OFG BANCORP MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

Written by on November 6, 2021


INTRODUCTION



The next dialogue of OFG's monetary situation and outcomes of operations
must be learn along with the "Chosen Monetary Information" and OFG's
consolidated monetary statements and associated notes. This dialogue and
evaluation comprises forward-looking statements. Please see "Ahead-Wanting
Statements," "Danger Components," and "Quantitative and Qualitative Disclosures about
Market Danger" on this Quarterly Report on Type 10-Q for the quarter ended
September 30, 2021 and set forth in our Type 10-Okay for the 12 months ended December
31, 2020 (the "2020 Type 10-Okay"), for dialogue of the uncertainties, dangers and
assumptions related to these statements.



Different components not recognized above, together with these described below the headings
in our Annual Report on Type 10-Okay for the 12 months ended December 31 might also trigger
precise outcomes to vary materially from these described in our forward-looking
statements.



OFG is a publicly-owned monetary holding firm that gives a full vary of
banking and monetary providers by its subsidiaries, together with business,
client, auto and mortgage lending; checking and financial savings accounts; monetary
planning, insurance coverage and securities brokerage providers; and company and
particular person belief and retirement providers. OFG operates by three main
enterprise segments: Banking, Wealth Administration, and Treasury, and distinguishes
itself primarily based on high quality service. OFG has 50 branches in Puerto Rico, 2 branches
within the USVI, a subsidiary in Boca Raton, Florida, and a non-bank working
subsidiary in Cornelius, North Carolina. OFG's long-term purpose is to strengthen
its banking and monetary providers franchise by increasing its lending
companies, rising the extent of integration within the advertising and supply of
banking and monetary providers, sustaining efficient asset-liability
administration, rising non-interest income from banking and monetary providers,
and bettering working efficiencies.



OFG's diversified combine of companies and merchandise generates each the curiosity
earnings historically related to a banking establishment and non-interest
earnings historically related to a monetary providers establishment (generated
by such companies as securities brokerage, fiduciary providers, funding
banking, insurance coverage company, and retirement plan administration). Though all of
these companies, to various levels, are affected by rate of interest and
monetary market fluctuations and different exterior components, OFG's dedication is to
proceed producing a balanced and rising income stream.



RECENT DEVELOPMENTS



Capital Actions



In July 2021, OFG introduced the approval by the Board of Administrators of a brand new
inventory repurchase program to buy $50 million of its widespread inventory within the open
market. At September 30, 2021, OFG has repurchased roughly 1.7 million
shares of its widespread inventory for a complete buy value of $40.2 million at an
common of $23.83 per share.


Additionally, on July 2021, OFG introduced that its Board of Administrators accepted a 50%
enhance in its widespread inventory dividend payable to shareholders of report on
September 30, 2021, to $0.12 per share.

In the course of the nine-months interval ended September 30, 2021, OFG accomplished the
redemption of $92.Zero million of Collection A, B and D most popular inventory which
represented all of OFG’s excellent most popular inventory.


Covid-19 Pandemic



Within the first quarter of 2020, the World Well being Group declared the
outbreak of Covid-19 a pandemic. OFG has been and should proceed to be impacted by
the Covid-19 pandemic. Puerto Rico's economic system is bettering as extra folks get
vaccinated and restrictive measures have eased. Nonetheless, uncertainty stays
concerning the length of the pandemic and the timing and power of Puerto Rico's
financial restoration. In response to the pandemic, the federal authorities enacted
a number of financial aid packages offering trillions of {dollars} in aid to
companies and people and have additionally decreased rates of interest to additional
stimulate the economic system. Along with these authorities aid initiatives, OFG
and different banks in Puerto Rico granted numerous types of help to clients
and purchasers impacted by the Covid-19 pandemic, together with fee deferrals and
extending forgivable loans to companies for payroll and sure different bills
below the Paycheck Safety Program of the Small Enterprise Administration.
These aid measures have led to a surge in liquidity in Puerto Rico which have
considerably elevated OFG's deposits ($9.2 billion as of September 30, 2021)
and money balances ($2.Eight billion as of September 30, 2021). This enhance in
deposits induced OFG to exceed $10 billion in belongings for the primary

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time throughout the first quarter of 2021, and OFG has commenced making ready for the
elevated regulatory oversight and different necessities that can apply as a
results of crossing such measurement threshold.



With respect to our mortgage portfolios, the elevated liquidity has considerably
decreased delinquent and non-performing loans by $94.Zero million and $20.Four million,
respectively, in comparison with December 31, 2020. Furthermore, such liquidity coupled
with the lower in rates of interest has led to will increase in new house purchases,
actual property values, and refinancing of owned residential mortgage loans with
lower-rate residential mortgage loans offered to company traders. These
refinancing along with the lower in PPP loans as they're forgiven have
been partially offset by will increase within the manufacturing of business and auto
loans because the economic system reopened and began to indicate indicators of development.



The macroeconomic outlook for Puerto Rico has improved from decreased Covid-19
associated restrictions on financial exercise, mixed with the extra federal
stimulus funds Puerto Rico is predicted to obtain associated to the restoration from
hurricane Maria in 2017, the early 2020 earthquakes, and now the Covid-19
pandemic.



For our folks, we've selected a compulsory Covid vaccination coverage to maintain
our clients and other people protected. We have now additionally applied a hybrid work mannequin to
enhance flexibility for our folks and have elevated the hourly base pay fee
for non-salaried workers.



Given OFG's money place and capital ranges, OFG will search alternatives to
proceed rising our mortgage portfolios organically and can proceed to judge
returning capital to shareholders by is inventory repurchase program and
quarterly widespread inventory dividend.



CRITICAL ACCOUNTING POLICIES AND ESTIMATES



The preparation of monetary statements in accordance with GAAP requires
administration to make numerous judgments, estimates and assumptions that have an effect on
the reported quantity of belongings, liabilities, earnings and bills within the
consolidated monetary statements. Understanding our accounting insurance policies and the
extent to which we use administration judgment and estimates in making use of these
insurance policies is integral to understanding our monetary statements. We offer a
abstract of our important accounting insurance policies in "Observe 1-Abstract of Important
Accounting Insurance policies" of our 2020 Type 10-Okay.



Within the "Administration's Dialogue and Evaluation of Monetary Situation and Outcomes
of Operations-Vital Accounting Insurance policies and Estimates" part of our 2020
Type 10-Okay, we recognized a number of accounting insurance policies as crucial, together with the
following, as a result of they require important judgments and assumptions about
extremely complicated and inherently unsure issues and the usage of fairly
totally different estimates and assumptions may have a cloth influence on our reported
outcomes of operations or monetary situation:



?Allowance for Mortgage and Lease Losses

We consider our crucial accounting estimates and judgments on an ongoing foundation
and replace them as vital primarily based on altering circumstances. There have been no
materials modifications within the strategies used to formulate these crucial accounting
estimates from these mentioned in our 2020 Type 10-Okay.

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FINANCIAL HIGHLIGHTS



OFG generated excellent outcomes throughout the quarter ended September 30, 2021.
This displays the constant rising recurring internet earnings, our bigger scale, our
concentrate on rising digital utilization and customer support differentiation,
and Puerto Rico's nascent financial and post-pandemic restoration.



OFG noticed the consequences of all this throughout all our companies. New mortgage origination
remained robust at $556.Zero million. Asset high quality traits continued to enhance as
reconstruction and stimulus funds offered important liquidity to companies
and people. On account of this, the supply for credit score losses was a internet
advantage of $5.Zero million.


Outcomes had been enhanced by a 17.0% discount in value of funds in comparison with the
quarter ended June 30, 2021 and the beforehand introduced deployment of extra
capital to redeem all three of our excellent sequence of most popular inventory,
eliminating $1.6 million in quarterly dividends.

Return on common belongings and on common tangible fairness expanded to 1.59% and
17.72%, respectively, in comparison with the earlier and 12 months in the past quarters.



In the course of the quarter ended September 30, 2021, OFG efficiently executed on the
buyback program, buying $40.2 million of shares as a part of our beforehand
introduced $50.Zero million authorization.



OFG is strategically well-positioned to proceed to learn from and play a
main function supporting the financial improvement of the communities we serve.


Third quarter of 2021:



Earnings: Earnings per share diluted was $0.81 in comparison with $0.78 within the second
quarter of 2021 and $0.50 within the third quarter of 2020. Whole core revenues had been
$134.7 million in comparison with $133.Three million within the second quarter of 2021 and
$127.Zero million within the third quarter of 2020. Internet curiosity margin was 4.12%
in comparison with 4.22% within the second quarter of 2021 and 4.30% within the third quarter
of 2020.



Curiosity Revenue: Whole curiosity earnings of $112.1 million in comparison with $113.5
million in second quarter and $114.9 million within the third quarter of 2020. Third
quarter mirrored mortgage paydowns and PPP mortgage forgiveness principally offset by
elevated earnings from auto and business loans, and funding securities.
Common mortgage balances had been $6.47 billion in comparison with $6.60 billion in second
quarter and $6.79 billion in third quarter of 2020.

Mortgage Origination: Mortgage origination totaled $556.2 million in comparison with $673.6
million in second quarter and $457.Eight million in third quarter of 2020. Third
quarter mirrored continued excessive ranges of auto, business, client, and
mortgage lending.



Deposit Balances and Price of Funds: Curiosity Expense was $9.Four million in contrast
to $11.2 million in second quarter and $15.Four million in third quarter of 2020.
This quarter mirrored decrease value of core deposits (30 bps in comparison with 38 bps in
second quarter and 56 bps in third quarter of 2020) primarily on account of usually
decrease charges and CD maturities. Common buyer deposit balances had been $9.10
billion in comparison with $8.96 billion in second quarter and $8.38 billion in third
quarter of 2020.



Asset High quality and Provision for Credit score Losses: The third quarter of 2021
mirrored a internet advantage of $5.Zero million, reflecting $4.Three million in internet reserve
releases. This compares to a internet advantage of $8.Three million within the second quarter
and a internet expense of $13.7 million in prior 12 months quarter. This quarter mirrored
continued enchancment in asset high quality traits. Third quarters internet charge-offs of
$6 million included $6.5 million for a beforehand reserved quantity on a
business mortgage.



Banking and Monetary Service Revenues: Whole banking and monetary service
income totaled $32.Zero million in comparison with $31.Zero million within the second quarter
and $27.5 million in prior 12 months quarter. This quarter mirrored continued larger
ranges of banking service, wealth administration, and mortgage banking exercise as
pandemic-related restrictions have subsided.

Bills: Non-interest bills had been $78.9 million in comparison with $82.7 million in
the second quarter and $83.Four million in prior 12 months quarter. This quarter
displays a $2.2 million profit in credit score associated bills from positive aspects on gross sales
of actual property owned, beforehand introduced value financial savings, and elevated
compensation. The second quarter included a $2.2 million know-how venture
write down.



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Pre-Provision Internet Revenues: PPNR was $56.Three million, which incorporates the above
non-cash write down, in comparison with $51.Eight million within the second quarter of 2021 and
$47.Four million within the third quarter of 2020.



Loans held for funding: Loans totaled $6.41 billion at third quarter in contrast
to $6.50 billion at second quarter and $6.76 billion at prior 12 months quarter.
Excluding PPP loans, loans held for funding of $6.27 billion elevated $5.0
million in comparison with second quarter.

Capital: Tangible e-book worth per share was $18.59 in comparison with $18.13 within the
second quarter and $16.51 in prior 12 months quarter. CET1 ratio was 13.52% in contrast
to 13.95% within the second quarter and 12.55% in prior 12 months quarter.



                            Quarter Ended September 30,               

9-Month Interval Ended September 30,

                                                       Variance                                       Variance
                         2021             2020            %           2021             2020              %
EARNINGS DATA:         (In hundreds, besides per share knowledge)          (In hundreds, besides per share knowledge)
Curiosity earnings     $      112,139    $     114,937       -2.4%   $     336,584    $     360,326           -6.6%
Curiosity expense             9,434           15,404      -38.8%          33,418           50,632          -34.0%
Internet curiosity earnings        102,705           99,533        3.2%         303,166          309,694           -2.1%
(Recapture)
provision for
credit score losses, internet         (4,997)           13,669     -136.6%         (6,978)           78,496         -108.9%
Internet curiosity earnings
after (recapture)
provision for
credit score losses              107,702           85,864       25.4%         310,144          231,198           34.1%
Non-interest earnings         32,517           31,326        3.8%          95,115           89,928            5.8%
Non-interest
bills                    78,924           83,444       -5.4%         239,266          256,247           -6.6%
Revenue earlier than taxes         61,295           33,746       81.6%         165,993           64,879          155.9%
Revenue tax expense          19,624            6,308      211.1%          53,122           13,853          283.5%
Internet earnings                  41,671           27,438       51.9%         112,871           51,026          121.2%
Much less: dividends on
most popular inventory                  -          (1,628)      100.0%         (1,255)          (4,884)           74.3%
Revenue accessible to
widespread shareholders $       41,671    $      25,810       61.5%   $     111,616    $      46,142          141.9%
PER SHARE DATA:
Primary               $         0.82    $        0.50       64.0%   $        2.18    $        0.90          142.2%
Diluted             $         0.81    $        0.50       62.0%   $        2.15    $        0.89          141.6%
Common widespread
shares excellent          51,063           51,342       -0.5%          51,364           51,361            0.0%
Common widespread
shares excellent
and equivalents             51,516           51,527        0.0%          51,748           51,563            0.4%
Money dividends
declared per widespread
share               $         0.12    $        0.07       75.2%   $        0.28    $        0.21           33.0%
Money dividends
declared on widespread
shares              $        6,240    $       3,595       73.6%   $      14,637    $      10,787           35.7%
PERFORMANCE RATIOS:
Return on common
belongings (ROA)                 1.59%            1.11%       43.2%           1.46%            0.71%          105.6%
Return on common
tangible widespread
fairness                      17.72%           12.23%       44.9%          16.25%            7.44%          118.4%
Return on common
widespread fairness (ROE)         15.63%           10.53%       48.4%          14.25%            6.37%          123.7%
Effectivity ratio            58.59%           65.69%      -10.8%          60.47%           66.30%           -8.8%
Rate of interest
unfold                       4.09%            4.25%       -3.8%           4.16%            4.60%           -9.6%
Rate of interest
margin                       4.12%            4.30%       -4.0%           4.20%            4.65%           -9.7%




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                                            September 30,     December 31,    Variance
                                                2021              2020           %

PERIOD END BALANCES AND CAPITAL RATIOS: (In hundreds, besides per share knowledge)
Money, money equivalents and restricted money $ 2,755,691 $ 2,155,577

     27.8%
Investments and loans
Funding securities                      $       902,273   $      458,700      96.7%
Loans and leases, internet                            6,282,485        6,501,259      -3.4%
Whole investments and loans                $     7,184,758   $    6,959,959       3.2%
Deposits and borrowings
Deposits                                   $     9,244,389   $    8,415,640       9.8%
Different borrowings                                    99,017          102,351      -3.3%
Whole deposits and borrowings              $     9,343,406   $    8,517,991       9.7%
Stockholders' fairness
Most well-liked inventory                            $             -   $       92,000    -100.0%
Frequent inventory                                        59,885           59,885       0.0%
Extra paid-in capital                         635,808          622,652       2.1%
Authorized surplus                                      114,485          103,269      10.9%
Retained earnings                                  375,729          300,096      25.2%
Treasury inventory, at value                          (140,862)        (102,949)     -36.8%
Collected different complete (loss)               8,620           11,022     -21.8%
Whole stockholders' fairness                 $     1,053,665   $    1,085,975      -3.0%
Per share knowledge
E book worth per widespread share                $         21.08   $        19.54       7.9%

Tangible e-book worth per widespread share $ 18.59 $ 16.97

9.5%

Market value at finish of interval              $         25.22   $        18.54 

36.0%

Capital ratios
Leverage capital                                     9.33%           10.30% 

-9.4%

Frequent fairness Tier 1 capital ratio                  13.52%           13.08%       3.4%
Tier 1 risk-based capital                           14.03%           14.78%      -5.1%
Whole risk-based capital                            15.28%           16.04%      -4.7%
Fairness-to-assets ratio                               9.93%           11.05%     -10.1%
Monetary belongings managed
Belief belongings managed                       $     3,685,968   $    3,476,491       6.0%
Dealer-dealer belongings                       $     2,362,317   $    2,474,234      -4.5%




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ANALYSIS OF RESULTS OF OPERATIONS



The next tables present main classes of interest-earning belongings and
interest-bearing liabilities, their respective curiosity earnings, bills, yields
and prices, and their influence on internet curiosity earnings on account of modifications in quantity and
charges for the quarters and nine-month intervals ended September 30, 2021 and 2020.
Comparative September 30, 2020 to September 30, 2019 data has been
omitted pursuant to Merchandise 303(b) of Regulation S-Okay. For such comparative
data, please see Administration's Dialogue and Evaluation of Monetary
Situation and Outcomes of Operations in Oriental's September 30, 2020 quarterly
report on Type 10-Q.


TABLE 1 – ANALYSIS OF NET INTEREST INCOME AND CHANGES DUE TO VOLUME/RATE
FOR THE QUARTERS ENDED SEPTEMBER 30, 2021 AND 2020

                               Curiosity                Common fee         

Common steadiness

                        September     September    September   September    September     September
                          2021          2020          2021       2020         2021          2020
                                                  ({Dollars} in hundreds)
A - TAX EQUIVALENT
SPREAD
Curiosity-earning
belongings                 $   112,139   $   114,938       4.50%       4.96%   $ 9,879,687   $ 9,218,717
Tax equal
adjustment                   2,438         2,427       0.10%       0.10%             -             -
Curiosity-earning
belongings - tax
equal                 114,577       117,365       4.60%       5.06%   
 9,879,687     9,218,717
Curiosity-bearing
liabilities                  9,434        15,404       0.41%       0.71%     9,213,530     8,619,955
Tax equal internet
curiosity earnings /
unfold                     105,143       101,961       4.19%       4.35%       666,157       598,762
Tax equal
rate of interest margin                                   4.30%       4.45%
B - NORMAL SPREAD
Curiosity-earning
belongings:
Investments:
Funding securities        3,216         2,278       1.80%       1.81%   
   714,669       502,671
Curiosity bearing money
and cash market
investments                    986           613       0.14%       0.13%     2,699,144     1,929,024
Whole investments            4,202         2,891       0.49%       0.47%     3,413,813     2,431,695
Non-PCD:
Mortgage                     9,759        11,208       5.22%       5.51%       747,942       814,189
Business                  29,558        27,667       5.55%       5.20%     2,111,935     2,117,502
Shopper                    11,180        12,931      11.12%      11.31%       399,002       454,780
Auto                        34,535        31,223       8.35%       8.37%     1,640,433     1,484,282
Whole Non-PCD loans         85,032        83,029       6.89%       6.78%     4,899,312     4,870,753

PCD loans:
Mortgage                    18,785        21,843       5.66%       5.75%     1,299,330     1,511,567
Business                   3,609         6,390       5.76%       6.92%       248,708       367,475
Shopper                        64            35      16.16%       4.87%         1,580         2,839
Auto                           447           750      10.47%       8.68%        16,944        34,388
Whole PCD loans             22,905        29,018       5.85%       6.06%     1,566,562     1,916,269
Whole loans                107,937       112,047       6.62%       6.57%     6,465,874     6,787,022
Whole interest-earning
belongings                     112,139       114,938       4.50%       4.96%     9,879,687     9,218,717




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                               Curiosity                 Common fee        

Common steadiness

                        September     September      September  September   September     September
                          2021          2020           2021       2020        2021          2020
                                                  ({Dollars} in hundreds)
Curiosity-bearing
liabilities:
Deposits:
NOW Accounts                 2,288         2,247        0.33%      0.40%     2,754,985     2,227,687
Financial savings and cash
market                       1,639         2,010        0.28%      0.41%     2,330,121     1,927,680
Time deposits                2,916         7,512        0.84%      1.55%     1,378,505     1,944,856
Whole core deposits          6,843        11,769        0.42%      0.78%     6,463,611     6,100,223
Brokered deposits               10           812        0.34%      2.30%        11,366       140,416
                             6,853        12,581        0.42%      0.81%     6,474,977     6,240,639
Non-interest bearing
deposits                         -             -        0.00%      0.00%     2,639,610     2,276,400
Truthful worth premium and
core deposit
intangible
amortizations                1,838         2,039            -          -             -             -
Whole deposits               8,691        14,620        0.38%      0.68%     9,114,587     8,517,039
Borrowings:
Advances from FHLB and
different borrowings               450           476        2.84%      2.83%        62,860        66,833
Subordinated capital
notes                          293           308        3.21%      3.39%        36,083        36,083
Whole borrowings               743           784        2.98%      3.03%        98,943       102,916
Whole curiosity bearing
liabilities                  9,434        15,404        0.41%      0.71%     9,213,530     8,619,955
Internet curiosity earnings /
unfold                 $   102,705   $    99,534        4.09%      4.25%
Rate of interest margin                                    4.12%      4.30%
Extra of common
interest-earning
belongings over common
interest-bearing
liabilities                                                                $   666,157   $   598,762
Common
interest-earning
belongings to common
interest-bearing
liabilities ratio                                                              107.23%       106.95%

C – CHANGES IN NET INTEREST INCOME DUE TO:

                         Quantity         Fee         Whole
                                   (In hundreds)
Curiosity Revenue:
Investments            $     1,168   $       143   $    1,311
Loans                      (4,809)           699      (4,110)
Whole curiosity earnings      (3,641)           842      (2,799)
Curiosity Expense:
Deposits                     1,026       (6,955)      (5,929)
Different borrowings              (30)          (11)         (41)
Whole curiosity expense         996       (6,966)      (5,970)
Internet Curiosity Revenue    $   (4,637)   $     7,808   $    3,171




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TABLE 1A – ANALYSIS OF NET INTEREST INCOME AND CHANGES DUE TO VOLUME/RATE
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2021 AND 2020

                               Curiosity                Common fee         

Common steadiness

                        September     September    September   September    September     September
                          2021          2020          2021       2020         2021          2020
                                                  ({Dollars} in hundreds)
A - TAX EQUIVALENT
SPREAD
Curiosity-earning
belongings                 $   336,584   $   360,326       4.66%       5.41%   $ 9,656,838   $ 8,874,886
Tax equal
adjustment                   6,803         7,869       0.09%       0.12%             -             -
Curiosity-earning
belongings - tax
equal                 343,387       368,195       4.75%       5.53%     9,656,838     8,874,886
Curiosity-bearing
liabilities                 33,418        50,632       0.50%       0.81%     8,999,822     8,297,837
Tax equal internet
curiosity earnings /
unfold                     309,969       317,563       4.25%       4.72%       657,016       577,049
Tax equal
rate of interest margin                                   4.34%       4.84%
B - NORMAL SPREAD
Curiosity-earning
belongings:
Investments:
Funding securities        8,088         9,552       1.75%       1.88%       614,599       679,201
Curiosity bearing money
and cash market
investments                  2,287         3,760       0.12%       0.35%     2,476,139     1,423,781
Whole investments           10,375        13,312       0.45%       0.85%     3,090,738     2,102,982
Non-PCD
Mortgage                    30,557        33,196       5.25%       5.50%       776,225       804,702
Business                  86,934        85,528       5.44%       5.64%     2,138,474     2,019,853
Shopper                    34,006        42,064      11.28%      11.81%       403,037       474,455
Auto and leasing           101,652        93,555       8.53%       8.43%     1,592,482     1,481,956
Whole Non-PCD loans        253,149       254,343       6.89%       7.09%     4,910,218     4,780,966

PCD
Mortgage                    59,548        72,570       5.80%       6.19%     1,369,410     1,564,153
Business                  11,716        17,172       5.93%       5.98%       264,238       383,525
Shopper                       176           323      14.39%      12.54%         1,635         3,434
Auto                         1,620         2,606      10.51%       8.74%        20,599        39,826
Whole PCD loans             73,060        92,671       5.88%       6.21%     1,655,882     1,990,938
Whole loans                326,209       347,014       6.64%       6.83%     6,566,100     6,771,904
Whole interest-earning
belongings                     336,584       360,326       4.66%       5.41%     9,656,838     8,874,886




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                               Curiosity                 Common fee        

Common steadiness

                        September    September      September   September    September     September
                          2021          2020          2021        2020         2021          2020
                                                   ({Dollars} in hundreds)
Curiosity-bearing
liabilities:
Deposits:
NOW Accounts                 6,940        6,772         0.36%       0.43%     2,566,201     2,092,973
Financial savings and cash
market                       5,859        6,426         0.36%       0.46%     2,191,316     1,845,253
Time deposits               12,664       23,480         1.07%       2.37%     1,576,460     1,991,432
Whole core deposits         25,463       36,678         0.54%       0.85%     6,333,977     5,929,658
Brokered deposits              197        3,844         0.86%       2.51%   

30,482 203,779

                            25,660       40,522         0.54%       0.88%     6,364,459     6,133,437
Non-interest bearing
deposits                         -            -         0.00%       0.00%     2,535,422     1,987,211
Truthful worth premium and
core deposit
intangible
amortizations                5,515        6,163             -           -             -             -
Whole deposits              31,175       46,685         0.47%       0.77%  
  8,899,881     8,120,648
Borrowings:
Securities offered below
agreements to
repurchase                       -        1,335         0.00%       2.62%             -        67,956
Advances from FHLB and
different borrowings             1,361        1,521         2.85%       2.77%        63,858        73,150
Subordinated capital
notes                          882        1,091         3.26%       4.02%        36,083        36,083
Whole borrowings             2,243        3,947         3.00%       2.97%        99,941       177,189
Whole interest-bearing
liabilities                 33,418       50,632         0.50%       0.81%     8,999,822     8,297,837
Internet curiosity earnings /
unfold                 $   303,166   $  309,694         4.16%       4.60%
Rate of interest margin                                    4.20%       4.65%
Extra of common
interest-earning
belongings over common
interest-bearing
liabilities                                                                 $   657,016   $   577,049
Common
interest-earning
belongings to common
interest-bearing
liabilities ratio                                                               107.30%   $   106.95%

C – CHANGES IN NET INTEREST INCOME DUE TO:

                         Quantity         Fee         Whole
                                   (In hundreds)
Curiosity Revenue:
Investments            $     6,253   $  (9,190)   $   (2,937)
Loans                      (8,720)     (12,085)      (20,805)
Whole curiosity earnings      (2,467)     (21,275)      (23,742)
Curiosity Expense:
Deposits                     4,480     (19,990)      (15,510)
Repurchase agreements      (1,335)            -       (1,335)
Different borrowings             (222)        (147)         (369)
Whole curiosity expense       2,923     (20,137)      (17,214)
Internet Curiosity Revenue    $   (5,390)   $  (1,138)   $   (6,528)




Internet Curiosity Revenue



Internet curiosity earnings is a operate of the distinction between charges earned on
OFG's interest-earning belongings and charges paid on its interest-bearing liabilities
(rate of interest unfold) and the relative quantities of its curiosity incomes belongings
and interest-bearing liabilities (rate of interest margin). OFG continually screens
the composition and re-pricing of its belongings and liabilities to take care of its internet
curiosity earnings at ample ranges.



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Comparability of the quarters ended September 30, 2021 and 2020

Internet curiosity earnings of $102.7 million elevated $3.2 million from $99.5 million.
Tax equal foundation internet curiosity earnings of $105.1 million elevated $3.2
million
, or 3.1%, from $101.9 million.



Rate of interest unfold decreased 16 foundation factors to 4.09% from 4.25% and internet
curiosity margin decreased 18 foundation factors to 4.12% from 4.30%. These decreases
are primarily as a result of internet impact of a lower of 46 foundation factors within the common
yield of whole interest-earning belongings, pushed by the rise in money and
funding securities, and a lower of 30 foundation factors within the whole common
value of interest-bearing liabilities. Internet curiosity margin, on a taxable
equal foundation, is 4.30%, a lower of 15 foundation factors in comparison with 4.45% for
the identical quarter of 2020.


Internet curiosity earnings was adversely impacted by:



?Decrease curiosity earnings from loans by $4.1 million, reflecting decrease common
balances within the mortgage and business PCD portfolios and the impact of Federal
Reserve Board's fee cuts on variable fee business loans offset by curiosity
earnings of $3.Four million from unamortized yield for $95.6 million of forgiven PPP
loans.


Internet curiosity earnings was positively impacted by:



?Decrease curiosity expense from deposits by $5.9 million, primarily associated to pricing
modifications applied throughout fourth quarter of 2020 and to the maturity and
cancelation of upper value time and brokered deposits and migration of those
time deposits to checking and financial savings accounts at decrease prices.



Comparability of the nine-month intervals ended September 30, 2021 and 2020

Internet curiosity earnings of $303.2 million decreased $6.5 million from $309.7
million
. Tax equal internet curiosity earnings of $310.Zero million decreased $7.6
million
, or 2.4%, from $317.6 million.



Rate of interest unfold decreased 44 foundation factors to 4.16% from 4.60% and internet
curiosity margin decreased 45 foundation factors to 4.20% from 4.65%. These decreases
are primarily as a result of internet impact of a lower of 75 foundation factors within the common
yield of whole interest-earning belongings, pushed by the rise in money and
funding securities, and a lower of 31 foundation factors within the whole common
value of interest-bearing liabilities.



Internet curiosity earnings was adversely impacted by:



?Decrease curiosity earnings from loans by $20.Eight million, reflecting decrease common
balances within the mortgage and business PCD portfolios, and the impact of
Federal Reserve Board's fee cuts on variable fee business loans, partially
offset by curiosity earnings of $7.Zero million from unamortized yield for $310.7
million of forgiven PPP loans;



?$6.5 million in one-time curiosity recoveries from acquired PCD loans recorded
throughout prior 12 months; and

?Decrease curiosity earnings from curiosity bearing money and funding securities by
$2.9 million, primarily impacted by the Federal Reserve Financial institution’s fee cuts.

Internet curiosity earnings was positively impacted by:



?Decrease curiosity expense from deposits by $15.5 million, primarily associated to
pricing modifications applied throughout fourth quarter of 2020 and to the maturity
and cancelation of upper value time and brokered deposits and migration of those
time deposits to checking and financial savings accounts at decrease prices; and



?Decrease curiosity expense in borrowings by $1.7 million, primarily because of a
lower in curiosity expense from securities offered below agreements to repurchase
from $1.Three million within the prior 12 months interval to none within the present interval. Throughout
the nine-month interval ended September 30, 2020, all repurchase agreements
matured or had been early extinguished.



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TABLE 2 - NON-INTEREST
INCOME SUMMARY

                                Quarter Ended September 30,           

9-Month Interval Ended September 30,

                                2021         2020      Variance       2021             2020           Variance
                                                                (In 

hundreds)

Banking service income $ 18,198 $ 16,297 11.7% $ 52,939 $ 45,678

            15.9%

Wealth administration income 7,619 7,272 4.8% 23,270

           20,924            11.2%

Mortgage banking actions 6,195 3,917 58.2% 16,303

           10,223            59.5%
Whole banking and monetary
service income                  32,012       27,486      16.5%          92,512           76,825            20.4%
Internet achieve on:
Sale of securities accessible
on the market                              -            -       0.0%               -            4,728          -100.0%
Discount buy from
Scotiabank acquisition                -        3,465    -100.0%               -            7,336          -100.0%
Different non-interest earnings           505          375      34.7%           2,603            1,039           150.5%
Whole non-interest earnings,
internet                          $   32,517    $  31,326       3.8%   $      95,115    $      89,928             5.8%




Non-Curiosity Revenue



Non-interest earnings is affected by the quantity of the Financial institution's belief division
belongings below administration, transactions generated by purchasers' monetary belongings
serviced by OFG's securities broker-dealer and insurance coverage company subsidiaries,
the extent of mortgage banking actions, charges generated from loans and deposit
accounts, and positive aspects on gross sales of belongings.



Comparability of quarters ended September 30, 2021 and 2020

OFG recorded non-interest earnings, internet, within the quantity of $32.5 million, in contrast
to $31.Three million, a rise of three.8%, or $1.2 million. The rise in
non-interest earnings was primarily on account of:



?A rise of $1.9 million in banking service revenues, primarily from larger
charges on deposit accounts, credit score and debit playing cards interchange charges and better
quantity of transactions as a result of influence of the COVID-19 on financial exercise
final 12 months; and


?A rise of $2.Three million in mortgage-banking actions, as quarterly
mortgage-servicing rights valuation and positive aspects on loans offered elevated by
$1.2 million and $1.Zero million, respectively.

The rise in non-interest earnings was offset by:



?A $3.5 million discount buy achieve from the Scotiabank Acquisition to regulate
the truthful worth of accrued curiosity receivable at closing, internet of taxes, recorded
throughout prior 12 months quarter.


Comparability of nine-month intervals ended September 30, 2021 and 2020

OFG recorded non-interest earnings, internet, within the quantity of $95.1 million, in contrast
to $89.9 million, a rise of 5.8%, or $5.2 million. The rise in
non-interest earnings was primarily on account of:



?A rise of $7.Three million in banking service revenues, primarily from larger
charges on deposit accounts, credit score and debit playing cards interchange charges and better
quantity of transactions reflecting the influence of the COVID-19 on financial
exercise final 12 months;



?A rise of $2.Three million in wealth administration income on account of larger
broker-dealer gross sales, insurance coverage earnings and belief charges of $1.Three million, $460
thousand
, and $568 thousand, respectively; and

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?A rise of $6.1 million in mortgage-banking actions, as internet servicing
charges and positive aspects on loans offered elevated by $3.Four million and $5.1 million,
respectively. This enhance was offset by larger losses of $2.Four million on
repurchased loans as common quantity elevated throughout the interval.

The rise in non-interest earnings was offset by:

?A $4.7 million achieve recorded throughout 2020 on the gross sales of $316.Zero million
mortgage-backed securities; and



?A $7.Three million discount buy achieve from the Scotiabank Acquisition to regulate
the truthful worth of accrued curiosity receivable at closing, internet of taxes, recorded
throughout 2020.



TABLE 3 -
NON-INTEREST
EXPENSES SUMMARY

                        Quarter Ended September 30,           9-Month Interval Ended September 30,
                       2021         2020      Variance %       2021             2020        Variance %
                                                      (In hundreds)
Compensation and
worker advantages   $   33,745   $   31,955         5.6%   $      99,282    $     102,005        -2.7%
Occupancy,
gear and
infrastructure
prices                   12,078       11,943         1.1%          37,734           35,220         7.1%
Digital
banking costs          9,615        8,734        10.1%          27,163           26,284         3.3%
Info
know-how
bills                 3,621        5,381       -32.7%          13,407           16,259       -17.5%
Skilled and
service charges             5,003        3,331        50.2%          14,938           12,596        18.6%
Taxes, aside from
payroll and
earnings taxes             3,257        3,774       -13.7%          10,535           10,123         4.1%
Insurance coverage                2,530        2,428         4.2%           7,659            8,667       -11.6%
Foreclosed actual
property and different
repossessed
belongings (earnings)
bills               (2,163)        1,323      -263.5%         (1,885)            6,763      -127.9%
Mortgage servicing
and clearing
bills                 1,908        2,345       -18.6%           5,690            4,836        17.7%
Promoting,
enterprise
promotion, and
strategic
initiatives              1,646        1,481        11.1%           4,783            4,643         3.0%
Communication            1,327        1,117        18.8%           3,332            2,993        11.3%
Printing,
postage,
stationery and
provides                   878        1,094       -19.7%           3,037            2,767         9.8%
Director and
investor
relations                  243          302       -19.5%             867              928        -6.6%
Merger and
restructuring
costs                      -        2,681      -100.0%               -            5,991      -100.0%
Pandemic bills        1,223        2,090       -41.5%           4,523            4,291         5.4%
Different                    4,013        3,465        15.8%           8,201           11,881       -31.0%
Whole
non-interest
bills            $   78,924   $   83,444        -5.4%   $     239,266    $     256,247        -6.6%
Related ratios
and knowledge:
Effectivity ratio        58.59%       65.69%                       60.47%           66.30%
Compensation and
advantages to
non-interest
expense                 42.76%       38.30%                       41.49%           39.81%
Compensation to
common whole
belongings owned
(annualized)             1.29%        1.29%                        1.29%            1.42%
Common variety of
staff                2,251        2,343                        2,241            2,405
Common
compensation per
worker
(annualized, in
hundreds)          $     60.0   $     54.6                $        59.1    $        56.6
Common loans per
common worker    $    2,872   $    2,897                $       2,931    $       2,816




Non-Curiosity Bills



Comparability of quarters ended September 30, 2021 and 2020

Non-interest expense was $78.9 million, representing a lower of 5.4%, or $4.5
million
, in comparison with $83.Four million.

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Non-interest bills had been positively impacted by:



?Lower in foreclosed actual property and different repossessed belongings bills by
$3.5 million reflecting larger positive aspects on gross sales and favorable valuation of $2.2
million and $800 thousand, respectively;



?Lower in data know-how bills by $1.Eight million reflecting programs
integrations bills associated to Scotiabank Acquisition recorded within the prior
12 months quarter; and


?Merger and restructuring costs amounting $2.7 million in 2020 associated to the
Scotiabank Acquisition.

Non-interest bills had been adversely impacted by:



?Improve in compensation and worker advantages by $1.Eight million reflecting $1.2
million of upper stock-based compensation expense and elevated compensation
for hourly staff; and



?Improve in skilled and repair charges bills by $1.7 million primarily due
to larger consulting and advisory bills and authorized bills by $832 thousand
and $512 thousand, respectively.



The effectivity ratio improved to 58.59% from 65.69%. The effectivity ratio
measures how a lot of OFG's revenues is used to pay working bills. OFG
computes its effectivity ratio by dividing non-interest bills by the sum of
its internet curiosity earnings and non-interest earnings, however excluding positive aspects on the sale
of funding securities, derivatives positive aspects or losses, different positive aspects and losses,
and different earnings which may be thought-about risky in nature. Administration believes
that the exclusion of these gadgets permits constant comparability. Quantities
introduced as a part of non-interest earnings which can be excluded from the effectivity
ratio computation for the quarters ended September 30, 2021 and 2020 amounted to
$505 thousand and $3.Eight million, respectively.



Comparability of nine-month intervals ended September 30, 2021 and 2020

Non-interest expense was $239.Three million, representing a lower of 6.6%, or
$17.Zero million, in comparison with $256.2 million.

Non-interest bills had been positively impacted by:

?Decrease compensation and worker advantages by $2.7 million, reflecting decrease
worker depend and a $1.Three million Covid-19 worker tax credit score;



?Lower in data know-how bills by $2.9 million reflecting programs
integrations bills associated to Scotiabank Acquisition recorded throughout prior
12 months interval;



?Enhancements in foreclosed actual property and different repossessed belongings (earnings)
bills by $8.6 million reflecting larger valuations and positive aspects on gross sales on
different actual property owned of $1.9 million and $2.9 million, respectively. Additionally,
larger positive aspects on repossessed auto of $1.6 million on account of larger demand and quantity
in comparison with prior 12 months interval;



?Merger and restructuring costs amounting $6.Zero million in 2020 associated to the
Scotiabank Acquisition within the prior 12 months interval; and

?Lower in claims and settlements accruals by $3.6 million.

Non-interest bills had been adversely impacted by:

?Improve in skilled and repair charges bills by $2.Three million primarily due
to larger authorized bills by $1.Eight million.

?Improve in occupancy, gear, and infrastructure prices by $2.5 million
reflecting larger data know-how infrastructure bills by $1.8
million
.



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The effectivity ratio improved to 60.47% from 66.30%. Quantities introduced as half
of non-interest earnings which can be excluded from the effectivity ratio computation
for the nine-months ended September 30, 2021 and 2020 amounted to $2.6 million
and $13.1 million, respectively.



Provision for Credit score Losses


Comparability of quarters ended September 30, 2021 and 2020



Primarily based on an evaluation of the credit score high quality and the composition of OFG's mortgage
portfolio, administration decided that the supply for the quarter ended
September 30, 2021 was ample to take care of the allowance for credit score losses at
an acceptable stage to supply for anticipated credit score losses.



Provision for credit score losses decreased $18.7 million from $13.7 million to a
recapture of $5.Zero million ensuing from $4.Three million internet reserve releases. Internet
charge-offs for the quarter amounting to $6.Zero million included $6.5 million for
a beforehand reserved quantity on a business mortgage.



Comparability of nine-month intervals ended September 30, 2021 and 2020



Primarily based on an evaluation of the credit score high quality and the composition of OFG's mortgage
portfolio, administration decided that the supply for the nine-month interval
ended September 30, 2021 was ample to take care of the allowance for credit score
losses at an acceptable stage to supply for anticipated credit score losses primarily based upon
an analysis of identified and inherent dangers.



Provision for credit score losses decreased $85.5 million from $78.5 million to a
recapture of $7.Zero million reflecting continued enchancment in asset high quality
traits. Prior 12 months provision included a $39.9 million provision to include
modifications within the macro-economic state of affairs and qualitative changes in consequence
of the Covid-19 pandemic.



Revenue Taxes


Comparability of quarters ended September 30, 2021 and 2020

OFG’s efficient tax fee (ETR) was 32.0% in 2021 in comparison with 18.7% in 2020. The
enhance in ETR is related to a better proportion of exempt earnings and
earnings taxed at preferential charges within the earlier 12 months quarter.

Comparability of nine-month intervals ended September 30, 2021 and 2020

OFG’s efficient tax fee (ETR) was 32.0% in 2021 in comparison with 21.4% in 2020. The
enhance in ETR is related to a better proportion of exempt earnings and
earnings taxed at preferential charges within the earlier 12 months.

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Enterprise Segments



OFG segregates its companies into the next main reportable segments:
Banking, Wealth Administration, and Treasury. Administration established the reportable
segments primarily based on the inner reporting used to judge efficiency and to
assess the place to allocate assets. Different components resembling OFG's group,
nature of its merchandise, distribution channels and financial traits of
its providers had been additionally thought-about within the dedication of the reportable
segments. OFG measures the efficiency of those reportable segments primarily based on
pre-established targets of various monetary parameters resembling internet earnings, internet
curiosity earnings, mortgage manufacturing, and costs generated. OFG's methodology for
allocating non-interest bills amongst segments is predicated on a number of components such
as income, worker headcount, occupied house, devoted providers or time,
amongst others. Following are the outcomes of operations and the chosen monetary
data by working phase for the quarters and nine-month intervals ended
September 30, 2021 and 2020.



                                             Quarter Ended September 30, 2021
                                    Wealth                    Whole Main                    Consolidated
                    Banking       Administration     Treasury       Segments   

Eliminations Whole

                                                      (In hundreds)

Curiosity earnings $ 108,479 $ 7 $ 3,653 $ 112,139 $

           -   $      112,139
Curiosity expense      (8,946)             -         (488)        (9,434)               -          (9,434)
Internet curiosity
earnings                 99,533             7         3,165        102,705               -          102,705
Recapture of
credit score losses           4,815             -           182          4,997               -            4,997
Non-interest
earnings                 24,348         8,079            90         32,517               -           32,517
Non-interest
bills             (72,463)       (5,245)       (1,216)       (78,924)               -         (78,924)
Intersegment
income                   616             -             -            616           (616)                -
Intersegment
bills                    -         (318)         (298)          (616)             616                -
Revenue earlier than
earnings taxes      $    56,849   $     2,523         1,923   $     61,295   $           -   $       61,295
Revenue tax
expense                19,614             -            10         19,624               -           19,624
Internet earnings        $    37,235   $     2,523   $     1,913   $     41,671   $           -   $       41,671
Whole belongings      $ 8,116,648   $    24,581   $ 3,558,568   $ 11,699,797   $ (1,092,932)   $   10,606,865


                                        9-Month Interval Ended September 30, 2021
                                    Wealth                    Whole Main                    Consolidated
                    Banking       Administration     Treasury       Segments     Eliminations       Whole
                                                      (In hundreds)

Curiosity earnings $ 327,167 $ 25 $ 9,392 $ 336,584 $

           -   $      336,584
Curiosity expense     (31,794)             -       (1,624)       (33,418)               -         (33,418)
Internet curiosity
earnings                295,373            25         7,768        303,166               -          303,166
Recapture of
credit score losses           5,964             -         1,014          6,978               -            6,978
Non-interest
earnings                 71,424        23,584           107         95,115               -           95,115
Non-interest
bills            (222,960)      (13,089)       (3,217)      (239,266)               -        (239,266)
Intersegment
income                 1,714             -             -          1,714         (1,714)                -
Intersegment
bills                    -         (911)         (803)        (1,714)           1,714                -
Revenue earlier than
earnings taxes      $   151,515   $     9,609         4,869   $    165,993   $           -   $      165,993
Revenue tax
expense                53,089             -            33         53,122               -           53,122
Internet earnings        $    98,426   $     9,609   $     4,836   $    112,871   $           -   $      112,871
Whole belongings      $ 8,116,648   $    24,581   $ 3,558,568   $ 11,699,797   $ (1,092,932)   $   10,606,865




                                       86
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                                             Quarter Ended September 30, 2020
                                   Wealth                    Whole Main                    Consolidated
                    Banking      Administration     Treasury       Segments     Eliminations        Whole
                                                      (In hundreds)
Curiosity earnings   $   112,832   $         14   $     2,091   $    114,937   $           -   $     114,937
Curiosity expense     (14,092)              -       (1,312)       (15,404)               -        (15,404)
Internet curiosity
earnings                 98,740             14           779         99,533               -          99,533
Provision for
mortgage and lease
losses               (14,461)              -           792       (13,669)               -        (13,669)
Non-interest
earnings                 23,994          7,323             9         31,326               -          31,326
Non-interest
bills             (76,988)        (5,138)       (1,318)       (83,444)               -        (83,444)
Intersegment
income                   769              -             -            769           (769)               -
Intersegment
bills                    -          (225)         (544)          (769)             769               -
Revenue earlier than
earnings taxes      $    32,054   $      1,974   $     (282)   $     33,746   $           -   $      33,746
Revenue tax
expense                 6,308           (13)            13          6,308               -           6,308
Internet earnings        $    25,746   $      1,987   $     (295)   $     27,438   $           -   $      27,438
Whole belongings      $ 9,367,141   $     33,006   $ 1,725,221   $ 11,125,368   $ (1,106,377)   $  10,018,991

                                        9-Month Interval Ended September 30, 2020
                                   Wealth                    Whole Main                    Consolidated
                    Banking      Administration     Treasury       Segments     Eliminations        Whole
                                                      (In hundreds)
Curiosity earnings   $   351,933   $         46   $     8,347   $    360,326   $           -   $     360,326
Curiosity expense     (44,307)              -       (6,325)       (50,632)               -        (50,632)
Internet curiosity
earnings                307,626             46         2,022        309,694               -         309,694
Provision for
mortgage and lease
losses               (77,795)              -         (701)       (78,496)               -        (78,496)
Non-interest
earnings                 64,349         21,089         4,490         89,928               -          89,928
Non-interest
bills            (237,943)       (14,819)       (3,485)      (256,247)               -       (256,247)
Intersegment
income                 1,920              -             -          1,920         (1,920)               -
Intersegment
bills                    -          (580)       (1,340)        (1,920)           1,920               -
Revenue earlier than
earnings taxes      $    58,157   $      5,736   $       986   $     64,879   $           -   $      64,879
Revenue tax
expense                 9,305          4,506            42         13,853               -          13,853
Internet earnings        $    48,852   $      1,230   $       944   $     51,026   $           -   $      51,026
Whole belongings      $ 9,367,141   $     33,006   $ 1,725,221   $ 11,125,368   $ (1,106,377)   $  10,018,991



Comparability of quarters ended September 30, 2021 and 2020


Banking


OFG’s banking phase internet earnings earlier than taxes elevated $24.Eight million from $32.1
million
to earnings of $56.Eight million, primarily reflecting:

?Lower in provision for credit score losses by $19.Three million, primarily on account of present
quarter $4.Three million provision launch because of continued important
enchancment in asset high quality;

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?Decrease curiosity expense from deposits by $5.1 million, primarily associated to pricing
modifications applied throughout fourth quarter of 2020 and to the maturity and
cancelation of upper value time and brokered deposits and migration of those
time deposits to checking and financial savings accounts at decrease prices;



?A rise of $1.9 million in banking service revenues, primarily from larger
charges on deposit accounts, credit score and debit playing cards interchange charges and better
quantity of transactions reflecting the influence of the COVID-19 on financial
exercise final 12 months; and



?A rise of $2.Three million in mortgage-banking actions, as quarterly
mortgage-servicing rights valuation and positive aspects on loans offered elevated by $1.2
million
and $1.Zero million, respectively.



The will increase within the banking phase's internet earnings was partially offset by, decrease
curiosity earnings from loans by $4.Four million, reflecting decrease common balances in
the mortgage and business PCD portfolios and the impact of Federal Reserve
Board's fee cuts on variable fee business loans offset by curiosity earnings of
$3.Four million from unamortized yield for $95.6 million of forgiven PPP loans.



Wealth Administration



Wealth administration phase income consists of commissions and costs from
fiduciary actions, and securities brokerage and insurance coverage actions. Internet
earnings earlier than taxes from this phase elevated $549 thousand, primarily from
larger broker-dealer gross sales and belief charges of $265 thousand and $99 thousand,
respectively.



Treasury


Treasury phase internet earnings earlier than taxes elevated by $2.2 million, primarily
reflecting:

?Improve in curiosity earnings by $1.6 million, reflecting the acquisition of held to
maturity securities throughout present quarter; and

?Lower in provision for credit score losses in US business loans by $610
thousand
, primarily on account of continued asset high quality enhancements.

Comparability of nine-month intervals ended September 30, 2021 and 2020


Banking


OFG’s banking phase internet earnings earlier than taxes elevated $93.Four million from $58.2
million
to $151.5 million, primarily reflecting:



?Lower in provision for credit score losses by $83.Eight million, primarily on account of updates
in macro-economic outlook and continued asset high quality enchancment, as mirrored
in charge-off, non-performing, and delinquency charges. Prior 12 months interval included
a $39.9 million provision to include modifications within the macro-economic state of affairs
and qualitative changes because of the Covid-19 pandemic;



?Decrease curiosity expense from deposits by $12.5 million, primarily associated to
pricing modifications applied throughout fourth quarter of 2020 and to the maturity
and cancelation of upper value time and brokered deposits and migration of those
time deposits to checking and financial savings accounts at decrease prices;



?A rise of $7.Three million in banking service revenues, primarily from larger
charges on deposit accounts, credit score and debit playing cards interchange charges and better
quantity of transactions reflecting the influence of the COVID-19 on financial
exercise final 12 months;



?A rise of $6.1 million in mortgage-banking actions, as internet servicing
charges and positive aspects on loans offered elevated by $3.Four million and $5.1 million,
respectively. This enhance was offset by larger losses of $2.Four million on
repurchased loans as common quantity elevated throughout the interval; and



?Lower in non-interest bills by $15.Zero million, primarily in compensation and
worker advantages, data know-how bills, foreclosed actual property and
different repossessed belongings bills, merger and restructuring, and insurance coverage
bills.

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The will increase within the banking phase’s internet earnings had been partially offset by:



?Decrease curiosity earnings from loans by $25.Zero million, reflecting decrease balances in
the mortgage and business PCD portfolios and the impact of Federal Reserve
Board's fee cuts on variable fee business loans offset by curiosity earnings of
$7.Zero million from unamortized yield for $310.7 million of forgiven PPP loans.



?A $7.Three million discount buy achieve from the Scotiabank Acquisition recorded
in prior 12 months.



Wealth Administration



Wealth administration phase income consists of commissions and costs from
fiduciary actions, and securities brokerage and insurance coverage actions. Internet
earnings earlier than taxes from this phase elevated $3.9 million, primarily from larger
broker-dealer gross sales, insurance coverage earnings and belief charges of $1.Three million, $460
thousand, and $568 thousand, respectively.



Treasury


Treasury phase internet earnings earlier than taxes elevated by $3.9 million, primarily
reflecting:

?Decrease curiosity bills in borrowings by $4.7 million, from the maturity and
early extinguishment of repurchase agreements throughout 2020; and

?Lower in provision for credit score losses in US business loans by $1.7 million,
primarily due asset high quality enhancements throughout the present interval.

Such will increase had been partially offset by a achieve of $4.7 million on the gross sales of
securities recorded in prior interval.

ANALYSIS OF FINANCIAL CONDITION


Belongings Owned



At September 30, 2021, OFG's whole belongings amounted to $10.607 billion
representing a rise of seven.9%, when in comparison with $9.826 billion at December
31, 2020. Money and due from banks and investments portfolios elevated by $602.2
million and $443.6 million, respectively, whereas loans decreased by $218.8
million.



Money and money equivalents of $2.756 billion elevated by $600.1 million
primarily due to the inflow of each business and retail deposits from
elevated liquidity within the economic system due to authorities stimulus packages.



OFG's mortgage portfolio is comprised of residential mortgage loans, business
loans collateralized by mortgages on actual property, different business and
industrial loans, client loans, and auto loans. At September 30, 2021, OFG's
mortgage portfolio decreased by 3.4% primarily on account of mortgage portfolios run-off. PCD mortgage
portfolio, excluding allowance for credit losses, decreased $244.Eight million to
$1.527 billion at September 30, 2021. This lower was offset by mortgage
manufacturing within the nine-month interval of 2021 of $1.758 billion, in comparison with
$1.245 billion within the 12 months in the past interval, pushed by auto and business lending,
together with $159.Zero million PPP mortgage originations.



Monetary Belongings Managed



OFG's monetary belongings embrace these managed by OFG's belief division, retirement
plan administration subsidiary, and belongings gathered by its broker-dealer and
insurance coverage subsidiaries. OFG's belief division affords numerous varieties of particular person
retirement accounts ("IRAs") and manages 401(okay) and Keogh retirement plans and
custodian and company belief accounts, whereas the retirement plan administration
subsidiary manages non-public retirement plans. At September 30, 2021, the entire
belongings managed by OFG's belief division and retirement plan administration
subsidiary amounted to $3.667 billion, in comparison with $3.476 billion at December
31, 2020. OFG's broker-dealer subsidiary affords a big selection of funding
options to its shopper base, resembling tax-advantaged mounted earnings securities,
mutual funds, shares, bonds and cash administration wrap-fee packages. At September
30, 2021, whole belongings gathered by the broker-dealer and insurance coverage company
subsidiaries from their clients' funding accounts amounted to $2.362
billion, in comparison with $2.474 billion at December 31, 2020.

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Goodwill



OFG's goodwill will not be amortized to expense however is examined a minimum of yearly for
impairment. A quantitative annual impairment check will not be required if, primarily based on a
qualitative evaluation, OFG determines that the existence of occasions and
circumstances point out that it's extra probably than not that goodwill will not be
impaired. OFG completes its annual goodwill impairment check as of October 31 of
annually. OFG checks for impairment by first allocating its goodwill and different
belongings and liabilities, as vital, to outlined reporting items. A good worth
is then decided for every reporting unit. If the truthful values of the reporting
items exceed their e-book values, no write-down of the recorded goodwill is
vital.



As of September 30, 2021, OFG had $86.1 million of goodwill allotted as
follows: $84.1 million to the banking phase and $2.Zero million to the wealth
administration phase. Please confer with Observe 9 Goodwill and Different Intangible Belongings
for extra data on the annual goodwill impairment check.



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TABLE 4 – ASSETS SUMMARY AND COMPOSITION

                                                     September 30     December 31,    Variance
                                                         2021             2020           %
                                                             (In hundreds)
Investments:
FNMA and FHLMC certificates                          $     570,489   $      210,949     170.4%
Obligations of US government-sponsored businesses              1,280            1,606     -20.3%
US Treasury securities                                      10,875           10,983      -1.0%
CMOs issued by US government-sponsored businesses             27,625           39,214     -29.6%
GNMA certificates                                          271,828          182,772      48.7%
FHLB inventory                                                   7,496            8,278      -9.4%
Different debt securities                                        2,224              914     143.3%
Different investments                                           10,456            3,984     162.4%
Whole investments                                          902,273          458,700      96.7%
Loans                                                    6,282,485        6,501,259      -3.4%
Whole investments and loans                              7,184,758        6,959,959       3.2%
Different belongings:
Money and due from banks (together with restricted money)      2,745,854        2,143,669      28.1%
Cash market investments                                     9,837           11,908     -17.4%
Foreclosed actual property                                      13,904           11,596      19.9%
Accrued curiosity receivable                                 56,815           65,547     -13.3%
Deferred tax asset, internet                                    128,663          162,478     -20.8%
Premises and gear, internet                                 86,981           83,786       3.8%
Servicing belongings                                            48,227           47,295       2.0%
Goodwill                                                    86,069           86,069       0.0%
Working lease right-of-use belongings                         30,625           31,383      -2.4%
Different intangible belongings                                     38,545           45,896     -16.0%
Different belongings and clients' legal responsibility on acceptances       176,587          176,425       0.1%
Whole different belongings                                       3,422,107        2,866,052      19.4%
Whole belongings                                         $  10,606,865   $    9,826,011       7.9%
Funding portfolio composition:
FNMA and FHLMC certificates                                  63.2%          

46.0%

Obligations of US government-sponsored businesses               0.1%          

0.4%

US Treasury securities                                        1.2%          

2.4%

CMOs issued by US government-sponsored businesses               3.1%             8.5%
GNMA certificates                                            30.1%            39.8%
FHLB inventory                                                    0.8%             1.8%
Different debt securities and different investments                   1.5%             1.1%
                                                            100.0%           100.0%




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TABLE 5 – LOAN PORTFOLIO COMPOSITON

                                     September 30,     December 31,
                                         2021              2020
                                             (In hundreds)
Loans held for funding:
Business                          $     2,331,056   $    2,402,010
Mortgage                                  2,022,243        2,307,034
Shopper                                    374,631          391,287
Auto                                      1,682,933        1,561,802
                                          6,410,863        6,662,133
Allowance for credit score losses               (180,872)        (204,809)
Whole loans held for funding           6,229,991        6,457,324
Mortgage loans held on the market                 35,031           41,654
Different loans held on the market                    17,463            2,281
Whole loans, internet                    $     6,282,485   $    6,501,259




OFG's mortgage portfolio consists of mortgage, business, client, and auto
loans enterprise merchandise. As proven in Desk 5 above, whole loans, internet, amounted
to $6.282 billion at September 30, 2021 and $6.501 billion at December 31, 2020.
OFG's loans held-for-investment portfolio composition and traits had been as
follows:



?Business mortgage portfolio amounted to $2.331 billion (36.4% of the gross mortgage
portfolio) in comparison with $2.402 billion (36.1% of the gross mortgage portfolio) at
December 31, 2020. Business manufacturing, excluding PPP mortgage manufacturing,
elevated 45.8%, or $79.Eight million, and 73.4% or $300.9 million to $254.2 million
and $710.Eight million within the quarter and nine-month interval ended September 30,
2021, respectively, from $174.4 and $409.9 million for a similar intervals in 2020.
PPP mortgage manufacturing decreased $10.Three million and $137.7 million in quarter and
nine-months interval ended September 30, 2021, respectively, from $10.Three million
and $296.7 million for a similar intervals in 2020, as PPP program was initially
launched within the second quarter of 2020 and concluded in 2021.



?Mortgage mortgage portfolio amounted to $2.022 billion (31.5% of the gross mortgage
portfolio) in comparison with $2.307 billion (34.6% of the gross originated mortgage
portfolio) at December 31, 2020. Mortgage mortgage manufacturing totaled $85.5 million
and $285.2 million for the quarter and nine-month interval ended September 30,
2021, respectively, which represents a lower of 8.7% and a rise of 92.2%
from $93.7 million and $148.Four million for a similar intervals in 2020. Mortgage
loans included delinquent loans within the GNMA buy-back choice program amounting to
$19.9 million and $56.2 million at September 30, 2021 and December 31, 2020,
respectively. Servicers of loans underlying GNMA mortgage-backed securities should
report as their very own belongings the defaulted loans that they've the choice (however
not the duty) to repurchase, even once they elect to not train that
choice.



?Shopper mortgage portfolio amounted to $374.6 million (5.8% of the gross mortgage
portfolio) in comparison with $391.Three million (5.9% of the gross mortgage portfolio) at
December 31, 2020. Shopper mortgage manufacturing elevated 115.0% to $50.6 million
and 50.9% to $116.2 million for the quarter and nine-month interval ended
September 30, 2021, respectively, from $23.5 million and $77.Zero million for the
identical intervals in 2020.



?Auto and leasing portfolio amounted to $1.683 billion (26.3% of the gross mortgage
portfolio) in comparison with $1.562 billion (23.4% of the gross mortgage portfolio) at
December 31, 2020. Auto manufacturing elevated 6.4% to $165.9 million and 55.6% to
$486.Three million within the quarter and nine-month interval ended September 30, 2021,
respectively, in comparison with $155.9 million and $312.6 million for a similar intervals
in 2020.



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The next desk consists of the maturities of OFG's lending publicity to the Puerto Rico
authorities, which is proscribed solely to loans to municipalities secured by advert valorem
taxation, with out limitation as to fee or quantity, on all taxable property throughout the
issuing municipalities and a mortgage to a public company acquired within the Scotiabank
Acquisition. The great religion, credit score and limitless taxing energy of every issuing
municipality are pledged for the fee of its basic obligations. Deposits from the
Puerto Rico authorities totaled $281.7 million at September 30, 2021.

TABLE 6 – PUERTO RICO GOVERNMENT RELATED LOANS AND SECURITIES

                                   September 30, 2021
                                                                    Maturity
                                                         Much less                      Extra
                                          Carrying      than 1       1 to three       than 3
                                           Worth         12 months        Years        Years
Loans:                                                   (In hundreds)
Public firms                     $    1,102   $    1,102   $        -   $        -
Municipalities                              86,010            -       34,818       51,192
Whole                                   $   87,112   $    1,102   $   34,818   $   51,192



At September 30, 2021, OFG has $87.1 million of direct credit score publicity to the
Puerto Rico authorities, a $12.Zero million lower from December 31, 2020.


Credit score Danger Administration



Allowance for Credit score Losses


OFG maintains an allowance for credit score losses at a stage that administration
considers ample to supply for lifetime anticipated losses primarily based upon an
analysis of identified and inherent dangers and cheap and supportable forecasts.
OFG’s allowance for credit score losses (“ACL”) coverage offers for an in depth
quarterly evaluation of anticipated credit score losses.



On January 1, 2020, OFG adopted the brand new CECL accounting customary that requires
the measurement of the allowance for credit score losses to be primarily based on administration's
finest estimate of future anticipated credit score losses over the lifetime of the Firm's
related monetary belongings.



Tables 7 by 9 set forth an evaluation of exercise within the allowance for credit score
losses for the quarters and nine-month intervals ended September 30, 2021 and 2020
and current chosen credit score loss statistics for September 30, 2021 and December
31, 2020. As well as, Desk 5 units forth the composition of the mortgage portfolio.



Please confer with the “Provision for Credit score Losses” part within the MD&A for a extra
detailed evaluation of provisions for credit score losses.


Non-performing Belongings



OFG's non-performing belongings embrace non-performing loans and foreclosed actual
property (see Tables 10 and 12). At September 30, 2021, OFG had $123.9 million of
non-accrual loans, together with $38.Eight million PCD loans accounted for below ASU
2016-13, in comparison with $147.9 million at December 31, 2020.



At September 30, 2021 and December 31, 2020, loans whose phrases have been
prolonged and that are categorised as troubled-debt restructurings that aren't
included in non-performing belongings amounted to $122.5 million and $113.9 million,
respectively.



Delinquent residential mortgage loans insured or assured below relevant FHA
and VA packages are categorised as non-performing loans once they develop into 90 days
or extra overdue, however should not positioned in non-accrual standing till they develop into 12
months or extra overdue, since they're insured loans. Subsequently, these loans
are included as non-performing loans however excluded from non-accrual loans.



At September 30, 2021, OFG's non-performing belongings decreased by 10.3% to $148.6
million (1.40% of whole belongings) from $165.6 million (1.69% of whole belongings) at
December 31, 2020. Foreclosed actual property amounting to $13.9 million at
September 30, 2021, elevated from $11.6 million at December 31, 2020. Different
repossessed belongings amounting to $1.5 million at September 30, 2021,

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decreased from $1.Eight million at December 31, 2020. OFG doesn't count on
non-performing loans to end in considerably larger losses. At September 30,
2021, the allowance protection ratio to non-performing loans was 135.8% (134.6% at
December 31, 2020).



Upon adoption of CECL, OFG elected to take care of swimming pools of loans that had been
beforehand accounted for below ASC 310-30 and can proceed to account for these
swimming pools as a unit of account. As such, for PCD loans the dedication of
nonaccrual or accrual standing is made on the pool stage, not the person mortgage
stage. Upon adoption of CECL, the allowance for credit score losses was decided for
every pool and added to the pool's carrying quantity to ascertain a brand new amortized
value foundation. The distinction between the unpaid principal steadiness of the pool and
the brand new amortized value foundation is the non-credit premium or low cost which might be
amortized curiosity earnings over the remaining lifetime of the pool. On a quarterly
foundation, administration will monitor the composition and habits of the swimming pools to
assess the flexibility for money circulate estimation and timing. If primarily based on the evaluation
carried out, the pool is assessed as non-accrual the accretion/amortization of
the non-credit (low cost) premium will stop.



OFG follows a conservative residential mortgage lending coverage, with greater than
90% of its residential mortgage portfolio consisting of fixed-rate, absolutely
amortizing, absolutely documented loans that should not have the extent of threat related
with subprime loans supplied by sure main U.S. mortgage mortgage originators.
Moreover, OFG has by no means been lively in unfavourable amortization loans or
adjustable fee mortgage loans, together with these with teaser charges.



The next gadgets comprise non-performing loans held for funding, Non-PCD
and PCDs:



Business loans -At September 30, 2021, OFG's non-performing business loans
amounted to $65.Three million (49.0 % of OFG's non-performing loans), a 16.8%
lower from $78.5 million at December 31, 2020 (51.6% of OFG's non-performing
loans). Non-PCD business loans are positioned on non-accrual standing once they
develop into 90 days or extra overdue and are written-down, if vital, primarily based on the
particular analysis of the underlying collateral, if any.



Residential mortgage loans -At September 30, 2021, OFG's non-performing mortgage
loans totaled $53.6 million (40.3% of OFG's non-performing loans), a 10.1%
enhance from $48.7 million (32.0% of OFG's non-performing loans) at December
31, 2020. Non-PCD residential mortgage loans are positioned on non-accrual standing
once they develop into 90 days or extra overdue and are written-down, if vital,
primarily based on the precise analysis of the collateral underlying the mortgage, besides
for FHA and VA insured mortgage loans that are positioned in non-accrual once they
develop into 12 months or extra overdue.



Shopper loans -At September 30, 2021, OFG's non-performing client loans
amounted to $2.2 million (1.7% of OFG's non-performing loans), a 47.9% lower
from $4.2 million at December 31, 2020 (2.8% of OFG's non-performing loans).
Non-PCD client loans are positioned on non-accrual standing once they develop into 90 days
overdue and written-off when funds are delinquent 120 days in private loans
and 180 days in bank cards and private strains of credit score.



Auto loans and leases -At September 30, 2021, OFG's non-performing auto loans
and leases amounted to $12.1 million (9.1% of OFG's whole non-performing loans),
a lower of 41.9% from $20.Eight million at December 31, 2020 (13.6% of OFG's
whole non-performing loans). Non-PCD auto loans and leases are positioned on
non-accrual standing once they develop into 90 days overdue, partially written-off to
collateral worth when funds are delinquent 120 days, and absolutely written-off
when funds are delinquent 180 days.



OFG has two mortgage mortgage modification packages. These are the Loss Mitigation
Program and the Non-Conforming Mortgage Mortgage Program. Each packages are supposed
to assist accountable householders to stay of their houses and keep away from foreclosures,
whereas additionally lowering OFG's losses on non-performing mortgage loans.



The Loss Mitigation Program helps mortgage debtors who are or will develop into
financially unable to satisfy the present or scheduled mortgage funds. Loans
that qualify below this program are these assured by FHA, VA, RURAL, PRHFA,
standard loans assured by Mortgage Warranty Insurance coverage Company (MGIC),
standard loans offered to FNMA and FHLMC, and traditional loans retained by
OFG. This system affords diversified options resembling common or decreased
fee plans, fee moratorium, mortgage mortgage modification, partial claims
(solely FHA), quick sale, and deed in lieu of foreclosures.



The Non-Conforming Mortgage Mortgage Program is for non-conforming mortgages,
together with balloon fee, curiosity solely/curiosity first, variable rate of interest,
adjustable rate of interest and different certified loans. Non-conforming mortgage mortgage
portfolios are segregated into the next classes: performing loans that
meet secondary market requirement and are refinanced below the credit score
underwriting tips of FHA/VA/FNMA/ FHLMC, and performing loans not assembly
secondary market tips processed pursuant OFG's present credit score and
underwriting tips. OFG achieved an reasonably priced and sustainable month-to-month
fee by taking

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particular, sequential, and vital steps resembling lowering the rate of interest,
extending the mortgage time period, capitalizing arrearages, deferring the fee of
principal or, if the borrower qualifies, refinancing the mortgage.



With the intention to apply for any of our mortgage modification packages, if the borrower is
lively in Chapter 13 chapter, it should request an authorization from the
chapter trustee to permit for the mortgage modification. Debtors with discharged
Chapter 7 bankruptcies might also apply. Loans in these packages are evaluated by
designated underwriters for troubled-debt restructuring classification if OFG
grants a concession for authorized or financial causes as a result of debtor's monetary
difficulties.



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TABLE 7 – ALLOWANCE FOR CREDIT LOSSES BREAKDOWN

                                                   September 30,     December 31,     Variance
                                                       2021              2020             %
                                                                  (In hundreds)
Allowance for credit score losses:
Non-PCD:
Business                                        $        33,240   $       45,779        -27.4%
Mortgage                                                   16,867           19,687        -14.3%
Shopper                                                   17,848           25,253        -29.3%
Auto and leases                                            70,919           70,296          0.9%
Whole allowance for credit score losses                 $       138,874   $      161,015   $    -13.8%

PCD:
Business                                        $        11,166           16,405        -31.9%
Mortgage                                                   30,390           26,389         15.2%
Shopper                                                       37               57        -35.1%
Auto and leases                                               405              943        -57.1%
Whole allowance for credit score losses                 $        41,998           

43,794 -4.1%

Allowance for credit score losses abstract
Business                                        $        44,406   $       62,184        -28.6%
Mortgage                                                   47,257           46,076          2.6%
Shopper                                                   17,885           25,310        -29.3%
Auto and leases                                            71,324           71,239          0.1%
Whole allowance for credit score losses                 $       180,872   $      204,809   $    -11.7%

Allowance composition:
Business                                                  24.6%            30.4%
Mortgage                                                    26.1%            22.5%
Shopper                                                     9.9%            12.4%
Auto and leases                                             39.4%            34.8%
                                                           100.0%           100.0%

Allowance protection ratio at finish of interval:
Business                                                   1.9%             2.6%        -26.6%
Mortgage                                                     2.3%             2.0%         17.0%
Shopper                                                     4.8%             6.5%        -26.3%
Auto and leases                                              4.2%             4.6%         -7.0%
                                                            2.82%             3.1%         -8.1%

Allowance protection ratio to non-performing loans:
Business                                                  68.0%            79.3%        -14.2%
Mortgage                                                    88.1%            94.6%         -6.8%
Shopper                                                   811.9%           599.1%         35.5%
Auto and leases                                            591.7%           343.1%         72.5%
                                                           135.8%           134.6%          0.9%




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TABLE 8 – ALLOWANCE FOR CREDIT LOSSES SUMMARY

                            Quarter Ended September 30,         Variance    9-Month Interval Ended       Variance
                                                                                 September 30,
                              2021               2020             %           2021           2020           %
                                                              (In hundreds)
Allowance for credit score
losses:
Steadiness at starting of
interval                   $       191,717    $       232,701       -17.6%   $   204,809    $   116,539        75.7%
Influence of ASC 326
adoption                               -                  -         0.0%             -         89,720      -100.0%
Provision for credit score
losses                           (4,794)             13,182      -136.4%       (6,664)         79,407      -108.4%
Cost-offs                     (16,237)           (18,095)       -10.3%      (44,718)       (71,021)       -37.0%
Recoveries                        10,186              7,525        35.4%        27,445         20,668        32.8%
Steadiness at finish of interval $       180,872    $       235,313       -23.1%   $   180,872    $   235,313   $   -23.1%




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TABLE 9 - NET CREDIT
LOSSES STATISTICS ON
LOAN AND LEASES

                                                                         9-Month Interval Ended
                        Quarter Ended September 30,        Variance           September 30,           Variance
                            2021             2020             %              2021         2020           %
                                                        ({Dollars} in hundreds)
Non-PCD:
Mortgage
Cost-offs          $         (160)    $          (56)       185.7%    $   (1,216)    $     (659)        84.5%
Recoveries                       419                269        55.8%          1,227            527       132.8%
Whole                            259                213        21.6%             11          (132)      -108.3%
Business
Cost-offs                  (7,518)              (298)      2422.8%        (8,238)        (4,566)        80.4%
Recoveries                       558                253       120.6%          1,983          2,407       -17.6%
Whole                        (6,960)               (45)     15366.7%        (6,255)        (2,159)       189.7%
Shopper
Cost-offs                  (2,370)            (5,114)       -53.7%        (9,736)       (15,316)       -36.4%
Recoveries                       894                663        34.8%          2,157          1,750        23.3%
Whole                        (1,476)            (4,451)       -66.8%        (7,579)       (13,566)       -44.1%
Auto and leases
Cost-offs                  (4,989)           (10,123)       -50.7%       (19,242)       (36,476)       -47.2%
Recoveries                     5,874              5,950        -1.3%         17,688         13,566        30.4%
Whole                            885            (4,173)      -121.2%        (1,554)       (22,910)       -93.2%

PCD:
Mortgage
Cost-offs          $       (1,008)    $       (1,677)       -39.9%    $   (5,340)    $   (8,998)       -40.7%
Recoveries                       641                 89       620.2%            971            791        22.8%
Whole                          (367)            (1,588)       -76.9%        (4,369)        (8,207)       -46.8%
Business
Cost-offs                     (68)              (293)       -76.8%          (118)        (3,036)       -96.1%
Recoveries                     1,316                 91      1346.2%          2,183            752       190.3%
Whole                          1,248              (202)      -717.8%          2,065        (2,284)      -190.4%
Shopper
Cost-offs                        -               (61)      -100.0%           (22)          (521)       -95.8%
Recoveries                       219                  -       100.0%            274             92       197.8%
Whole                            219               (61)       100.0%            252          (429)      -158.7%
Auto and leases
Cost-offs                    (124)              (474)       -73.8%          (806)        (1,449)       -44.4%
Recoveries                       265                211        25.6%            962            783        22.9%
Whole                            141              (263)      -153.6%            156          (666)      -123.4%

Whole charge-offs           (16,237)           (18,096)       -10.3%       (44,718)       (71,021)       -37.0%
Whole recoveries              10,186              7,526        35.3%         27,445         20,668        32.8%
Internet charge-offs      $       (6,051)    $      (10,570)       -42.8%    $  (17,273)    $  (50,353)       -65.7%

Internet credit score losses to
common
loans excellent:


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Mortgage                   0.02%         0.24%      -91.08%          0.27%         0.47%      -42.30%
Business                 0.97%         0.04%     2334.35%          0.23%         0.25%       -5.68%
Shopper                   1.26%         3.94%      -68.17%          2.41%         3.90%      -38.17%
Auto and leases           -0.25%         1.17%     -121.19%          0.12%         2.07%      -94.41%
Whole                      0.37%         0.62%      -39.91%          0.35%         0.99%      -64.62%
Recoveries to
charge-offs               62.73%        41.59%       50.84%         61.37%        29.10%      110.90%
Common Loans Held
for Funding
Mortgage             $ 2,047,272   $ 2,325,756       -12.0%    $ 2,145,635   $ 2,368,855        -9.4%
Business             2,360,642     2,484,977        -5.0%      2,402,904     2,403,377         0.0%
Shopper                 400,582       457,620       -12.5%        404,672       477,889       -15.3%
Auto and leases        1,657,378     1,518,669         9.1%      1,612,889     1,521,783         6.0%
Whole                $ 6,465,874   $ 6,787,022        -4.7%    $ 6,566,100   $ 6,771,904        -3.0%



TABLE 10 – NON-PERFORMING ASSETS

                                        September 30,     December 31,    Variance
                                            2021              2020          (%)
                                            ({Dollars} in hundreds)
Non-performing belongings:
Non-PCD
Non-accruing loans
Troubled-Debt Restructuring loans      $        26,586   $       28,297     

-6.0%

Different loans                                     58,537           82,122     

-28.7%

Accruing loans
Troubled-Debt Restructuring loans                8,239            3,411     141.5%
Different loans                                        980              889      10.2%
Whole                                  $        94,342    $     114,719     -17.8%
PCD[1]                                          38,828           37,475       3.6%
Whole non-performing loans             $       133,170    $     152,194     -12.5%
Foreclosed actual property                          13,904           11,596      19.9%
Different repossessed belongings                         1,528            1,816     -15.9%
                                       $       148,602    $     165,606     -10.3%

Non-performing belongings to whole belongings            1.40%            1.69%     

-17.2%

Non-performing belongings to whole capital          14.10%           15.25%     

-7.5%

[1] PCD loans on nonaccrual standing




                                       99
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                                                                           9-Month Interval Ended
                                       Quarter Ended September 30,              September 30,
                                         2021              2020            2021              2020
                                             (In hundreds)                    (In hundreds)
Curiosity that might have been
recorded within the interval if the
loans had not been categorised as
non-accruing loans                   $         634       $       855   $       1,558       $     1,879



TABLE 11 – NON-ACCRUAL LOANS

                                                   September 30,     December 31    Variance
                                                       2021             2020           %
                                                      ({Dollars} in hundreds)
Non-accrual loans:
Non-PCD loans
Business                                        $        28,473   $      41,999     -32.2%
Mortgage                                                   42,392          43,430      -2.4%
Shopper                                                    2,200           4,224     -47.9%
Auto and leasing                                           12,055          20,766     -41.9%
                                                           85,120         110,419     -22.9%
PCD loans
Business                                                 36,798          36,471       0.9%
Mortgage                                                    2,030           1,003     102.4%
Shopper                                                        -               1    -100.0%
                                                           38,828          37,475       3.6%
Whole                                             $       123,948   $     147,894     -16.2%
Non-performing loans composition percentages:
Business                                                  52.7%           53.1%
Mortgage                                                    35.8%           30.0%
Shopper                                                     1.8%            2.9%
Auto and leasing                                             9.7%           14.0%
Whole                                                      100.0%          100.0%
Non-accrual loans ratios:
Non-accrual loans to whole loans                            1.93%           

2.22% -13.1%
Allowance for credit score losses to non-accrual loans 145.93% 138.48% 5.4%



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TABLE 12 – NON-PERFORMING LOANS

                                                  September 30,     December 31,      Variance
                                                      2021              2020             %
                                                            ({Dollars} in hundreds)
Non-performing loans
Non-PCD
Business                                       $        28,472   $       41,999       -32.2%
Mortgage                                                  51,612           47,730         8.1%
Shopper                                                   2,203            4,224       -47.8%
Auto and leases                                           12,055           20,766       -41.9%
Whole                                            $        94,342   $      114,719       -17.8%

PCD
Business                                       $        36,798   $       36,471         0.9%
Mortgage                                                   2,030            1,003       100.0%
Shopper                                                       -                1      -100.0%
Whole                                            $        38,828   $       37,475         3.6%
Whole non-performing loans                       $       133,170   $      152,194       -12.5%

Non-performing loans composition percentages:
Business                                                 49.0%            51.6%
Mortgage                                                   40.3%            32.0%
Shopper                                                    1.7%             2.8%
Auto and leases                                             9.1%            13.6%
                                                          100.0%           100.0%

Non-performing loans to:
Whole loans                                                 2.1%             2.3%        -8.8%
Whole belongings                                                1.3%             1.6%       -18.7%
Whole capital                                              12.6%            14.0%        -9.8%

Non-performing loans with partial charge-offs
to:
Whole loans                                                 0.5%             0.6%        -8.8%
Non-performing loans                                       25.1%            24.8%         1.2%

Different non-performing loans ratios:
Cost-off fee on non-performing loans to
non-performing loans on which charge-offs have            181.2%           151.3%        19.7%
been taken
Allowance for credit score losses to non-performing             181.4%           179.0%         1.3%
loans on which no charge-offs have been taken




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TABLE 13 – LIABILITIES SUMMARY AND COMPOSITION

                                                   September 30,     December 31,    Variance
                                                       2021              2020           %
                                                       ({Dollars} in hundreds)
Deposits:
Non-interest bearing deposits                     $     2,695,993   $    2,259,048      19.3%
NOW accounts                                            2,835,075        2,354,194      20.4%
Financial savings and cash market accounts                       2,378,205        1,944,426      22.3%
Certificates of deposit                                 1,334,324        1,856,400     -28.1%
Whole deposits                                          9,243,597        8,414,068       9.9%
Accrued curiosity payable                                      792            1,572     -49.6%
Whole deposits and accrued curiosity payable             9,244,389        8,415,640       9.8%
Borrowings:
Advances from FHLB                                         62,559           65,561      -4.6%
Subordinated capital notes                                 36,083           36,083       0.0%
Different time period notes                                              375              707     -47.0%
Whole borrowings                                           99,017          102,351      -3.3%
Whole deposits and borrowings                           9,343,406        8,517,991       9.7%

Different Liabilities:
Securities bought however not but obtained                  31,565                -     100.0%
By-product liabilities                                      1,136            1,712     -33.6%
Acceptances excellent                                    24,371           33,349     -26.9%
Lease legal responsibility                                            32,167           32,566      -1.2%
Different liabilities                                         120,555          154,418     -21.9%
Whole liabilities                                 $     9,553,200   $    8,740,036       9.3%
Deposits portfolio composition percentages:
Non-interest bearing deposits                               29.2%           

26.8%

NOW accounts                                                30.7%           

28.0%

Financial savings and cash market accounts                           25.7%            23.1%
Certificates of deposit                                     14.4%            22.1%
                                                           100.0%           100.0%
Borrowings portfolio composition percentages:
Advances from FHLB                                          63.2%            64.1%
Different time period notes                                             0.4%             0.7%
Subordinated capital notes                                  36.4%            35.2%
                                                           100.0%           100.0%
Securities offered below agreements to repurchase
(excluding accrued curiosity)
Quantity excellent at period-end                  $             -   $       

Every day common excellent steadiness                 $             -   $       

50,492

Most excellent steadiness at any month-end      $             -   $      190,000



Liabilities and Funding Sources



As proven in Desk 13 above, at September 30, 2021, OFG's whole liabilities had been
$9.553 billion, 9.3% greater than the $8.740 billion reported at December 31, 2020.
Deposits and borrowings, OFG's funding sources, amounted to $9.343 billion at
September 30, 2021 versus $8.518 billion at December 31, 2020, a 9.7% enhance,
primarily from larger core deposits by $1.352 billion, whereas time deposits,
brokered deposits and borrowings decreased by $509.2 million, $13.6 million and
$3.Three million, respectively.



At September 30, 2021, deposits represented 99% and borrowings represented 1% of
interest-bearing liabilities. At September 30, 2021, deposits, the most important
class of OFG's interest-bearing liabilities, had been $9.244 billion, a rise
of 9.8% from $8.416 billion

                                      102
--------------------------------------------------------------------------------


at December 31, 2020, reflecting larger business deposits from current and
new purchasers and better retail deposits because of elevated liquidity within the
economic system from authorities stimulus.



Borrowings consist primarily of FHLB-NY advances and subordinated capital notes.
The general declines in time deposits, brokered deposits and borrowings are half
of the technique to switch larger value funding with decrease value core deposits.



Stockholders' Fairness



At September 30, 2021, OFG's whole stockholders' fairness was $1.054 billion, a
3.0% lower when in comparison with $1.086 billion at December 31, 2020. This
discount in stockholders' fairness displays lower in most popular inventory of $92.0
million as a result of Collection A, Collection B and Collection D most popular inventory redemptions,
in collected different complete earnings, internet of tax, of $2.Four million, and in
treasury inventory of $37.9 million on account of repurchases of $41.2 million, as a part of
purchase again program of $50 million applied throughout the quarter ended September
30, 2021. Lower was offset by, enhance in authorized surplus of $11.2 million, in
retained earnings of $75.6 million, and extra paid-in capital of $13.2
million. E book worth per share was $21.08 at September 30, 2021 in comparison with
$19.54 at December 31, 2020.



From December 31, 2020 to September 30, 2021, tangible widespread fairness to tangible
whole belongings decreased from 9.00% to eight.86%, leverage capital ratio decreased
from 10.30% to 9.33%, tier 1 risk-based capital ratio decreased from 14.78% to
14.03%, and whole risk-based capital ratio decreased from 16.04% to 15.28%, as a
results of the popular inventory redemptions and inventory repurchase program. Frequent
fairness tier 1 capital ratio elevated from 13.08% to 13.52% from internet earnings
throughout the nine-month interval ended September 30, 2021, partially offset by the
inventory repurchase program.



Regulatory Capital



OFG and the Financial institution are topic to regulatory capital necessities established by
the Federal Reserve Board and the FDIC. The present risk-based capital requirements
relevant to OFG and the Financial institution ("Basel III capital guidelines"), which have been
efficient since January 1, 2015, are primarily based on the ultimate capital framework for
strengthening worldwide capital requirements, often known as Basel III, of the Basel
Committee on Banking Supervision. As of September 30, 2021, the capital ratios
of OFG and the Financial institution proceed to exceed the minimal necessities for being
"well-capitalized" below the Basel III capital guidelines.



On January 1, 2020, the Firm applied CECL utilizing the modified
retrospective method. Consequently, a $39.2 million allowance for credit score losses
was recorded for Non-PCD loans and $0.2 million for unused commitments with the
corresponding adjustment lowering retained earnings, internet of a $13.9 million
deferred tax impact. For extra data, see Observe 1 - Abstract of Important
Accounting Insurance policies to the Consolidated Monetary Statements. On March 27, 2020,
in response to the Covid-19 pandemic, U.S. banking regulators issued an interim
ultimate rule that the Firm adopted to delay for 2 years the preliminary adoption
influence of CECL on regulatory capital, adopted by a three-year transition interval
to section out the combination quantity of the capital profit offered throughout 2020
and 2021 (i.e., a five-year transition interval). In the course of the two-year delay, OFG
will add again to widespread fairness tier 1 ("CET1") capital 100% of the preliminary
adoption influence of CECL plus 25% of the cumulative quarterly modifications within the
allowance for credit score losses (i.e., quarterly transitional quantities). After two
years, beginning on January 1, 2022, the quarterly transitional quantities alongside
with the preliminary adoption influence of CECL might be phased out of CET1 capital over
a three-year interval.



In July 2019, the federal banking regulatory businesses adopted a ultimate rule,
pursuant to the Financial Development and Regulatory Paperwork Discount Act of 1996,
that simplifies for non-advanced approaches banking organizations the regulatory
capital therapy for mortgage servicing belongings ("MSAs") and sure deferred
tax belongings arising from non permanent variations (non permanent distinction DTAs). It
will increase CET1 capital threshold deductions from 10% to 25% and removes the
combination 15% CET1 threshold deduction. Nonetheless, it retains the 250% threat weight
relevant to non-deducted quantities of MSAs and non permanent distinction DTAs. On
January 1, 2020, the Firm elected to early implement the simplifications to
the capital rule.



The chance-based capital ratios introduced in Desk 14, which embrace widespread fairness
tier 1, tier 1 capital, whole capital and leverage capital as of September 30,
2021 and December 31, 2020, are calculated primarily based on the Basel III capital guidelines
associated to the measurement of capital, risk-weighted belongings and common belongings.



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The next are OFG’s consolidated capital ratios below the Basel III capital
guidelines at September 30, 2021 and December 31, 2020:

TABLE 14 – CAPITAL, DIVIDENDS AND STOCK DATA

                                                     September 30,      December 31,     Variance
                                                         2021               2020            %
                                                    ({Dollars} in hundreds, besides per
                                                               share knowledge)
Capital knowledge:
Stockholders' fairness                                $     1,053,665    $     1,085,975      -3.0%
Regulatory Capital Ratios knowledge:
Frequent fairness tier 1 capital ratio                           13.52%             13.08%       3.4%
Minimal widespread fairness tier 1 capital ratio required           4.50%              4.50%       0.0%
Precise widespread fairness tier 1 capital                 $       931,885            894,075       4.2%
Minimal widespread fairness tier 1 capital required       $       310,196            307,703       0.8%
Minimal capital conservation buffer required (2.5%) $       172,331            170,946       0.8%
Extra over regulatory requirement                  $       449,357            415,426       8.2%
Danger-weighted belongings                                $     6,893,254          6,837,846       0.8%
Tier 1 risk-based capital ratio                              14.03%             14.78%      -5.1%
Minimal tier 1 risk-based capital ratio required              6.00%              6.00%       0.0%
Precise tier 1 risk-based capital                    $       966,885    $     1,010,945      -4.4%
Minimal tier 1 risk-based capital required          $       413,595    $       410,271       0.8%
Minimal capital conservation buffer required (2.5%) $       172,331            170,946       0.8%
Extra over regulatory requirement                  $       380,959    $       429,728     -11.3%
Danger-weighted belongings                                $     6,893,254    $     6,837,846       0.8%
Whole risk-based capital ratio                               15.28%             16.04%      -4.7%
Minimal whole risk-based capital ratio required               8.00%              8.00%       0.0%
Precise whole risk-based capital                     $     1,053,185    $     1,096,766      -4.0%
Minimal whole risk-based capital required           $       551,460    $       547,028       0.8%
Minimal capital conservation buffer required (2.5%) $       172,331            170,946       0.8%
Extra over regulatory requirement                  $       329,394    $       378,972     -13.1%
Danger-weighted belongings                                $     6,893,254    $     6,837,846       0.8%
Leverage capital ratio                                        9.33%             10.30%      -9.5%
Minimal leverage capital ratio required                       4.00%              4.00%       0.0%
Precise tier 1 capital                               $       966,885    $     1,010,945      -4.4%
Minimal tier 1 capital required                     $       414,708    $       392,424       5.7%
Extra over regulatory requirement                  $       552,177    $       618,521     -10.7%
Tangible widespread fairness to whole belongings                        8.76%              8.88%      -1.4%
Tangible widespread fairness to risk-weighted belongings               13.48%             12.75%       5.7%
Whole fairness to whole belongings                                  9.93%             11.05%     -10.1%
Whole fairness to risk-weighted belongings                         15.29%             15.88%      -3.8%
Inventory knowledge:
Excellent widespread shares                                49,977,236         51,387,071      -2.7%
E book worth per widespread share                         $         21.08    $         19.54       7.9%
Tangible e-book worth per widespread share                $         18.59    $         16.97       9.5%
Market value at finish of interval                       $         25.22    $         18.54      36.0%
Market capitalization at finish of interval              $     1,260,426    $       952,716      32.3%




                                      104
--------------------------------------------------------------------------------

The next desk presents a reconciliation of OFG’s whole stockholders’
fairness to tangible widespread fairness and whole belongings to tangible belongings at
September 30, 2021 and December 31, 2020:


                                                            September 30,      December 31,
                                                                2021               2020
                                                            (In hundreds, besides share or per
                                                                    share data)
Whole stockholders' fairness                                 $     1,053,665    $     1,085,975
Most well-liked inventory                                                          -           (92,000)
Most well-liked inventory issuance prices                                           -             10,130
Goodwill                                                          (86,069)           (86,069)
Core deposit intangible                                           (29,468)           (34,983)
Buyer relationship intangible                                   (8,934)  

(10,629)

Different intangibles                                                    (143)              (284)
Whole tangible widespread fairness (non-GAAP)                    $       929,051    $       872,140
Whole belongings                                                    10,606,865          9,826,011
Goodwill                                                          (86,069)           (86,069)
Core deposit intangible                                           (29,468)           (34,983)
Buyer relationship intangible                                   (8,934)           (10,629)
Different intangibles                                                    (143)              (284)
Whole tangible belongings                                      $    10,482,251    $     9,694,046
Tangible widespread fairness to tangible belongings                            8.86%              9.00%
Frequent shares excellent at finish of interval                      49,977,236  

51,387,071

Tangible e-book worth per widespread share                       $         18.59    $         16.97




The tangible widespread fairness ratio and tangible e-book worth per widespread share are
non-GAAP measures and, in contrast to tier 1 capital and customary fairness tier 1 capital,
should not codified within the federal banking rules. Administration and lots of inventory
analysts use the tangible widespread fairness ratio and tangible e-book worth per widespread
share along with extra conventional financial institution capital ratios to match the
capital adequacy of banking organizations. Neither tangible widespread fairness nor
tangible belongings or associated measures must be thought-about in isolation or as a
substitute for stockholders' fairness, whole belongings or another measure
calculated in accordance with GAAP. Furthermore, the style during which OFG calculates
its tangible widespread fairness, tangible belongings and another associated measures could
differ from that of different firms reporting measures with comparable names.



Non-GAAP monetary measures have inherent limitations, should not required to be
uniformly utilized, and should not audited. To mitigate these limitations, OFG has
procedures in place to calculate these measures utilizing the suitable GAAP or
regulatory parts. Though these non-GAAP monetary measures are steadily
utilized by stakeholders within the analysis of an organization, they've limitations as
analytical instruments and shouldn't be thought-about in isolation or instead
for analyses of outcomes as reported below GAAP.



                                      105

--------------------------------------------------------------------------------


The next desk presents OFG's capital adequacy data below the Basel
III capital guidelines:



                                                   September 30,     December 31,    Variance
                                                       2021              2020           %
                                                       ({Dollars} in hundreds)
Danger-based capital:
Frequent fairness tier 1 capital                      $       931,885   $      894,075       4.2%
Extra tier 1 capital                                  35,000          116,870     -70.1%
Tier 1 capital                                            966,885        1,010,945      -4.4%
Extra Tier 2 capital                                  86,300           85,820       0.6%
Whole risk-based capital                          $     1,053,185   $    1,096,765      -4.0%
Danger-weighted belongings:
Steadiness sheet gadgets                               $     6,312,427   $    6,338,524      -0.4%
Off-balance sheet gadgets                                   580,827          499,322      16.3%
Whole risk-weighted belongings                        $     6,893,254   $    6,837,846       0.8%
Ratios:
Frequent fairness tier 1 capital (minimal required,
together with capital conservation buffer - 7%)                13.52%           13.08%       3.4%
Tier 1 capital (minimal required, together with
capital conservation buffer - 8.5%)                        14.03%           14.78%      -5.1%
Whole capital (minimal required, together with
capital conservation buffer - 10.5%)                       15.28%           16.04%      -4.7%
Leverage ratio (minimal required - 4%)                      9.33%           10.30%      -9.4%
Fairness to belongings                                            9.93%           11.05%     -10.1%
Tangible widespread fairness to belongings                            8.76%            8.88%      -1.4%




                                      106
--------------------------------------------------------------------------------


The Financial institution is taken into account "nicely capitalized" below the regulatory framework for
immediate corrective motion. The desk beneath reveals the Financial institution's regulatory capital
ratios at September 30, 2021 and December 31, 2020:



                                                        September 30,     December 31,    Variance
                                                            2021              2020           %
                                                            ({Dollars} in hundreds)
Oriental Financial institution Regulatory Capital Ratios:
Frequent Fairness Tier 1 Capital to Danger-Weighted Belongings            13.45%           14.06%      -4.3%
Precise widespread fairness tier 1 capital                    $       921,975   $      956,845      -3.6%
Minimal capital requirement (4.5%)                     $       308,528   $      306,206       0.8%
Minimal capital conservation buffer requirement (2.5%) $       171,404   $      170,114       0.8%
Minimal to be nicely capitalized (6.5%)                  $       445,651   $      442,297       0.8%
Tier 1 Capital to Danger-Weighted Belongings                          13.45%           14.06%      -4.3%
Precise tier 1 risk-based capital                       $       921,975   $      956,845      -3.6%
Minimal capital requirement (6%)                       $       411,370   $      408,274       0.8%
Minimal capital conservation buffer requirement (2.5%) $       171,404   $      170,114       0.8%
Minimal to be nicely capitalized (8%)                    $       548,493   $      544,366       0.8%
Whole Capital to Danger-Weighted Belongings                           14.70%           15.32%      -4.0%
Precise whole risk-based capital                        $     1,007,817   $    1,042,255      -3.3%
Minimal capital requirement (8%)                       $       548,493   $      544,366       0.8%
Minimal capital conservation buffer requirement (2.5%) $       171,404   $      170,114       0.8%
Minimal to be nicely capitalized (10%)                   $       685,617   $      680,457       0.8%
Whole Tier 1 Capital to Common Whole Belongings                     8.96%            9.81%      -8.7%
Precise tier 1 capital                                  $       921,975   $      956,845      -3.6%
Minimal capital requirement (4%)                       $       411,478   $      390,304       5.4%
Minimal to be nicely capitalized (5%)                    $       514,348   $      487,879       5.4%




OFG's widespread inventory is traded on the New York Inventory Alternate ("NYSE") below the
image "OFG." At September 30, 2021 and December 31, 2020, OFG's market
capitalization for its excellent widespread inventory was $1.260 billion ($25.22 per
share) and $952.7 million ($18.54 per share), respectively.



                                      107

--------------------------------------------------------------------------------

The next desk offers the excessive and low costs and dividends per share of
OFG’s widespread inventory for every quarter of the final three calendar years:



                                          Money
                         Worth          Dividend
                    Excessive       Low     Per share
2021
September 30, 2021 $ 25.66   $ 20.04   $     0.12
June 30, 2021      $ 25.14   $ 21.61   $     0.08
March 31, 2021     $ 22.93   $ 16.48   $     0.08
2020
December 31, 2020  $ 18.54   $ 12.59   $     0.07
September 30, 2020 $ 14.35   $ 12.12   $     0.07
June 30, 2020      $ 15.10   $  9.38   $     0.07
March 31, 2020     $ 23.50   $  9.32   $     0.07
2019
December 31, 2019  $ 23.61   $ 20.00   $     0.07
September 30, 2019 $ 24.20   $ 19.84   $     0.07
June 30, 2019      $ 23.77   $ 18.78   $     0.07
March 31, 2019     $ 21.24   $ 16.37   $     0.07




In July 2021, the Firm introduced the approval by the Board of Administrators of a
inventory repurchase program to buy an extra $50 million of the Firm's
widespread inventory within the open market.



Underneath OFG's inventory repurchase program in impact at September 30, 2021, it was
approved to buy within the open market as much as $50.Zero million of its excellent
shares of widespread inventory. The shares of widespread inventory repurchased are to be held by
OFG as treasury shares. In the course of the nine-month interval ended September 30, 2021,
OFG repurchased 1,684,921 shares below this program for a complete of $40.2
million, at a mean value of $23.83 per share. In the course of the nine-month interval
ended September 30, 2020, OFG repurchased 175,000 shares below this program for
a complete of $2.2 million, at a mean value of $12.69 per share. OFG didn't
repurchase any shares of its widespread inventory within the quarters and nine-month intervals
ended on September 30, 2021 and 2020, aside from by its publicly introduced
inventory repurchase program.



At September 30, 2021, the variety of shares which will but be bought below such
program is estimated at 390,652 and was calculated by dividing the remaining
steadiness of $9.Eight million by $25.22 (closing value of OFG's widespread inventory at
September 30, 2021).



Influence of Inflation and Altering Costs



The monetary statements and associated knowledge introduced herein (apart from sure
non-GAAP measures as beforehand indicated) have been ready in accordance with
GAAP which require the measurement of monetary place and working outcomes
by way of historic {dollars} with out contemplating modifications within the relative
buying energy of cash over time on account of inflation.



Not like most industrial firms, nearly the entire belongings and liabilities of
a monetary establishment are financial in nature. Consequently, rates of interest have
a extra important influence on a monetary establishment's efficiency than the
results of basic ranges of inflation. Rates of interest don't essentially transfer
in the identical course or with the identical magnitude as the costs of products and
providers since such costs are affected by inflation.

                                      108

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