OFG Bancorp (OFG) 8-K OFG Bancorp Reports 2Q20 Results

Exhibit 99

OFG Bancorp Reports 2Q20 Results

SAN JUAN, Puerto Rico, July 24, 2020 – OFG Bancorp (NYSE: OFG) today reported results for the second quarter ended June 30, 2020.

2Q20 Financial Highlights

·Net income available to common shareholders totaled $20.2 million or $0.39 per share fully diluted. This compares to 1Q20 net income available to common shareholders of $173 thousand or break-even per share and 2Q19 net income available to shareholders of $22.4 million or $0.43 per share fully diluted.

·Total core revenues were $128.2 million compared to $131.3 million in 1Q20 and $99.2 million in 2Q19. 2Q20 revenues included $6.0 million in one-time interest recoveries from acquired SOP Scotiabank loans.

·Provision of $17.7 million included a $5.0 million increase to 1Q20’s $34.1 million provision based on additional data available to forecast the effects of the Covid-19 pandemic.

·Net interest margin was 4.78%. Loan production totaled $503.4 million, including $286.4 million in Paycheck Protection Plan (PPP) commercial loans.

·Total assets of $9.93 billion increased 7.5% from 1Q20 primarily due to a $574.1 million increase in cash and a $198.1 million increase in loans. Customer deposits of $8.32 billion increased $760.0 million or 10.0% from 1Q20.

·All regulatory capital ratios increased and continue to be significantly above requirements for a well-capitalized institution with the CET1 ratio at 12.03% on June 30, 2020.

Conference Call

A conference call to discuss 2Q20 results, outlook and related matters will be held today at 10:00 AM Eastern Time. Phone (888) 562-3356 or (973) 582-2700. Conference ID: 807-1129. 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:

“As other banks did, we faced a number of Covid-19 pandemic related challenges during the second quarter, but acting promptly and with foresight, we generated excellent results. We are extremely proud and thankful of our team’s accomplishments.

“Governments in Puerto Rico and U.S. Virgin Islands shut down their respective economies in mid-March. Restrictions eased in late May, but recent spikes in contagiousness have forced Puerto Rico to scale down the flexibility. Results were also impacted by the Federal Reserve Bank 150 bps rate cut in March. All of this followed the Puerto Rico earthquakes in January and occurred while we are in the process of integrating the Scotiabank acquisition.

“Our commitment and preparation enabled us to successfully manage these challenges fácil, rápido, hecho. During the quarter, our team worked mostly remotely. Branches operated safely assisted by our enhanced technology platform. Full-service ATMs and ITMs, mobile app, and online bill paying tools facilitated routine transactions in a contactless manner. Online/mobile appointment scheduling helped make possible Covid-19 safe meetings with customers at branches.

“The results speak for themselves. Loan production totaled more than $500 million, including $286 million in PPP loans, exceeding our Puerto Rico market share. We deployed a 100% digital, client-friendly application and funds disbursement process for PPP loans. Our PPP results enabled us to help more than 4,000 small businesses save more than 50,000 jobs. It also enabled us to attract new accounts in this strategically important customer base. Our online loan deferral tool and call centers processed relief for more than 44,000 retail customers. During the quarter, we also maintained a strong level of net interest margin, added to our Covid-19 related provisioning, reduced higher-cost wholesale funding, and increased liquidity and capital.

“Looking ahead, we expect to complete the integration of Scotiabank operations as planned by the end of the year, improve efficiencies, and continue to invest for the future to further simplify our operations and enhance our ability to serve customers. While we still face much uncertainty regarding Covid-19 and its impact on the economy, we are in a strong financial position, ready to assist our customers during these trying times.”

Income Statement

Unless otherwise noted, the following compares data for the second quarter 2020 to the second quarter 2019. Balances are quarterly averages. The Scotiabank acquisition closed on December 31, 2019.

·Total interest income of $121.7 million increased $27.4 million. This was primarily due to a 46.6% increase in interest earning assets partially offset by a 73 bps decline in yield. The increase in interest income from loans more than offset declines from increased cash due to significantly lower rates and lower investment securities balances. 2Q20 also included the previously-mentioned $6.0 million in interest recoveries.

·Total interest expense of $16.6 million increased $3.5 million. This was primarily due to a 54.4% increase in interest bearing liabilities and an 18 bps decline in rate. Rate declined due to the increase in lower-cost core deposits and the reduction in higher-cost balances of brokered CDs and borrowings.

·Provision for credit losses of $17.7 million was level with last year. 2Q20 included $5.0 million to incorporate the expected economic effects of the Covid-19 pandemic, while 2Q19 included $8.8 million for loans transferred to held for sale.

·Total banking and financial service revenues of $23.1 million increased $5.0 million. This was primarily due to our increased customer base and our larger mortgage servicing portfolio.

·All other non-interest income of $4.0 million declined $0.8 million. 2Q20 included a $3.5 million bargain purchase gain from the Scotiabank acquisition, while 2Q19 included a $4.8 million gain on sales of mortgage backed securities (MBS).

·Total non-interest expense of $85.5 million increased $34.0 million primarily due to the Scotiabank acquisition. 2Q20 also included $3.0 million in merger and restructuring charges, $2.4 million in legal claims, and $2.0 million in expenses necessary to deal with Covid-19’s impact on operations.

·The effective tax rate (ETR) was 25.0% compared to 31.2%. 2Q20 reflected a 24.2% full year ETR based on the mix of exempt income and income taxed at preferential rates.

Balance Sheet

Unless otherwise noted, the following compares data at June 30, 2020 to June 30, 2019. Balances are end-of-period. The purchase of Scotiabank closed on December 31, 2019.

·Net loans of $6.7 billion increased $2.3 billion primarily due to the Scotiabank acquisition. Compared to March 31, 2020, loans increased $198.1 million. This reflected increases from PPP and other commercial loans partially offset by paydown of retail loans.

·Loan production of $503.4 million increased $176.9 million. This reflected increases from PPP and other commercial loans and declines in the mortgage, auto and consumer categories due to the Covid-19 pandemic. Compared to 1Q20, production increased $222.9 million.

·Cash and cash equivalents of $1.9 billion increased $1.2 billion. Compared to March 31, 2020, they increased $574.1 million primarily because of the influx of both commercial and retail deposits.

·Total investments of $549.7 million declined $321.0 million. Compared to March 31, 2020, they declined $119.1 million, reflecting Treasury maturities and MBS repayments.

·Customer deposits, excluding brokered, of $8.3 billion increased $3.8 billion. Compared to March 31, 2020, customer deposits increased $760.0 million, reflecting commercial deposits from existing and new clients, and in retail accounts from increased liquidity in the economy.

·Brokered deposits of $218.2 million declined $170.2 million year-over-year and $37.3 million quarter-over-quarter. Borrowings of $104.4 million declined $252.4 million year-over-year and $59.4 million quarter-over-quarter.

·Total stockholder’s equity of $1.04 billion declined $3.6 million. Compared to March 31, 2020, it was $18.7 million higher due to the increase in retained earnings.

·Book value per common share of $18.69 declined $0.07 from a year-ago and increased $0.36 from March 31, 2020. Tangible book value per share of $16.01 declined $1.02 year-over-year and increased $0.41 from March 31, 2020.

Credit Quality

Unless otherwise noted, the following compares data at June 30, 2020 to June 30, 2019.

·Loans under 1-4 month deferral programs totaled $2.1 billion or 30% of total loans. Retail loans under deferral totaled $1.4 billion or 32% of such loans. Commercial loans under deferral totaled $685 million or 27% of such loans.

·The allowance for loan and lease losses of $232.7 million increased $70.1 million and as a percentage of loans held for investment was 3.35%, a decline of 17 bps. Compared to March 31, 2020, the allowance increased $1.9 million and as a percentage of loans declined 6 bps.

·Net charge offs of $15.8 million increased $2.8 million due to higher loan balances. The NCO rate of 0.92% declined 23 bps. Compared to March 31, 2020, NCOs declined $8.3 million and the NCO rate declined 52 bps.

·The early delinquency loan rate of 2.64% was down 86 bps year-over-year and 52 bps quarter-over-quarter. The total delinquency rate of 5.56% was down 51 bps year-over-year and 82 bps quarter-over-quarter. The declines reflect increased payments from customers and deferral programs.

·Total non-performing loans of $90.2 million declined $23.4 million year-over-year and $8.4 million quarter-over-quarter. The NPL rate of 1.81% declined 113 bps year-over-year and 26 bps quarter-over-quarter. The sequential decline in NPLs and rate reflects loan paydowns and deferrals.

Capital Position

June 30, 2020 regulatory capital ratios increased from March 31, 2020 and continue to be significantly above requirements for a well-capitalized institution: Leverage ratio was 10.16%, up 2 bps; common equity Tier 1 capital ratio (CET1) was 12.03%, up 34 bps; Tier 1 risk-based capital ratio was 13.71%, up 35 bps; and total risk-based capital ratio was 14.96%, up 34 bps.

Financial Supplement & Conference Call Presentation

OFG’s Financial Supplement, with full financial tables for the quarter ended June 30, 2020, and the 2Q20 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. Please refer to Tables 8-1, 8-2 and 8-3 in OFG’s above-mentioned Financial Supplement for a reconciliation of GAAP to non-GAAP measures and calculations.

Forward Looking Statements

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

Factors that might cause such a difference include, but are not limited to (i) 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, earthquakes and other 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; (xiv) possible legislative, tax or regulatory changes; and (xv) the severity, magnitude and duration of the Covid-19 pandemic, including impacts of the pandemic and of responses of federal, state and local governments on our branches, operations and personnel, and on our customers and their businesses.

For a discussion of such factors and certain risks and uncertainties to which OFG is subject, please refer to OFG’s annual report on Form 10-K for the year ended December 31, 2019, 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.

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Contacts

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

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

OFG Bancorp
Financial Supplement
The information contained in this Financial Supplement is preliminary and based on data available at the time of the earnings presentation, and investors should refer to our June 30, 2020 Quarterly Report on Form 10-Q 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		5-6
	Table  5:	Average Balances, Net Interest Income and Net Interest Margin		7-8
	Table  6:	Loan Information and Performance Statistics		9-11
	Table  7:	Allowance for Credit Losses		12
	Table  8:	Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory
		Capital		13-15
	Table  9:	Notes to Financial Summary, Selected Metrics, Loans, and Consolidated
		Financial Statements (Tables 1-8)		16

OFG Bancorp (NYSE: OFG)
Table 1: Financial and Statistical Summary - Consolidated
		2020			2020			2019			2019			2019			2020			2019
(Dollars in thousands, except per share data) (unaudited)		Q2			Q1			Q4			Q3			Q2			YTD			YTD
Statement of Operations
Net interest income		$	105,060		$	105,101	(e)	$	79,209		$	80,710		$	81,085		$	210,161		$	162,874
Non-interest income, net (core)	(2)		23,106			26,233	(e)		19,196			18,542			18,074			49,339			35,627
Total core revenues	(2)		128,166			131,334	(e)		98,405			99,252			99,159			259,500			198,501
Non-interest expense			85,481			87,322	(e)		78,913	(e)		50,727			51,452			172,803			103,604
Pre-provision net revenues	(22)		46,731			49,229			20,007			52,161			52,581			95,960			99,874
Total provision for credit losses	(22)		17,696			47,131	(c)(d)		23,068	(g)		43,770	(g)(h)		17,705	(h)		64,827			29,954
Net income (loss) before income taxes			29,035			2,098			(3,061)			8,391			34,876			31,133			69,920
Income tax expense (benefit)			7,248			297			(2,070)			1,008			10,897			7,545			22,471
Net income (loss) available to common stockholders		$	20,159			173			(2,619)			5,755			22,351			20,332			44,193
Common Share Statistics
Earnings (loss) per common share - basic	(3)	$	0.39			-			(0.05)			0.11			0.44			0.40			0.86
Earnings (loss) per common share - diluted	(4)	$	0.39			-			(0.05)			0.11			0.43			0.39			0.86
Average common shares outstanding			51,336			51,404			51,360			51,345			51,330			51,370			51,317
Average common shares outstanding and equivalents			51,470			51,713			51,791			51,772			51,680			51,584			51,652
Cash dividends per common share		$	0.07		$	0.07		$	0.07		$	0.07		$	0.07		$	0.14		$	0.14
Book value per common share (period end)		$	18.69		$	18.33	(c)	$	18.75		$	18.84		$	18.76		$	18.69		$	18.76
Tangible book value per common share (period end)	(5)	$	16.01		$	15.60	(c)	$	15.96		$	17.11		$	17.03		$	16.01		$	17.03
Balance Sheet (Average Balances)
Loans	(6)	$	6,840,650	(a)	$	6,687,875		$	4,500,071		$	4,539,045		$	4,514,030		$	6,764,263		$	4,509,403
Interest-earning assets			8,845,744	(a)		8,556,421			5,886,379			5,981,756			6,034,338			8,701,083			6,092,944
Total assets			9,512,129	(a)		9,326,627			6,325,334			6,433,658			6,496,423			9,419,378			6,550,575
Core deposits			7,852,495			7,516,438			4,582,872			4,563,187			4,467,729			7,684,466			4,430,331
Total deposits			8,088,106			7,752,446			4,850,979			4,921,317			4,880,112			7,920,275			4,885,344
Borrowings			157,669			271,800			304,365			340,194			459,802			214,735			510,694
Stockholders' equity			1,037,195			1,043,481	(c)		1,062,720			1,061,541			1,037,057			1,040,338			1,027,356
Common stockholders' equity			955,325			961,611	(c)		980,850			979,671			955,187			958,468			945,486
Performance Metrics
Net interest margin	(7)		4.78%			4.94%			5.34%			5.35%			5.39%			4.84%			5.39%
Return on average assets	(8)		0.92%			0.08%			-0.06%			0.46%			1.48%			0.50%			1.45%
Return on average tangible common stockholders' equity	(9)		9.88%			0.08%			-1.17%			2.58%			10.32%			4.97%			10.32%
Efficiency ratio	(10)		66.70%			66.49%			80.19%			51.11%			51.89%			66.59%			52.19%
Full-time equivalent employees, period end			2,373			2,449			2,455			1,436			1,417			2,373			1,417
Credit Quality Metrics	(1)(21)
Allowance for loan and lease losses		$	232,701		$	230,755	(c)(d)	$	116,539		$	154,343		$	162,642		$	232,701		$	162,642
Allowance as a % of loans held for investment			3.35%	(a)		3.41%			1.73%			3.41%			3.52%			3.35%	(a)		3.52%
Net charge-offs		$	15,750		$	24,034		$	14,395		$	34,486	(f)(g)	$	12,982		$	39,784		$	25,050
Net charge-off rate	(11)		0.92%			1.44%			1.28%			3.04%	(f)(g)		1.15%			1.18%			1.11%
Early delinquency rate (30 - 89 days past due)			2.64%			3.16%			3.07%			3.63%			3.50%			2.64%			3.50%
Total delinquency rate (30 days and over)			5.56%			6.38%			5.85%			5.40%			6.07%			5.56%			6.07%
Capital Ratios (Non-GAAP)	(12)(20)
Leverage ratio			10.16%			10.14%	(b)(c)		9.24%			15.41%			15.20%			10.16%			15.20%
Common equity Tier 1 capital ratio			12.03%	(a)		11.69%	(b)(c)		10.91%			17.98%			17.48%			12.03%			17.48%
Tier 1 risk-based capital ratio			13.71%	(a)		13.36%	(b)(c)		12.64%			20.43%			19.87%			13.71%			19.87%
Total risk-based capital ratio			14.96%	(a)		14.62%	(b)(c)		13.91%			21.71%			21.14%			14.96%			21.14%
Tangible common equity ("TCE") ratio			8.39%			8.80%			8.96%			14.07%			13.71%			8.39%			13.71%
(a) In response to the Coronavirus (COVID-19) pandemic, CARES Act created funding for the Small Business Administration (SBA) Paycheck Protection Program (PPP), which provides loans to small businesses to keep their employees on payroll and make other eligible payments. The original funding for the PPP was fully allocated by mid-April 2020, with additional funding made available on April 24, 2020 under the Paycheck Protection Program and Health Care Enhancement Act. During 2Q 2020, the Company participated in this program originating 4,342 PPP loans. At June 30, 2020, Oriental had PPP loans amounting to $278.1 million. These loans are fully guaranteed by the SBA and risk-weighted at 0%.
(b) During 1Q 2020, the Company decided to early implement Simplifications to the Capital Rule, which simplified the regulatory capital treatment for mortgage servicing assets (MSA) and certain deferred tax assets arising from temporary differences (temporary difference DTAs). It Increased common equity tier 1 (CET1) capital threshold deductions from 10 percent to 25 percent and removes the aggregate 15 percent CET1 threshold deduction. However, it retains the 250 percent risk weight applicable to non-deducted amounts of MSAs and temporary difference DTAs.
(c) On January 1, 2020, the Company implemented ASU No. 2016-13: Measurement of Credit Losses on Financial Instruments "(CECL)" using the modified retrospective approach. As a result, a $39.2 million allowance for credit losses was recorded for Non-PCD loans and $0.2 million for unused commitments with the corresponding adjustment reducing retained earnings, net of a $13.9 million deferred tax effect. For PCD loans, including BBVA and Eurobank acquired book plus the recently acquired Scotiabank, the adjustment amounting to $50.5 million was made through the allowance and loan balances with no impact in capital. As disclosed in the Company’s 2019 Form 10-K, the Company had initially elected to phase-in the January 1, 2020 (“day 1”) impact to retained earnings to regulatory capital, over a three-year transition period beginning in 2020. As part of its response to the impact of COVID-19, in March 2020, the Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency issued an interim final rule that provided the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period. In addition, for the first two years, a uniform 25% “scaling factor” is introduced to approximate the portion of the post day-one allowance attributable to CECL relative to the incurred loss methodology. The 25% scaling factor is calibrated to approximate an overall after-tax impact of differences in allowances under CECL vs the incurred loss methodology.
(d) During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly impacted the economic conditions in P.R. and the U.S., creating significant uncertainties. As a result of these developments, we increased our provision for credit losses in 1Q 2020 and 2Q 2020 by $34.1 million and $5.0 million, respectively.
(e) 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. At December 31, 2019, the consolidated statement of financial condition contemplated the effects of the Scotiabank PR & USVI acquisition. Nevertheless, the consolidated statement of operations did not contemplated the effects of the Scotiabank PR & USVI acquisition until January 1, 2020.
(f) During 3Q 2019, the Company received $2.4 million proceeds from the sale of fully charged-off originated auto and consumer loans.
(g) 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.
(h) 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

OFG Bancorp (NYSE: OFG)
Table 2: Consolidated Statements of Operations
		Quarter Ended															Six-Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
(Dollars in thousands, except per share data) (unaudited)		2020			2020			2019			2019			2019			2020			2019
Interest income:
Loans	(1)
Non-PCD loans		$	83,832		$	87,482		$	74,142		$	74,910		$	73,648		$	171,314		$	145,673
PCD loans			34,700	(a)		28,953			10,762			10,862			11,432			63,653	(a)		23,526
Total interest income from loans			118,532			116,435			84,904			85,772			85,080			234,967			169,199
Investment securities			3,160			7,262			6,271			7,883			9,175			10,422			19,766
Total interest income			121,692			123,697	(d)		91,175			93,655			94,255			245,389			188,965
Interest expense:
Deposits
Core deposits			13,999			15,034			7,957			8,256			7,465			29,033			13,679
Brokered deposits			1,446			1,586			1,804			2,298			2,526			3,032			5,362
Total deposits			15,445			16,620	(d)		9,761			10,554			9,991			32,065	(d)		19,041
Borrowings			1,187			1,976			2,205			2,391			3,179			3,163			7,050
Total interest expense			16,632			18,596			11,966			12,945			13,170			35,228			26,091
Net interest income			105,060			105,101			79,209			80,710			81,085			210,161			162,874
Provision for credit losses, excluding PCD loans	(1)		15,227			40,951			18,859			23,427			8,616			56,178			20,248
Provision for credit losses on PCD loans	(1)		2,469			6,180			4,209			20,343			9,089			8,649			9,706
Total provision for credit losses			17,696			47,131	(c)(d)		23,068			43,770	(f)(g)(h)		17,705	(h)		64,827	(c)(d)		29,954
Net interest income after provision for loan and lease losses			87,364			57,970			56,141			36,940			63,380			145,334			132,920
Non-interest income:
Banking service revenues			13,668			15,713			10,812			10,813			10,776			29,381			21,241
Wealth management revenues			6,366			7,286			7,062			6,611			6,669			13,652			12,551
Mortgage banking activities			3,072			3,234			1,322			1,118			629			6,306			1,835
Total banking and financial service revenues			23,106	(c)		26,233	(d)		19,196			18,542			18,074			49,339	(d)		35,627
Bargain purchase from Scotiabank PR & USVI acquisition			3,462	(b)		409			315			-			-			3,871	(b)		-
Other income, net			584			4,808	(e)		200			3,636	(e)		4,874	(e)		5,392	(e)		4,977	(e)
Total non-interest income, net			27,152			31,450			19,711			22,178			22,948			58,602			40,604
Non-interest expense:
Compensation and employee benefits			34,506			35,544			21,817			20,500			19,875			70,050			40,216
Occupancy, equipment and infrastructure costs			11,837			11,439			7,488			7,307			7,511			23,276			15,257
Merger and restructuring charges			3,006	(d)		304			21,499	(d)		1,556			1,000			3,310			-
Net (gain) loss on sale of foreclosed real estate and other repossessed assets			316			(193)			541			794			21			123			1,091
General and administrative expenses			33,214			37,513			25,450			18,475			20,482			70,727			42,181
Credit related expenses			2,602			2,715			2,118			2,095			2,563			5,317			4,859
Total non-interest expense			85,481			87,322	(d)		78,913			50,727			51,452			172,803	(d)		103,604
Income (loss) before income taxes			29,035			2,098			(3,061)			8,391			34,876			31,133			69,920
Income tax expense (benefit)			7,248			297			(2,070)			1,008			10,897			7,545			22,471
Net income (loss)			21,787			1,801	(c)		(991)	(d)		7,383			23,979			23,588	(c)		47,449
Less:  dividends on preferred stock			(1,628)			(1,628)			(1,628)			(1,628)			(1,628)			(3,256)			(3,256)
Net income (loss) available to common shareholders		$	20,159		$	173		$	(2,619)		$	5,755		$	22,351		$	20,332		$	44,193
(a) During 2Q 2020, the Company recognized interest recoveries on SOP loans acquired in the Scotiabank PR & USVI acquisition collected subsequently to the acquisition date amounting to $6.0 million.
(b) During 2Q 2020, the Company increased the Bargain purchase from Scotiabank PR & USVI acquisition by $3.5 million to adjust the fair value of accrued interest receivable in Day 1, net of taxes.
(c) During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly impacted the economic conditions in P.R. and the U.S., creating significant uncertainties. As a result of these developments, we increased our provision for credit losses in the 1Q 2020 and 2Q 2020 by $34.1 million and $5.0 million, respectively.
(d) 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 and $3.0 million during 2Q 2020. At December 31, 2019, the consolidated statement of financial condition contemplated the effects of the Scotiabank PR & USVI acquisition. Nevertheless, the consolidated statement of operations did not contemplated the effects of the Scotiabank PR & USVI acquisition until January 1, 2020.
(e) During 1Q 2020, 2Q 2019 and 3Q 2019, the Company sold $316 million, $350 million and $322 million available-for-sale mortgage-backed securities, respectively, and recognized a gain in the sale of $4.7 million, $4.8 million and $3.5 million.
(f) During 3Q 2019, the Company received $2.4 million proceeds from the sale of fully charged-off originated auto and consumer loans.
(g) 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.
(h) 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.
3

OFG Bancorp (NYSE: OFG)
Table 3: Consolidated Statements of Financial Condition
	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands) (unaudited)	2020			2020			2019			2019			2019
Cash and cash equivalents	$	1,900,037	(b)	$	1,325,941		$	852,757		$	962,887		$	677,430
Investments:
Trading securities		22			29			37			41			412
Investment securities available-for-sale, at fair value, with amortized cost of $529,985 and allowance for credit losses of $0
(March 31, 2020 - $648,565 and an allowance for credit losses of $0; December 31, 2019 - $1,074,474;
September 30, 2019 - $520,960; June 30, 2019 - $860,911)
Mortgage-backed securities		340,192			355,637			673,886			505,102			843,333
US treasury notes		197,340			298,986			397,183			10,938			10,907
Other investment securities		2,707			2,837			3,100			3,055			3,193
Total investment securities available-for-sale		540,239			657,460	(e)		1,074,169	(d)		519,095	(e)		857,433
Federal Home Loan Bank (FHLB) stock, at cost		8,366			10,301			13,048			10,525			12,821
Other investments		1,076			973			560			57			3
Total investments		549,703			668,763			1,087,814			529,718			870,669
Loans, net		6,739,243	(b)		6,541,174	(c)		6,641,847	(d)		4,407,190	(f)		4,474,497
Other assets:
Prepaid expenses		40,119			44,633			52,648			14,244			11,903
Deferred tax asset, net		186,730			196,129	(c)		176,740			112,602			111,147
Foreclosed real estate and repossessed properties		26,152			30,388			33,236			30,488			32,016
Premises and equipment, net		82,234			81,834			81,105			69,754			71,001
Goodwill		86,069			86,069			86,069			86,069			86,069
Right of use assets		34,692			36,844			39,112			19,318			20,419
Core deposit, customer relationship intangible and other intangibles		51,406			54,174			56,965			2,491			2,783
Servicing asset		47,926			49,287			50,779			10,125			10,134
Accounts receivable and other assets		188,408	(a)		123,335			138,589			88,619			96,059
Total assets	$	9,932,719		$	9,238,571		$	9,297,661	(b)	$	6,333,505		$	6,464,127
Deposits:
Demand deposits	$	4,370,419	(b)	$	3,711,492		$	3,579,115		$	2,228,256		$	2,219,911
Savings accounts		1,978,118			1,829,054			1,815,044			1,206,569			1,200,408
Time deposits		1,975,223			2,023,211			2,060,953			1,154,871			1,136,411
Brokered deposits		218,166			255,514			243,498			288,362			388,407
Total deposits		8,541,926			7,819,271			7,698,610	(d)		4,878,058			4,945,137
Borrowings:
Securities sold under agreements to repurchase		-			50,103			190,274			190,261			240,324
Advances from FHLB and other borrowings		68,340			77,601			79,204			79,603			80,423
Subordinated capital notes		36,083			36,083			36,083			36,083			36,083
Total borrowings		104,423			163,787			305,561			305,947			356,830
Other liabilities:
Derivative liabilities		2,078			2,059			913			1,159			985
Acceptances outstanding		20,034			11,763			21,599			21,796			23,610
Lease liability		35,694			37,702			39,840			21,081			22,179
Accrued expenses and other liabilities		187,280			181,395			185,660			56,388			70,512
Total liabilities		8,891,435			8,215,977			8,252,183			5,284,429			5,419,253
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		621,860			621,206			621,515			620,948			620,368
Legal surplus		98,347			95,945			95,779			95,783			95,019
Retained earnings		264,725			250,557	(c)		279,646			285,854			284,459
Treasury stock, at cost		(103,121)			(103,289)			(102,339)			(102,936)			(103,171)
Accumulated other comprehensive (loss) income, net		7,588			6,290			(1,008)			(2,458)			(3,686)
Total stockholders' equity		1,041,284			1,022,594			1,045,478			1,049,076			1,044,874
Total liabilities and stockholders' equity	$	9,932,719		$	9,238,571		$	9,297,661		$	6,333,505		$	6,464,127
(a) During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly impacted the economic conditions in P.R. and the U.S., creating significant uncertainties. After recent disruptions in economic conditions caused by COVID-19, the Company has offered several deferral programs for the payment of principal and interest for auto, personal, credit cards and mortgage, and commercial loans, for customers whose payments were not over 89 days past due at March 12, 2020 and requested to be included in these programs, which has caused accrued interest receivable to increase by approximately $40 million from 1Q 2020 to 2Q 2020.
(b) In response to the Coronavirus (COVID-19) pandemic, CARES Act created funding for the Small Business Administration (SBA) Paycheck Protection Program (PPP), which provides loans to small businesses to keep their employees on payroll and make other eligible payments. The original funding for the PPP was fully allocated by mid-April 2020, with additional funding made available on April 24, 2020 under the Paycheck Protection Program and Health Care Enhancement Act. During 2Q 2020, the Company participated in this program originating 4,342 PPP loans. At June 30, 2020, Oriental had PPP loans amounting to $278.1 million. These loans are fully guaranteed by the SBA and risk-weighted at 0%. These funds has been disbursed into the customers' deposit accounts which have increased the Company's cash and core deposits.
(c) On January 1, 2020, the Company implemented ASU No. 2016-13: Measurement of Credit Losses on Financial Instruments "(CECL)" using the modified retrospective approach. As a result, a $39.2 million allowance for credit losses was recorded for Non-PCD loans and $0.2 million for unused commitments with the corresponding adjustment reducing retained earnings, net of a $13.9 million deferred tax effect. For PCD loans, including BBVA and Eurobank acquired book plus the recently acquired Scotiabank, the adjustment amounting to $50.5 million was made through the allowance and loan balances with no impact in capital.
(d) On December 31, 2019,  the Company acquired Scotiabank's Puerto Rico and USVI operations, increasing investments by $576.2 million, loans by $2.2 billion and deposits by $3.0 billion.
(e) During 1Q 2020, the Company sold $316 million available-for-sale mortgage-backed securities and recognized a gain in the sale of $4.7 million. 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.
(f) 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.
4

OFG Bancorp (NYSE: OFG)
Table 4-1: Information on Loan Portfolio and Production
		June 30,			March 31,		December 31,		September 30,		June 30,
(Dollars in thousands) (unaudited)		2020			2020		2019		2019		2019
Non-PCD:	(1)
Mortgage		$	874,286		$	887,950	$	898,118	$	588,535	$	634,774
Commercial			1,918,424			1,910,192		1,862,484		1,575,491		1,618,809
Commercial Paycheck Protection Program (PPP Loans)			278,059	(a)		-		-		-		-
Consumer			458,714			481,710		495,244		383,819		388,582
Auto			1,454,987			1,487,701		1,479,612		1,277,114		1,219,066
			4,984,470			4,767,553		4,735,458		3,824,959		3,861,231
Less:  Allowance for credit losses			(151,507)			(149,961)		(85,044)		(80,579)		(91,637)
Total non- PCD loans held for investment, net			4,832,963			4,617,592		4,650,414		3,744,380		3,769,594
PCD:	(1)
Mortgage			1,541,637			1,561,557		1,591,112		494,278		538,001
Commercial			386,046			391,158		359,601		202,065		215,902
Consumer			2,950			3,350		9,263		802		867
Auto			37,409			42,466		43,361		3,883		6,462
			1,968,042			1,998,531		2,003,337		701,028		761,232
Less:  Allowance for credit losses	(1)		(81,194)			(80,794)		(31,495)		(73,764)		(71,005)
Total PCD loans held for investment, net			1,886,848			1,917,737		1,971,842		627,264		690,227
Total loans held for investment			6,719,811			6,535,329		6,622,256		4,371,644		4,459,821
Mortgage loans held for sale			19,432			5,845		19,591		23,504		13,293
Other loans held for sale			-			-		-		12,042		1,383
Total loans, net		$	6,739,243		$	6,541,174	$	6,641,847	$	4,407,190	$	4,474,497
Loan Portfolio Summary:
Loans held for investment:
Mortgage		$	2,415,923		$	2,449,507	$	2,489,230	$	1,082,813	$	1,172,775
Commercial			2,582,529			2,301,350		2,222,085		1,777,556		1,834,711
Consumer			461,664			485,060		504,507		384,621		389,449
Auto			1,492,396			1,530,167		1,522,973		1,280,997		1,225,528
			6,952,512			6,766,084		6,738,795		4,525,987		4,622,463
Less:  Allowance for credit losses			(232,701)			(230,755)		(116,539)		(154,343)		(162,642)
Total loans held for investment, net			6,719,811			6,535,329		6,622,256		4,371,644		4,459,821
Mortgage loans held for sale			19,432			5,845		19,591		23,504		13,293
Other loans held for sale			-			-		-		12,042		1,383
Total loans, net		$	6,739,243		$	6,541,174	$	6,641,847	$	4,407,190	$	4,474,497
(a) In response to the Coronavirus (COVID-19) pandemic, CARES Act created funding for the Small Business Administration (SBA) Paycheck Protection Program (PPP), which provides loans to small businesses to keep their employees on payroll and make other eligible payments. The original funding for the PPP was fully allocated by mid-April 2020, with additional funding made available on April 24, 2020 under the Paycheck Protection Program and Health Care Enhancement Act. During 2Q 2020, the Company participated in this program originating 4,342 PPP loans. At June 30, 2020, Oriental had PPP loans amounting to $278.1 million. These loans are fully guaranteed by the SBA and risk-weighted at 0%.
5

OFG Bancorp (NYSE: OFG)
Table 4-2: Information on Loan Portfolio and Production
		Quarter Ended												Six-Months Ended
		June 30,		March 31,		December 31,		September 30,		June 30,		June 30,			June 30,
(Dollars in thousands) (unaudited)			2020		2020		2019		2019		2019			2020		2019
Loan production	(13)
Mortgage		$	21,138	$	30,776	$	23,680	$	23,805	$	22,196		$	51,914	$	45,293
Commercial			98,558		54,113		216,610		65,635		64,079			152,671		124,564
Commercial PPP Loans			286,420		-		-		-		-			286,420		-
US Loan Programs			35,711		47,125		12,482		12,225		56,372			82,836		88,078
Consumer			14,231		39,199		41,947		48,257		47,662			53,430		88,539
Auto			47,374		109,344		110,184		141,507		136,263			156,718		256,462
Total		$	503,432	$	280,557	$	404,903	$	291,429	$	326,572		$	783,989	$	602,936
6

OFG Bancorp (NYSE: OFG)
Table 5-1: Average Balances, Net Interest Income and Net Interest Margin
		2020 Q2						2020 Q1						2019 Q4						2019 Q3						2019 Q2
				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		$	1,393,187	$	359	0.10	%	$	943,581	$	2,788	1.19	%	$	863,497	$	3,684	1.69	%	$	734,105	$	4,086	2.21	%	$	481,115	$	2,904	2.42	%
Investment securities			611,907		2,801	1.83	%		924,965		4,474	1.93	%		522,811		2,587	1.98	%		708,606		3,797	2.14	%		1,039,193		6,271	2.41	%
Loans held for investment	(1)
Non-PCD loans			4,857,281		83,832	6.94	%		4,613,878		87,482	7.63	%		3,888,442		74,142	7.56	%		3,873,743		74,910	7.67	%		3,810,005		73,648	7.75	%
PCD loans			1,983,369		34,700	7.00	%		2,073,997		28,953	5.58	%		611,629		10,762	7.04	%		665,302		10,862	6.53	%		704,025		11,432	6.50	%
Total loans			6,840,650		118,532	6.97	%		6,687,875		116,435	7.00	%		4,500,071		84,904	7.49	%		4,539,045		85,772	7.50	%		4,514,030		85,080	7.56	%
Total interest-earning assets		$	8,845,744	$	121,692	5.53	%	$	8,556,421	$	123,697	5.81	%	$	5,886,379	$	91,175	6.15	%	$	5,981,756	$	93,655	6.21	%	$	6,034,338	$	94,255	6.27	%
Interest bearing liabilities:
Deposits
NOW accounts		$	2,069,247	$	2,138	0.42	%	$	1,980,505	$	2,389	0.49	%	$	1,119,371	$	1,471	0.52	%	$	1,118,214	$	1,616	0.57	%	$	1,124,668	$	1,730	0.62	%
Savings accounts			1,809,517		1,976	0.44	%		1,797,658		2,440	0.55	%		1,195,689		1,843	0.61	%		1,199,678		2,012	0.67	%		1,180,153		1,882	0.64	%
Time deposits			1,990,639		7,835	1.58	%		2,039,311		8,131	1.60	%		1,156,965		4,442	1.52	%		1,151,248		4,427	1.53	%		1,065,005		3,652	1.38	%
Brokered deposits			235,611		1,446	2.47	%		236,008		1,586	2.70	%		268,108		1,804	2.67	%		358,130		2,298	2.55	%		412,383		2,526	2.46	%
			6,105,014		13,394	0.88	%		6,053,482		14,546	0.97	%		3,740,133		9,560	1.01	%		3,827,270		10,353	1.07	%		3,782,209		9,790	1.04	%
Non-interest bearing deposit accounts			1,983,092		-	-			1,698,964		-	-			1,110,847		-	-			1,094,047		-	-			1,097,903		-	-	%
Fair value premium amortization and core deposit intangible amortization			-		2,051	-			-		2,074	-			-		201	-			-		201	-			-		201	-
Total deposits			8,088,106		15,445	0.77	%		7,752,446		16,620	0.86	%		4,850,980		9,761	0.80	%		4,921,317		10,554	0.85	%		4,880,112		9,991	0.82	%
Borrowings
Securities sold under agreements to repurchase			46,154		334	2.91	%		158,462		1,002	2.54	%		190,000		1,189	2.48	%		224,783		1,342	2.37	%		343,370		2,107	2.46	%
Advances from FHLB and other borrowings			75,432		505	2.69	%		77,255		539	2.81	%		78,282		541	2.74	%		79,328		550	2.75	%		80,349		559	2.79	%
Subordinated capital notes			36,083		348	3.88	%		36,083		435	4.85	%		36,083		475	5.22	%		36,083		499	5.49	%		36,083		514	5.71	%
Total borrowings			157,669		1,187	3.03	%		271,800		1,976	2.92	%		304,365		2,205	2.87	%		340,194		2,391	2.79	%		459,802		3,180	2.77	%
Total interest-bearing liabilities		$	8,245,775	$	16,632	0.81	%	$	8,024,246	$	18,596	0.93	%	$	5,155,345	$	11,966	0.92	%	$	5,261,511	$	12,945	0.98	%	$	5,339,914	$	13,171	0.99	%
Interest rate spread				$	105,060	4.72	%			$	105,101	4.88	%			$	79,209	5.23	%			$	80,710	5.23	%			$	81,084	5.28	%
Net interest margin						4.78	%					4.94	%					5.34	%					5.35	%					5.39	%
				$	-					$	-					$	701					$	217					$	241
					-						-						332						154						189
SOP loan cost recoveries (interest recoveries in 2Q 2020)				$	5,982					$	-					$	1,033					$	371					$	430
Adjusted excluding cost/interests recoveries (Non-GAAP):
Total interest-earning assets		$	8,845,744	$	115,710	5.26	%	$	8,556,421	$	123,697	5.81	%	$	5,886,379	$	90,142	6.08	%	$	5,981,756	$	93,284	6.19	%	$	6,034,338	$	93,825	6.24	%
Interest rate spread				$	99,078	4.45	%			$	105,101	4.88	%			$	78,176	5.16	%			$	80,339	5.21	%			$	80,654	5.25	%
Net interest margin						4.50	%					4.94	%					5.27	%					5.33	%					5.36	%
Core deposits: (Non-GAAP)
Deposits
NOW accounts		$	2,069,247	$	2,138	0.42	%	$	1,980,505	$	2,389	0.49	%	$	1,119,371	$	1,471	0.52	%	$	1,118,214	$	1,616	0.57	%	$	1,124,668	$	1,730	0.62	%
Savings accounts			1,809,517		1,976	0.44	%		1,797,658		2,440	0.55	%		1,195,689		1,843	0.61	%		1,199,678		2,012	0.67	%		1,180,153		1,882	0.64	%
Time deposits			1,990,639		7,835	1.58	%		2,039,311		8,131	1.60	%		1,156,965		4,442	1.52	%		1,151,248		4,427	1.53	%		1,065,005		3,652	1.38	%
			5,869,403		11,949	0.82	%		5,817,474		12,960	0.90	%		3,472,025		7,756	0.89	%		3,469,140		8,055	0.92	%		3,369,826		7,264	0.86	%
Non-interest bearing deposit accounts			1,983,092		-	-	%		1,698,964		-	-	%		1,110,847		-	-	%		1,094,047		-	-	%		1,097,903		-	-	%
Total core deposits		$	7,852,495	$	11,949	0.61	%	$	7,516,438	$	12,960	0.69	%	$	4,582,872	$	7,756	0.67	%	$	4,563,187	$	8,055	0.70	%	$	4,467,729	$	7,264	0.65	%
7

OFG Bancorp (NYSE: OFG)
Table 5-2: Average Balances, Net Interest Income and Net Interest Margin (Continued)
	2020 YTD						2019 YTD
			Interest						Interest
	Average		Income/		Yield/		Average		Income/		Yield/
(Dollars in thousands) (unaudited)	Balance		Expense		Rate		Balance		Expense		Rate
Interest earning assets:
Cash equivalents	$	1,168,384	$	3,147	0.54	%	$	435,102	$	5,271	2.44	%
Investment securities		768,436		7,275	1.89	%		1,148,439		14,495	2.52	%
Loans held for investment
Non-PCD loans		4,735,580		171,315	7.26	%		3,796,169		145,673	7.74	%
PCD loans		2,028,683		63,653	6.28	%		713,234		23,526	6.60	%
Total loans		6,764,263		234,968	6.97	%		4,509,403		169,199	7.57	%
Total interest-earning assets	$	8,701,083	$	245,390	5.66	%	$	6,092,944	$	188,965	6.25	%
Interest bearing liabilities:
Deposits
NOW accounts	$	2,024,876	$	4,525	0.45	%	$	1,122,155	$	3,183	0.57	%
Savings accounts		1,803,587		4,416	0.49	%		1,180,586		3,496	0.60	%
Time deposits		2,014,975		15,967	1.59	%		1,028,870		6,598	1.29	%
Brokered deposits		235,809		3,032	2.58	%		455,013		5,362	2.38	%
		6,079,247		27,940	0.92	%		3,786,624		18,639	0.99	%
Non-interest bearing deposit accounts		1,841,028		-	-			1,098,720		-	-	%
Fair value premium amortization and core deposit intangible amortization		-		4,125	-			-		401	-
Total deposits		7,920,275		32,065	0.81	%		4,885,344		19,040	0.79	%
Borrowings
Securities sold under agreements to repurchase		102,308		1,334	2.62	%		393,826		4,892	2.50	%
Advances from FHLB and other borrowings		76,344		1,045	2.74	%		80,785		1,121	2.80	%
Subordinated capital notes		36,083		785	4.35	%		36,083		1,038	5.80	%
Total borrowings		214,735		3,164	2.95	%		510,694		7,051	2.78	%
Total interest-bearing liabilities	$	8,135,010	$	35,229	0.87	%	$	5,396,038	$	26,091	0.98	%
Interest rate spread			$	210,161	4.79	%			$	162,874	5.27	%
Net interest margin					4.84	%					5.39	%
SOP loan cost recoveries (interest recoveries in 2Q 2020)			$	5,982					$	967
Acquired BBVAPR loans			$	-						668
Acquired Eurobank loans				-						299
Adjusted excluding cost/interests recoveries (Non-GAAP):
Total interest-earning assets	$	8,701,083	$	239,408	5.52	%	$	6,092,944	$	187,998	6.22	%
Interest rate spread			$	204,179	4.65	%			$	161,907	5.24	%
Net interest margin					4.71	%					5.36	%
Core deposits: (Non-GAAP)
Deposits
NOW accounts	$	2,024,876	$	4,525	0.45	%	$	1,122,155	$	3,183	0.57	%
Savings accounts		1,803,587		4,416	0.49	%		1,180,586		3,496	0.60	%
Time deposits		2,014,975		15,967	1.59	%		1,028,870		6,598	1.29	%
		5,843,438		24,908	0.85	%		3,331,611		13,277	0.80	%
Non-interest bearing deposit accounts		1,841,028		-	-	%		1,098,720		-	-	%
Total core deposits	$	7,684,466	$	24,908	0.65	%	$	4,430,331	$	13,277	0.60	%
8

OFG Bancorp (NYSE: OFG)
Table 6-1: Loan Information and Performance Statistics (1)
		2020		2020		2019		2019			2019
(Dollars in thousands) (unaudited)		Q2		Q1		Q4		Q3			Q2
Net Charge-offs	(21)
Non-PCD
Mortgage:
Charge-offs		$	185	$	418	$	1,075	$	16,299	(b)	$	604
Recoveries			(9)		(249)		(437)		(493)			(316)
Total mortgage			176		169		638		15,806			288
Commercial:
Charge-offs			497		3,771		463		8,421	(b)		2,226
Recoveries			(631)		(1,522)		(606)		(176)			(179)
Total commercial			(134)		2,249		(143)		8,245			2,047
Consumer:
Charge-offs			4,187		6,015		5,289		5,317			5,272
Recoveries			(443)		(644)		(196)		(1,463)	(a)		(405)
Total consumer			3,744		5,371		5,093		3,854			4,867
Auto:
Charge-offs			13,300		13,053		12,930		12,383			10,728
Recoveries			(3,405)		(4,211)		(4,123)		(5,802)	(a)		(4,948)
Total auto			9,895		8,842		8,807		6,581			5,780
Total		$	13,681	$	16,631	$	14,395	$	34,486		$	12,982
PCD
Mortgage:
Charge-offs		$	2,178	$	5,143	$	-	$	-		$	-
Recoveries			(580)		(122)		-		-			-
Total mortgage			1,598		5,021		-		-			-
Commercial:
Charge-offs			386		2,357		-		-			-
Recoveries			(286)		(375)		-		-			-
Total commercial			100		1,982		-		-			-
Consumer:
Charge-offs			30		431		-		-			-
Recoveries			(30)		(63)		-		-			-
Total consumer			-		368		-		-			-
Auto:
Charge-offs			600		375		-		-			-
Recoveries			(229)		(343)		-		-			-
Total auto			371		32		-		-			-
Total		$	2,069	$	7,403	$	-	$	-		$	-
Total Net Charge-offs		$	15,750	$	24,034	$	14,395	$	34,486		$	12,982
Net Charge-off Rates	(21)
Mortgage			0.30%		0.86%		0.24%		5.68%			0.10%
Commercial			-0.01%		0.76%		-0.03%		1.86%			0.46%
Consumer			3.12%		4.63%		5.15%		3.93%			5.04%
Auto			2.72%		2.31%		2.73%		2.09%			1.92%
Total			0.92%		1.44%		1.28%		3.04%	(b)		1.15%
Average Loans Held For Investment	(21)
Mortgage		$	2,366,598	$	2,414,686	$	1,062,845	$	1,112,487		$	1,153,357
Commercial			2,484,533		2,239,659		1,753,070		1,772,333			1,770,601
Consumer			479,996		496,336		395,612		392,724			386,177
Auto			1,509,523		1,537,194		1,288,544		1,261,501			1,203,895
Total		$	6,840,650	$	6,687,875	$	4,500,071	$	4,539,045		$	4,514,030
(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.
9

OFG Bancorp (NYSE: OFG)
Table 6-2: Loan Information and Performance Statistics (Excludes PCD/PCI Loans) (1)
		2020			2020		2019			2019		2019
(Dollars in thousands) (unaudited)		Q2			Q1		Q4			Q3		Q2
Early Delinquency (30 - 89 days past due)
Mortgage		$	15,665		$	20,518	$	22,389		$	21,631	$	24,303
Commercial			7,704			6,074		9,895			4,467		2,823
Consumer			18,254			13,127		9,560			9,360		9,223
Auto			89,825			110,959		103,749			103,452		98,847
Total		$	131,448	(a)	$	150,678	$	145,593		$	138,910	$	135,196
Early Delinquency Rates (30 - 89 days past due)
Mortgage			1.79%			2.31%		2.49%			3.68%		3.83%
Commercial			0.40%			0.32%		0.53%			0.28%		0.17%
Consumer			3.98%			2.73%		1.93%			2.44%		2.37%
Auto			6.17%			7.46%		7.01%			8.10%		8.11%
Total			2.64%			3.16%		3.07%			3.63%		3.50%
Total Delinquency (30 days and over past due)
Mortgage:
Traditional, Non traditional, and Loans under Loss Mitigation		$	40,719		$	46,768	$	41,314	(b)	$	40,194	$	70,364
GNMA's buy-back option program			75,091			75,314		75,181	(b)		11,403		11,675
Total mortgage			115,810			122,082		116,495			51,597		82,039
Commercial			38,258			33,746		30,111	(b)		25,271		29,673
Consumer			22,796			16,808		12,258	(b)		11,927		11,710
Auto			100,027			131,715		118,020	(b)		117,716		110,926
Total		$	276,891	(a)	$	304,351	$	276,884		$	206,511	$	234,348
Total Delinquency Rates (30 days and over past due)
Mortgage:
Traditional, Non traditional, and Loans under Loss Mitigation			4.66%			5.27%		4.60%			6.83%		11.08%
GNMA's buy-back option program			8.59%			8.48%		8.37%			1.94%		1.84%
Total mortgage			13.25%			13.75%		12.97%			8.77%		12.92%
Commercial			1.99%			1.77%		1.62%			1.60%		1.83%
Consumer			4.97%			3.49%		2.48%			3.11%		3.01%
Auto			6.87%			8.85%		7.98%			9.22%		9.10%
Total			5.56%			6.38%		5.85%			5.40%		6.07%
Nonperforming Assets	(14)
Mortgage		$	30,491		$	31,073	$	22,552		$	21,138	$	53,534
Commercial			44,187			42,668		42,606	(b)		36,409		45,443
Consumer			4,933			3,690		5,287			4,213		2,495
Auto			10,539			21,147		14,295			15,063		12,082
Total nonperforming loans			90,150	(a)		98,578		84,740			76,823		113,554
Foreclosed real estate			24,792			27,292		29,909			26,952		29,509
Other repossessed assets			1,360			3,096		3,327			3,537		2,507
Total nonperforming assets		$	116,302		$	128,966	$	117,976		$	107,312	$	145,570
Nonperforming Loan Rates
Mortgage			3.49%			3.50%		2.51%			3.59%		8.43%
Commercial			2.30%			2.23%		2.29%			2.31%		2.81%
Consumer			1.08%			0.77%		1.07%			1.10%		0.64%
Auto			0.72%			1.42%		0.97%			1.18%		0.99%
Total loans			1.81%			2.07%		1.79%			2.01%		2.94%
(a) During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly impacted the economic conditions in P.R. and the U.S., creating significant uncertainties. After recent disruptions in economic conditions caused by COVID-19, the Company has offered several deferral programs for the payment of principal and interest for auto, personal, credit cards and mortgage, and commercial loans, for customers whose payments were not over 89 days past due at March 12, 2020 and requested to be included in these programs.
(b) 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.
10

OFG Bancorp (NYSE: OFG)
Table 6-3: Loan Information and Performance Statistics (1)
		2020		2020		2019			2019		2019
(Dollars in thousands) (unaudited)		Q2		Q1		Q4			Q3		Q2
Nonperforming PCD Loans	(14)
Mortgage		$	1,373	$	1,341	$	-		$	-	$	-
Commercial			81,064		82,411		225			242		239
Consumer			12		10		499			560		628
Total nonperforming loans		$	82,449	$	83,762	$	724		$	802	$	867
Nonperforming PCD Loan Rates
Mortgage			0.09%		0.09%		0.00%			0.00%		0.00%
Commercial			21.00%		21.07%		0.06%			0.12%		0.11%
Consumer			0.41%		0.30%		5.39%			69.83%		72.43%
Total loans			4.19%		4.19%		0.04%			0.11%		0.11%
Total PCD Loans Held for Investment	(21)
Mortgage		$	1,541,637	$	1,561,557	$	1,591,112		$	494,278	$	538,001
Commercial			386,046		391,158		359,601	(b)		202,065		215,902
Consumer			2,950		3,350		9,263			802		867
Total loans		$	1,930,633	$	1,956,065	$	1,959,976		$	697,145	$	754,770
11

OFG Bancorp (NYSE: OFG)
Table 7: Allowance for Credit Losses (1)
	Quarter Ended June 30, 2020
(Dollars in thousands) (unaudited)	Mortgage		Commercial		Consumer		Auto		Total
Allowance for credit losses Non-PCD:
Balance at beginning of period	$	19,694	$	49,196	$	27,763	$	53,308	$	149,961
Provision for credit losses		455		(6,319)		7,935		13,156		15,227
Charge-offs		(185)		(497)		(4,187)		(13,300)		(18,169)
Recoveries		9		631		443		3,405		4,488
Balance at end of period	$	19,973	$	43,011	$	31,954	$	56,569	$	151,507
Allowance for credit losses PCD:
Balance at beginning of period	$	30,603	$	48,836	$	177	$	1,178	$	80,794
Provision for credit losses		1,915		177		(8)		385		2,469
Charge-offs		(2,178)		(386)		(30)		(600)		(3,194)
Recoveries		580		286		30		229		1,125
Balance at end of period	$	30,920	$	48,913	$	169	$	1,192	$	81,194
Allowance for credit losses summary:
Balance at beginning of period	$	50,297	$	98,032	$	27,940	$	54,486	$	230,755
Provision for credit losses		2,370		(6,142)		7,927		13,541		17,696
Charge-offs		(2,363)		(883)		(4,217)		(13,900)		(21,363)
Recoveries		589		917		473		3,634		5,613
Balance at end of period	$	50,893	$	91,924	$	32,123	$	57,761	$	232,701
Allowance coverage ratio		2.11%		3.56%		6.96%		3.87%		3.35%
Allowance coverage ratio excluding PPP loans (Non-GAAP)		2.11%		3.99%		6.96%		3.87%		3.49%
12

OFG Bancorp (NYSE: OFG)
Table 8-1: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital
In addition to disclosing required regulatory capital measures, we also report certain non-GAAP capital measures that management uses in assessing its capital adequacy. These non-GAAP measures include tangible common equity ("TCE") and TCE ratio. The table below provides the details of the calculation of our regulatory capital and non-GAAP capital measures. While our non-GAAP capital measures are widely used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies, they may not be comparable to similarly titled measures reported by other companies.
	2020		2020			2019		2019		2019
(Dollars in thousands) (unaudited)	Q2		Q1			Q4		Q3		Q2
Stockholders' Equity to Non-GAAP Tangible Common Equity
Total stockholders' equity	$	1,041,284	$	1,022,594	(a)	$	1,045,478	$	1,049,076	$	1,044,874
Less:  Intangible assets		(137,475)		(140,243)			(143,034)		(88,560)		(88,852)
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	$	821,939	$	800,481		$	820,574	$	878,646	$	874,152
Common stock outstanding at end of period		51,342		51,327			51,399		51,347		51,330
Tangible book value (Non-GAAP)	$	16.01	$	15.60		$	15.96	$	17.11	$	17.03
Total Assets to Tangible Assets
Total assets	$	9,932,719	$	9,238,571		$	9,297,661	$	6,333,505	$	6,464,127
Less:  Intangible assets		(137,475)		(140,243)			(143,034)		(88,560)		(88,852)
Tangible assets (Non-GAAP)	$	9,795,244	$	9,098,328		$	9,154,627	$	6,244,945	$	6,375,275
Non-GAAP TCE Ratio
Tangible common equity	$	821,939	$	800,481		$	820,574	$	878,646	$	874,152
Tangible assets		9,795,244		9,098,328			9,154,627		6,244,945		6,375,275
TCE ratio		8.39%		8.80%			8.96%		14.07%		13.71%
Average Equity to Non-GAAP Average Tangible Common Equity
Average total stockholders' equity	$	1,037,195	$	1,043,481	(a)	$	1,062,720	$	1,061,541	$	1,037,057
Less:  Average noncumulative perpetual preferred stock		(92,000)		(92,000)			(92,000)		(92,000)		(92,000)
Average noncumulative perpetual preferred stock issuance costs		10,130		10,130			10,130		10,130		10,130
Average total common stockholders' equity	$	955,325	$	961,611		$	980,850	$	979,671	$	955,187
Less:  Average intangible assets		(139,094)		(141,875)			(89,005)		(88,701)		(88,995)
Average tangible common equity	$	816,231	$	819,736		$	891,845	$	890,970	$	866,192
(a) On January 1, 2020, the Company implemented ASU No. 2016-13: Measurement of Credit Losses on Financial Instruments "(CECL)" using the modified retrospective approach. As a result, a $39.2 million allowance for credit losses was recorded for Non-PCD loans and $0.2 million for unused commitments with the corresponding adjustment reducing retained earnings, net of a $13.9 million deferred tax effect. For PCD loans, including BBVA and Eurobank acquired book plus the recently acquired Scotiabank, the adjustment amounting to $50.5 million was made through the allowance and loan balances with no impact in capital.
13

OFG Bancorp (NYSE: OFG)
Table 8-2: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued)
		BASEL III
		Standardized
		2020		2020			2019		2019		2019
(Dollars in thousands) (unaudited)		Q2		Q1			Q4		Q3		Q2
Regulatory Capital Metrics
Common equity Tier 1 capital		$	836,899	$	816,356		$	735,442	$	858,092	$	855,667
Tier 1 capital			953,769		933,226			852,312		974,962		972,537
Total risk-based capital	(15)		1,040,984		1,020,748			937,963		1,035,910		1,035,109
Risk-weighted assets			6,957,647		6,983,626	(a)		6,740,846		4,771,165		4,895,441
Regulatory Capital Ratios
Common equity Tier 1 capital ratio	(16)		12.03%		11.69%			10.91%		17.98%		17.48%
Tier 1 risk-based capital ratio	(17)		13.71%		13.36%			12.64%		20.43%		19.87%
Total risk-based capital ratio	(18)		14.96%		14.62%			13.91%		21.71%		21.14%
Leverage ratio	(19)		10.16%		10.14%			9.24%		15.41%		15.20%
Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach
Total stockholders' equity	(1)	$	1,041,284	$	1,022,594		$	1,045,478	$	1,049,076	$	1,044,874
CECL transition adjustment	(20)		32,269		31,882			-		-		-
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			(8,885)		(7,576)			441		1,742		3,087
Unrealized losses on cash flow hedges, net of income tax			1,297		1,286			567		716		599
			984,095		966,316			964,616		969,664		966,690
Less:    Disallowed goodwill			(86,069)		(86,069)			(86,069)		(86,069)		(86,069)
Disallowed other intangible assets, net			(35,563)		(37,241)			(39,127)		(1,557)		(1,739)
Disallowed deferred tax assets, net			(25,564)		(26,650)	(a)		(95,879)		(23,946)		(23,215)
Threshold 15%			-		-	(a)		(8,099)		-		-
Common equity Tier 1 capital			836,899		816,356			735,442		858,092		855,667
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			953,769		933,226			852,312		974,962		972,537
Plus tier 2 capital:  Qualifying allowance for loan and lease losses			87,215		87,522			85,651		60,948		62,572
Total risk-based capital		$	1,040,984	$	1,020,748		$	937,963	$	1,035,910	$	1,035,109
(a) During 1Q 2020, the Company decided to early implement Simplifications to the Capital Rule, which simplified the regulatory capital treatment for mortgage servicing assets (MSA) and certain deferred tax assets arising from temporary differences (temporary difference DTAs). It Increased common equity tier 1 (CET1) capital threshold deductions from 10 percent to 25 percent and removes the aggregate 15 percent CET1 threshold deduction. However, it retains the 250 percent risk weight applicable to non-deducted amounts of MSAs and temporary difference DTAs.
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OFG Bancorp (NYSE: OFG)
Table 8-3: 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 quarters ended June 30, 2020 and March 31, 2020.
		Quarter ended June 30, 2020							Quarter ended March 31, 2020
				Income Tax		Impact on					Income Tax		Impact on
(Dollars in thousands) (unaudited)		Pre-tax		Effect		Net Income			Pre-tax		Effect		Net Income
U.S. GAAP net income						$	21,787						$	1,801
Non-GAAP adjustments:
Sale of mortgage-backed securities available-for-sale	(a)	$	-	$	-		-		$	(4,728)	$	1,324		(3,404)	(a)
Merger expenses			3,006		(1,127)		1,879	(b)		304		(114)		190	(b)
Bargain purchase from Scotiabank PR & USVI			(3,462)		-		(3,462)	(c)		(409)		-		(409)	(c)
Interest recoveries on PCI loans acquired in the Scotiabank PR & USVI acquisition			(5,982)		2,243		(3,739)	(d)		-		-		-
COVID 19 additional provision for credit losses			5,000		(1,875)		3,125	(e)		34,083		(12,781)		21,302	(e)
COVID 19 expenses			2,008		(753)		1,255	(f)		168		(63)		105	(f)
Adjusted net income (Non-GAAP)						$	20,845						$	19,585
Less:  dividends on preferred stock							(1,628)							(1,628)
Adjusted net income available to common shareholders (Non-GAAP)						$	19,217						$	17,957
Adjusted earnings per common share - diluted (Non-GAAP)						$	0.37						$	0.35
Adjusted Performance Metrics - Reconciliation to GAAP Financial Measures:
Net income						$	21,787						$	1,801
Non-GAAP adjustments							(942)							17,784
Adjusted net income (Non-GAAP)							20,845							19,585
Average assets							9,512,129							9,326,627
Return on average assets							0.92%							0.08%
Adjusted return on average assets (Non-GAAP)							0.88%							0.84%
Net income available to common shareholders						$	20,159						$	173
Non-GAAP adjustments							(942)							17,784
Adjusted net income available to common shareholders (Non-GAAP)							19,217							17,957
Average tangible common equity							816,231							819,736
Return on average tangible common stockholders' equity							9.88%							0.08%
Adjusted return on average tangible common stockholders' equity (Non-GAAP)							9.42%							8.76%
Total non-interest expense						$	85,481						$	87,322
Non-GAAP adjustments, pre-tax							(5,014)							(472)
Adjusted total non-interest expense (Non-GAAP)							80,467							86,850
Net interest income							105,060							105,101
Total banking and financial service revenues							23,106							26,233
Non-GAAP adjustments							(5,982)							-
							122,184							131,334
Efficiency ratio							66.70%							66.49%
Adjusted efficiency ratio (Non-GAAP)							65.86%							66.13%
(a) During 1Q 2020, 2Q 2019 and 3Q 2019, the Company sold $316 million, $350 million and $322 million available-for-sale mortgage-backed securities, respectively, and recognized a gain in the sale of $4.7 million, $4.8 million and $3.5 million.
(b) During 2Q 2019, the Company entered into an agreement with Scotiabank to acquire its Puerto Rico and US Virgin Islands operations. On December 31, 2019, the Company completed the acquisition. During 1Q 2020 and 2Q 2020, $0.3 million, and $3.0 million, respectively, were incurred in related expenses.
(c)  On December 31, 2019, the Company acquired Scotiabank de Puerto Rico and USVI resulting in bargain purchase income of $5.7 million during 4Q 2019. During 2Q 2020, the Company increased the bargain purchase income by $3.5 million to adjust the fair value of accrued interest receivable in Day 1, net of taxes. $2.3 million.
(d) During 2Q 2020, the Company recognized interest recoveries on SOP loans acquired in the Scotiabank PR & USVI acquisition collected subsequently to the acquisition date amounting to $6.0 million.
(e) During 1Q 2020 and 2Q 2020, the Company recorded a $34.1 million and $5.0 million provision for credit losses, respectively, in relation to the global pandemic from the coronavirus COVID-19.
(f) During 1Q 2020 and 2Q 2020, the Company recorded $0.2 million and $2.0 million expenses, respectively, in relation to the global pandemic from the coronavirus COVID-19.
15

OFG Bancorp (NYSE: OFG)
Table 9: Notes to Financial Summary, Selected Metrics, Loans, and Consolidated Financial Statements (Tables 1 - 8)
(1)	We used the terms "PCI" and "SOP" to refer to loans acquired with credit deterioration 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. On January 1, 2020, the Company implemented ASU No. 2016-13: Measurement of Credit Losses on Financial Instruments "(CECL)" using the modified retrospective approach. CECL replaces the concept of purchased credit impaired loans (PCI) with the concept of purchased financial assets with credit deterioration (PCD). PCD accounting is called ‘gross-up accounting’ because, at acquisition, an entity grosses up the amortized cost basis of the PCD asset for the initial estimate of credit losses. This Day 1 allowance for credit losses is established without an income statement effect. The Company elected to maintain previously existing pools on adoption, therefore the pool continues to be the unit of account, and the allowance and non-credit discount or premium is not allocated to the individual assets. These loans are not classified as delinquent or nonperforming even though the customer may be contractually past due because we expect that we will fully collect the carrying value of these loans.
(2)	Total banking and financial service revenues.
(3)	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 PCD/PCI loans.
(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)	Most PCD loans are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses. Therefore, they are not included as non-performing loans. PCD loan pools that are not accreting interest income are deemed to be non-performing loans and presented separately.
(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)	In March 2020, in light of recent strains on the U.S. economy as a result of the coronavirus disease 2019 (COVID-19), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency issued an interim final rule that provided the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period. In addition, for the first two years, a uniform 25% “scaling factor” is introduced to approximate the portion of the post day-one allowance attributable to CECL relative to the incurred loss methodology. The 25% scaling factor is calibrated to approximate an overall after-tax impact of differences in allowances under CECL vs the incurred loss methodology.
(21)	CECL replaces the concept of purchased credit impaired loans (PCI assets) with the concept of purchased financial assets with credit deterioration (PCD assets). An entity records a PCD asset at the purchase price plus the allowance for credit losses expected at the time of acquisition. Under this method, there is no credit loss expense affecting net income on acquisition. Changes in estimates of expected credit losses after acquisition are recognized as credit loss expense (or reversal of credit loss expense) in subsequent periods as they arise.
(22)	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.
16