EX-99 2 ofg-20222qxexx99.htm EX-99 Document

Exhibit 99
ofg_logo.jpg
OFG Bancorp Reports 2Q22 Results
SAN JUAN, Puerto Rico, July 21, 2022 – OFG Bancorp (NYSE: OFG), the financial holding company for Oriental Bank, reported results for the second quarter ended June 30, 2022. EPS diluted was $0.84 compared to $0.76 in 1Q22 and $0.78 in 2Q21. Total core revenues were $146.3 million compared to $136.4 million in 1Q22 and $133.3 million in 2Q21.
CEO Comment

José Rafael Fernández, Chief Executive Officer, said: “We had another strong quarterly performance in all our core businesses. Loans and deposits grew, net interest margin expanded, and banking and wealth management income rebounded. All this confirms an overall increase in business activity, driven by our solid strategic position and continuously improving customer experience. This quarter we increased our number of self-service banking kiosks and introduced digital commercial account opening. We also repurchased $30.6 million of shares, completing $64.1 million of our current $100 million buyback program. Capital metrics remain high. On a macro level, despite global headwinds, the Puerto Rico economic environment continues to trend positively.”
2Q22 Highlights

Net Interest Income of $115.1 million compared to $105.2 million in 1Q22 and $102.3 million in 2Q21. Net Interest Margin expanded to 4.80% from 4.47% in 1Q22 due to increased volume of loans and investments and FRB rate hikes.

Interest Income of $122.2 million compared to $112.9 million in 1Q22 and $113.5 million in 2Q21. Compared to 1Q22, 2Q22 interest income benefited from higher yields on higher average balances of loans and of investment securities, and higher average yields on cash.

Total Interest Expense of $7.1 million compared to $7.8 million in 1Q22 and $11.2 million in 2Q21. Compared to 1Q22, 2Q22 interest expense primarily reflected lower average balances and cost of borrowings.

Non-Interest Income of $36.2 million compared to $31.6 million in 1Q22 and $32.2 million in 2Q21. Compared to 1Q22, 2Q22 non-interest income primarily reflected higher banking service and wealth management revenues, lower mortgage banking revenues, and a $4.7 million gain on sale of a legacy branch building.

Pre-Provision Net Revenues of $66.0 million compared to $55.6 million in 1Q22 and $51.8 million in 2Q21.

Provision for Credit Losses of $6.7 million compared to $1.6 million in 1Q22 and a net benefit of $8.3 million in 2Q21. 2Q22 reflected increases of $5.1 million due to loan growth and $4.8 million in commercial specific reserves due to two loans placed in non-accrual, partly offset by a reduction of $4.9 million in qualitative adjustment and loss factors due to the improvement in the performance of loan portfolios and economic conditions in Puerto Rico.



Credit Quality: Net charge off and nonperforming loan rates increased to 0.27% and 1.61%, respectively, compared to 0.04% and 1.49% in 1Q22. 2Q22 NCOs of $4.5 million included $2.5 million from a previously reserved commercial loan sold during the quarter. 1Q22 NCOs of $0.6 million benefited from $3.9 million in recoveries from an acquired PCD loan and the final settlement of the sale of non-performing mortgage loans in 4Q21.

Non-Interest Expenses of $85.3 million compared to $81.2 million in 1Q22 and $82.7 million in 2Q21. The $4.1 million increase from 1Q22 primarily reflected higher compliance related professional expenses due to greater levels of business activity as well as higher technology expenses related to digital transformation.

Loans Held for Investment (EOP) of $6.70 billion compared to $6.55 billion in 1Q22 and $6.50 billion in 2Q21. Loans grew $154.7 million from 1Q22, primarily reflecting increases in commercial loans as well as increases in consumer and auto loans.

New Loan Origination of $587.2 million compared to $623.2 million in 1Q22 and $673.6 million in 2Q21, which included $32.7 million of PPP loans. 2Q22 reflected continued high levels of auto and consumer lending as well as commercial lending in Puerto Rico and the US.

Total Investments (EOP) of $1.73 billion compared to $1.26 billion in 1Q22 and $643.5 million in 2Q21. Investments grew $468.5 million from 1Q22, taking advantage of the higher yield environment.

Customer Deposits (EOP) of $9.02 billion compared to $8.97 billion in 1Q22 and $9.08 billion in 2Q21. Core deposits grew $51.3 million from 1Q22, reflecting increases in commercial and retail accounts.

Total Assets (EOP) of $10.25 billion compared to $10.19 billion in 1Q22 and $10.46 billion in 2Q21.

Capital: CET1 ratio was 12.80% compared to 13.24% in 1Q22 and 13.95% in 2Q21. The decline from 1Q22 reflected common stock repurchased during the quarter and an increase in risk weighted assets, partially offset by an increase in retained earnings. Tangible book value per share was $18.86 compared to $18.90 in 1Q22 and $18.13 in 2Q21. The slight decline from 1Q22 reflected the common stock repurchase and a reduction in other comprehensive income, partially offset by the increase in retained earnings.
Conference Call, Financial Supplement & Presentation
A conference call to discuss 2Q22 results, outlook and related matters will be held today at 10:00 AM ET. Phone (800) 459-5346 or (203) 518-9544. Conference ID: OFGQ222. The call can also be accessed live on www.ofgbancorp.com with webcast replay shortly thereafter.
OFG’s Financial Supplement, with full financial tables for the quarter ended June 30, 2022, and the 2Q22 Conference Call Presentation, can be found on the Quarterly Results page on OFG’s Investor Relations website at www.ofgbancorp.com.
Non-GAAP Financial Measures
In addition to our financial information presented in accordance with GAAP, management uses certain “non-GAAP financial measures” within the meaning of SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Please refer to Tables


8-1 and 8-2 in OFG’s above-mentioned Financial Supplement for a reconciliation of GAAP to non-GAAP measures and calculations.
Forward Looking Statements
The information included in this document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and involve certain risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements.
Factors that might cause such a difference include but are not limited to (i) general business and economic conditions, including changes in interest rates; (ii) cybersecurity breaches; (iii) hurricanes, earthquakes, and other natural disasters; (iv) competition in the financial services industry; and (v) the severity, magnitude and duration of the COVID-19 pandemic, and its impact on our operations, personnel, and customers.
For a discussion of such factors and certain risks and uncertainties to which OFG is subject, please refer to OFG’s annual report on Form 10-K for the year ended December 31, 2021, as well as its other filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, OFG assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.
About OFG Bancorp
Now in its 58th year in business, OFG Bancorp is a diversified financial holding company that operates under U.S., Puerto Rico and U.S. Virgin Islands banking laws and regulations. Its three principal subsidiaries, Oriental Bank, Oriental Financial Services, and Oriental Insurance, provide a wide range of retail and commercial banking, lending and wealth management products, services, and technology, primarily in Puerto Rico and U.S. Virgin Islands. Visit us at www.ofgbancorp.com. 
# # #
Contacts
Puerto Rico & USVI: Idalis Montalvo (idalis.montalvo@orientalbank.com) at (787) 777-2847
US: Gary Fishman (gfishman@ofgbancorp.com) and Steven Anreder (sanreder@ofgbancorp.com) at (212) 532-3232


OFG Bancorp
Financial Supplement
The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our June 30, 2022 Quarterly Report on Form 10-Q once it is filed with the Securities and Exchange Commission.


OFG Bancorp (NYSE: OFG)
Table 1-1: Financial and Statistical Summary - Consolidated

2022
2022
2021
2021
2021
(Dollars in thousands, except per share data) (unaudited)
Q2
Q1
Q4
Q3
Q2
Statement of Operations
Net interest income $115,094(a)$105,194$104,199$102,701$102,251
Non-interest income, net (core)(2)31,21431,20136,75132,01631,054
Total core revenues(3)146,308(a)136,395140,950134,717133,305
Non-interest expense 85,25881,15586,49078,92482,676
Pre-provision net revenues(23)66,04655,64555,80956,29851,772
Total provision for (recapture of) credit losses 6,6911,5517,199(4,997)(8,305)
Net income before income taxes 59,35554,09448,61061,29560,077
Income tax expense 18,92316,57315,33019,62419,250
Net income available to common stockholders 40,43237,52133,28041,67140,827
Common Share Statistics      
Earnings per common share - basic(4)$0.84$0.77$0.67$0.82$0.79
Earnings per common share - diluted(5)$0.84$0.76$0.66$0.81$0.78
Average common shares outstanding 48,053(b)48,96849,74651,06351,636
Average common shares outstanding and equivalents 48,389(b)49,48450,29951,51652,048
Cash dividends per common share $0.15$0.15$0.12$0.12$0.08
Book value per common share (period end) $21.34$21.37$21.54$21.08$20.59
Tangible book value per common share (period end)(6)$18.86$18.90$19.08$18.59$18.13
Balance Sheet (Average Balances)      
Loans(7)$6,640,440$6,519,119$6,452,128$6,465,874$6,598,569
Interest-earning assets 9,613,3279,540,2669,897,0739,879,6879,726,905
Total assets 10,207,57910,113,75010,418,27410,492,50210,356,879
Core deposits 8,946,5178,808,5479,084,2829,103,2218,963,336
Total deposits 8,957,8838,819,9139,095,6489,114,5878,997,842
Interest-bearing deposits 6,266,1876,271,9366,435,2466,474,9776,392,219
Borrowings 27,72644,26275,97098,94399,950
Stockholders' equity 1,032,270(b)1,066,2781,066,7641,068,6181,083,452
Common stockholders' equity 1,032,2701,066,2781,066,7641,066,3611,046,835
Performance Metrics      
Net interest margin(8)4.80 %(a)4.47 %4.18 %4.12 %4.22 %
Return on average assets(9)1.58 %1.48 %1.28 %1.59 %1.58 %
Return on average tangible common stockholders' equity(10)17.70 %15.88 %14.11 %17.72 %17.78 %
Efficiency ratio(11)58.27 %59.50 %61.36 %58.59 %62.02 %
Full-time equivalent employees, period end 2,230 2,244 2,269 2,274 2,231 
Credit Quality Metrics(1)(22)     
Allowance for credit losses$159,039$157,075$155,937$180,872$191,717
Allowance as a % of loans held for investment2.37 %2.40 %2.44 %2.82 %2.95 %
Net charge-offs$4,543$577$32,482$6,051$2,118
Net charge-off rate(12)0.27 %0.04 %2.01 %0.37 %0.13 %
Early delinquency rate (30 - 89 days past due)2.20 %1.97 %2.34 %2.06 %1.86 %
Total delinquency rate (30 days and over)3.68 %3.17 %3.71 %3.82 %3.90 %
Capital Ratios (period end) (Non-GAAP)(13)(21)
Leverage ratio9.46 %(b)9.54 %9.69 %9.33 %9.84 %
Common equity Tier 1 capital ratio12.80 %(b)13.24 %13.77 %13.52 %13.95 %
Tier 1 risk-based capital ratio12.80 %(b)13.24 %14.27 %14.03 %14.70 %
Total risk-based capital ratio14.05 %(b)14.49 %15.52 %15.28 %15.95 %
Tangible common equity ("TCE") ratio8.85 %(b)9.14 %9.69 %8.86 %9.06 %
(a)During 2Q 2022, the Company purchased $350 million mortgage backed securities available for sale and $200 million US Treasury Notes held to maturity.
(b)During 2Q 2022, the Company repurchased $30.6 million of shares pursuant to its $100 million share buyback program.


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OFG Bancorp (NYSE: OFG)
Table 1-2: Financial and Statistical Summary - Consolidated (Continued)
June 2022
June 2021
(Dollars in thousands, except per share data) (unaudited)YTDYTD
Statement of Operations
Net interest income$220,288 (a)$200,449 
Non-interest income, net (core)(2)62,415 60,512 
Total core revenues282,703 (a)260,961 
Non-interest expense166,413 160,342 
Pre-provision net revenues(22)121,691 102,717 
Total provision for (recapture of) credit losses8,242 (1,981)
Net income before income taxes113,449 104,698 
Income tax expense35,496 33,498 
Net income available to common stockholders77,953 69,945 
Common Share Statistics
Earnings per common share - basic(3)$1.61 $1.36 
Earnings per common share - diluted(4)$1.59 $1.35 
Average common shares outstanding48,508 (b)51,517 
Average common shares outstanding and equivalents48,933 (b)51,885 
Cash dividends per common share$0.30 (c)$0.16 
Book value per common share (period end)$21.34 $20.59 
Tangible book value per common share (period end)(5)$18.86 $18.13 
Balance Sheet (Average Balances)
Loans(6)$6,580,115 $6,617,002 
Interest-earning assets9,576,999 9,543,525 
Total assets10,160,924 10,181,437 
Core deposits8,877,913 8,750,551 
Total deposits8,889,279 8,790,750 
Interest-bearing deposits6,269,046 6,308,286 
Borrowings35,948 (d)100,448 
Stockholders' equity1,049,180 (b)1,092,201 
Common stockholders' equity1,049,180 1,033,083 
Performance Metrics
Net interest margin(7)4.64 %(a)4.24 %
Return on average assets(8)1.53 %1.40 %
Return on average tangible common stockholders' equity(9)16.78 %15.48 %
Efficiency ratio(10)58.86 %61.44 %
Full-time equivalent employees, period end2,230 2,231 
Credit Quality Metrics(1)(21)
Allowance for credit losses$159,039 $191,717 
Allowance as a % of loans held for investment2.37 %2.95 %
Net charge-offs$5,120 $11,233 
Net charge-off rate(11)0.16 %0.34 %
Early delinquency rate (30 - 89 days past due)2.20 %1.86 %
Total delinquency rate (30 days and over)3.68 %3.90 %
(a)During the six-month period ended June 30, 2022, the Company purchased $773 million mortgage backed securities available for sale and $200 million US Treasury Notes held to maturity.
(b)During the six-month period ended June 30, 2022, the Company repurchased $64.1 million of shares pursuant to its $100.0 million share buyback program.
(c)During the six-month period ended June 30, 2022, the Company increased its common stock quarterly dividend to $0.15 per share.
(d)During the six-month period ended June 30, 2022, the Company redeemed all outstanding $36.1 million subordinated capital notes prior to maturity.





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OFG Bancorp (NYSE: OFG)
Table 2-1: Consolidated Statements of Operations
Quarter Ended
(Dollars in thousands, except per share data) (unaudited) June 30, 2022March 31, 2022December 31,
2021		September 30,
2021		June 30,
2021
Interest income: 
Loans(1)
Non-PCD loans $91,788 $86,631 $84,914 $85,028 $85,175 
PCD loans 19,569 20,934 22,660 22,905 24,880 
Total interest income from loans 111,357 107,565 107,574 107,933 110,055 
Investment securities 10,865 (a)5,384 5,036 4,202 3,402 
Total interest income 122,222 112,949 112,610 112,135 113,457 
Interest expense:
Deposits
Core deposits 6,935 7,033 7,830 8,681 10,436 
Brokered deposits 9 8 9 10 24 
Total deposits 6,944 7,041 7,839 8,691 10,460 
Borrowings 184 714 572 743 746 
Total interest expense 7,128 7,755 8,411 9,434 11,206 
Net interest income 115,094 105,194 104,199 102,701 102,251 
Provision for (recapture of) credit losses, excluding PCD loans(1)12,486 8,399 (461)(2,351)(7,726)
(Recapture of) provision for credit losses on PCD loans(1)(5,795)(6,848)7,660 (2,646)(579)
Total provision for (recapture of) credit losses 6,691 1,551 7,199 (4,997)(8,305)
Net interest income after provision for credit losses 108,403 103,643 97,000 107,698 110,556 
Non-interest income:      
Banking service revenues 18,141 17,562 18,770 18,200 18,251 
Wealth management revenues 8,270 7,857 11,774 7,619 8,263 
Mortgage banking activities 4,803 5,782 6,207 6,197 4,540 
Total banking and financial service revenues 31,214 31,201 36,751 32,016 31,054 
Other income, net 4,996 (b)405 1,349 505 1,143 
Total non-interest income, net 36,210 31,606 38,100 32,521 32,197 
Non-interest expense:
Compensation and employee benefits 34,730 34,768 34,160 33,745 32,919 
Occupancy, equipment and infrastructure costs 12,861 11,916 12,424 12,078 12,528 
General and administrative expenses 37,972 (c)35,072 39,920 34,041 35,371 
Foreclosed real estate and other repossessed assets (income) expenses (1,404)(1,482)(1,122)(2,163)327 
COVID 19 expenses 1,099 881 1,108 1,223 1,531 
Total non-interest expense 85,258 81,155 86,490 78,924 82,676 
Income before income taxes 59,355 54,094 48,610 61,295 60,077 
Income tax expense 18,923 16,573 15,330 19,624 19,250 
Net income available to common shareholders $40,432 $37,521 $33,280 $41,671 $40,827 
(a)Refer to “(a)” in Table 1-1.
(b)During 2Q 2022, the Company recognized $4.6 million in other income from the sale of a legacy branch building.
(c)During 2Q 2022, the Company recognized $2.2 million higher compliance related professional expenses due to greater levels of business activity.



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OFG Bancorp (NYSE: OFG)
Table 2-2: Consolidated Statements of Operations (Continued)
(Dollars in thousands, except per share data) (unaudited)Six-Month Period Ended
June 30, 2022
June 30, 2021
Interest income:
Loans(1)
Non-PCD loans$178,419 $168,105 
PCD loans40,503 50,155 
Total interest income from loans218,922 218,260 
Investment securities16,249 (a)6,173 
Total interest income235,171 224,433 
Interest expense:
Deposits
Core deposits13,968 22,297 
Brokered deposits17 187 
Total deposits13,985 22,484 
Borrowings898 1,500 
Total interest expense14,883 23,984 
Net interest income220,288 200,449 
Provision for (Recapture of) credit losses, excluding PCD loans(1)20,885 (4,728)
(Recapture of) Provision for credit losses on PCD loans(1)(12,643)2,747 
Total provision for (recapture of) credit losses8,242 (b)(1,981)
Net interest income after provision for credit losses212,046 202,430 
Non-interest income:  
Banking service revenues35,703 34,748 
Wealth management revenues16,127 15,651 
Mortgage banking activities10,585 10,113 
Total banking and financial service revenues62,415 60,512 
Other income, net5,401 (c)2,098 
Total non-interest income, net67,816 62,610 
Non-interest expense:
Compensation and employee benefits69,498 65,537 
Occupancy, equipment and infrastructure costs24,777 25,656 
General and administrative expenses73,044 (d)65,571 
Foreclosed real estate and other repossessed assets (income) expenses(2,886)(e)278 
COVID 19 expenses1,980 3,300 
Total non-interest expense166,413 160,342 
Income before income taxes113,449 104,698 
Income tax expense35,496 33,498 
Net income77,953 71,200 
Less:  dividends on preferred stock— (1,255)
Net income available to common shareholders$77,953 $69,945 
(a)Refer to “a” in Table 1-2.
(b)During the six-month period ended June 30, 2022, the Company grew its loan portfolio balances, requiring higher provision for credit losses, among other factors evaluated.
(c)During the six-month period ended June 30, 2022, the Company recognized $4.6 million in other income from the sale of a legacy branch building.
(d)During the six-month period ended June 30, 2022, the Company recognized $2.0 million costs related to electronic banking and $3.1 million higher compliance related professional expenses due to greater levels of business activity.
(e)During the six-month period ended June 30, 2022, foreclosed real estate and other repossessed assets (income) expenses benefited from gain in real estate owned sales.


5

OFG Bancorp (NYSE: OFG)
Table 3: Consolidated Statements of Financial Condition
(Dollars in thousands) (unaudited)
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
Cash and cash equivalents$1,307,281 (a)$1,855,729 $2,023,650 $2,755,691 $2,767,693 
Investments:
Trading securities13 18 20 22 29 
Investment securities available-for-sale, at fair value, no allowance for credit losses for any period
Mortgage-backed securities1,146,459 (a)867,191 496,310 494,727 487,014 
US treasury notes10,733 10,763 10,825 10,875 10,910 
Other investment securities2,378 2,384 3,578 3,505 3,695 
Total investment securities available-for-sale1,159,570 (a)880,338 510,713 509,107 501,619 
Investment securities held-to-maturity, at amortized cost, no allowance for credit losses for any period
Mortgage-backed securities351,016 359,806 367,507 375,214 125,138 
US treasury notes196,816 (a)— — — — 
Total investment securities held-to-maturity547,832 (a)359,806 367,507 375,214 125,138 
Equity securities19,848 18,556 17,578 17,930 16,709 
Total investments1,727,263 (a)1,258,718 895,818 902,273 643,495 
Loans, net6,585,210 6,449,130 6,329,311 6,282,485 6,354,040 
Other assets:
Prepaid expenses65,327 56,513 60,856 65,003 61,678 
Deferred tax asset, net76,101 87,608 99,063 128,663 144,799 
Foreclosed real estate and repossessed properties17,594 17,922 16,984 15,433 16,818 
Premises and equipment, net101,848 97,403 92,124 86,981 85,993 
Goodwill86,069 86,069 86,069 86,069 86,069 
Other intangibles31,800 33,947 36,093 38,545 40,995 
Right of use assets27,699 28,576 28,846 30,625 32,621 
Servicing asset49,280 49,446 48,973 48,227 47,712 
Accounts receivable and other assets172,302 169,059 181,933 166,870 179,900 
Total assets$10,247,774 $10,190,120 $9,899,720 $10,606,865 $10,461,813 
Deposits:
Demand deposits$5,459,104 $5,504,640 $5,204,340 $5,531,124 $5,337,691 
Savings accounts2,433,819 2,295,113 2,177,780 2,378,211 2,277,296 
Time deposits1,125,276 1,167,103 1,209,627 1,323,688 1,464,134 
Brokered deposits11,371 11,366 11,371 11,366 11,371 
Total deposits9,029,570 8,978,222 8,603,118 9,244,389 9,090,492 
Borrowings:     
Advances from FHLB and other borrowings27,618 28,035 28,488 62,934 63,867 
Subordinated capital notes— — 36,083 36,083 36,083 
Total borrowings27,618 28,035 64,571 99,017 99,950 
Other liabilities:     
Securities purchased but not yet received— — — 31,565 — 
Acceptances outstanding27,150 29,858 35,329 24,371 27,703 
Lease liability29,538 30,287 30,498 32,167 34,052 
GNMA buy-back option program liability(25)33,431 9,664 14,511 19,944 28,118 
Accrued expenses and other liabilities85,655 74,019 82,533 101,747 101,501 
Total liabilities9,232,962 9,150,085 8,830,560 9,553,200 9,381,816 
Stockholders' equity:
Preferred stock— — — — 24,000 
Common stock59,885 59,885 59,885 59,885 59,885 
Additional paid-in capital634,612 633,796 637,061 635,808 626,995 
Legal surplus125,365 121,389 117,677 114,485 110,235 
Retained earnings 455,590 426,320 399,949 375,729 352,001 
Treasury stock, at cost(211,138)(b)(180,717)(150,572)(140,862)(100,719)
Accumulated other comprehensive income, net(49,502)(20,638)5,160 8,620 7,600 
Total stockholders' equity1,014,812 1,040,035 1,069,160 1,053,665 1,079,997 
Total liabilities and stockholders' equity$10,247,774 $10,190,120 $9,899,720 $10,606,865 $10,461,813 
(a)Refer to “(a)” in Table 1-1.
(b)Refer to “(b)” in Table 1-1.

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OFG Bancorp (NYSE: OFG)
Table 4-1: Information on Loan Portfolio and Production
(Dollars in thousands) (unaudited)
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
Non-PCD:(1)
Mortgage$675,324 $694,613 $704,337 $731,445 $747,488 
Mortgage GNMA buy-back option program(25)33,431 9,664 14,511 19,944 28,118 
Commercial2,388,281 2,256,011 2,088,106 1,954,804 1,903,866 
Commercial Paycheck Protection Program (PPP Loans)(24)33,304 53,277 86,889 136,698 228,677 
Consumer498,404 454,959 408,759 373,672 366,037 
Auto1,791,052 1,732,859 1,693,029 1,667,113 1,618,788 
5,419,796 5,201,383 4,995,631 4,883,676 4,892,974 
Less:  Allowance for credit losses(143,896)(137,344)(132,065)(138,874)(148,314)
Total non- PCD loans held for investment, net5,275,900 5,064,039 4,863,566 4,744,802 4,744,660 
PCD:(1)
Mortgage1,099,097 1,144,364 1,188,423 1,270,854 1,324,274 
Commercial174,282 190,626 204,335 239,554 260,627 
Consumer698 833 916 959 981 
Auto8,788 10,765 13,281 15,820 19,236 
1,282,865 1,346,588 1,406,955 1,527,187 1,605,118 
Less:  Allowance for credit losses(1)(15,143)(19,731)(23,872)(41,998)(43,403)
Total PCD loans held for investment, net1,267,722 1,326,857 1,383,083 1,485,189 1,561,715 
Total loans held for investment6,543,622 6,390,896 6,246,649 6,229,991 6,306,375 
Mortgage loans held for sale26,947 26,761 51,096 35,031 37,885 
Other loans held for sale14,641 31,473 31,566 17,463 9,780 
Total loans, net$6,585,210 $6,449,130 $6,329,311 $6,282,485 $6,354,040 
Loan Portfolio Summary:
Loans held for investment:
Mortgage$1,774,421 $1,838,977 $1,892,760 $2,002,299 $2,071,762 
Mortgage GNMA buy-back option program(25)33,431 9,664 14,511 19,944 28,118 
Commercial2,562,563 2,446,637 2,292,441 2,194,358 2,164,493 
Commercial Paycheck Protection Program (PPP Loans)(24)33,304 53,277 86,889 136,698 228,677 
Consumer499,102 455,792 409,675 374,631 367,018 
Auto1,799,840 1,743,624 1,706,310 1,682,933 1,638,024 
6,702,661 6,547,971 6,402,586 6,410,863 6,498,092 
Less:  Allowance for credit losses(159,039)(157,075)(155,937)(180,872)(191,717)
Total loans held for investment, net6,543,622 6,390,896 6,246,649 6,229,991 6,306,375 
Mortgage loans held for sale26,947 26,761 51,096 35,031 37,885 
Other loans held for sale14,641 31,473 31,566 17,463 9,780 
Total loans, net$6,585,210 $6,449,130 $6,329,311 $6,282,485 $6,354,040 


7

OFG Bancorp (NYSE: OFG)
Table 4-2: Information on Loan Portfolio and Production
  Quarter EndedSix-Month Period Ended
(Dollars in thousands) (unaudited)
June 30, 2022
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
June 30, 2022
June 30, 2021
Loan production(14)
Mortgage 62,835 $63,883 $78,991 $85,535 $103,837 $126,718 $199,688 
Commercial 143,796 175,531 238,356 154,146 218,425 319,327 302,245 
Commercial PPP Loans — — — 16 32,712 — 158,978 
Commercial US Loans 90,952 108,390 79,264 100,066 109,522 199,342 154,363 
Consumer 96,571 97,108 80,688 50,630 38,038 193,679 65,530 
Auto 193,031 178,288 155,390 165,854 171,104 371,319 320,461 
Total $587,185 $623,200 $632,689 $556,247 $673,638 $1,210,385 $1,201,265 
8

OFG Bancorp (NYSE: OFG)
Table 5-1: Average Balances, Net Interest Income and Net Interest Margin
2022 Q2
2022 Q1
2021 Q4
2021 Q3
2021 Q2
(Dollars in thousands) (unaudited)Average
Balance		Interest
Income/
Expense		Yield/
Rate		Average
Balance		Interest
Income/
Expense		Yield/
Rate		Average
Balance		Interest
Income/
Expense		Yield/
Rate		Average
Balance		Interest
Income/
Expense		Yield/
Rate		Average
Balance		Interest
Income/
Expense		Yield/
Rate
Interest earning assets:
Cash equivalents$1,546,036 $2,984 0.77 %$2,072,112 $929 0.18 %$2,553,118 $944 0.15 %$2,699,144 $986 0.14 %$2,519,406 $706 0.11 %
Investment securities1,426,851 7,881 2.21 %949,035 4,455 1.88 %891,827 4,092 1.84 %714,669 3,216 1.80 %608,930 2,696 1.77 %
Loans held for investment
(1)
               
Non-PCD loans5,315,401 91,788 6.93 %5,113,715 86,631 6.87 %4,953,279 84,914 6.80 %4,899,312 85,028 6.89 %4,937,602 85,175 6.92 %
PCD loans1,325,039 19,569 5.91 %1,405,404 20,934 5.96 %1,498,849 22,660 6.05 %1,566,562 22,905 5.85 %1,660,967 24,880 5.99 %
Total loans6,640,440 111,357 6.73 %6,519,119 107,565 6.69 %6,452,128 107,574 6.62 %6,465,874 107,933 6.62 %6,598,569 110,055 6.69 %
Total interest-earning assets$9,613,327 $122,222 5.10 %$9,540,266 $112,949 4.80 %$9,897,073 $112,610 4.51 %$9,879,687 $112,135 4.50 %$9,726,905 $113,457 4.68 %
Interest bearing liabilities:               
Deposits               
NOW accounts$2,811,396 $2,174 0.31 %$2,813,037 $2,140 0.31 %$2,792,966 $2,239 0.32 %$2,754,985 $2,288 0.33 %$2,542,018 $2,259 0.36 %
Savings accounts2,296,903 1,289 0.23 %2,248,193 1,198 0.22 %2,359,959 1,289 0.22 %2,330,121 1,639 0.28 %2,236,281 2,097 0.38 %
Time deposits1,146,522 1,834 0.64 %1,199,340 2,057 0.70 %1,270,955 2,464 0.77 %1,378,505 2,916 0.84 %1,579,414 4,243 1.08 %
Brokered deposits11,366 9 0.30 %11,366 8 0.30 %11,366 9 0.30 %11,366 10 0.34 %34,506 24 0.28 %
 6,266,187 5,306 0.34 %6,271,936 5,403 0.35 %6,435,246 6,001 0.37 %6,474,977 6,853 0.42 %6,392,219 8,623 0.54 %
Non-interest bearing deposit accounts2,691,696 — — 2,547,977 — — 2,660,402 — — 2,639,610 — — 2,605,623 — — 
Fair value premium and core deposit intangible amortization— 1,638 — — 1,638 — — 1,838 — — 1,838 — — 1,837 — 
Total deposits8,957,883 6,944 0.31 %8,819,913 7,041 0.32 %9,095,648 7,839 0.34 %9,114,587 8,691 0.38 %8,997,842 10,460 0.47 %
Borrowings
Advances from FHLB and other borrowings27,726 184 2.66 %28,184 193 2.77 %39,887 279 2.78 %62,860 450 2.84 %63,867 452 2.84 %
Subordinated capital notes— — — %16,078 521 13.15 %36,083 293 3.23 %36,083 293 3.21 %36,083 294 3.27 %
Total borrowings27,726 184 2.66 %44,262 714 6.54 %75,970 572 2.99 %98,943 743 2.98 %99,950 746 2.99 %
Total interest-bearing liabilities$8,985,609 $7,128 0.32 %$8,864,175 $7,755 0.35 %$9,171,618 $8,411 0.36 %$9,213,530 $9,434 0.41 %$9,097,792 $11,206 0.49 %
Interest rate spread $115,094 4.78 % $105,194 4.45 % $104,199 4.15 % $102,701 4.09 % $102,251 4.19 %
Net interest margin  4.80 %  4.47 %  4.18 %  4.12 %  4.22 %
Core deposits: (Non-GAAP)               
Deposits               
NOW accounts$2,811,396 $2,174 0.31 %$2,813,037 $2,140 0.31 %$2,792,966 $2,239 0.32 %$2,754,985 $2,288 0.33 %$2,542,018 $2,259 0.36 %
Savings accounts2,296,903 1,289 0.23 %2,248,193 1,198 0.22 %2,359,959 1,289 0.22 %2,330,121 1,639 0.28 %2,236,281 2,097 0.38 %
Time deposits1,146,522 1,834 0.64 %1,199,340 2,057 0.70 %1,270,955 2,464 0.77 %1,378,505 2,916 0.84 %1,579,414 4,243 1.07 %
 6,254,821 5,297 0.34 %6,260,570 5,395 0.35 %6,423,880 5,992 0.37 %6,463,611 6,843 0.42 %6,357,713 8,599 0.54 %
Non-interest bearing deposit accounts2,691,696 — — 2,547,977 — — 2,660,402 — — 2,639,610 — — 2,605,623 — — 
Total core deposits$8,946,517 $5,297 0.24 %$8,808,547 $5,395 0.25 %$9,084,282 $5,992 0.26 %$9,103,221 $6,843 0.30 %$8,963,336 $8,599 0.38 %

9

OFG Bancorp (NYSE: OFG)
Table 5-2: Average Balances, Net Interest Income and Net Interest Margin (Continued)
2022 YTD2021 YTD
(Dollars in thousands) (unaudited)Average
Balance		Interest
Income/
Expense		Yield/
Rate		Average
Balance		Interest
Income/
Expense		Yield/
Rate
Interest earning assets:
Cash equivalents$1,807,621 $3,913 0.44 %$2,362,788 $1,301 0.11 %
Investment securities1,189,263 12,336 2.07 %563,735 4,872 1.73 %
Loans held for investment(1)
Non-PCD loans5,215,115 178,419 6.90 %4,915,722 168,105 6.90 %
PCD loans1,365,000 40,503 5.93 %1,701,280 50,155 5.90 %
Total loans6,580,115 218,922 6.71 %6,617,002 218,260 6.65 %
Total interest-earning assets$9,576,999 $235,171 4.95 %$9,543,525 $224,433 4.74 %
Interest bearing liabilities:
Deposits
NOW accounts$2,812,212 $4,314 0.31 %$2,470,244 $4,652 0.38 %
Savings accounts2,272,683 2,487 0.22 %2,120,764 4,220 0.40 %
Time deposits1,172,785 3,891 0.67 %1,677,079 9,748 1.17 %
Brokered deposits11,366 17 0.30 %40,199 187 0.94 %
6,269,046 10,709 0.34 %6,308,286 18,807 0.60 %
Non-interest bearing deposit accounts2,620,233 — — 2,482,464 — — %
Fair value premium and core deposit intangible amortization— 3,276 — — 3,677 — 
Total deposits8,889,279 13,985 0.32 %8,790,750 22,484 0.52 %
Borrowings
Securities sold under agreements to repurchase— — — %— — — %
Advances from FHLB and other borrowings27,954 377 2.71 %64,365 911 2.86 %
Subordinated capital notes7,994 521 13.15 %36,083 589 3.29 %
Total borrowings35,948 898 5.04 %100,448 1,500 3.01 %
Total interest-bearing liabilities$8,925,227 $14,883 0.34 %$8,891,198 $23,984 0.54 %
Interest rate spread$220,288 4.61 %$200,449 4.20 %
Net interest margin 4.64 %4.24 %
Core deposits: (Non-GAAP)
Deposits
NOW accounts$2,812,212 $4,314 0.31 %$2,470,244 $4,652 0.38 %
Savings accounts2,272,683 2,487 0.22 %2,120,764 4,220 0.40 %
Time deposits1,172,785 3,891 0.67 %1,677,079 9,748 1.17 %
6,257,680 10,692 0.34 %6,268,087 18,620 0.60 %
Non-interest bearing deposit accounts2,620,233 — — %2,482,464 — — %
Total core deposits$8,877,913 $10,692 0.24 %$8,750,551 $18,620 0.43 %
10

OFG Bancorp (NYSE: OFG)
Table 6-1: Loan Information and Performance Statistics (1)
20222022202120212021
(Dollars in thousands) (unaudited)Q2Q1Q4Q3Q2
Net Charge-offs(22)
Non-PCD
Mortgage:
Charge-offs$259 $3 $4,573 $160 $268 
Recoveries(335)(2,074)(416)(419)(193)
Total mortgage(76)(2,071)4,157 (259)75 
Commercial:
Charge-offs2,907 (a)544 550 7,518 653 
Recoveries(456)(192)(418)(558)(996)
Total commercial2,451 352 132 6,960 (343)
Consumer:     
Charge-offs3,307 2,659 2,144 2,370 2,897 
Recoveries(795)(655)(743)(894)(697)
Total consumer2,512 2,004 1,401 1,476 2,200 
Auto:     
Charge-offs6,428 7,890 7,288 4,989 5,170 
Recoveries(5,565)(4,891)(6,282)(5,874)(5,997)
Total auto863 2,999 1,006 (885)(827)
Total$5,750 $3,284 $6,696 $7,292 $1,105 
PCD
Mortgage:
Charge-offs$183 $1,134 $15,010 $1,008 $1,742 
Recoveries(1,026)(845)(452)(641)(184)
Total mortgage(843)289 14,558 367 1,558 
Commercial:     
Charge-offs— 34 12,123 68 6 
Recoveries(249)(3,023)(746)(1,316)(430)
Total commercial(249)(2,989)11,377 (1,248)(424)
Consumer:     
Charge-offs8 39 — — — 
Recoveries(13)(23)(42)(219)(33)
Total consumer(5)16 (42)(219)(33)
Auto:     
Charge-offs75 114 140 124 226 
Recoveries(185)(137)(247)(265)(314)
Total auto(110)(23)(107)(141)(88)
Total$(1,207)$(2,707)$25,786 $(1,241)$1,013 
Total Net Charge-offs$4,543 $577 $32,482 $6,051 $2,118 
Net Charge-off Rates(22)     
Mortgage-0.20 %-0.38 %3.79 %0.02 %0.30 %
Commercial0.34 %-0.43 %1.95 %0.97 %-0.13 %
Consumer1.98 %1.75 %1.29 %1.26 %2.17 %
Auto0.17 %0.69 %0.21 %-0.25 %-0.23 %
Total0.27 %0.04 %2.01 %0.37 %0.13 %
Average Loans Held For Investment(22)     
Mortgage$1,809,228 $1,885,159 $1,972,889 $2,047,272 $2,147,927 
Commercial2,555,575 2,450,177 2,362,120 2,360,642 2,443,407 
Consumer506,588 461,890 421,824 400,582 400,365 
Auto1,769,049 1,721,893 1,695,295 1,657,378 1,606,870 
Total$6,640,440 $6,519,119 $6,452,128 $6,465,874 $6,598,569 
(a)During 2Q 2022, the Company charged-off $2.5 million for a previously reserved amount on a commercial loan sold.



11

OFG Bancorp (NYSE: OFG)
Table 6-2: Loan Information and Performance Statistics (Excludes PCD Loans) (1)
20222022202120212021
(Dollars in thousands) (unaudited)Q2Q1Q4Q3Q2
Early Delinquency (30 - 89 days past due)     
Mortgage$13,941 $13,788 $16,565 $15,233 $16,556 
Commercial6,001 2,600 4,736 4,150 3,715 
Consumer7,766 6,485 5,273 4,985 4,885 
Auto91,407 79,491 90,272 76,262 66,068 
Total $119,115 $102,364 $116,846 $100,630 $91,224 
Early Delinquency Rates (30 - 89 days past due)     
Mortgage1.97 %1.96 %2.30 %2.03 %2.13 %
Commercial0.25 %0.12 %0.23 %0.21 %0.20 %
Consumer1.56 %1.43 %1.29 %1.33 %1.33 %
Auto5.10 %4.59 %5.33 %4.57 %4.08 %
Total2.20 %1.97 %2.34 %2.06 %1.86 %
Total Delinquency (30 days and over past due)
Mortgage:
Traditional, Non traditional, and Loans under Loss Mitigation$36,178 $39,004 $45,521 $58,146 $60,892 
GNMA's buy-back option program(25)33,431 9,664 14,511 19,944 28,118 
Total mortgage69,609 48,668 60,032 78,090 89,010 
Commercial13,243 16,061 14,129 13,742 21,549 
Consumer9,744 8,446 7,246 6,987 7,200 
Auto106,637 91,855 103,733 87,672 73,259 
Total$199,233 $165,030 $185,140 $186,491 $191,018 
Total Delinquency Rates (30 days and over past due)
Mortgage:
Traditional, Non traditional, and Loans under Loss Mitigation5.10 %5.54 %6.33 %7.74 %7.85 %
GNMA's buy-back option program(25)4.72 %1.37 %2.02 %2.65 %3.63 %
Total mortgage9.82 %6.91 %8.35 %10.39 %11.48 %
Commercial0.55 %0.71 %0.68 %0.70 %1.13 %
Consumer1.96 %1.86 %1.77 %1.87 %1.97 %
Auto5.95 %5.30 %6.13 %5.26 %4.53 %
Total3.68 %3.17 %3.71 %3.82 %3.90 %
Nonperforming Assets(15)
Mortgage$33,344 $36,775 $39,394 $51,612 $52,773 
Commercial47,206 34,892 37,603 28,472 37,858 
Consumer1,987 2,030 2,303 2,203 2,466 
Auto15,329 12,495 19,829 12,055 7,606 
Total nonperforming loans97,866 86,192 99,129 94,342 100,703 
Foreclosed real estate15,061 15,297 15,039 13,904 15,093 
Other repossessed assets2,533 2,625 1,945 1,528 1,725 
Total nonperforming assets$115,460 $104,114 $116,113 $109,774 $117,521 
Nonperforming Loan Rates     
Mortgage4.70 %5.22 %5.48 %6.87 %6.80 %
Commercial1.98 %1.55 %1.80 %1.46 %1.99 %
Consumer0.40 %0.45 %0.56 %0.59 %0.67 %
Auto0.86 %0.72 %1.17 %0.72 %0.47 %
Total loans1.81 %1.66 %1.98 %1.93 %2.06 %
12

OFG Bancorp (NYSE: OFG)
Table 6-3: Loan Information and Performance Statistics (1)
 20222021202120212021
(Dollars in thousands) (unaudited) Q2Q1Q4Q3Q2
Nonperforming PCD Loans(15)
Mortgage $261 $310 $334 $2,030 $2,067 
Commercial 10,057 10,877 12,545 36,798 34,502 
Total nonperforming loans $10,318 $11,187 $12,879 $38,828 $36,569 
Nonperforming PCD Loan Rates      
Mortgage 0.02 %0.03 %0.03 %0.16 %0.16 %
Commercial 5.77 %5.71 %6.14 %15.36 %13.24 %
Total 0.80 %0.83 %0.92 %2.54 %2.28 %
Total PCD Loans Held for Investment(22)     
Mortgage $1,099,097 $1,144,364 $1,188,423 $1,270,854 $1,324,274 
Commercial 174,282 190,626 204,335 239,554 260,627 
Consumer 698 833 916 959 981 
Total loans $1,274,077 $1,335,823 $1,393,674 $1,511,367 $1,585,882 
 20222022202120212021
(Dollars in thousands) (unaudited) Q2Q1Q4Q3Q2
Total Nonperforming Loans(15)     
Mortgage $33,605 $37,085 $39,728 $53,642 $54,840 
Commercial 57,263 45,769 50,148 65,270 72,360 
Consumer 1,987 2,030 2,303 2,203 2,466 
Auto 15,329 12,495 19,829 12,055 7,606 
Total nonperforming loans $108,184 $97,379 $112,008 $133,170 $137,272 
Total Nonperforming Loan Rates 
Mortgage 1.86 %2.01 %2.08 %2.65 %2.61 %
Commercial 2.21 %1.83 %2.11 %2.80 %3.02 %
Consumer 0.40 %0.45 %0.56 %0.59 %0.67 %
Auto 0.85 %0.72 %1.16 %0.72 %0.46 %
Total 1.61 %1.49 %1.75 %2.08 %2.11 %
Total Loans Held for Investment(22)     
Mortgage $1,807,852 $1,848,641 $1,907,271 $2,022,243 $2,099,880 
Commercial 2,595,867 2,499,914 2,379,330 2,331,056 2,393,170 
Consumer 499,102 455,792 409,675 374,631 367,018 
Auto 1,799,840 1,743,624 1,706,310 1,682,933 1,638,024 
Total loans $6,702,661 $6,547,971 $6,402,586 $6,410,863 $6,498,092 


13

OFG Bancorp (NYSE: OFG)
Table 7: Allowance for Credit Losses (1)
Quarter Ended June 30, 2022
(Dollars in thousands) (unaudited)MortgageCommercialConsumerAutoTotal
Allowance for credit losses Non-PCD:     
Balance at beginning of period$14,952 $37,097 $21,100 $64,195 $137,344 
(Recapture of) provision for credit losses(3,122)7,368 4,521 3,535 12,302 
Charge-offs(259)(2,907)(3,307)(6,428)(12,901)
Recoveries335 456 795 5,565 7,151 
Balance at end of period$11,906 $42,014 $23,109 $66,867 $143,896 
Allowance for credit losses PCD:
Balance at beginning of period$15,881 $3,622 $31 $197 $19,731 
(Recapture of) provision for credit losses(4,183)(1,444)(16)(152)(5,795)
Charge-offs(183)— (8)(75)(266)
Recoveries1,026 249 13 185 1,473 
Balance at end of period$12,541 $2,427 $20 $155 $15,143 
Allowance for credit losses summary:
Balance at beginning of period$30,833 $40,719 $21,131 $64,392 $157,075 
(Recapture of) provision for credit losses(7,305)5,924 4,505 3,383 6,507 
Charge-offs(442)(2,907)(3,315)(6,503)(13,167)
Recoveries1,361 705 808 5,750 8,624 
Balance at end of period$24,447 $44,441 $23,129 $67,022 $159,039 
Allowance coverage ratio1.35 %1.71 %4.63 %3.72 %2.37 %
Allowance coverage ratio excluding PPP loans (Non-GAAP)1.35 %1.73 %4.63 %3.72 %2.38 %

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OFG Bancorp (NYSE: OFG)
Table 8-1: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital
In addition to disclosing required regulatory capital measures, we also report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity ("TCE") and TCE ratio. The table below provides the details of the calculation of our regulatory capital and non-GAAP capital measures. While our non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.
20222022202120212021
(Dollars in thousands) (unaudited)Q2Q1Q4Q3Q2
Stockholders' Equity to Non-GAAP Tangible Common Equity
Total stockholders' equity$1,014,812 (a)$1,040,035 $1,069,160 $1,053,665 $1,079,997 
Less:  Intangible assets(117,869)(120,016)(122,162)(124,614)(127,064)
Noncumulative perpetual preferred stock— ———(24,000)
Noncumulative perpetual preferred stock issuance costs— ———7,453
Tangible common equity$896,943 $920,019$946,998$929,051$936,386
     
Common shares outstanding at end of period47,554 (a)48,673 49,636 49,977 51,661 
Tangible book value per common share (Non-GAAP)$18.86 (a)$18.90 $19.08 $18.59 $18.13 
Total Assets to Tangible Assets     
Total assets  $10,247,774 $10,190,120 $9,899,720 $10,606,865 $10,461,813 
Less:  Intangible assets(117,869)(120,016)(122,162)(124,614)(127,064)
Tangible assets (Non-GAAP)$10,129,905 $10,070,104 $9,777,558 $10,482,251 $10,334,749 
Non-GAAP TCE Ratio     
Tangible common equity$896,943 (a)$920,019$946,998$929,051$936,386
Tangible assets10,129,905 10,070,104 9,777,558 10,482,251 10,334,749 
TCE ratio8.85 %9.14 %9.69 %8.86 %9.06 %
Average Equity to Non-GAAP Average Tangible Common Equity
Average total stockholders' equity$1,032,270 (a)$1,066,278 $1,066,764 $1,068,618 $1,083,452 
Less: Average noncumulative perpetual preferred stock— — — (3,391)(44,923)
Average noncumulative perpetual preferred stock issuance costs— — — 1,134 8,306 
Average total common stockholders' equity$1,032,270 $1,066,278 $1,066,764 $1,066,361 $1,046,835 
Less:  Average intangible assets(118,750)(120,874)(123,201)(125,723)(128,311)
Average tangible common equity$913,520 $945,404$943,563$940,638$918,524
(a)Refer to “(b)” in Table 1-1.


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OFG Bancorp (NYSE: OFG)
Table 8-2: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued)
BASEL III
Standardized
2022 2022 202120212021
(Dollars in thousands) (unaudited)Q2 Q1 Q4Q3Q2
Regulatory Capital Metrics       
Common equity Tier 1 capital$960,015(a)$955,221$964,284(a)$931,884$957,238
Tier 1 capital960,015(a)955,221999,284(a)966,8841,008,785
Total risk-based capital(16)1,053,766(a)1,045,4371,086,897(a)1,053,1841,094,786
Risk-weighted assets7,499,171 7,214,6927,004,8766,893,2546,861,890
Regulatory Capital Ratios
Common equity Tier 1 capital ratio(17)12.80 % 13.24 %13.77 %13.52 %13.95 %
Tier 1 risk-based capital ratio(18)12.80 % 13.24 %14.27 %14.03 %14.70 %
Total risk-based capital ratio(19)14.05 % 14.49 %15.52 %15.28 %15.95 %
Leverage ratio(20)9.46 % 9.54 %9.69 %9.33 %9.84 %
 
Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach
Total stockholders' equity(1)$1,014,812(a)$1,040,035 $1,069,160 (a)$1,053,665 $1,079,997 
Plus:CECL transition adjustment(21)20,55720,55727,40929,11131,471
Less:Noncumulative perpetual preferred stock————(24,000)
Noncumulative perpetual preferred stock issuance costs————7,453
Unrealized gains on available-for-sale securities, net of income tax49,60620,522(5,663)(9,330)(8,408)
Unrealized losses on cash flow hedges, net of income tax(104)116503710808
1,084,8711,081,2301,091,4091,074,1561,087,321
Less:Disallowed goodwill(86,069)(86,069)(86,069)(86,069)(86,069)
Disallowed other intangible assets, net(22,997)(24,384)(25,771)(26,938)(28,555)
Disallowed deferred tax assets, net(15,790)(15,556)(15,285)(29,265)(15,459)
Common equity Tier 1 capital960,015955,221964,284931,884957,238
Plus:Qualifying noncumulative perpetual preferred stock————24,000
Qualifying noncumulative perpetual preferred stock issuance costs————(7,453)
Subordinated capital notes——35,00035,00035,000
Tier 1 capital960,015 955,221999,284966,8841,008,785
Plus tier 2 capital:  Qualifying allowance for loan and lease losses93,751 90,21687,61386,30086,001
Total risk-based capital$1,053,766 $1,045,437 $1,086,897 $1,053,184 $1,094,786 
(a)Refer to “(b)” in Table 1-1.

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OFG Bancorp (NYSE: OFG)
Table 9: Notes to Financial Summary, Selected Metrics, Loans, and Consolidated Financial Statements (Tables 1 - 8)
(1)On January 1, 2020, the Company implemented ASU No. 2016-13: Measurement of Credit Losses on Financial Instruments "(CECL)" using the modified retrospective approach. CECL replaces the concept of purchased credit impaired loans (PCI) with the concept of purchased financial assets with credit deterioration (PCD). PCD accounting is called ‘gross-up accounting’ because, at acquisition, an entity grosses up the amortized cost basis of the PCD asset for the initial estimate of credit losses. This Day 1 allowance for credit losses is established without an income statement effect. The Company elected to maintain previously existing pools on adoption, therefore the pool continues to be the unit of account, and the allowance and non-credit discount or premium is not allocated to the individual assets. These loans are not classified as delinquent or nonperforming even though the customer may be contractually past due because we expect that we will fully collect the carrying value of these loans.
(2)Total banking and financial service revenues.
(3)Net interest income plus non-interest income, net (core)
(4)Calculated based on net income available to common shareholders divided by average common shares outstanding for the period.
(5)Calculated based on net income available to common shareholders divided by total average common shares outstanding and equivalents for the period as if converted.
(6)Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Tables 8-1 and 8-2: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
(7)Information includes all loans held for investment, including PCD loans.
(8)Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
(9)Calculated based on annualized income, net of tax, for the period divided by average total assets for the period.
(10)Calculated based on annualized income available to common shareholders for the period divided by average tangible common equity for the period.
(11)Calculated based on non-interest expense for the period divided by total net interest income and total banking and financial services revenues for the period.
(12)Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(13)Non-GAAP ratios. See "Tables 8-1 and 8-2: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.
(14)Production of new loans (excluding renewals).
(15)Most PCD loans are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses. Therefore, they are not included as non-performing loans. PCD loan pools that are not accreting interest income are deemed to be non-performing loans and presented separately.
(16)Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.
(17)Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets.
(18)Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(19)Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk-weighted assets.
(20)Leverage capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.
(21)In March 2020, in light of recent strains on the U.S. economy as a result of the coronavirus disease 2019 (COVID-19), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency issued an interim final rule that provided the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period. In addition, for the first two years, a uniform 25% “scaling factor” is introduced to approximate the portion of the post day-one allowance attributable to CECL relative to the incurred loss methodology. The 25% scaling factor is calibrated to approximate an overall after-tax impact of differences in allowances under CECL versus the incurred loss methodology.
(22)CECL replaced the concept of purchased credit impaired loans (PCI assets) with the concept of purchased financial assets with credit deterioration (PCD assets). An entity records a PCD asset at the purchase price plus the allowance for credit losses expected at the time of acquisition. Under this method, there is no credit loss expense affecting net income on acquisition. Changes in estimates of expected credit losses after acquisition are recognized as credit loss expense (or reversal of credit loss expense) in subsequent periods as they arise.
(23)Pre-provision net revenues is a non-GAAP measure calculated based on net interest income plus total non-interest income, net, less total non-interest expenses for the period.
(24)PPP loans are fully guaranteed by the SBA and risk-weighted at 0%.
(25)Under the GNMA program, issuers such as OFG Bancorp have the option but not the obligation to repurchase loans that are 90 days or more past due. For accounting purposes, these loans subject to the repurchase option are required to be reflected (rebooked) on the financial statements of the Company with an offsetting liability.
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