OPERATING LEASES

3 Months Ended

Mar. 31, 2024

Substantially all leases in which OFG is the lessee are comprised of real estate property for branches, ATM locations, and office space with terms extending through 2038. OFG’s leases do not contain residual value guarantees or material variable lease payments. All leases are classified as operating leases and are included on the consolidated statements of financial condition as a right-of-use asset and a corresponding lease liability. OFG leases to others certain space in its principal offices for terms extending through 2024; all are operating leases.

Operating Lease Cost


	Quarter Ended March 31,
	2024		2023		Statement of Operations Classification
	(In thousands)
Lease costs	$	2,653	$	2,600	Occupancy and equipment
Variable lease costs	411		341		Occupancy and equipment
Short-term lease costs	50		157		Occupancy and equipment
Lease income	(22)		(38)		Occupancy and equipment
Total lease costs	$	3,092	$	3,060

Operating Lease Assets and Liabilities



	March 31, 2024		December 31, 2023		Statement of Financial Condition Classification
	(In thousands)
Right-of-use assets	$	21,606	$	21,725	Operating lease right-of-use assets
Lease Liabilities	$	23,969	$	24,029	Operating leases liabilities


	March 31, 2024		December 31, 2023
	(In thousands)
Weighted-average remaining lease term	5.1 years		5.1 years
Weighted-average discount rate	7.5	%	7.0	%

Future minimum payments for operating leases with initial or remaining terms of one year or more as of March 31, 2024 were as follows:


	Minimum Rent
As of March 31, 2024	(In thousands)
2024	$	6,212
2025	6,540
2026	4,481
2027	3,724
2028	2,937
Thereafter	5,179
Total lease payments	$	29,073
Less imputed interest	5,104
Present value of lease liabilities	$	23,969

OFG, as lessor, leases and subleases real property to tenants under operating leases. As of March 31, 2024, no material lease concessions have been granted to tenants. As of March 31, 2024, OFG, as lessee, has not requested any lease concessions.