Exhibit 99

OFG Bancorp Reports 4Q19 & 2019 Results;
Updates on Scotia PR & USVI Acquisition

SAN JUAN, Puerto Rico, January 29, 2020 – OFG Bancorp (NYSE: OFG) today reported results for 4Q19 and 2019, reflecting the previously announced acquisition of the Puerto Rico and U.S. Virgin Islands operations of The Bank of Nova Scotia (Scotiabank).

Due to the acquisition closing occurring at year-end, OFG’s 4Q19 and 2019 income statements and credit quality metrics reflect pre-acquisition operations as well as acquisition related expenses, while the December 31, 2019 balance sheet and capital metrics reflect the newly acquired assets and liabilities.

4Q19

· OFG reported a net loss to shareholders of $2.3 million, or ($0.04) per share, which included $21.5 million in acquisition related merger and restructuring charges and $6.6 million in additional provision for non-performing loans the Company decided to sell in 3Q19.

· 4Q19 compares to 3Q19 net income available to shareholders of $5.8 million, or $0.11 per share fully diluted, and 4Q18 net income of $23.1 million, or $0.45 per share.

· 4Q19 core operations were strong, with net interest margin of 5.35% and loan production of $404.9 million. Most credit quality metrics improved.

· During the quarter, OFG obtained all regulatory approvals, developed an integration plan, and closed on the $560.0 million cash acquisition (excluding settlement amounts), adding $2.2 billion in net loans and $3.0 billion in low cost, core deposits.

· Acquisition related merger and restructuring charges, core deposit intangible of $41.5 million, no goodwill, and tangible book value dilution of 6% were all lower than originally assumed. Loan marks were in line at an average of 6.44%.

2019

· OFG for the year ended 2019 reported net income available to shareholders of $47.7 million, or $0.92 per share fully diluted, which included acquisition related merger and restructuring charges and increased provision from the sale of non-performing loans (NPLs).

· On a non-GAAP basis*, adjusted net income available to shareholders was $83.8 million or $1.62 per share, which compares favorably to 2018 net income of $72.4 million, or $1.52 per share.

· OFG ended the year with book value of $18.75 per common share, up 4.8% from a year ago; tangible book value of $15.97 per common share, down 1.1% as a result of the acquisition; total stockholders’ equity of $1.05 billion, up 4.6%; and record total assets of $9.3 billion, up 40.9%.

Conference Call

A conference call to discuss 4Q19 results, outlook and related matters will be held today at 10:00 AM Eastern Time. Phone (888) 562-3356 or (973) 582-2700. Use conference ID 827-3089. The call can also be accessed live on www.ofgbancorp.com. Webcast replay will be available shortly thereafter.

CEO Comment

José Rafael Fernández, President, Chief Executive Officer, and Vice Chairman of the Board, said: “We ended 2019 on a high note, closing the Scotiabank acquisition at year-end as originally anticipated. We welcome our new team members and clients in Puerto Rico and U.S. Virgin Islands. We are committed to providing excellent career opportunities to our new employees and excellent service, products, and technology to our new clients. We’re excited about the prospects for future growth.

“I also want to thank all our staff for their exceptional work, some despite their own difficult personal circumstances, in assisting earthquake evacuees. As early responders on the ground in affected areas, Oriental teams helped organized shelters and relief centers. In coordination and collaboration with several of our clients, we provided more than 4,000 meals, bottled water, batteries, electric fans and other essentials. We also arranged access to teams of doctors and structural engineers. The quick response would not have been possible without our compassionate staff and clients. We are extremely proud of our commitment to the communities we serve.

“Turning back to business, 4Q19 was a very busy quarter, closing on the acquisition while continuing to build our existing business. Operationally, we had a strong quarter. We effectively managed the transition to slightly lower yields in the commercial loan portfolio, reflecting FRB rate cuts, with our pro-active effort to reduce high cost wholesale funding. Going forward, our funding mix will improve even further with our larger core deposit base.

“We are well positioned for 2020. The acquisition enabled us to more effectively use our excess capital and end 2019 with a record $6.6 billion in loans and a record $7.7 billion in deposits, which increases our ability to generate future growth. We are moving fast, starting the year focused on integration and loan production, and look forward to reporting our progress in the quarters ahead.”

Current Expected Credit Losses (CECL)

The following updates the model development process for CECL Day 1 implementation.

· For the originated book (58% of total gross loans): We are estimating an increase in the current allowance of approximately $21 million to $25 million or 25% to 30%.

· For the Scotiabank non-PCD acquired book (12% of total gross loans): Based on the fair market value of the portfolio, we are estimating the non-PCD allowance will be approximately $16 million to $22 million.

· For PCD loans, including BBVA and Eurobank acquired book plus the recently acquired Scotiabank (30% of total gross loans): The adjustment will be made through the allowance and loan balances with no impact in capital.

The final impact of CECL will depend on the circumstances at the date of adoption such as asset quality, macro-economic conditions and economic perspective, and continued refinement in 1Q20.

Income Statement

Unless otherwise noted, the following compares data for the fourth quarter 2019 to the fourth quarter 2018.

· Total interest Income fell $3.9 million, to $91.2 million, primarily due to sales of mortgage backed securities totaling $350 million in 2Q19 and $322 million in 3Q19 to free up liquidity to fund the Scotiabank acquisition. Interest income from originated loans increased $2.9 million, reflecting loan growth (+4.8%) and lower yield (-6 basis points). Interest income from acquired loans declined $2.3 million due to continued pay downs of loans. Interest income from investment securities declined $5.6 million, while interest income increased $1.1 million from higher cash balances.

· Total interest expense fell $1.1 million, to $12.0 million, primarily reflecting a more favorable change in the funding mix. Core deposit costs increased $1.6 million due to higher rate (+12 basis points) from a shift to longer-term time deposits. Brokered deposit costs fell $1.2 million primarily due to lower average balances (-49.1%). Borrowing costs fell $1.5 million due to lower average balances (-44.0%) and lower rate (-19 basis points).

· Net Interest Margin, excluding cost recoveries, decreased 6 basis points to 5.28%, reflecting effective management of the interest yield and expense mix.

· Total provision for Loan and Lease Losses increased $11.8 million, to $23.1 million, which includes the previously mentioned $6.6 million for additional provision for NPLs sold. 4Q19 provision also included $3.6 million allowance for the remaining balance of an originated commercial loan, pending insurance recoveries, on a property destroyed in a fire.

· Total Banking and Wealth Management Revenues were level at $19.2 million. Higher mortgage banking revenues offset lower wealth management and banking service revenues.

· Total Non-Interest Expenses increased $26.6 million to $78.4 million, which includes the previously mentioned $21.5 million merger and restructuring charges. 4Q19 expenses also included $2.8 million in contingent legal reserves and operational losses, and $1.5 million in incremental health insurance expenses and technology development expenses.

· Effective Tax Rate was 28.5% in 2019 compared to 36.4% in 2018. The decline was primarily due a higher proportion of exempt income and capital gains at lower rates in 2019.

Balance Sheet

Unless otherwise noted, the following compares data at December 31, 2019 to December 31, 2018.

· Total Loans increased 49.9% or $2.2 billion to $6.6 billion. Originated loans increased 4.2%, or $152.2 million. Acquired BBVA and Eurobank loans declined 21.7%, or $171.6 million. Acquired Scotiabank loans totaled $2.2 billion. Compared to September 30, 2019, originated loans increased 2.4%, or $87.8 million, and acquired BBVA and Eurobank loans declined 7.7%, or $50.3 million. Acquired BBVA and Eurobank loans declined year over year and on a sequential quarter basis due to sales of non-performing loans in 3Q19 and 4Q19 and continued pay downs.

· Loan Production totaled $404.9 million compared to $323.0 million in the year-ago quarter. 4Q19 production was the highest since the post-hurricane comeback quarter in 2Q18. Auto and consumer lending remained strong at $110.2 million and $41.9 million, respectively, while residential mortgage lending totaled $23.7 million. Commercial lending at $229.1 million primarily reflected the closing of large and middle market corporate loans as well as continued growth of small business customers.

· Cash and Cash Equivalents increased 89.5%, or $402.7 million, to $852.8 million, which included $626.9 million from the Scotiabank acquisition. Compared to September 30, 2019, cash declined 11.4%, or $110.1 million.

· Total Investments declined 15.0%, or $191.8 million, to $1.1 billion, which included $576.2 million from the Scotiabank acquisition. Compared to September 30, 2019, investments increased 105.4%, or $558.1 million.

· Customer Deposits (excluding brokered) increased 70.1% or $3.1 billion to $7.5 billion, which included $3.0 billion from the Scotiabank acquisition. Compared to September 30, 2019, deposits increased 62.4% or $2.9 billion.

· Brokered deposits declined 53.6%, or $281.6 million, to $243.5 million. Compared to September 30, 2019, brokered deposits declined 15.6%, or $44.9 million. The declines reflect the maturity of brokered CDs. The acquisition did not add any brokered CDs.

· Borrowings declined 46.4%, or $264.9 million, to $305.6 million. Compared to September 30, 2019, borrowings declined $0.4 million. The declines reflect the repayment of repurchase agreement funding. The acquisition did not add any borrowings.

· Total stockholders’ equity increased 4.6% or $45.9 million to $1.05 billion. Compared to September 30, 2019, stockholders’ equity declined 0.3%. The year over year increase reflects earnings growth and reduced other comprehensive loss.

Credit Quality

Unless otherwise noted, the following compares data on the originated loan portfolio at December 31, 2019 to December 31, 2018.

· Non-performing loan rate at 2.07% fell 121 basis points. Allowance for loan and lease losses declined 12.3%, to $83.5 million. As a percentage of loans, ALLL at 2.15% fell 39 basis points. The decrease in the NPL rate and ALLL reflects the previously mentioned sales of NPLs.

· Early and total delinquency rates, at 3.69% and 5.31%, were up 35 and down 105 basis points, respectively.

· Net Charge-Offs increased $3.1 million to $14.0 million. As a percentage of loans, the NCOs increased 27 basis points to 1.45%. NCOs reflect increases from auto and consumer loans, partially offset by declines in mortgage and commercial loans.

Capital Position

· Because of the effective use of excess capital in the Scotiabank acquisition, OFG’s capital ratios have now become more comparable to similar sized peers while continuing to be significantly above regulatory requirements for a well-capitalized institution.

· At December 31, 2019, the Leverage ratio was 13.99%, Common Equity Tier 1 capital ratio was 10.78%, Tier 1 Risk-Based Capital ratio was 12.50%, and Total Risk-Based Capital ratio was 13.77%. Tangible Common Equity ratio was 8.97%.

Financial Supplement & Conference Call Presentation

OFG’s Financial Supplement, with full financial tables for the quarter ended December 31, 2019, and 4Q19 Conference Call Presentation, can be found on the Webcasts, Presentations & Other Files page, on OFG’s Investor Relations website at www.ofgbancorp.com.

*Non-GAAP Financial Measures

In addition to our financial information presented in accordance with GAAP, management uses certain “non-GAAP financial measures” within the meaning of the SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. See Tables 9-1, 9-2 and 10 in OFG’s above-mentioned Financial Supplement for reconciliation of GAAP to non-GAAP Measures and Calculations. OFG has attached to this news release Table 10: “Reconciliation of GAAP to Non-GAAP with adjustments to exclude the impact of significant events” for the year ended December 31, 2019.

Forward Looking Statements

The information included in this document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and involve certain risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements.

Factors that might cause such a difference include, but are not limited to (i) the rate of growth in the economy and employment levels, as well as general business and economic conditions; (ii) changes in interest rates, as well as the magnitude of such changes; (iii) changes to the financial condition of the government of Puerto Rico; (iv) amendments to the fiscal plan approved by the Financial Oversight and Management Board of Puerto Rico; (v) determinations in the court-supervised debt-restructuring process under Title III of PROMESA for the Puerto Rico government and all of its agencies, including some of its public corporations; (vi) the amount of government, private and philanthropic financial assistance for the reconstruction of Puerto Rico’s critical infrastructure, which suffered catastrophic damages caused by hurricane Maria; (vii) the pace and magnitude of Puerto Rico’s economic recovery; (viii) the potential impact of damages from future hurricanes and natural disasters in Puerto Rico; (ix) the fiscal and monetary policies of the federal government and its agencies; (x) changes in federal bank regulatory and supervisory policies, including required levels of capital; (xi) the relative strength or weakness of the commercial and consumer credit sectors and the real estate market in Puerto Rico; (xii) the performance of the stock and bond markets; (xiii) competition in the financial services industry; and (xiv) possible legislative, tax or regulatory changes.

For a discussion of such factors and certain risks and uncertainties to which OFG is subject, see OFG’s annual report on Form 10-K for the year ended December 31, 2018, as well as its other filings with the U.S. Securities and Exchange Commission. Other than to the extent required by applicable law, including the requirements of applicable securities laws, OFG assumes no obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

About OFG Bancorp

Now in its 56^th year in business, OFG Bancorp is a diversified financial holding company that operates under U.S., Puerto Rico and U.S. Virgin Islands banking laws and regulations. Its three principal subsidiaries, Oriental Bank, Oriental Financial Services and Oriental Insurance, provide a wide range of retail and commercial banking, lending and wealth management products, services and technology, primarily in Puerto Rico and U.S. Virgin Islands. Visit us at Error! Hyperlink reference not valid.www.ofgbancorp.com.

# # #

Contacts

Puerto Rico & USVI: Idalis Montalvo (idalis.montalvo@orientalbank.com) at (787) 777-2847

US: Gary Fishman (gfishman@ofgbancorp.com) and Steven Anreder (sanreder@ofgbancorp.com) at (212) 532-3232

a) During 2Q 2019 and 3Q 2019, the Company sold $350 million and $322 million available-for-sale mortgage-backed securities, respectively, and recognized a gain in the sale of $4.8 million and $3.5 million, respectively.

b) During 2019, the Company sold mostly non-performing loans, increasing the provision by $8.8 million in 2Q2019, $38.9 million in 3Q2019, and $6.6 million in 4Q2019.

c) During 3Q 2019, the Company received $2.4 million proceeds from the sale of fully charged-off originated auto and consumer loans.

d) During 2Q 2019, the Company entered into an agreement with Scotiabank to acquire its Puerto Rico and US Virgin Islands operations, subject to customary closing conditions. On December 31, 2019, the Company completed the acquisition. During 2Q2019, 3Q2019 and 4Q2019, $1.0 million, $1.6 million and $27.2 million, respectively, were incurred in related merger and restructuring charges.

e) During 3Q 2019, the Company recognized an FDIC insurance assessment credit received amounting to $1.5 million.

f) During 3Q 2019, the Company received an additional $1 million credit from Puerto Rico Treasury on employee retention during hurricane Maria.

g) During 3Q 2019, the Company had a reduction in provision for loan losses of $4.5 million as a result of the adjustment to the qualitative factor related to sustained favorable macroeconomic conditions in Puerto Rico.

h) On December 31, 2019, the Company acquired Scotiabank's Puerto Rico and USVI operations for $560 million (excluding settlement amounts), which approximated the fair value of net assets acquired. The determination of fair value may necessitate the use of one year measurement period to adequately analyze all the factors used as of the acquisition date.

Click here to enter text.


OFG Bancorp
Financial Supplement


The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our December 31, 2019 Annual Report on Form 10-K once it is filed with the Securities and Exchange Commission.


Table of Contents
			Pages

	OFG Bancorp (Consolidated Financial Information)
	Table 1:	Financial and Statistical Summary - Consolidated		2
	Table 2:	Consolidated Statements of Operations		3
	Table 3:	Consolidated Statements of Financial Condition		4
	Table 4:	Information on Loan Portfolio and Production		5
	Table 5:	Average Balances, Net Interest Income and Net Interest Margin		6-7
	Table 6:	Loan Information and Performance Statistics (Excluding Acquired Loans)		8-9
	Table 7:	Allowance for Loan and Lease Losses		10
	Table 8:	Accretable Yield on Loans Accounted for Under ASC 310-30 (Loans Acquired
		with Deteriorated Credit Quality, Including those by Analogy)		11
	Table 9:	Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory
		Capital		12-13
	Table 10:	Reconciliation of GAAP to Non-GAAP with adjustments to exclude the impact
		of quarter-specific items		14
	Table 11:	Notes to Financial Summary, Selected Metrics, Loans, and Consolidated
		Financial Statements (Tables 1-10)		15

Click here to enter text.

OFG Bancorp (NYSE: OFG)
Table 1: Financial and Statistical Summary - Consolidated
		2019			2019			2019			2019		2018		2019			2018
(Dollars in thousands, except per share data) (unaudited)		Q4			Q3			Q2			Q1		Q4		YTD			YTD
Earnings
Net interest income		$	79,209		$	80,710		$	81,085		$	81,789	$	82,035	$	322,793		$	315,894
Non-interest income, net (core)	(2)		19,196			18,542			18,074			17,553		19,260		73,365			74,339
Non-interest expense			78,356	(a)		50,727			51,452			52,152		51,719		232,687	(a)		207,081
Pre-provision net revenues	(21)		20,564			52,161			52,581			47,293		54,574		172,599			188,908
Provision for loan and lease losses			23,068	(c)		43,770	(b)(c)(d)		17,705	(d)		12,249		11,300		96,792	(b)(c)(d)		56,108
Net (loss) income before income taxes			(2,504)			8,391			34,876			35,044		43,274		75,807			132,800
Income tax (benefit) expense			(1,861)			1,008			10,897			11,574		18,530		21,618			48,390
Net (loss) income		$	(643)	(a)	$	7,383		$	23,979		$	23,470	$	24,744	$	54,189	(a)	$	84,410
Common Share Statistics
(Loss) earnings per common share - basic	(3)	$	(0.04)	(a)	$	0.11		$	0.44		$	0.43	$	0.47	$	0.93	(a)	$	1.59
(Loss) earnings per common share - diluted	(4)	$	(0.04)	(a)	$	0.11		$	0.43		$	0.42	$	0.45	$	0.92	(a)	$	1.52
Average common shares outstanding			51,360			51,345			51,330			51,305		49,628		51,335			45,400
Average common shares outstanding and equivalents			51,791			51,772			51,680			51,626		51,602		51,719			51,349
Cash dividends per common share		$	0.07		$	0.07		$	0.07		$	0.07	$	0.07	$	0.28		$	0.25
Book value per common share (period end)		$	18.75		$	18.84		$	18.76		$	18.30	$	17.90	$	18.75		$	17.90
Tangible book value per common share (period end)	(5)	$	15.97		$	17.11		$	17.03		$	16.56	$	16.15	$	15.97		$	16.15
Balance Sheet (Average Balances)
Loans	(6)	$	4,486,851		$	4,539,046		$	4,514,030		$	4,504,725	$	4,460,002	$	4,511,190		$	4,348,135
Interest-earning assets			5,873,159			5,981,757			6,034,338			6,152,202		6,170,455		6,009,521			5,985,524
Total assets			6,325,334			6,433,658			6,496,423			6,605,328		6,619,026		6,464,329			6,425,811
Total deposits			4,834,597			4,921,259			4,880,114			4,890,630		4,987,446		4,881,605			4,889,584
Interest-bearing deposits			3,723,751			3,827,212			3,782,211			3,791,083		3,866,842		3,781,006			3,811,406
Borrowings			304,365			340,194			459,802			562,152		543,920		415,712			466,051
Stockholders' equity			1,062,724			1,061,541			1,037,057			1,017,546		983,015		1,044,882			967,437
Common stockholders' equity			980,854			979,671			955,187			935,676		881,971		963,012			817,907
Performance Metrics
Net interest margin	(7)		5.35%			5.35%			5.39%			5.39%		5.27%		5.37%			5.28%
Return on average assets	(8)		-0.04%			0.46%			1.48%			1.42%		1.50%		0.84%			1.31%
Return on average tangible common stockholders' equity	(9)		-1.02%			2.58%			10.32%			10.32%		11.67%		5.45%			9.95%
Efficiency ratio	(10)		79.63%			51.11%			51.89%			52.50%		51.06%		58.74%			53.07%
Full-time equivalent employees, period end			2,431			1,436			1,417			1,394		1,392		2,431			1,392
Credit Quality Metrics
Excluding acquired loans:	(1)
Allowance for loan and lease losses		$	83,470		$	79,089		$	89,952		$	94,035	$	95,188	$	83,470		$	95,188
Allowance as a % of loans held for investment			2.15%			2.09%			2.35%			2.51%		2.54%		2.15%			2.54%
Net charge-offs		$	14,006		$	34,427	(b)(c)(d)	$	12,564		$	12,486	$	10,885	$	73,483	(b)(c)(d)	$	49,580
Net charge-off rate	(11)		1.45%			3.57%	(b)(c)(d)		1.32%			1.33%		1.18%		1.63%	(b)(c)(d)		1.14%
Early delinquency rate (30 - 89 days past due)			3.69%			3.64%			3.51%			3.61%		3.34%		3.69%			3.34%
Total delinquency rate (30 days and over)			5.31%			5.39%			6.07%			6.33%		6.36%		5.31%			6.36%
Capital Ratios (Non-GAAP)	(12)
Leverage ratio			13.99%			15.41%			15.20%			14.64%		14.22%		13.99%			14.22%
Common equity Tier 1 capital ratio			10.78%			17.98%			17.48%			17.09%		16.78%		10.78%			16.78%
Tier 1 risk-based capital ratio			12.50%			20.43%			19.87%			19.49%		19.20%		12.50%			19.20%
Total risk-based capital ratio			13.77%			21.71%			21.14%			20.77%		20.48%		13.77%			20.48%
Tangible common equity ("TCE") ratio			8.97%			14.07%			13.71%			13.05%		12.76%		8.97%			12.76%

(a) On December 31, 2019, the Company acquired Scotiabank's Puerto Rico and USVI operations, incurring in merger and restructuring charges of $21.5 million during 4Q 2019.
(b) During 3Q 2019, the Company received $2.4 million proceeds from the sale of fully charged-off originated auto and consumer loans.
(c) During 3Q 2019, the Company decided to sell mostly non-performing loans, increasing the provision by $37.2 million. Originated loans that were transferred to held-for-sale amounted to $25.3 million at September 30, 2019, the remaining were purchased credit impaired loans. Loans were sold during 4Q 2019, with an additional increase in the provision of $6.6 million.
(d) During 2Q 2019, the Company decided to sell mostly non-performing mortgage loans increasing the provision by $8.8 million. Most of these loans were sold in 3Q 2019, increasing the provision by an additional $1.8 million.

2

Click here to enter text.

OFG Bancorp (NYSE: OFG)
Table 2: Consolidated Statements of Operations
		Quarter Ended														Year Ended
		December 31,			September 30,			June 30,			March 31,			December 31,		December 31,			December 31,
(Dollars in thousands, except per share data) (unaudited)		2019			2019			2019			2019			2018		2019			2018
Interest income:
Loans	(1)
Non-acquired loans		$	73,600		$	74,303		$	72,978		$	71,298		$	70,747	$	292,179		$	254,047
Acquired BBVAPR loans			8,969			9,090			9,603			10,247			10,935		37,909			54,500
Acquired Eurobank loans			2,335			2,379			2,499			2,574			2,642		9,787			12,834
Total interest income from loans			84,904			85,772			85,080			84,119			84,324		339,875			321,381
Investment securities			6,271			7,883			9,175			10,591			10,782		33,920			39,038
Total interest income			91,175			93,655			94,255			94,710			95,106		373,795			360,419
Interest expense:
Deposits
Core deposits			7,957			8,256			7,465			6,214			6,396		29,892			23,202
Brokered deposits			1,804			2,298			2,526			2,835			3,003		9,463			9,751
Total deposits			9,761			10,554			9,991			9,049			9,399		39,355			32,953
Borrowings			2,205			2,391			3,179			3,872			3,672		11,647			11,572
Total interest expense			11,966			12,945			13,170			12,921			13,071		51,002			44,525
Net interest income			79,209			80,710			81,085			81,789			82,035		322,793			315,894
Provision for loan and lease losses, excluding acquired loans	(1)		18,387			23,564	(c)(d)(e)		8,481			11,333			10,842		61,765			52,055
Provision (recapture) for acquired BBVAPR loan and lease losses	(1)		4,526			19,135	(c)(d)(e)		7,446	(e)		1,567			(998)		32,674			1,487
Provision for acquired Eurobank loan and lease losses	(1)		155			1,071	(d)(e)		1,778	(e)		(651)	(f)		1,456		2,353			2,566
Total provision for loan and lease losses, net			23,068			43,770			17,705			12,249			11,300		96,792			56,108
Net interest income after provision for loan and lease losses			56,141			36,940			63,380			69,540			70,735		226,001			259,786
Non-interest income:
Banking service revenues			10,812			10,813			10,776			10,465			11,234		42,866			43,638
Wealth management revenues			7,062			6,611			6,669			5,882			7,246		26,224			25,934
Mortgage banking activities			1,322			1,118			629			1,206			780		4,275			4,767
Total banking and financial service revenues			19,196			18,542			18,074			17,553			19,260		73,365			74,339
Bargain purchase from Scotiabank PR & USVI acquisition			315			-			-			-			-		315			-
Other income, net			200			3,636	(b)		4,874	(b)		103			4,998		8,813	(b)		5,756
Total non-interest income, net			19,711			22,178			22,948			17,656			24,258		82,493			80,095
Non-interest expense:
Compensation and employee benefits			21,817			20,500			19,875			20,341			19,322		82,533			76,524
Occupancy, equipment and infrastructure costs			7,488			7,307			7,511			7,746			7,762		30,052			33,084
Merger and restructuring charges			21,498	(a)		1,556			1,000			-			-		24,054	(a)		-
Net loss on sale of foreclosed real estate and other repossessed assets			541			794			21			1,070			1,834		2,426			4,662
General and administrative expenses			24,894			18,475			20,482			20,699			20,963		84,550			83,921
Total operating expenses			76,238			48,632			48,889			49,856			49,881		223,615			198,191
Credit related expenses			2,118			2,095			2,563			2,296			1,838		9,072			8,890
Total non-interest expense			78,356			50,727			51,452			52,152			51,719		232,687			207,081
(Loss) income before income taxes			(2,504)			8,391			34,876			35,044			43,274		75,807			132,800
Income tax (benefit) expense			(1,861)			1,008			10,897			11,574			18,530		21,618			48,390
Net (loss) income			(643)	(a)		7,383			23,979			23,470			24,744		54,189	(a)		84,410
Less: dividends on preferred stock
Convertible preferred stock			-			-			-			-			-		-			(5,513)
Other preferred stock			(1,628)			(1,628)			(1,628)			(1,628)			(1,628)		(6,512)			(6,511)
Net (loss) income available to common shareholders		$	(2,271)		$	5,755		$	22,351		$	21,842		$	23,116	$	47,677		$	72,386

(a) On December 31, 2019, the Company acquired Scotiabank's Puerto Rico and USVI operations, incurring in merger and restructuring charges of $21.5 million during 4Q 2019.
(b) During 2Q 2019 and 3Q 2019, the Company sold $350 million and $322 million available-for-sale mortgage-backed securities, respectively, and recognized a gain in the sale of $4.8 million and $3.5 million.
(c) During 3Q 2019, the Company received $2.4 million proceeds from the sale of fully charged-off originated auto and consumer loans.
(d) During 3Q 2019, the Company decided to sell mostly non-performing loans, increasing the provision by $37.2 million. Originated loans that were transferred to held-for-sale amounted to $25.3 million at September 30, 2019, the remaining were purchased credit impaired loans. Loans were sold during 4Q 2019, with an additional increase in the provision of $6.6 million.
(e) During 2Q 2019, the Company decided to sell mostly non-performing mortgage loans increasing the provision by $8.8 million. Most of these loans were sold in 3Q 2019, increasing the provision by an additional $1.8 million.
(f) During the 1Q 2019, the provision for acquired Eurobank loans and leases reflected better cashflows than expected.

3

Click here to enter text.

OFG Bancorp (NYSE: OFG)
Table 3: Consolidated Statements of Financial Condition
	December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in thousands) (unaudited)	2019			2019			2019			2019			2018
Cash and cash equivalents	$	852,757		$	962,887		$	677,430		$	509,023		$	450,063
Investments:
Trading securities		37			41			412			381			360
Investment securities available-for-sale, at fair value, with amortized cost of $1,074,474
(September 30, 2019 - $520,960; June 30, 2019 - $860,911; March 31, 2019 - $1,248,750;
December 31, 2018 - $854,511)
Mortgage-backed securities		673,886			505,102			843,333			1,225,225			827,564
US treasury notes		397,183			10,938			10,907			10,859			10,807
Other investment securities		3,100			3,055			3,193			3,385			3,486
Total investment securities available-for-sale		1,074,169			519,095	(b)		857,433	(b)		1,239,469	(d)		841,857
Mortgage-backed securities held-to-maturity, at amortized cost
(fair value at December 31, 2018 - $410,353;
September 30, 2018 - $425,066)		-			-			-			-	(d)		424,740
Federal Home Loan Bank (FHLB) stock, at cost		13,048			10,525			12,821			12,800			12,644
Other investments		560			57			3			3			3
Total investments		1,087,814			529,718			870,669			1,252,653			1,279,604
Securities sold but not yet delivered	$	339		$	-		$	-		$	-		$	-
Loans, net		6,641,847	(a)		4,407,190	(c)		4,474,497			4,401,401			4,431,594
Other assets:
Derivative assets		6			13			26			110			347
Prepaid expenses		52,648			14,244			11,903			7,830			10,283
Deferred tax asset, net		176,531			112,602			111,147			112,744			113,763
Foreclosed real estate and repossessed properties		33,236			30,488			32,016			34,439			36,754
Premises and equipment, net		81,105			69,754			71,001			69,017			68,892
Goodwill		86,069			86,069			86,069			86,069			86,069
Right of use assets		39,112			19,318			20,419			20,860	(e)		-
Core deposit, customer relationship intangible and other intangibles		56,965			2,491			2,783			3,076			3,368
Servicing asset		50,779			10,125			10,134			10,623			10,716
Accounts receivable and other assets		138,244			88,606			96,033			95,346			91,899
Total assets	$	9,297,452	(a)	$	6,333,505		$	6,464,127		$	6,603,191		$	6,583,352

Deposits:
Demand deposits	$	3,579,115		$	2,228,256		$	2,219,911		$	2,218,186		$	2,191,802
Savings accounts		1,815,044			1,206,569			1,200,408			1,231,170			1,187,945
Time deposits		2,060,953			1,154,871			1,136,411			996,519			1,003,271
Brokered deposits		243,498			288,362			388,407	(b)		451,226			525,097
Total deposits		7,698,610	(a)		4,878,058			4,945,137			4,897,101			4,908,115
Borrowings:
Securities sold under agreements to repurchase		190,274			190,261			240,324	(b)		431,566			455,508
Advances from FHLB and other borrowings		79,204			79,603			80,423			81,397			78,834
Subordinated capital notes		36,083			36,083			36,083			36,083			36,083
Total borrowings		305,561			305,947			356,830			549,046			570,425
Other liabilities:
Derivative liabilities		913			1,159			985			439			333
Acceptances outstanding		21,599			21,796			23,610			25,791			16,937
Lease liability		39,840			21,081			22,179			22,618	(e)		-
Accrued expenses and other liabilities		185,103			56,388			70,512			87,004			87,665
Total liabilities		8,251,626			5,284,429			5,419,253			5,581,999			5,583,475
Stockholders' equity:
Preferred stock		92,000			92,000			92,000			92,000			92,000
Common stock		59,885			59,885			59,885			59,885			59,885
Additional paid-in capital		621,515			620,948			620,368			619,828			619,381
Legal surplus		95,779			95,783			95,020			92,621			90,167
Retained earnings		279,994			285,854			284,458			268,101	(e)		253,040
Treasury stock, at cost		(102,339)			(102,936)			(103,171)			(103,196)			(103,633)
Accumulated other comprehensive (loss) income, net		(1,008)			(2,458)			(3,686)			(8,047)			(10,963)
Total stockholders' equity		1,045,826			1,049,076			1,044,874			1,021,192			999,877
Total liabilities and stockholders' equity	$	9,297,452		$	6,333,505		$	6,464,127		$	6,603,191		$	6,583,352

(a) On December 31, 2019, the Company acquired Scotiabank's Puerto Rico and USVI operations, increasing loans by $2.2 billion and deposits by $3.0 billion.
(b) During 3Q 2019, the Company sold $322 million available-for-sale mortgage-backed securities and recognized a gain in the sale of $3.4 million. During 2Q 2019, the Company sold $350 million available-for-sale mortgage-backed securities and recognized a gain in the sale of $4.8 million, resulting in the termination before maturity of $191.2 million of securities sold under agreements to repurchase and in a reduction of $62.8 million of brokered CDs.
(c) During 3Q 2019, the Company decided to sell mostly non-performing loans. Originated loans that were transferred to held-for-sale amounted to $25.3 million at September 30, 2019 and were sold in 4Q 2019.
(d) On January 1, 2019, the Company adopted the Accounting Standard Update ("ASU") No. 2017-12 and reclassified all of its mortgage backed securities from the held-to-maturity portfolio into the available-for-sale portfolio.
(e) On January 1, 2019, the Company adopted the ASU No. 2016-02, under the effective date method, which requires lessees to recognize a right-of-use asset and related lease liability for lease classified as operating leases, prospectively.

4

Click here to enter text.

OFG Bancorp (NYSE: OFG)
Table 4: Information on Loan Portfolio and Production

		December 31,		September 30,		June 30,		March 31,		December 31,
(Dollars in thousands) (unaudited)		2019		2019		2019		2019		2018
Non-acquired loans held for investment:
Mortgage		$	577,416	$	589,383	$	635,616	$	651,423	$	668,809
Commercial			1,667,494		1,573,629		1,616,973		1,569,551		1,597,588
Consumer			361,638		362,358		356,110		350,543		348,980
Auto			1,277,732		1,266,066		1,218,070		1,167,482		1,129,695
			3,884,280		3,791,436		3,826,769		3,738,999		3,745,072
Less: Allowance for loan and lease losses			(83,471)		(79,089)		(89,952)		(94,035)		(95,188)
			3,800,809		3,712,347		3,736,817		3,644,964		3,649,884
Deferred loan costs, net			8,965		9,608		9,251		8,254		7,740
Total non-acquired loans held for investment, net			3,809,774		3,721,955		3,746,068		3,653,218		3,657,624

Acquired loans:	(1)
Scotiabank PR & USVI
Accounted for under ASC 310-20
Mortgage			322,179		-		-		-		-
Commercial			193,206		-		-		-		-
Consumer			112,742		-		-		-		-
Auto			191,016		-		-		-		-
			819,143		-		-		-		-
			819,143		-		-		-		-

Accounted for under ASC 310-30
Mortgage			1,130,964		-		-		-		-
Commercial			212,866		-		-		-		-
Consumer			8,539		-		-		-		-
Auto			41,571		-		-		-		-
			1,393,940		-		-		-		-
			1,393,940		-		-		-		-
Total Acquired Scotiabank PR & USVI loans, net			2,213,083		-		-		-		-

BBVAPR
Accounted for under ASC 310-20
Commercial			2,141		2,217		2,249		2,405		2,546
Consumer			20,794		21,461		21,966		22,768		23,988
Auto			135		237		996		2,336		4,435
			23,070		23,915		25,211		27,509		30,969
Less: Allowance for loan and lease losses			(1,573)		(1,490)		(1,685)		(1,968)		(2,062)
			21,497		22,425		23,526		25,541		28,907

Accounted for under ASC 310-30
Mortgage			411,531		439,675		476,081		484,578		492,890
Commercial			117,694		155,653		169,481		176,908		182,319
Auto			1,790		3,883		6,462		9,866		14,403
			531,015		599,211		652,024		671,352		689,612
Less: Allowance for loan and lease losses			(17,036)		(51,394)		(45,427)		(42,133)		(42,010)
			513,979		547,817		606,597		629,219		647,602
Total Acquired BBVAPR loans, net			535,476		570,242		630,123		654,760		676,509

Eurobank
Accounted for under ASC 310-30
Mortgage			48,617		54,603		61,920		62,649		63,392
Commercial			29,041		46,412		46,421		46,588		47,826
Consumer			724		802		867		856		846
			78,382		101,817		109,208		110,093		112,064
Less: Allowance for loan and lease losses			(14,459)		(22,370)		(25,578)		(24,352)		(24,971)
Total Acquired Eurobank loans, net			63,923		79,447		83,630		85,741		87,093
Total acquired loans, net			2,812,482		649,689		713,753		740,501		763,602
Total loans held for investment			6,622,256		4,371,644		4,459,821		4,393,719		4,421,226
Mortgage loans held for sale			19,591		23,504		13,293		7,682		10,368
Other loans held for sale			-		12,042		1,383		-		-
Total loans, net		$	6,641,847	$	4,407,190	$	4,474,497	$	4,401,401	$	4,431,594

Loan Portfolio Summary:
Loans held for investment:
Mortgage		$	2,490,707	$	1,083,661	$	1,173,617	$	1,198,650	$	1,225,091
Commercial			2,222,442		1,777,911		1,835,124		1,795,452		1,830,279
Consumer			504,437		384,621		378,943		374,167		373,814
Auto			1,512,244		1,270,186		1,225,528		1,179,684		1,148,533
			6,729,830		4,516,379		4,613,212		4,547,953		4,577,717
Less: Allowance for loan and lease losses			(116,539)		(154,343)		(162,642)		(162,488)		(164,231)
			6,613,291		4,362,036		4,450,570		4,385,465		4,413,486
Deferred loan costs, net			8,965		9,608		9,251		8,254		7,740
Total loans held for investment, net			6,622,256		4,371,644		4,459,821		4,393,719		4,421,226
Mortgage loans held for sale			19,591		23,504		13,293		7,682		10,368
Other loans held for sale			-		12,042		1,383		-		-
Total loans, net		$	6,641,847	$	4,407,190	$	4,474,497	$	4,401,401	$	4,431,594

		2019		2019		2019		2019		2018
(Dollars in thousands) (unaudited)		Q4		Q3		Q2		Q1		Q4
Quarterly loan production	(13)
Mortgage		$	23,680	$	23,805	$	22,196	$	23,097	$	33,373
Commercial			216,610		65,635		64,079		60,485		92,088
US Loan Program			12,482		12,225		56,372		31,706		31,667
Consumer			41,947		48,257		47,662		40,877		42,055
Auto			110,184		141,507		136,263		120,199		123,770
Total		$	404,903	$	291,429	$	326,572	$	276,364	$	322,953


5

Click here to enter text.

OFG Bancorp (NYSE: OFG)
Table 5: Average Balances, Net Interest Income and Net Interest Margin
	2019 Q4						2019 Q3						2019 Q2						2019 Q1						2018 Q4
			Interest						Interest						Interest						Interest						Interest
	Average		Income/		Yield/		Average		Income/		Yield/		Average		Income/		Yield/		Average		Income/		Yield/		Average		Income/		Yield/
(Dollars in thousands) (unaudited)	Balance		Expense		Rate		Balance		Expense		Rate		Balance		Expense		Rate		Balance		Expense		Rate		Balance		Expense		Rate

Interest earning assets:
Cash equivalents	$	863,497	$	3,684	1.69	%	$	734,105	$	4,086	2.21	%	$	481,115	$	2,904	2.42	%	$	388,578	$	2,368	2.47	%	$	434,701	$	2,572	2.35	%
Investment securities		522,811		2,587	1.98	%		708,606		3,797	2.14	%		1,039,193		6,271	2.41	%		1,258,899		8,223	2.61	%		1,275,752		8,210	2.57	%
Loans
Non-acquired loans		3,870,976		73,589	7.54	%		3,859,035		74,303	7.64	%		3,794,263		72,979	7.71	%		3,764,457		71,298	7.68	%		3,693,398		70,747	7.60	%
Acquired BBVAPR loans		546,565		8,969	6.56	%		597,777		9,090	6.08	%		634,598		9,603	6.05	%		654,109		10,247	6.27	%		678,026		10,935	6.45	%
Acquired Eurobank loans		69,310		2,346	13.54	%		82,234		2,379	11.57	%		85,169		2,499	11.74	%		86,159		2,574	11.95	%		88,578		2,642	11.93	%
Total loans		4,486,851		84,904	7.51	%		4,539,046		85,772	7.50	%		4,514,030		85,081	7.56	%		4,504,725		84,119	7.57	%		4,460,002		84,324	7.50	%
Total interest-earning assets	$	5,873,159	$	91,175	6.16	%	$	5,981,757	$	93,655	6.21	%	$	6,034,338	$	94,256	6.27	%	$	6,152,202	$	94,710	6.24	%	$	6,170,455	$	95,106	6.11	%

Interest bearing liabilities:
Deposits
NOW accounts	$	1,110,635	$	1,471	0.53	%	$	1,118,156	$	1,616	0.57	%	$	1,124,670	$	1,730	0.62	%	$	1,119,612	$	1,454	0.53	%	$	1,109,795	$	1,432	0.51	%
Savings accounts		1,188,043		1,843	0.62	%		1,199,678		2,012	0.67	%		1,180,153		1,882	0.64	%		1,181,024		1,615	0.55	%		1,217,931		1,741	0.57	%
Time deposits		1,156,965		4,442	1.52	%		1,151,248		4,427	1.53	%		1,065,005		3,652	1.38	%		992,331		2,944	1.20	%		1,012,267		3,008	1.18	%
Brokered deposits		268,108		1,804	2.67	%		358,130		2,298	2.55	%		412,383		2,526	2.46	%		498,116		2,835	2.31	%		526,849		3,003	2.26	%
		3,723,751		9,560	1.02	%		3,827,212		10,353	1.07	%		3,782,211		9,790	1.04	%		3,791,083		8,848	0.95	%		3,866,842		9,184	0.94	%
Non-interest bearing deposit accounts		1,110,846		-	-			1,094,047		-	-			1,097,903		-	-			1,099,547		-	-			1,120,604		-	-	%
Fair value premium amortization and core deposit intangible amortization		-		201	-			-		201	-			-		201	-			-		201	-			-		215	-
Total deposits		4,834,597		9,761	0.80	%		4,921,259		10,554	0.85	%		4,880,114		9,991	0.82	%		4,890,630		9,049	0.75	%		4,987,446		9,399	0.75	%
Borrowings
Securities sold under agreements to repurchase		190,000		1,189	2.48	%		224,783		1,342	2.37	%		343,370		2,107	2.46	%		444,843		2,785	2.54	%		430,889		2,633	2.42	%
Advances from FHLB and other borrowings		78,282		541	2.74	%		79,328		550	2.75	%		80,349		559	2.79	%		81,226		563	2.81	%		76,948		536	2.76	%
Subordinated capital notes		36,083		475	5.22	%		36,083		499	5.49	%		36,083		514	5.71	%		36,083		524	5.89	%		36,083		503	5.53	%
Total borrowings		304,365		2,205	2.87	%		340,194		2,391	2.79	%		459,802		3,180	2.77	%		562,152		3,872	2.79	%		543,920		3,672	2.68	%
Total interest-bearing liabilities	$	5,138,962	$	11,966	0.92	%	$	5,261,453	$	12,945	0.98	%	$	5,339,916	$	13,171	0.99	%	$	5,452,782	$	12,921	0.96	%	$	5,531,366	$	13,071	0.94	%
Interest rate spread			$	79,209	5.24	%			$	80,710	5.23	%			$	81,085	5.28	%			$	81,789	5.28	%			$	82,035	5.17	%
Net interest margin					5.35	%					5.35	%					5.39	%					5.39	%					5.27	%

ASC 310-30 loan cost recoveries:
Acquired BBVAPR loans			$	701					$	217					$	241					$	427					$	653
Acquired Eurobank loans				332						154						189						110						123
			$	1,033					$	371					$	430					$	537					$	776
Adjusted excluding cost recoveries (Non-GAAP):
Total interest-earning assets	$	5,873,159	$	90,142	6.09	%	$	5,981,757	$	93,284	6.19	%	$	6,034,338	$	93,826	6.24	%	$	6,152,202	$	94,173	6.21	%	$	6,170,455	$	94,330	6.07	%
Interest rate spread			$	78,176	5.17	%			$	80,339	5.21	%			$	80,655	5.25	%			$	81,252	5.25	%			$	81,259	5.13	%
Net interest margin					5.28	%					5.33	%					5.36	%					5.36	%					5.22	%

6

Click here to enter text.

OFG Bancorp (NYSE: OFG)
Table 5: Average Balances, Net Interest Income and Net Interest Margin (Continued)
	2019 YTD						2018 YTD
			Interest						Interest
	Average		Income/		Yield/		Average		Income/		Yield/
(Dollars in thousands) (unaudited)	Balance		Expense		Rate		Balance		Expense		Rate

Interest earning assets:
Cash equivalents	$	618,446	$	13,041	2.11	%	$	343,982	$	6,698	1.95	%
Investment securities		879,885		20,879	3.16	%		1,293,407		32,340	2.50	%
Loans
Non-acquired loans		3,822,575		292,179	7.64	%		3,460,583		254,047	7.34	%
Acquired BBVAPR loans		607,939		37,909	8.31	%		794,092		54,500	9.15	%
Acquired Eurobank loans		80,676		9,787	16.17	%		93,460		12,834	18.31	%
Total loans		4,511,190		339,875	7.53	%		4,348,135		321,381	7.39	%
Total interest-earning assets	$	6,009,521	$	373,795	6.22	%	$	5,985,524	$	360,419	6.02	%

Interest bearing liabilities:
Deposits
NOW accounts	$	1,118,243	$	6,271	0.56	%	$	1,079,538	$	4,492	0.42	%
Savings accounts		1,187,278		7,351	0.62	%		1,216,636		6,364	0.52	%
Time deposits		1,092,002		15,468	1.42	%		1,019,061		11,486	1.13	%
Brokered deposits		383,483		9,463	2.47	%		496,171		9,751	1.97	%
		3,781,006		38,553	1.02	%		3,811,406		32,093	0.84	%
Non-interest bearing deposit accounts		1,100,599		-	-			1,078,178		-	-	%
Fair value premium amortization and core deposit intangible amortization		-		802	-			-		860	-
Total deposits		4,881,605		39,355	0.81	%		4,889,584		32,953	0.67	%
Borrowings
Securities sold under agreements to repurchase		299,842		7,423	2.48	%		357,086		7,794	2.18	%
Advances from FHLB and other borrowings		79,787		2,212	2.77	%		72,882		1,875	2.57	%
Subordinated capital notes		36,083		2,012	5.58	%		36,083		1,903	5.27	%
Total borrowings		415,712		11,647	2.80	%		466,051		11,572	2.48	%
Total interest-bearing liabilities	$	5,297,317	$	51,002	0.96	%	$	5,355,635	$	44,525	0.83	%
Interest rate spread			$	322,793	5.26	%			$	315,894	5.19	%
Net interest margin					5.37	%					5.28	%

ASC 310-30 loan cost recoveries:
Acquired BBVAPR loans			$	1,587						2,206
Acquired Eurobank loans				785						1,875
			$	2,371					$	4,081
Adjusted excluding cost recoveries (Non-GAAP):
Total interest-earning assets	$	6,009,521	$	371,424	6.18	%	$	5,985,524	$	356,338	5.95	%
Interest rate spread			$	320,422	5.22	%			$	311,813	5.12	%
Net interest margin					5.33	%					5.21	%


7

Click here to enter text.

OFG Bancorp (NYSE: OFG)
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (1)
	2019		2019			2019		2019		2018
(Dollars in thousands) (unaudited)	Q4		Q3			Q2		Q1		Q4
Net Charge-offs
Mortgage:
Charge-offs	$	1,075	$	16,299	(b)	$	604	$	587	$	1,570
Recoveries		(437)		(493)			(316)		(287)		(128)
Total mortgage		638		15,806			288		300		1,442
Commercial:
Charge-offs		439		8,402	(b)		2,146		1,086		386
Recoveries		(606)		(174)			(177)		(147)		(126)
Total commercial		(167)		8,228			1,969		939		260
Consumer:
Charge-offs		4,907		5,046			4,839		4,121		4,191
Recoveries		(164)		(1,260)	(a)		(327)		(263)		(1,000)
Total consumer		4,743		3,786			4,512		3,858		3,191
Auto:
Charge-offs		12,903		12,331			10,672		11,371		10,843
Recoveries		(4,111)		(5,724)	(a)		(4,877)		(3,982)		(4,851)
Total auto		8,792		6,607			5,795		7,389		5,992
Total	$	14,006	$	34,427		$	12,564	$	12,486	$	10,885
Net Charge-off Rates
Mortgage		0.43%		10.14%			0.18%		0.18%		0.88%
Commercial		-0.04%		2.06%			0.50%		0.24%		0.07%
Consumer		4.97%		4.00%			4.85%		4.18%		3.47%
Auto		2.73%		2.10%			1.94%		2.54%		2.14%
Total		1.45%		3.57%	(b)		1.32%		1.33%		1.18%
Average Loans Held For Investment
Mortgage	$	593,480	$	623,772		$	640,141	$	649,408	$	658,835
Commercial		1,608,492		1,597,902			1,584,362		1,584,246		1,546,166
Consumer		381,812		378,967			372,477		369,382		368,083
Auto		1,287,192		1,258,394			1,197,283		1,161,421		1,120,314
Total	$	3,870,976	$	3,859,035		$	3,794,263	$	3,764,457	$	3,693,398

(a) During 3Q 2019, the Company received $2.4 million proceeds from the sale of fully charged-off originated auto and consumer loans.
(b) During 3Q 2019, the Company decided to sell several non-performing originated loans, which were sold during 4Q 2019, increasing charge-offs by $15.9 million, $4.4 million in commercial loans and $11.5 million in residential mortgages.

8

Click here to enter text.

OFG Bancorp (NYSE: OFG)
Table 6: Loan Information and Performance Statistics (Excluding Acquired Loans) (Continued) (1)
		2019		2019			2019		2019		2018
(Dollars in thousands) (unaudited)		Q4		Q3			Q2		Q1		Q4
Early Delinquency (30 - 89 days past due)
Mortgage		$	21,822	$	21,631		$	24,303	$	26,775	$	26,150
Commercial			9,589		4,403			2,738		12,825		5,568
Consumer			8,287		8,550			8,617		7,795		7,285
Auto			103,562		103,346			98,625		87,500		86,039
Total		$	143,260	$	137,930		$	134,283	$	134,895	$	125,042
Early Delinquency Rates (30 - 89 days past due)
Mortgage			3.78%		3.67%			3.82%		4.11%		3.91%
Commercial			0.58%		0.28%			0.17%		0.82%		0.35%
Consumer			2.29%		2.36%			2.42%		2.22%		2.09%
Auto			8.11%		8.16%			8.10%		7.49%		7.62%
Total			3.69%		3.64%			3.51%		3.61%		3.34%
Total Delinquency (30 days and over past due)
Mortgage:
Traditional, Non traditional, and Loans under Loss Mitigation		$	40,747	$	40,194	(a)	$	70,364	$	78,560	$	82,404
GNMA's buy-back option program			10,805		11,403			11,675		12,942		19,721
Total mortgage			51,552		51,597			82,039		91,502		102,125
Commercial			26,536		24,399	(a)		28,762		35,737		27,423
Consumer			10,400		10,912			10,817		9,873		8,983
Auto			117,788		117,566			110,646		99,663		99,533
Total		$	206,276	$	204,474		$	232,264	$	236,775	$	238,064
Total Delinquency Rates (30 days and over past due)
Mortgage:
Traditional, Non traditional, and Loans under Loss Mitigation			7.06%		6.82%			11.07%		12.06%		12.32%
GNMA's buy-back option program			1.87%		1.93%			1.84%		1.99%		2.95%
Total mortgage			8.93%		8.75%			12.91%		14.05%		15.27%
Commercial			1.59%		1.55%			1.78%		2.28%		1.72%
Consumer			2.88%		3.01%			3.04%		2.82%		2.57%
Auto			9.22%		9.29%			9.08%		8.54%		8.81%
Total			5.31%		5.39%			6.07%		6.33%		6.36%
Nonperforming Assets	(14)
Mortgage		$	22,552	$	21,138	(a)	$	53,534	$	59,665	$	63,717
Commercial			39,089		35,601	(a)		44,617		50,376		42,456
Consumer			4,701		4,008			2,208		3,971		3,354
Auto			14,239		15,019			12,024		12,163		13,494
Total nonperforming loans			80,581		75,766			112,383		126,175		123,021
Foreclosed real estate			8,689		11,210			10,954		10,011		9,571
Other repossessed assets			3,327		3,537			2,507		3,574		2,986
Total nonperforming assets		$	92,597	$	90,513		$	125,844	$	139,760	$	135,578
Nonperforming Loan Rates
Mortgage			3.91%		3.59%			8.42%		9.16%		9.53%
Commercial			2.34%		2.26%			2.76%		3.21%		2.66%
Consumer			1.30%		1.11%			0.62%		1.13%		0.96%
Auto			1.11%		1.19%			0.99%		1.04%		1.19%
Total loans			2.07%		2.00%			2.94%		3.37%		3.28%

(a) During 3Q 2019, the Company identified non-performing originated loans sold during 4Q 2019, $29 million in mortgage loans and $9 million in commercial loans. These loans were reclassified as held-for-sale at their fair value.

9

Click here to enter text.

OFG Bancorp (NYSE: OFG)

Table 7: Allowance for Loan and Lease Losses

Quarter Ended December 31, 2019

(Dollars in thousands) (unaudited)

Mortgage

Commercial

Consumer

Auto

Total

Non-acquired loans

Balance at beginning of period

8,391

22,323

15,328

33,047

79,089

(Recapture) provision for loan and lease losses, net

974

3,499

6,297

7,617

18,387

Charge-offs

(1,075)

(439)

(4,907)

(12,903)

(19,324)

Recoveries

437

606

164

4,111

5,318

Balance at end of period

8,727

25,989

16,882

31,872

83,470

Allowance coverage ratio

1.51%

1.56%

4.67%

2.49%

2.15%

Acquired loans

Acquired BBVAPR loans:

Acquired loans accounted for under ASC 310-20

Balance at beginning of period

1,448

1,490

(Recapture) provision for loan and lease losses, net

466

(1)

472

Charge-offs

(24)

(382)

(27)

(433)

Recoveries

Balance at end of period

1,564

1,573

Acquired loans accounted for under ASC 310-30

Balance at beginning of period

20,458

28,647

2,289

51,394

Provision (recapture) for loan and lease losses, net

2,038

2,234

(218)

4,054

Allowance de-recognition

(13,120)

(24,168)

(1,124)

(38,412)

Balance at end of period

9,376

6,713

947

17,036

Acquired Eurobank loans:

Balance at beginning of period

13,809

8,561

22,370

Provision (recapture) for loan and lease losses, net

335

(180)

155

Allowance de-recognition

(1,865)

(6,201)

(8,066)

Balance at end of period

12,279

2,180

14,459

Total acquired loans

Balance at beginning of period

34,267

37,228

1,448

2,311

75,254

Provision (recapture) for loan and lease losses, net

2,373

2,061

466

(219)

4,681

Charge-offs

(24)

(382)

(27)

(433)

Recoveries

Allowance de-recognition

(14,985)

(30,369)

(1,124)

(46,478)

Balance at end of period

21,655

8,897

1,564

952

33,068

Click here to enter text.

OFG Bancorp (NYSE: OFG)
Table 8: Accretable Yield on Loans Accounted for Under ASC 310-30 (Loans Acquired with Deteriorated Credit Quality, including those by Analogy)
	Quarter Ended December 31, 2019
(Dollars in thousands) (unaudited)	Mortgage		Commercial		Construction		Auto		Consumer		Total
Accretable Yield and Non-Accretable Discount
Acquired Scotiabank PR & USVI loans:
Accretable Yield
Balance at beginning of period	$	-	$	-	$	-	$	-	$	-	$	-
Additions		325,731		122,334		6,848		3,715		257		458,886
Accretion		-		-		-		-		-		-
Change in expected cash flows		-		-		-		-		-		-
Transfers (to) from non-accretable discount		-		-		-		-		-		-
Balance at end of period	$	325,731	$	122,334	$	6,848	$	3,715	$	257	$	458,886

Non-Accretable Discount
Balance at beginning of period	$	-	$	-	$	-	$	-	$	-	$	-
Additions		217,113		69,952		3,246		3,720		393		294,424
Change in actual and expected cash flows		-		-		-		-		-		-
Transfers from (to) accretable yield		-		-		-		-		-		-
Balance at end of period	$	217,113	$	69,952	$	3,246	$	3,720	$	393	$	294,424

Acquired BBVAPR loans:
Accretable Yield
Balance at beginning of period	$	201,824	$	17,801	$	1,325	$	28	$	194	$	221,172
Accretion		(5,529)		(2,016)		(773)		2		(100)		(8,416)
Change in expected cash flows		(212)		743		2,791		(35)		100		3,387
Transfers (to) from non-accretable discount		-		(726)		(522)		52		(61)		(1,257)
Balance at end of period	$	196,083	$	15,802	$	2,821	$	47	$	133	$	214,886

Non-Accretable Discount
Balance at beginning of period	$	280,751	$	16,790	$	7,329	$	24,070	$	18,786	$	347,726
Change in actual and expected cash flows		(4,572)		(3,141)		(522)		(195)		(87)		(8,517)
Transfers from (to) accretable yield		-		726		522		(52)		61		1,257
Balance at end of period	$	276,179	$	14,375	$	7,329	$	23,823	$	18,760	$	340,466

					Construction &
					Development
	Loans Secured				Secured by
	by 1-4 Family		Commercial		1-4 Family
	Residential		and Other		Residential
	Properties		Construction		Properties		Leasing		Consumer		Total
Acquired Eurobank loans:
Accretable Yield
Balance at beginning of period	$	34,116	$	893	$	579	$	-	$	-	$	35,588
Accretion		(1,150)		(1,171)		-		(2)		(12)		(2,335)
Change in expected cash flows		1,054		854		-		(11)		23		1,920
Transfers (to) from non-accretable discount		(482)		(155)		(96)		13		(11)		(731)
Balance at end of period	$	33,538	$	421	$	483	$	-	$	-	$	34,442

Non-Accretable Discount
Balance at beginning of period	$	-	$	-	$	1,626	$	-	$	88	$	1,714
Change in actual and expected cash flows		(482)		2,322		-		13		(13)		1,840
Transfers from (to) accretable yield		482		155		96		(13)		11		731
Balance at end of period	$	-	$	2,477	$	1,722	$	-	$	86	$	4,285

11

Click here to enter text.

OFG Bancorp (NYSE: OFG)
Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital

In addition to disclosing required regulatory capital measures, we also report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity ("TCE") and TCE ratio. The table below provides the details of the calculation of our regulatory capital and non-GAAP capital measures. While our non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.

	2019		2019		2019		2019		2018
(Dollars in thousands) (unaudited)	Q4		Q3		Q2		Q1		Q4
Stockholders' Equity to Non-GAAP Tangible Common Equity
Total stockholders' equity	$	1,045,826	$	1,049,076	$	1,044,874	$	1,021,192	$	999,877
Less: Intangible assets		(143,034)		(88,560)		(88,852)		(89,145)		(89,437)
Noncumulative perpetual preferred stock		(92,000)		(92,000)		(92,000)		(92,000)		(92,000)
Noncumulative perpetual preferred stock issuance costs		10,130		10,130		10,130		10,130		10,130
Tangible common equity	$	820,922	$	878,646	$	874,152	$	850,177	$	828,570

Common stock outstanding at end of period		51,399		51,347		51,330		51,328		51,294
Tangible book value (Non-GAAP)	$	15.97	$	17.11	$	17.03	$	16.56	$	16.15
Total Assets to Tangible Assets
Total assets	$	9,297,452	$	6,333,505	$	6,464,127	$	6,603,191	$	6,583,352
Less: Intangible assets		(143,034)		(88,560)		(88,852)		(89,145)		(89,437)
Tangible assets (Non-GAAP)	$	9,154,418	$	6,244,945	$	6,375,275	$	6,514,046	$	6,493,915
Non-GAAP TCE Ratio
Tangible common equity	$	820,922	$	878,646	$	874,152	$	850,177	$	828,570
Tangible assets		9,154,418		6,244,945		6,375,275		6,514,046		6,493,915
TCE ratio		8.97%		14.07%		13.71%		13.05%		12.76%
Average Equity to Non-GAAP Average Tangible Common Equity
Average total stockholders' equity	$	1,062,724	$	1,061,541	$	1,037,057	$	1,017,546	$	983,015
Less: Average noncumulative perpetual preferred stock		(92,000)		(92,000)		(92,000)		(92,000)		(111,174)
Average noncumulative perpetual preferred stock issuance costs		10,130		10,130		10,130		10,130		10,130
Average total common stockholders' equity	$	980,854	$	979,671	$	955,187	$	935,676	$	881,971
Less: Average intangible assets		(89,005)		(88,701)		(88,995)		(89,291)		(89,580)
Average tangible common equity	$	891,849	$	890,970	$	866,192	$	846,385	$	792,391
12

Click here to enter text.

OFG Bancorp (NYSE: OFG)
Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued)

		BASEL III
		Standardized
		2019		2019		2019		2019		2018
(Dollars in thousands) (unaudited)		Q4		Q3		Q2		Q1		Q4
Regulatory Capital Metrics
Common equity Tier 1 capital		$	735,998	$	858,092	$	855,667	$	832,923	$	811,708
Tier 1 capital			852,868		974,962		972,537		949,793		928,578
Total risk-based capital	(15)		939,548		1,035,910		1,035,109		1,012,112		990,500
Risk-weighted assets			6,824,396		4,771,165		4,895,441		4,872,807		4,837,214
Regulatory Capital Ratios
Common equity Tier 1 capital ratio	(16)		10.78%		17.98%		17.48%		17.09%		16.78%
Tier 1 risk-based capital ratio	(17)		12.50%		20.43%		19.87%		19.49%		19.20%
Total risk-based capital ratio	(18)		13.77%		21.71%		21.14%		20.77%		20.48%
Leverage ratio	(19)		13.99%		15.41%		15.20%		14.64%		14.22%

Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach
Total stockholders' equity		$	1,045,826	$	1,049,076	$	1,044,874	$	1,021,192	$	999,877
Less: Noncumulative perpetual preferred stock			(92,000)		(92,000)		(92,000)		(92,000)		(92,000)
Noncumulative perpetual preferred stock issuance costs			10,130		10,130		10,130		10,130		10,130
Unrealized gains on available-for-sale securities, net of income tax			441		1,742		3,087		7,841		10,972
Unrealized losses on cash flow hedges, net of income tax			567		716		599		206		(9)
			964,964		969,664		966,690		947,369		928,970
Less: Disallowed goodwill			(86,069)		(86,069)		(86,069)		(86,069)		(86,069)
Disallowed other intangible assets, net	(20)		(39,127)		(1,557)		(1,739)		(1,922)		(2,105)
Disallowed deferred tax assets, net	(20)		(95,684)		(23,946)		(23,215)		(26,455)		(29,088)
Threshold 15%	(20)		(8,086)		-		-		-		-
Common equity Tier 1 capital			735,998		858,092		855,667		832,923		811,708
Plus: Qualifying noncumulative perpetual preferred stock			92,000		92,000		92,000		92,000		92,000
Qualifying noncumulative perpetual preferred stock issuance costs			(10,130)		(10,130)		(10,130)		(10,130)		(10,130)
Subordinated capital notes			35,000		35,000		35,000		35,000		35,000
Tier 1 capital			852,868		974,962		972,537		949,793		928,578
Plus tier 2 capital: Qualifying allowance for loan and lease losses			86,680		60,948		62,572		62,319		61,922
Total risk-based capital		$	939,548	$	1,035,910	$	1,035,109	$	1,012,112	$	990,500

13

Click here to enter text.

OFG Bancorp (NYSE: OFG)
Table 10: Reconciliation of GAAP to Non-GAAP with adjustments to exclude the impact of significant events.
The Company prepared its Consolidated Financial Statement using accounting principles generally accepted in the U.S. (“U.S. GAAP” or the “reported basis”). In addition to analyzing the Company’s results on the reported basis, management monitors the “Adjusted net income” of the Company and excludes the impact of certain transactions on the results of its operations. Management believes that “Adjusted net income” provides meaningful information to investors about the underlying performance of the Company’s ongoing operations. “Adjusted net income” is a non-GAAP financial measure. The table below describes adjustments to net income for the year ended December 31, 2019.
	Year ended December 31, 2019

			Income Tax		Impact on
(Dollars in thousands) (unaudited)	Pre-tax		Effect		Net Income

U.S. GAAP net income					$	54,189
Non-GAAP adjustments:
Sale of mortgage-backed securities available-for-sale	$	(8,267)	$	1,984		(6,283)	(a)
Non-performing loans transferred to held-for-sale or sold		54,319		(20,370)		33,949	(b)
Sale of fully charged-off loans		(2,382)		893		(1,489)	(c)
Merger and restructuring expenses		24,054		(9,020)		15,034	(d)
FDIC insurance assessment credit		(1,534)		575		(959)	(e)
Hacienda credit for hurricane Maria		(1,010)		-		(1,010)	(f)
Environmental factors adjustment		(4,541)		1,703		(2,838)	(g)
Bargain purchase from Scotiabank PR & USVI		(315)		-		(315)	(h)
Adjusted net income (Non-GAAP)					$	90,279
Less: dividends on preferred stock						(6,512)
Adjusted net income available to common shareholders (Non-GAAP)					$	83,767

Adjusted earnings per common share - diluted (Non-GAAP)					$	1.62

Adjusted Performance Metrics - Reconciliation to GAAP Financial Measures:					Year ended December 31, 2019
Net income					$	54,189
Non-GAAP adjustments						36,090
Adjusted net income (Non-GAAP)						90,279

Average assets						6,464,329

Return on average assets						0.84%
Adjusted return on average assets (Non-GAAP)						1.40%

Net income available to common shareholders					$	47,677
Non-GAAP adjustments						36,090
Adjusted net income available to common shareholders (Non-GAAP)						83,767

Average tangible common equity						874,015

Return on average tangible common stockholders' equity						5.45%
Adjusted return on average tangible common stockholders' equity (Non-GAAP)						9.58%

Total non-interest expense					$	232,687
Non-GAAP adjustments, pre-tax						(21,510)
Adjusted total non-interest expense (Non-GAAP)						211,177

Net interest income						322,793
Total banking and financial service revenues						73,365
						396,158

Efficiency ratio						58.74%
Adjusted efficiency ratio (Non-GAAP)						53.31%

(a) During 2Q 2019 and 3Q 2019, the Company sold $350 million and $322 million available-for-sale mortgage-backed securities, respectively, and recognized a gain in the sale of $4.8 million and $3.5 million, respectively.
(b) During 2019, the Company sold mostly non-performing loans, increasing the provision by $8.8 million in 2Q2019, $38.9 million in 3Q2019, and $6.6 million in 4Q2019.
(c) During 3Q 2019, the Company received $2.4 million proceeds from the sale of fully charged-off originated auto and consumer loans.
(d) During 2Q 2019, the Company entered into an agreement with Scotiabank to acquire its Puerto Rico and US Virgin Islands operations, subject to customary closing conditions. On December 31, 2019, the Company completed the acquisition. During 2Q2019, 3Q2019 and 4Q2019, $1.0 million, $1.6 and $21.5 million, respectively, were incurred in related merger and restructuring charges.
(e) During 3Q 2019, the Company recognized an FDIC insurance assessment credit received amounting to $1.5 million.
(f) During 3Q 2019, the Company received an additional $1 million credit from Puerto Rico Treasury on employee retention during hurricane Maria.
(g) During 3Q 2019, the Company had a reduction in provision for loan losses of $4.5 million as a result of the adjustment to the qualitative factor related to sustained favorable macroeconomic conditions in Puerto Rico.
(h) On December 31, 2019, the Company acquired Scotiabank's Puerto Rico and USVI operations for $560 million (excluding settlement amounts), which approximated the fair value of net assets acquired. The determination of fair value may necessitate the use of one year measurement period to adequately analyze all the factors used as of the acquisition date.

14

Click here to enter text.

OFG Bancorp (NYSE: OFG)
Table 11: Notes to Financial Summary, Selected Metrics, Loans, and Consolidated Financial Statements (Tables 1 - 10)

(1)	We use the term "acquired loans" to refer to loans acquired from the Scotiabank acquisition (December 31, 2019), the BBVAPR acquisition (December 18, 2012) and the Eurobank FDIC-Assisted acquisition (April 30, 2010), recorded at fair value at acquisition. The majority of these loans acquired are subsequently accounted for based on estimated cash flows expected to be collected over the life of the loans (under the accounting standard known as ASC 310-30). Because the guidance takes into consideration future credit losses expected to be incurred over the life of the loans, there are no charge-offs or an allowance associated with this loans unless the estimated cash flows expected to be collected decrease subsequent to acquisition. In addition, these loans are not classified as delinquent or nonperforming even though the customer may be contractually past due because we expect that we will fully collect the carrying value of these loans. Acquired loans also include loans acquired in the BBVAPR acquisition that were accounted for under the provisions of ASC 310-20, which at the end of the reporting period still have unamortized premium or discount. The fair value of these loans already include a credit mark for losses estimated on these loans. The allowance for loan and lease losses for these loans considers such marks applied. The accounting and classification of these loans may significantly alter some of our reported credit quality metrics. We therefore supplement certain reported credit quality metrics with metrics adjusted to exclude the impact of these acquired loans.
(2)	Total banking and financial service revenues.
(3)	Calculated based on net income available to common shareholders divided by average common shares outstanding for the period.
(4)	Calculated based on net income available to common shareholders plus the preferred dividends on the convertible preferred stock, divided by total average common shares outstanding and equivalents for the period as if converted.
(5)	Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See "Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for additional information.
(6)	Information includes all loans held for investment, including all acquired loans. Acquired loans, including those accounted for under ASC 310-30, are disclosed at carrying amount.
(7)	Calculated based on annualized net interest income for the period divided by average interest-earning assets for the period.
(8)	Calculated based on annualized income, net of tax, for the period divided by average total assets for the period.
(9)	Calculated based on annualized income available to common shareholders for the period divided by average tangible common equity for the period.
(10)	Calculated based on non-interest expense for the period divided by total net interest income and total banking and financial services revenues for the period.
(11)	Calculated based on annualized net charge-offs for the period divided by average loans held for investment for the period.
(12)	Non-GAAP ratios. See "Table 9: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures" for information on the calculation of each of these ratios.
(13)	Production of new loans (excluding renewals).
(14)	Loans accounted for under ASC 310-30 (loans acquired with deteriorated credit quality, including those by analogy), including Eurobank acquired loans, are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses. Therefore, they are not included as non-performing loans.
(15)	Total risk-based capital equals the sum of Tier 1 capital and Tier 2 capital.
(16)	Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on Common equity Tier 1 capital divided by risk-weighted assets.
(17)	Tier 1 risk-based capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets.
(18)	Total risk-based capital ratio is a regulatory capital measure calculated based on Total risk-based capital divided by risk-weighted assets.
(19)	Leverage capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by average assets, after certain adjustments.
(20)	Amounts based on transition provisions for regulatory capital deductions and adjustments of 80% for 2019 and 2018.
(21)	Pre-provision net revenues is a non-GAAP measure calculated based on net interest income plus total non-interest income, net, less total non-interest expenses for the period.
15

Click here to enter text.

OFG Bancorp (OFG) 8-KOFG Bancorp Reports 4Q19 & 2019 Results; Updates on Scotia PR & USVI Acquisition

4Q19

2019

Conference Call

CEO Comment

Current Expected Credit Losses (CECL)

Income Statement

Balance Sheet

Credit Quality

Capital Position

Financial Supplement & Conference Call Presentation

*Non-GAAP Financial Measures

Forward Looking Statements

About OFG Bancorp

Contacts