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INVESTMENT SECURITIES | 3 Months Ended
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Mar. 31, 2025
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 March 31, 2025 and December 31, 2024, money market instruments included as part of cash and cash equivalents amounted to $7.1 million and $6.7 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 March 31, 2025 and December 31, 2024 were as follows:
| March 31, 2025
| 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 after 10 years | 2,009,222 |  |  | 14,708 |  |  | 52,572 |  |  | 1,971,358 |  |  | 4.51 | %
GNMA certificates |  |  |  |  |  |  |  |  |
Due from 5 to 10 years | 5,040 |  |  | — |  |  | 125 |  |  | 4,915 |  |  | 1.75 | %
Due after 10 years | 462,132 |  |  | 5,867 |  |  | 35,601 |  |  | 432,398 |  |  | 3.65 | %
Total GNMA certificates | 467,172 |  |  | 5,867 |  |  | 35,726 |  |  | 437,313 |  |  | 3.63 | %
CMOs issued by US government-sponsored agencies |  |  |  |  |  |  |  |  |
Due after 10 years | 4,843 |  |  | — |  |  | 94 |  |  | 4,749 |  |  | 2.28 | %
Total mortgage-backed securities | 2,481,237 |  |  | 20,575 |  |  | 88,392 |  |  | 2,413,420 |  |  | 4.34 | %
Investment securities |  |  |  |  |  |  |  |  |
US Treasury securities |  |  |  |  |  |  |  |  |
Due less than 1 year | 1,384 |  |  | — |  |  | — |  |  | 1,384 |  |  | 4.23 | %
Other debt securities |  |  |  |  |  |  |  |  |
Due from 1 to 5 years | 500 |  |  | — |  |  | — |  |  | 500 |  |  | 2.35 | %
Due after 10 years | 33 |  |  | — |  |  | — |  |  | 33 |  |  | 2.97 | %
Total other debt securities | 533 |  |  | — |  |  | — |  |  | 533 |  |  | 2.39 | %
Total investment securities | 1,917 |  |  | — |  |  | — |  |  | 1,917 |  |  | 3.72 | %
Total securities available for sale | $ | 2,483,154 |  |  | $ | 20,575 |  |  | $ | 88,392 |  |  | $ | 2,415,337 |  |  | 4.34 | %
| March 31, 2025
| 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 | $ | 286,824 |  |  | $ | — |  |  | $ | 53,866 |  |  | $ | 232,958 |  |  | 1.73 | %
Other debt securities |  |  |  |  |  |  |  |  |
Due from 1 to 5 years | 35,000 |  |  | 18 |  |  | — |  |  | 35,018 |  |  | 5.32 | %
Total securities held to maturity | $ | 321,824 |  |  | $ | 18 |  |  | $ | 53,866 |  |  | $ | 267,976 |  |  | 2.12 | %
| 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 |  |  |  |  |  |  |  |  |
US Treasury securities |  |  |  |  |  |  |  |  |
Due from 1 to 5 years | 35,000 |  |  | 22 |  |  | — |  |  | 35,022 |  |  | 5.53 | %
Total securities held to maturity | $ | 327,158 |  |  | $ | 22 |  |  | $ | 60,006 |  |  | $ | 267,174 |  |  | 2.13 | %
As of March 31, 2025 and December 31, 2024, accrued interest receivable excluded in amortized cost of investment securities totaled $11.1 million and $10.8 million, respectively, and is included in the accrued interest receivable line in OFG’s consolidated statements of financial condition. Refer to Note 9 – Accrued Interest Receivable and Other Assets. 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 March 31, 2025 and December 31, 2024, 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 March 31, 2025, include $1.567 billion pledged to secure government deposits, advances from the FHLB, and regulatory collateral, of which $1.524 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, 2024, include $1.564 billion pledged to secure securities sold under agreements to repurchase, advances from the FHLB, government deposits, and regulatory collateral that the secured parties are not permitted to sell or repledge, of which $1.440 billion serve as collateral for public funds. At March 31, 2025, the Bank’s IBEs, OIB and Oriental Overseas, each held short-term US Treasury securities in the amount of $775 thousand and $525 thousand, respectively, as the legal reserve required for international banking entities under Puerto Rico law. At December 31, 2024, the Bank’s IBEs, OIB and Oriental Overseas, each held short-term US Treasury securities in the amount of $525 thousand 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 the quarters ended March 31, 2025 and 2024, OFG retained securitized Government National Mortgage Association (“GNMA”) pools totaling $19.7 million and $17.4 million, respectively, at a yield of 4.63% and 5.05%, respectively, from its own originations. During the quarter ended March 31, 2024, OFG sold $149.4 million of US Treasury securities available for sale and recognized a $7 thousand loss on the sale included in the consolidated statements of operations. There were no sales of investment securities during the quarter ended March 31, 2025.
|  | Quarter Ended March 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 |
The following table shows OFG’s gross unrealized losses and fair value of investment securities available-for-sale at March 31, 2025 and December 31, 2024, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position:
|  | March 31, 2025
|  | Less than 12 months |  | 12 months or more |  | Total
|  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss
|  | (In thousands)
Securities available-for-sale |  |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates |  | $ | 406,272 |  |  | $ | 3,984 |  |  | $ | 571,505 |  |  | $ | 48,588 |  |  | $ | 977,777 |  |  | $ | 52,572 |
GNMA certificates |  | 65,244 |  |  | 1,093 |  |  | 200,797 |  |  | 34,633 |  |  | 266,041 |  |  | 35,726 |
CMOs issued by US Government-sponsored agencies |  | — |  |  | — |  |  | 4,749 |  |  | 94 |  |  | 4,749 |  |  | 94 |
|  | $ | 471,516 |  |  | $ | 5,077 |  |  | $ | 777,051 |  |  | $ | 83,315 |  |  | $ | 1,248,567 |  |  | $ | 88,392 |
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 rate fluctuations. 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, 2024
|  |  | Less than 12 months |  |  | 12 months or more |  | Total
|  |  | Fair Value |  | Unrealized Loss |  |  | Fair Value |  |  | Unrealized Loss |  |  | Fair Value |  | Unrealized Loss
|  |  | (In thousands)
Securities available-for-sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FNMA and FHLMC certificates |  |  | $ | 791,987 |  |  | $ | 12,989 |  |  |  | $ | 579,727 |  |  |  | $ | 61,462 |  |  |  | $ | 1,371,714 |  |  | $ | 74,451 |
GNMA certificates |  |  | 83,773 |  |  | 2,019 |  |  |  | 201,320 |  |  |  | 38,945 |  |  |  | 285,093 |  |  | 40,964 |
CMOs issued by US Government-sponsored agencies |  |  | — |  |  | — |  |  |  | 5,639 |  |  |  | 129 |  |  |  | 5,639 |  |  | 129 |
|  |  | $ | 875,760 |  |  | $ | 15,008 |  |  |  | $ | 786,686 |  |  |  | $ | 100,536 |  |  |  | $ | 1,662,446 |  |  | $ | 115,544 |

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