FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2022

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:

	June 30, 2022
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	10,733	$	1,147,256	$	1,581	$	1,159,570
Trading securities	—		13		—		13
Money market investments	4,913		—		—		4,913
Derivative assets	—		187		—		187
Servicing assets	—		—		49,280		49,280
Derivative liabilities	—		(21)		—		(21)
	$	15,646	$	1,147,435	$	50,861	$	1,213,942
Non-recurring fair value measurements:
Collateral dependent loans	—		—		21,565		21,565
Foreclosed real estate	—		—		15,061		15,061
Other repossessed assets	—		—		2,533		2,533
	$	—	$	—	$	39,159	$	39,159

	December 31, 2021
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
	(In thousands)
Recurring fair value measurements:
Investment securities available-for-sale	$	10,825	$	498,358	$	1,530	$	510,713
Trading securities	—		20		—		20
Money market investments	8,952		—		—		8,952
Derivative assets	—		1		—		1
Servicing assets	—		—		48,973		48,973
Derivative liabilities	—		(804)		—		(804)
	$	19,777	$	497,575	$	50,503	$	567,855
Non-recurring fair value measurements:
Collateral dependent loans	$	—	$	—	$	10,233	$	10,233
Foreclosed real estate	—		—		15,039		15,039
Other repossessed assets	—		—		1,945		1,945
	$	—	$	—	$	27,217	$	27,217

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 six-month periods ended June 30, 2022 and 2021:

Level 3 Instruments Only

	Quarter Ended June 30,
	2022						2021
	Other debt securities available for sale		Servicing Assets		Total		Servicing Assets
	(In thousands)
Balance at beginning period	$	1,554	$	49,446	$	51,000	$	47,911
New instruments acquired	—		1,150		1,150		2,023
Principal repayments and amortization	—		(1,478)		(1,478)		(1,862)
Gains (losses) included in earnings	—		162		162		(360)
Gains included in other comprehensive income	27		—		27		—
Balance at end of period	$	1,581	$	49,280	$	50,861	$	47,712
	Other debt securities available for sale		Servicing Assets		Total		Servicing Assets
	Six-Month Period Ended June 30,
	2022						2021
	(In thousands)
Balance at beginning year	$	1,530	$	48,973	$	50,503	$	47,295
New instruments acquired	—		2,269		2,269		3,443
Principal repayments and amortization	—		(2,977)		(2,977)		(3,369)
Gains included in earnings	—		1,015		1,015		343
Gains included in other comprehensive income	51		—		51		—
Balance at end of year	$	1,581	$	49,280	$	50,861	$	47,712

Schedule of Qualitative Information for Assets and Liabilities

The table below presents quantitative information for all assets and liabilities measured at fair value on a recurring and non-recurring basis using significant unobservable inputs (Level 3) at June 30, 2022:

	June 30, 2022
	Fair Value		Valuation Technique	Unobservable Input	Range		Weighted Average
	(In thousands)
Other debt securities available-for-sale	$	1,581	Cash flow valuation	Credit Rating	Baa1 - Baa3		Baa2
				Probability of Default Rate	0.15% - 2.12%		0.15	%
				Recovery Rate	33.08	%	33.08	%
Servicing assets	$	49,280	Cash flow valuation	Constant prepayment rate	3.60% - 22.71%		5.90	%
				Discount rate	10.00% - 15.50%		11.45	%
Collateral dependent loans	$	21,565	Fair value of property or collateral	Appraised value less disposition costs	10.20% - 33.20%		17.16	%
Foreclosed real estate	$	15,061	Fair value of property or collateral	Appraised value less disposition costs	10.20% - 33.20%		11.69	%
Other repossessed assets	$	2,533	Fair value of property or collateral	Estimated net realizable value less disposition costs	20.00% - 90.00%		61.76	%

Schedule of Estimated Fair Value and Carrying Value

The estimated fair value and carrying value of OFG’s financial instruments at June 30, 2022 and December 31, 2021 is as follows:

	June 30,				December 31,
	2022				2021
	Fair Value		Carrying Value		Fair Value		Carrying Value
	(In thousands)
Level 1
Financial Assets:
Cash and cash equivalents	$	1,307,112	$	1,307,112	$	2,023,475	$	2,023,475
Restricted cash	$	169	$	169	$	175	$	175
Investment securities available-for-sale	$	10,733	$	10,733	$	10,825	$	10,825
Level 2
Financial Assets:
Trading securities	$	13	$	13	$	20	$	20
Investment securities available-for-sale	$	1,147,256	$	1,147,256	$	498,358	$	498,358
Investment securities held-to-maturity	$	501,747	$	547,832	$	363,653	$	367,507
Federal Home Loan Bank (FHLB) stock	$	6,047	$	6,047	$	5,966	$	5,966
Equity securities	$	13,801	$	13,801	$	11,612	$	11,612
Derivative assets	$	187	$	187	$	1	$	1
Financial Liabilities:
Derivative liabilities	$	21	$	21	$	804	$	804
Level 3
Financial Assets:
Investment securities available for sale	$	1,581	$	1,581	$	1,530	$	1,530
Total loans (including loans held-for-sale)	$	6,517,268	$	6,585,210	$	6,197,347	$	6,329,311
Accrued interest receivable	$	58,371	$	58,371	$	56,560	$	56,560
Servicing assets	$	49,280	$	49,280	$	48,973	$	48,973
Accounts receivable and other assets	$	86,225	$	86,225	$	88,756	$	88,756
Financial Liabilities:
Deposits	$	9,032,247	$	9,029,570	$	8,614,073	$	8,603,118
Advances from FHLB	$	27,557	$	27,586	$	28,480	$	28,488
Other borrowings	$	32	$	32	$	—	$	—
Subordinated capital notes	$	—	$	—	$	36,084	$	36,083
Accrued expenses and other liabilities	$	119,065	$	119,065	$	96,240	$	96,240