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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities on Recurring and Non-Recurring Basis

Assets and liabilities measured at fair value on a recurring and non-recurring basis are summarized below:

			September 30, 2024
			Fair Value Measurements
			Level 1						Level 2						Level 3						Total
			(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale			$	1,136					$	2,228,966					$	—					$	2,230,102
Trading securities			—						18						—						18
Money market investments			5,885						—						—						5,885
Servicing assets			—						—						68,512						68,512
			$	7,021					$	2,228,984					$	68,512					$	2,304,517
Non-recurring fair value measurements:
Collateral dependent loans			$	—					$	—					$	8,583					$	8,583
Foreclosed real estate			—						—						4,419						4,419
Other repossessed assets			—						—						6,969						6,969
Mortgage loans held for sale			—						—						10,908						10,908
Other loans held for sale			—						—						4,716						4,716
			$	—					$	—					$	35,595					$	35,595

			December 31, 2023
			Fair Value Measurements
			Level 1						Level 2						Level 3						Total
			(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale			$	296,799					$	1,802,465					$	—					$	2,099,264
Trading securities			—						13						—						13
Money market investments			4,623						—						—						4,623
Servicing assets			—						—						49,520						49,520
			$	301,422					$	1,802,478					$	49,520					$	2,153,420
Non-recurring fair value measurements:
Collateral dependent loans			$	—					$	—					$	8,027					$	8,027
Foreclosed real estate			—						—						10,780						10,780
Other repossessed assets			—						—						4,032						4,032
Other loans held for sale			$	—					$	—					$	28,345					28,345
			$	—					$	—					$	51,184					$	51,184

Schedule of Reconciliation of Assets and Liabilities Using Significant Unobservable Inputs (Level 3)

The tables below present a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the quarters and nine-month periods ended September 30, 2024 and 2023:

Level 3 Instruments Only

						Quarter Ended September 30,
						2024						2023
						Servicing Assets									Other debt securities available for sale			Servicing Assets			Total
						(In thousands)
Balance at beginning period						$	49,789								$	413		$	49,966		$	50,379
New instruments acquired						21,923									—			453			453
Principal repayments and amortization						(1,108)									—			(1,060)			(1,060)
Instrument converted to equity security						—									(413)			—			(413)
Gains (losses) included in earnings						(2,092)									—			1,242			1,242
Balance at end of period						$	68,512								$	—		$	50,601		$	50,601
						Nine-Month Period Ended September 30,
						2024						2023
						Servicing Assets									Other debt securities available for sale			Servicing Assets			Total
						(In thousands)
Balance at beginning of period						$	49,520								$	406		$	50,921		$	51,327
New instruments acquired						22,753									—			1,818			1,818
Principal repayments and amortization						(2,759)									—			(3,210)			(3,210)
Instrument converted to equity security						—									(406)			—			(406)
Gains (losses) included in earnings						(1,002)									—			1,072			1,072
Balance at end of period						$	68,512								$	—		$	50,601		$	50,601

Schedule of Qualitative Information for Assets and Liabilities

The table below presents quantitative information for all assets measured at fair value on a recurring and non-recurring basis using significant unobservable inputs (Level 3) at September 30, 2024 and December 31, 2023:

			September 30, 2024
			Fair Value						Valuation Technique						Unobservable Input						Range						Weighted Average
			(In thousands)
Servicing assets			$	68,512					Cash flow valuation						Constant prepayment rate						0.85% - 13.30%						6.25		%
															Discount rate						10.00% - 15.50%						11.61		%
Collateral dependent loans			$	8,583					Fair value of property or collateral						Appraised value less disposition costs						10.20% - 33.20%						17.04		%
Foreclosed real estate			$	4,419					Fair value of property or collateral						Appraised value less disposition costs						10.00% - 33.00%						11.10		%
Other repossessed assets			$	6,969					Fair value of property or collateral						Estimated net realizable value less disposition costs						37.00% - 71.00%						56.32		%
Mortgage loans held for sale			$	10,908					Market prices						Pricing and execution whole loan						94.06% - 102.10%						98.56		%
Other loans held for sale			$	4,716					Bids or sales contract prices						Estimated market value						99.75% - 101.21%						101.12		%

			December 31, 2023
			Fair Value						Valuation Technique						Unobservable Input						Range						Weighted Average
			(In thousands)
Servicing assets			$	49,520					Cash flow valuation						Constant prepayment rate						1.35% - 17.34%						6.12		%
															Discount rate						10.00% - 15.50%						11.45		%
Collateral dependent loans			$	8,027					Fair value of property or collateral						Appraised value less disposition costs						10.20% - 33.20%						17.00		%
Foreclosed real estate			$	10,780					Fair value of property or collateral						Appraised value less disposition costs						10.20% - 33.20%						12.67		%
Other repossessed assets			$	4,032					Fair value of property or collateral						Estimated net realizable value less disposition costs						31.00% - 77.00%						57.72		%
Other loans held for sale			$	28,345					Bids or sales contract prices						Estimated market value						52.00% - 103.20%						84.80%

Schedule of Estimated Fair Value and Carrying Value

The estimated fair value and carrying value of OFG’s financial instruments at September 30, 2024 and December 31, 2023 was as follows:

			September 30, 2024												December 31, 2023
			Fair Value						Carrying Value						Fair Value						Carrying Value
			(In thousands)
Financial Assets:
Level 1
Cash and cash equivalents			$	680,587					$	680,587					$	748,173					$	748,173
Investment securities available-for-sale			$	1,136					$	1,136					$	296,799					$	296,799
Level 2
Financial Assets:
Trading securities			$	18					$	18					$	13					$	13
Investment securities available-for-sale			$	2,228,966					$	2,228,966					$	1,802,465					$	1,802,465
Investment securities held-to-maturity			$	249,198					$	297,713					$	455,709					$	514,024
Federal Home Loan Bank (FHLB) stock			$	18,430					$	18,430					$	14,488					$	14,488
Equity securities			$	27,262					$	27,262					$	23,981					$	23,981
Level 3
Financial Assets:
Investment securities held-to-maturity			$	35,051					$	35,000					$	35,055					$	35,000
Total loans (including loans held-for-sale)			$	7,516,112					$	7,604,700					$	7,282,214					$	7,401,618
Accrued interest receivable			$	70,367					$	70,367					$	71,400					$	71,400
Servicing assets			$	68,512					$	68,512					$	49,520					$	49,520
Accounts receivable and other assets			$	62,052					$	62,052					$	47,859					$	47,589
Financial Liabilities:
Deposits			$	9,651,703					$	9,608,652					$	9,767,068					$	9,762,169
Advances from FHLB			$	270,045					$	270,827					$	199,184					$	200,768
Other borrowings			$	—					$	—					$	2					$	2
Accrued expenses and other liabilities			$	157,609					$	157,609					$	115,985					$	115,985

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Tabular disclosure of financial instrument measured at fair value on recurring or nonrecurring basis. Includes, but is not limited to, instrument classified in shareholders' equity.

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