XML 27 R12.htm IDEA: XBRL DOCUMENT v3.24.0.1

INVESTMENT SECURITIES

12 Months Ended

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

X

- References

No definition available.

+ Details

Name:	us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//320/tableOfContent

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6B
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482106/820-10-50-6B

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6B
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482106/820-10-50-6B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Name Regulation S-K (SK)
-Number 229
-Section 1403
-Paragraph (b)
-Publisher SEC

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//946-320/tableOfContent

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 940
-SubTopic 320
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//940-320/tableOfContent

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 320
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//942-320/tableOfContent

+ Details

Name:	us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix:	us-gaap_
Data Type:	dtr-types:textBlockItemType
Balance Type:	na
Period Type:	duration