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INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2024

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, 2024 and 2023, money market instruments included as part of cash and cash equivalents amounted to $6.7 million and $4.6 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, 2024 and 2023 were as follows:

			December 31, 2024
			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			$	14,930					$	—					$	587					$	14,343					2.07		%
Due from 5 to 10 years			23,664						—						1,415						22,249						1.90		%
Due after 10 years			1,943,193						5,545						72,449						1,876,289						4.51		%
Total FNMA and FHLMC certificates			1,981,787						5,545						74,451						1,912,881						4.46		%
GNMA certificates
Due from 1 to 5 years			6,215						—						177						6,038						1.74		%
Due from 5 to 10 years			11,358						10						641						10,727						2.25		%
Due after 10 years			437,308						4,058						40,146						401,220						3.63		%
Total GNMA certificates			454,881						4,068						40,964						417,985						3.57		%
CMOs issued by US government-sponsored agencies
Due from 1 to 5 years			5,015						—						126						4,889						1.78		%
Due after 10 years			753						—						3						750						5.07		%
Total CMOs issued by US government-sponsored agencies			5,768						—						129						5,639						2.21		%
Total mortgage-backed securities			2,442,436						9,613						115,544						2,336,505						4.29		%
Investment securities
US Treasury securities
Due less than 1 year			1,149						1						—						1,150						4.85		%
Other debt securities
Due from 1 to 5 years			550						—						—						550						2.41		%
Total investment securities			1,699						1						—						1,700						4.06		%
Total securities available for sale			$	2,444,135					$	9,614					$	115,544					$	2,338,205					4.29		%
			December 31, 2024
			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			$	292,158					$	—					$	60,006					$	232,152					1.73		%
Investment securities
Other debt securities
Due less than 1 year			35,000						22						—						35,022						5.53		%
Total securities held to maturity			$	327,158					$	22					$	60,006					$	267,174					2.13		%

			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 other debt securities			619						—						3						616						3.20		%
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		%

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, 2024 and 2023, 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 ACL.

Investment securities as of December 31, 2024, include $1.564 billion pledged to secure securities sold under agreements to repurchase, government deposits and regulatory collateral, of which $1.440 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, 2023, include $1.624 billion pledged to secure government deposits, and regulatory collateral that the secured parties are not permitted to sell or repledge, of which $1.575 billion serve as collateral for public funds.

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.

At December 31, 2024 and 2023, the Bank’s IBEs, OIB and Oriental Overseas, each held short-term US Treasury securities in the amount of $525 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 Office of the Commissioner of Financial Institutions.

During 2024, 2023 and 2022, OFG retained securitized GNMA pools totaling $74.7 million, $76.4 million and $112.4 million, respectively, at a yield of 4.87%, 5.33% and 3.90%, respectively, from its own originations. During 2023 and 2022, OFG retained FNMA pools totaling $17.2 million and $13.7 million at a yield of 5.37% and 4.97%, from its own originations. OFG did not retain FNMA pools during 2024.

During 2024 and 2023, OFG purchased $549.0 million and $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. US Treasury securities are exempt of income taxes.

During 2024, 2023 and 2022, OFG sold $149.4 million, $203.3 million and $242.4 million, respectively, of AFS US Treasury securities and recognized $7 thousand, $1.1 million and $247 thousand, respectively, in losses on the sales. These losses are included in the consolidated statements of operations.

						Year Ended December 31, 2024
Description						Sale Price						Book Value at Sale						Gross Gains						Gross Losses
						(In thousands)
Sale of investment securities available-for-sale
Investment securities
US Treasury securities						$	149,406					$	149,413					$	—					$	7

						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
Investment securities
US Treasury securities						$	242,126					$	242,373					$	—					$	247

The following table shows OFG’s gross unrealized losses and fair value of investment securities available-for-sale at December 31, 2024 and 2023, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position:

			December 31, 2024
			12 months or more
			Amortized Cost						Unrealized Loss						Fair Value
			(In thousands)
Securities available-for-sale
FNMA and FHLMC certificates			$	641,189					$	61,462					$	579,727
GNMA certificates			240,265						38,945						201,320
CMOs issued by US Government-sponsored agencies			5,768						129						5,639
			$	887,222					$	100,536					$	786,686
			December 31, 2024
			Less than 12 months
			Amortized Cost						Unrealized Loss						Fair Value
			(In thousands)
Securities available-for-sale
FNMA and FHLMC certificates			$	804,976					$	12,989					$	791,987
GNMA certificates			85,792						2,019						83,773
			$	890,768					$	15,008					$	875,760
			December 31, 2024
			Total
			Amortized Cost						Unrealized Loss						Fair Value
			(In thousands)
Securities available-for-sale
FNMA and FHLMC certificates			$	1,446,165					$	74,451					$	1,371,714
GNMA certificates			326,057						40,964						285,093
CMOs issued by US Government-sponsored agencies			5,768						129						5,639
			$	1,777,990					$	115,544					$	1,662,446

The unrealized losses on OFG’s investment in federal agency mortgage-backed securities were caused by market volatility related to market uncertainty tied to interest rates. 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 that is less than the amortized cost basis 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 basis.

			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

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- Definition

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

+ References

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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Name Regulation S-K (SK)
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-Section 1403
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