 | %
Other debt securities |  |  |  |  |  |  |  |  |
Due from 1 to 5 years | 1,116 |  |  | 30 |  |  | 4 |  |  | 1,142 |  |  | 4.45 | %
Total investment securities | 311,978 |  |  | 30 |  |  | 1,733 |  |  | 310,275 |  |  | 3.35 | %
Total securities available for sale | $ | 1,522,812 |  |  | $ | 995 |  |  | $ | 111,031 |  |  | $ | 1,412,776 |  |  | 2.90 | %
| December 31, 2022
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Weighted Average Yield
| (In thousands)
Held-to-maturity |  |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates |  |  |  |  |  |  |  |  |
Due after 10 years | $ | 337,435 |  |  | $ | — |  |  | $ | 62,358 |  |  | $ | 275,077 |  |  | 1.71 | %
Investment securities |  |  |  |  |  |  |  |  |
US Treasury securities |  |  |  |  |  |  |  |  |
Due from 1 to 5 years | 197,635 |  |  | — |  |  | 3,526 |  |  | 194,109 |  |  | 3.36 | %
Total securities held to maturity | $ | 535,070 |  |  | $ | — |  |  | $ | 65,884 |  |  | $ | 469,186 |  |  | 2.30 | %
Securities not due on a single contractual maturity date, such as collateralized mortgage obligations, are classified in the period of final contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. The weighted average yield on debt securities available-for-sale is based on amortized cost and does not give effect to changes in fair value. Weighted average yields on tax-exempt obligations have been computed on a fully taxable equivalent basis. At December 31, 2023 and 2022, most securities held by OFG are issued by U.S. government entities and government-sponsored agencies that have a zero-credit loss assumption and, therefore, have no allowance for credit losses. Investment securities at December 31, 2023 include $1.624 billion pledged to secure government deposits and regulatory collateral, of which $1.575 billion serve as collateral for public funds. For regulatory collateral, the secured parties are not permitted to sell or repledge them. Investment securities as of December 31, 2022 include $294.2 million pledged to secure government deposits, derivatives, and regulatory collateral that the secured parties are not permitted to sell or repledge, of which $293.7 million serve as collateral for public funds. At both December 31, 2023 and 2022, the Bank’s international banking entities held short-term US Treasury securities in the amount of $325 thousand and $325 thousand, respectively, as the legal reserve required for international banking entities under Puerto Rico law. These instruments cannot be withdrawn or transferred without the prior written approval of the OCFI. During 2023, OFG acquired a two-year $35.0 million private placement hospital revenue bond issued by AFICA, a public corporation and governmental instrumentality of the Commonwealth of Puerto Rico, to provide financing for a private entity. This bond is not marketable and therefore has no rating. It is included in “Other debt securities held to maturity” in the tables above. During 2023, 2022 and 2021, OFG retained securitized GNMA pools totaling $76.4 million, $112.4 million and $149.1 million amortized cost, respectively, at a yield of 5.33%, 3.90% and 2.45%, respectively, from its own originations. During 2023 and 2022, OFG retained FNMA pools totaling $17.2 million and $13.7 million amortized cost, respectively, at a yield of 5.37% and 4.97%, respectively, from its own originations. OFG did not retain FNMA pools during 2021. During 2023, OFG purchased $300.0 million of short-term available for sale US Treasury securities. During 2022, OFG purchased $550.0 million of available for sale US Treasury securities and $200.0 million of held to maturity US Treasury securities. During 2021, OFG did not purchase US Treasury securities. US Treasury securities are exempt of income taxes. During the 2023, OFG sold $203.3 million of available for sale US Treasury securities and recognized a $1.1 million loss in the sale. During 2022, OFG sold $242.4 million of available for sale US Treasury securities and recognized a $247 thousand loss in the sale. During 2021, OFG sold $2.2 million of available-for-sale mortgage-backed securities and recognized a $19 thousand gain in the sale. These losses and gains are included in “net (loss) gain on sale of securities” in the consolidated statements of operations.
|  | Year Ended December 31, 2023
Description |  | Sale Price |  | Book Value at Sale |  | Gross Gains |  | Gross Losses
|  | (In thousands)
Sale of investment securities available-for-sale |  |  |  |  |  |  |  |
US Treasury securities |  | $ | 202,133 |  |  | $ | 203,282 |  |  | $ | — |  |  | $ | 1,149 |
|  | Year Ended December 31, 2022
Description |  | Sale Price |  | Book Value at Sale |  | Gross Gains |  | Gross Losses
|  | (In thousands)
Sale of investment securities available-for-sale |  |  |  |  |  |  |  |
US Treasury securities |  | $ | 242,126 |  |  | $ | 242,373 |  |  | $ | — |  |  | $ | 247 |
|  | Year Ended December 31, 2021
Description |  | Sale Price |  | Book Value at Sale |  | Gross Gains |  | Gross Losses
|  | (In thousands)
Sale of securities available-for-sale |  |  |  |  |  |  |  |
Mortgage-backed securities |  |  |  |  |  |  |  |
GNMA certificates |  | $ | 2,175 |  |  | $ | 2,156 |  |  | $ | 19 |  |  | $ | — |
The following table shows OFG’s gross unrealized losses and fair value of investment securities available-for-sale at December 31, 2023 and 2022, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position:
| December 31, 2023
| 12 months or more
| Amortized Cost |  | Unrealized Loss |  | Fair Value
| (In thousands)
Securities available-for-sale |  |  |  |  |
FNMA and FHLMC certificates | $ | 731,334 |  |  | $ | 56,847 |  |  | $ | 674,487 |
GNMA certificates | 275,669 |  |  | 34,364 |  |  | 241,305 |
CMOs issued by US Government-sponsored agencies | 9,986 |  |  | 376 |  |  | 9,610 |
Other debt securities | 119 |  |  | 3 |  |  | 116 |
| $ | 1,017,108 |  |  | $ | 91,590 |  |  | $ | 925,518 |
| December 31, 2023
| Less than 12 months
| Amortized Cost |  | Unrealized Loss |  | Fair Value
| (In thousands)
Securities available-for-sale |  |  |  |  |
FNMA and FHLMC certificates | $ | 106,235 |  |  | $ | 331 |  |  | $ | 105,904 |
GNMA certificates | 7,864 |  |  | 52 |  |  | 7,812 |
| $ | 114,099 |  |  | $ | 383 |  |  | $ | 113,716 |
| December 31, 2023
| Total
| Amortized Cost |  | Unrealized Loss |  | Fair Value
| (In thousands)
Securities available-for-sale |  |  |  |  |
FNMA and FHLMC certificates | $ | 837,569 |  |  | $ | 57,178 |  |  | $ | 780,391 |
GNMA certificates | 283,533 |  |  | 34,416 |  |  | 249,117 |
CMOs issued by US Government-sponsored agencies | 9,986 |  |  | 376 |  |  | 9,610 |
Other debt securities | 119 |  |  | 3 |  |  | 116 |
| $ | 1,131,207 |  |  | $ | 91,973 |  |  | $ | 1,039,234 |
The unrealized losses on OFG’s investment in federal agency mortgage-backed securities were caused by market volatility related to interest rate increases. OFG purchased those investments at a discount relative to their face amount, and the contractual cash flows of those investments are guaranteed by an agency of the U.S. government or by a government sponsored enterprise. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost bases of OFG’s investments. OFG does not intend to sell the investments, and it is not more likely than not that OFG will be required to sell the investments before recovery of their amortized cost bases.
| December 31, 2022
| 12 months or more
| Amortized Cost |  | Unrealized Loss |  | Fair Value
| (In thousands)
Securities available-for-sale |  |  |  |  |
CMOs issued by US Government-sponsored agencies | $ | 337 |  |  | $ | 7 |  |  | $ | 330 |
FNMA and FHLMC certificates | 88,600 |  |  | 18,989 |  |  | 69,611 |
GNMA certificates | 82,074 |  |  | 14,031 |  |  | 68,043 |
| $ | 171,011 |  |  | $ | 33,027 |  |  | $ | 137,984 |
| December 31, 2022
| Less than 12 months
| Amortized Cost |  | Unrealized Loss |  | Fair Value
| (In thousands)
Securities available-for-sale |  |  |  |  |
CMOs issued by US Government-sponsored agencies | $ | 15,297 |  |  | $ | 776 |  |  | $ | 14,521 |
FNMA and FHLMC certificates | 745,566 |  |  | 50,657 |  |  | 694,909 |
GNMA certificates | 251,835 |  |  | 24,838 |  |  | 226,997 |
US Treasury securities | 310,862 |  |  | 1,729 |  |  | 309,133 |
Other debt securities | 240 |  |  | 4 |  |  | 236 |
| $ | 1,323,800 |  |  | $ | 78,004 |  |  | $ | 1,245,796 |
| December 31, 2022
| Total
| Amortized Cost |  | Unrealized Loss |  | Fair Value
| (In thousands)
Securities available-for-sale |  |  |  |  |
CMOs issued by US Government-sponsored agencies | $ | 15,634 |  |  | $ | 783 |  |  | $ | 14,851 |
FNMA and FHLMC certificates | 834,166 |  |  | 69,646 |  |  | 764,520 |
GNMA certificates | 333,909 |  |  | 38,869 |  |  | 295,040 |
US Treasury securities | 310,862 |  |  | 1,729 |  |  | 309,133 |
Other debt securities | 240 |  |  | 4 |  |  | 236 |
| $ | 1,494,811 |  |  | $ | 111,031 |  |  | $ | 1,383,780 |

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