OFG Bancorp (OFG) 8-K OFG Bancorp Reports 3Q21 Results

Exhibit 99

 

OFG Bancorp Reports 3Q21 Results

SAN JUAN, Puerto Rico, October 20, 2021 – OFG Bancorp (NYSE: OFG), the financial holding company for Oriental Bank, reported results for the third quarter ended September 30, 2021.

CEO Comment

José Rafael Fernández, Chief Executive Officer, said: “We had another strong overall quarterly performance as we continue to execute our strategic plan.

“Results reflect consistently growing recurring net income, our larger scale, our focus on increasing digital utilization and customer service differentiation, and Puerto Rico’s nascent economic and post-pandemic recovery.

“3Q21 new loan origination remained strong at $556 million. Compared to 2Q21, loans ex-PPP increased, cost of funds declined 17%, customer deposits increased $154 million, and net interest income continued to steadily grow.

“Provision for credit losses was a $5 million net benefit as asset quality continued to trend to levels closer to US peer banks. Total banking and financial service revenues rose 3%, and non-interest expenses fell 5%, reflecting in part reduced credit related expenses.

“During 3Q21, we also successfully executed on our buyback program, acquiring $40.2 million of shares as part of our previously announced $50.0 million authorization.

“Return on Average Assets and Average Equity was 1.59% and 17.72%, respectively.

“OFG is strategically well-positioned to continue to benefit from and play a major role supporting the economic development of the communities we serve. Thanks to all our team members who have been more than ready to help our customers achieve their goals.”

3Q21 Highlights

Summary: Earnings per share diluted of $0.81 compared to $0.78 in 2Q21 and $0.50 in 3Q20. Total core revenues of $134.7 million compared to $133.3 million in 2Q21 and $127.0 million in 3Q20. Net interest margin of 4.12% compared to 4.22% in 2Q21 and 4.30% in 3Q20.

Total Interest Income of $112.1 million compared to $113.5 million in 2Q21. 3Q21 reflected mortgage paydowns and PPP loan forgiveness mostly offset by increased income from auto and commercial loans, and investment securities. Average loan balances were $6.47 billion compared to $6.60 billion in 2Q21 and $6.79 billion in 3Q20.

New Loan Origination totaled $556.2 million compared to $673.6 million in 2Q21 and $457.8 million in 3Q20. 3Q21 reflected continued high levels of auto, commercial, consumer, and mortgage lending.

Total Interest Expense was $9.4 million compared to $11.2 million in 2Q21 and $15.4 million in 3Q20. 3Q21 reflected lower cost of core deposits (30 bps compared to 38 bps in 2Q21 and 56 bps in 3Q20) primarily due to generally lower rates and CD maturities. Average customer deposit balances were $9.10 billion compared to $8.96 billion in 2Q21 and $8.38 billion in 3Q20.

Provision for Credit Losses was a net benefit of $5.0 million, reflecting $4.3 million in net reserve releases. This compares to a net benefit of $8.3 million in 2Q21 and a net expense of $13.7 million in 3Q20. 3Q21 reflected continued improvement in asset quality trends. 3Q21 net charge-offs of $6 million included $6.5 million for a previously reserved amount on a commercial loan.

Banking and Financial Service Revenues were $32.0 million compared to $31.0 million in 2Q21 and $27.5 million in 3Q20. 3Q21 reflected continued higher levels of banking service, wealth management, and mortgage banking activity as pandemic-related restrictions have subsided.

Non-Interest Expenses were $78.9 million compared to $82.7 million in 2Q21 and $83.4 million in 3Q20. 3Q21 reflected a $2.2 million benefit in credit related expenses from gains on sales of real estate owned, previously announced cost savings, and increased compensation. 2Q21 included a $2.2 million technology project write down.

Pre-Provision Net Revenues were $56.3 million compared to $51.8 million in 2Q21 and $47.4 million in 3Q20.

Loans Held for Investment totaled $6.41 billion at 9/30/21 compared to $6.50 billion at 6/30/21 and $6.76 billion at 9/30/20. Excluding PPP loans, loans held for investment of $6.27 billion increased $5.0 million compared to 2Q21.

Capital: Tangible book value per share was $18.59 compared to $18.13 in 2Q21 and $16.51 in 3Q20. CET1 ratio was 13.52% compared to 13.95% 2Q21 and 12.55% in 3Q20.

Conference Call, Financial Supplement & Presentation

A conference call to discuss 3Q21 results, outlook and related matters will be held today at 10:00 AM ET. Phone (877) 876-9174 or (785) 424-1669. Conference ID: OFGQ321. The call can also be accessed live on www.ofgbancorp.com. Webcast replay will be available shortly thereafter.

OFG’s Financial Supplement, with full financial tables for the quarter ended September 30, 2021, and the 3Q21 Conference Call Presentation, can be found on the Quarterly Results page on OFG’s Investor Relations website at www.ofgbancorp.com. 

Non-GAAP Financial Measures

In addition to our financial information presented in accordance with GAAP, management uses certain “non-GAAP financial measures” within the meaning of SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Please refer to Tables 8-1 and 8-2 in OFG’s above-mentioned Financial Supplement for a reconciliation of GAAP to non-GAAP measures and calculations.

Forward Looking Statements

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

Factors that might cause such a difference include but are not limited to (i) general business and economic conditions, including changes in interest rates; (ii) cybersecurity breaches; (iii) hurricanes, earthquakes, and other natural disasters in Puerto Rico; (iv) competition in the financial services industry; and (v) the severity, magnitude and duration of the COVID-19 pandemic, and its impact on our operations, personnel, and customers.

For a discussion of such factors and certain risks and uncertainties to which OFG is subject, please refer to OFG’s annual report on Form 10-K for the year ended December 31, 2020, 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 57^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 September 30, 2021 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		2-3
	Table  2:	Consolidated Statements of Operations		4-5
	Table  3:	Consolidated Statements of Financial Condition		6
	Table  4:	Information on Loan Portfolio and Production		7-8
	Table  5:	Average Balances, Net Interest Income and Net Interest Margin		9-10
	Table  6:	Loan Information and Performance Statistics		11-13
	Table  7:	Allowance for Credit Losses		14
	Table  8:	Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital		15-16
	Table  9:	Notes to Financial Summary, Selected Metrics, Loans, and Consolidated
		Financial Statements (Tables 1-8)		17

OFG Bancorp (NYSE: OFG)
Table 1-1: Financial and Statistical Summary - Consolidated
		2021			2021			2021		2020			2020
(Dollars in thousands, except per share data) (unaudited)		Q3			Q2			Q1		Q4			Q3
Statement of Operations
Net interest income		$	102,705		$	102,257		$	98,204	$	98,738		$	99,533
Non-interest income, net (core)	(2)		32,012			31,048			29,452		34,047			27,486
Total core revenues			134,717			133,305			127,656		132,785			127,019
Non-interest expense			78,924	(a)		82,676			77,666		89,039			83,444
Pre-provision net revenues	(22)		56,298			51,772			50,945		44,123			47,415
Total provision for credit losses			(4,997)			(8,305)	(d)		6,324		14,176			13,669
Net income before income taxes			61,295			60,077			44,621		29,947			33,746
Income tax expense			19,624			19,250			14,248		6,646			6,308
Net income available to common stockholders			41,671			40,827			29,118		21,673			25,810
Common Share Statistics
Earnings (loss) per common share - basic	(3)	$	0.82		$	0.79		$	0.57	$	0.42		$	0.50
Earnings (loss) per common share - diluted	(4)	$	0.81		$	0.78		$	0.56	$	0.42		$	0.50
Average common shares outstanding			51,063			51,636			51,397		51,350			51,342
Average common shares outstanding and equivalents			51,516			52,048			51,752		51,618			51,527
Cash dividends per common share		$	0.12	(b)	$	0.08		$	0.08	$	0.07		$	0.07
Book value per common share (period end)		$	21.08		$	20.59		$	19.90	$	19.54		$	19.13
Tangible book value per common share (period end)	(5)	$	18.59		$	18.13		$	17.39	$	16.97		$	16.51
Balance Sheet (Average Balances)
Loans	(6)	$	6,465,874		$	6,598,569		$	6,635,908	$	6,708,284		$	6,787,022
Interest-earning assets			9,879,687			9,726,905			9,358,377		9,270,739			9,218,717
Total assets			10,492,502			10,356,879			10,004,047		9,921,254			9,918,410
Core deposits			9,103,221			8,963,336			8,535,678		8,451,308			8,376,623
Total deposits			9,114,587			8,997,842			8,581,633		8,515,646			8,517,039
Interest-bearing deposits			6,474,977			6,392,219			6,223,419		6,199,929			6,240,639
Borrowings			98,943			99,950			100,951		101,930			102,916
Stockholders' equity			1,068,618			1,083,452			1,101,046		1,083,423			1,062,460
Common stockholders' equity			1,066,361			1,046,835			1,019,176		1,001,553			980,590
Performance Metrics
Net interest margin	(7)		4.12%			4.22%			4.26%		4.24%			4.30%
Return on average assets	(8)		1.59%			1.58%			1.21%		0.94%			1.11%
Return on average tangible common stockholders' equity	(9)		17.72%			17.78%			13.11%		9.99%			12.23%
Efficiency ratio	(10)		58.59%			62.02%			60.84%		67.06%			65.69%
Full-time equivalent employees, period end			2,274			2,231			2,238		2,275			2,332
Credit Quality Metrics	(1)(21)
Allowance for credit losses		$	180,872		$	191,717	(d)	$	201,973	$	204,809	(e)	$	235,313
Allowance as a % of loans held for investment			2.82%			2.95%	(d)		3.06%		3.07%	(e)		3.48%
Net charge-offs		$	6,051	(e)	$	2,118	(d)	$	9,105	$	44,814	(e)	$	10,570
Net charge-off rate	(11)		0.37%	(e)		0.13%	(d)		0.55%		2.67%	(e)		0.62%
Early delinquency rate (30 - 89 days past due)			2.06%			1.86%	(d)		2.15%		2.68%			2.50%
Total delinquency rate (30 days and over)			3.82%			3.90%	(d)		4.65%		5.74%			5.67%
Capital Ratios (Non-GAAP)	(12)(20)
Leverage ratio			9.33%	(b)(c)		9.84%	(c)		10.48%		10.30%			10.00%
Common equity Tier 1 capital ratio			13.52%	(b)		13.95%			13.56%		13.08%			12.55%
Tier 1 risk-based capital ratio			14.03%	(b)(c)		14.70%	(c)		15.28%		14.78%			14.25%
Total risk-based capital ratio			15.28%	(b)(c)		15.95%	(c)		16.54%		16.04%			15.50%
Tangible common equity ("TCE") ratio			8.86%	(b)		9.06%			8.95%		9.00%			8.58%
(a) During 3Q 2021, foreclosed real estate and other repossessed assets (income) expenses benefited from gain in real estate owned sales.
(b) During 3Q 2021, the Company repurchased $40.2 million common stock from of our $50.0 million share buyback program and increased its common stock dividend to $0.12 per share.
(c) During 3Q 2021, the Company redeemed Series D Preferred Stock. During 2Q 2021, the Company redeemed Series A and B Preferred Stock.
(d) During 2Q 2021 asset quality trends improved consistently.
(e) During 3Q 2021, the Company charged-off $6.5 million for a previously reserved amount on a commercial loan. During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.
2

OFG Bancorp (NYSE: OFG)
Table 1-2: Financial and Statistical Summary - Consolidated (Continued)
		2021			2020
(Dollars in thousands, except per share data) (unaudited)		YTD			YTD
Statement of Operations
Net interest income		$	303,166		$	309,694
Non-interest income, net (core)	(2)		92,512			76,825
Total core revenues			395,678			386,519
Non-interest expense			239,266			256,247
Pre-provision net revenues	(22)		159,015			143,375
Total provision for credit losses			(6,978)	(b)		78,496	(c)
Net income before income taxes			165,993			64,879	(c)
Income tax expense			53,122			13,853
Net income available to common stockholders			111,616			46,142	(c)
Common Share Statistics
Earnings (loss) per common share - basic	(3)	$	2.18		$	0.90	(c)
Earnings (loss) per common share - diluted	(4)	$	2.15		$	0.89	(c)
Average common shares outstanding			51,364			51,361
Average common shares outstanding and equivalents			51,748			51,563
Cash dividends per common share		$	0.28	(a)	$	0.21
Book value per common share (period end)		$	21.08		$	19.13
Tangible book value per common share (period end)	(5)	$	18.59		$	16.51
Balance Sheet (Average Balances)
Loans	(6)	$	6,566,100		$	6,771,904
Interest-earning assets			9,656,838			8,874,886
Total assets			10,286,265			9,586,931
Core deposits			8,869,399			7,916,869
Total deposits			8,899,881			8,120,648
Interest-bearing deposits			6,364,459			6,133,437
Borrowings			99,941			177,189
Stockholders' equity			1,084,253			1,047,766
Common stockholders' equity			1,044,297			965,896
Performance Metrics
Net interest margin	(7)		4.20%			4.65%
Return on average assets	(8)		1.46%			0.71%	(c)
Return on average tangible common stockholders' equity	(9)		16.25%			7.44%	(c)
Efficiency ratio	(10)		60.47%			66.30%
Full-time equivalent employees, period end			2,274			2,332
Credit Quality Metrics	(1)(21)
Allowance for credit losses		$	180,872	(b)	$	235,313
Allowance as a % of loans held for investment			2.82%	(b)		3.48%
Net charge-offs		$	17,274	(b)	$	50,354
Net charge-off rate	(11)		0.35%	(b)		0.99%
Early delinquency rate (30 - 89 days past due)			2.06%	(b)		2.50%
Total delinquency rate (30 days and over)			3.82%	(b)		5.67%
(a) During 3Q 2021, the Company increased its common stock quarterly dividend to $0.12 per share, from $0.08 in 2Q 2021 and 1Q 2021, and $0.07 in 2020.
(b) During 2Q 2021 asset quality trends improved consistently.
(c) During 1Q 2020 and 2Q 2020, the Company increased its provision for credit losses by $34.1 million and $5 million, respectively, as a result of the Covid-19 pandemic. Core revenues were also negatively impacted by the pandemic during these quarters as a result of lockdown measures by the local Government.
3

OFG Bancorp (NYSE: OFG)
Table 2-1: Consolidated Statements of Operations
		Quarter Ended
		September 30,			June 30,			March 31,		December 31,			September 30,
(Dollars in thousands, except per share data) (unaudited)		2021			2021			2021		2020			2020
Interest income:
Loans	(1)
Non-PCD loans		$	85,032		$	85,181		$	82,936	$	81,171		$	83,029
PCD loans			22,905			24,880			25,275		29,250			29,018
Total interest income from loans			107,937			110,061			108,211		110,421			112,047
Investment securities			4,202			3,402			2,771		2,600			2,890
Total interest income			112,139			113,463			110,982		113,021			114,937
Interest expense:
Deposits
Core deposits			8,681			10,436			11,861		13,225			13,808
Brokered deposits			10			24			163		288			812
Total deposits			8,691			10,460			12,024		13,513			14,620
Borrowings			743			746			754		770			784
Total interest expense			9,434			11,206			12,778		14,283			15,404
Net interest income			102,705			102,257			98,204		98,738			99,533
(Recapture) provision for credit losses, excluding PCD loans	(1)		(2,351)			(7,726)			2,998		15,464			13,845
(Recapture) provision for credit losses on PCD loans	(1)		(2,646)			(579)			3,326		(1,288)			(176)
Total (recapture) provision for credit losses			(4,997)			(8,305)	(b)		6,324		14,176			13,669
Net interest income after provision for credit losses			107,702			110,562			91,880		84,562			85,864
Non-interest income:
Banking service revenues			18,198			18,248			16,493		16,901			16,297
Wealth management revenues			7,619			8,263			7,388		10,865	(d)		7,272
Mortgage banking activities			6,195			4,537			5,571		6,281			3,917
Total banking and financial service revenues			32,012			31,048			29,452		34,047			27,486
Bargain purchase from Scotiabank PR & USVI acquisition			-			-			-		-			3,465	(e)
Other income, net			505			1,143			955		377			375
Total non-interest income, net			32,517			32,191			30,407		34,424			31,326
Non-interest expense:
Compensation and employee benefits			33,745			32,919			32,618		30,921			31,955
Occupancy, equipment and infrastructure costs			12,078			12,528			13,128		12,064			11,943
General and administrative expenses			34,041			35,370	(c)		30,201		33,454			33,452
Foreclosed real estate and other repossessed assets (income) expenses			(2,163)	(a)		328			(50)		1,004			1,323
Merger and restructuring charges			-			-			-		10,092	(f)		2,681	(f)
COVID 19 expenses			1,223			1,531			1,769		1,504			2,090
Total non-interest expense			78,924			82,676			77,666		89,039			83,444
Income before income taxes			61,295			60,077			44,621		29,947			33,746
Income tax expense			19,624			19,250			14,248		6,646			6,308
Net income			41,671			40,827			30,373		23,301			27,438
Less:  dividends on preferred stock			-			-			(1,255)		(1,628)			(1,628)
Net income available to common shareholders		$	41,671		$	40,827		$	29,118	$	21,673		$	25,810
(a) During 3Q 2021, foreclosed real estate and other repossessed assets (income) expenses benefited from gain in real estate owned sales.
(b) During 2Q 2021 asset quality trends improved consistently.
(c) During 2Q 2021, includes a technology project write-down amounting to $2.2 million.
(d) During 4Q 2020, the Company recognized annual insurance contingent commissions amounting to $4.0 million.
(e) During 3Q 2020, the Company increased the Bargain purchase from Scotiabank PR & USVI acquisition by $3.5 million as part of remeasurement period adjustments.
(f) On December 31, 2019, the Company acquired Scotiabank's Puerto Rico and USVI operations, incurring in merger and restructuring charges of $2.7 million during 3Q 2020 and $10.1 million during 4Q 2020.
4

OFG Bancorp (NYSE: OFG)
Table 2-2: Consolidated Statements of Operations (Continued)
		Nine-Months Ended
		September 30,			September 30,
(Dollars in thousands, except per share data) (unaudited)		2021			2020
Interest income:
Loans	(1)
Non-PCD loans		$	253,149		$	254,343
PCD loans			73,060			92,671	(d)
Total interest income from loans			326,209			347,014
Investment securities			10,375			13,312
Total interest income			336,584			360,326
Interest expense:
Deposits
Core deposits			30,978	(a)		42,841
Brokered deposits			197			3,844
Total deposits			31,175			46,685
Borrowings			2,243			3,947
Total interest expense			33,418			50,632
Net interest income			303,166			309,694
(Recapture) provision for credit losses, excluding PCD loans	(1)		(7,079)			70,023
Provision for credit losses on PCD loans	(1)		101			8,473
Total (recapture) provision for credit losses			(6,978)	(b)		78,496	(e)
Net interest income after provision for loan and lease losses			310,144			231,198
Non-interest income:
Banking service revenues			52,939			45,678
Wealth management revenues			23,270			20,924
Mortgage banking activities			16,303			10,223
Total banking and financial service revenues			92,512			76,825	(e)
Bargain purchase from Scotiabank PR & USVI acquisition			-			7,336	(f)
Other income, net			2,603			5,767
Total non-interest income, net			95,115			89,928
Non-interest expense:
Compensation and employee benefits			99,282			102,005
Occupancy, equipment and infrastructure costs			37,734			35,219
General and administrative expenses			99,612			101,978
Foreclosed real estate and other repossessed assets (income) expenses			(1,885)			6,763
Merger and restructuring charges			-			5,991	(g)
COVID 19 expenses			4,523			4,291
Total non-interest expense			239,266			256,247
Income before income taxes			165,993			64,879
Income tax expense			53,122			13,853
Net income			112,871			51,026
Less:  dividends on preferred stock			(1,255)	(c)		(4,884)
Net income available to common shareholders		$	111,616		$	46,142
(a) During 2021, the Company had lower cost of core deposits, mainly from lower rates and time deposit maturities.
(b) During 2Q 2021 asset quality trends improved consistently.
(c) During 3Q 2021, the Company redeemed Series D Preferred Stock. During 2Q 2021, the Company redeemed Series A and B Preferred Stock.
(d) During 2Q 2020 and 3Q 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 and $469 thousand, respectively.
(e) During 1Q 2020 and 2Q2020, the Company increased its provision for credit losses by $34.1 million and $5 million, respectively, as a result of the Covid-19 pandemic. Core revenues were also negatively impacted by the pandemic during these quarters as a result of lockdown measures by the local Government.
(f) During 2Q 2020 and 3Q 2020, the Company increased the Bargain purchase from Scotiabank PR & USVI acquisition by $3.5 million and $3.5 million, respectively, as part of remeasurement period adjustments.
(g) On December 31, 2019, the Company acquired Scotiabank's Puerto Rico and USVI operations, incurring in merger and restructuring charges of $3.0 million during 2Q 2020 and $2.7 million during 3Q 2020.
5

OFG Bancorp (NYSE: OFG)
Table 3: Consolidated Statements of Financial Condition
	September 30,			June 30,			March 31,		December 31,		September 30,
(Dollars in thousands) (unaudited)	2021			2021			2021		2020		2020
Cash and cash equivalents	$	2,755,691		$	2,767,693		$	2,409,416	$	2,155,577	$	2,283,050
Investments:
Trading securities		22			29			23		22		22
Investment securities available-for-sale, at fair value,
with amortized cost of $497,450 (June 30, 2021 - $491,321;
March 31, 2021 - $462,115; December 31, 2020 - $432,175;
September 30, 2020 - $412,899;   no allowance for credit
losses for any period)
Mortgage-backed securities		494,727			487,014			457,673		432,935		329,719
US treasury notes		10,875			10,910			10,946		10,983		91,531
Other investment securities		3,505			3,695			2,390		2,520		2,565
Total investment securities available-for-sale		509,107			501,619			471,009		446,438		423,815
Mortgage-backed securities held-to-maturity, at amortized cost,
no allowance for credit losses for any period		375,214			125,138			126,767		-		-
Federal Home Loan Bank (FHLB) stock, at cost		7,496			7,541			8,233		8,278		8,322
Other investments		10,434			9,168			5,557		3,962		2,205
Total investments		902,273			643,495			611,589		458,700		434,364
Loans, net		6,282,485			6,354,040			6,432,079		6,501,259		6,579,140
Other assets:
Prepaid expenses		65,003			61,678			58,348		61,416		54,583
Deferred tax asset, net		128,663			144,799			154,540		162,478		178,957
Foreclosed real estate and repossessed properties		15,433			16,818			18,366		13,412		21,374
Premises and equipment, net		86,981			85,993			83,756		83,786		83,270
Goodwill		86,069			86,069			86,069		86,069		86,069
Right of use assets		30,625			32,621			32,714		31,383		35,900
Core deposit, customer relationship intangible and other intangibles		38,545			40,995			43,445		45,896		48,650
Servicing asset		48,227			47,712			47,911		47,295		47,242
Accounts receivable and other assets		166,870			179,900			175,109		178,740		166,392
Total assets	$	10,606,865		$	10,461,813		$	10,153,342	$	9,826,011	$	10,018,991
Deposits:
Demand deposits	$	5,531,124		$	5,337,691		$	4,889,759	$	4,619,395	$	4,689,512
Savings accounts		2,378,211			2,277,296	(c)		2,138,125		1,914,239		1,913,338
Time deposits		1,323,688			1,464,134			1,693,924		1,832,891		1,933,517
Brokered deposits		11,366			11,371	(c)		34,954		49,115		96,090
Total deposits		9,244,389			9,090,492			8,756,762		8,415,640		8,632,457
Borrowings:
Advances from FHLB and other borrowings		62,934			63,867			65,013		66,268		66,781
Subordinated capital notes		36,083			36,083			36,083		36,083		36,083
Total borrowings		99,017			99,950			101,096		102,351		102,864
Other liabilities:
Securities purchased but not yet received		31,565			-			-		-		-
Derivative liabilities		1,136			1,293			1,465		1,712		1,895
Acceptances outstanding		24,371			27,703			24,389		33,349		18,291
Lease liability		32,167			34,052			34,017		32,566		37,029
Accrued expenses and other liabilities		120,555			128,326			127,190		154,418		162,133
Total liabilities		9,553,200			9,381,816			9,044,919		8,740,036		8,954,669
Stockholders' equity:
Preferred stock		-	(a)		24,000	(a)		92,000		92,000		92,000
Common stock		59,885			59,885			59,885		59,885		59,885
Additional paid-in capital		635,808			626,995			622,935		622,652		621,978
Legal surplus		114,485			110,235			106,165		103,269		101,233
Retained earnings		375,729			352,001			322,202		300,096		284,053
Treasury stock, at cost		(140,862)	(b)		(100,719)			(100,994)		(102,949)		(103,095)
Accumulated other comprehensive income, net		8,620			7,600			6,230		11,022		8,268
Total stockholders' equity		1,053,665			1,079,997			1,108,423		1,085,975		1,064,322
Total liabilities and stockholders' equity	$	10,606,865		$	10,461,813		$	10,153,342	$	9,826,011	$	10,018,991
(a) During 3Q 2021, the Company redeemed Series D Preferred Stock. During 2Q 2021, the Company redeemed Series A and B Preferred Stock.
(b) During 3Q 2021, the Company repurchased $40.2 million common stock from our $50.0 million share buyback program.
(c) During 2Q 2021, money market deposit accounts amounting to $23.8 million were reclassified from brokered deposits to savings account, as a result of an FDIC exemption from the brokered deposit definition.
6

OFG Bancorp (NYSE: OFG)
Table 4-1: Information on Loan Portfolio and Production
		September 30,		June 30,		March 31,		December 31,			September 30,
(Dollars in thousands) (unaudited)		2021		2021		2021		2020			2020
Non-PCD:	(1)
Mortgage		$	751,389	$	760,168	$	791,062	$	823,443		$	847,671
Commercial			1,954,804		1,903,866		1,827,102		1,836,137			1,785,022
Commercial Paycheck Protection Program (PPP Loans)	(23)		136,698		228,677		311,823		282,713			289,218
Consumer			373,672		381,475		395,073		413,552			434,546
Auto			1,667,113		1,618,788		1,565,473		1,534,269			1,511,829
			4,883,676		4,892,974		4,890,533		4,890,114			4,868,286
Less:  Allowance for credit losses			(138,874)		(148,314)		(156,978)		(161,015)			(156,409)
Total non- PCD loans held for investment, net			4,744,802		4,744,660		4,733,555		4,729,099			4,711,877
PCD:	(1)
Mortgage			1,270,854		1,324,274		1,406,044		1,459,932			1,504,914
Commercial			239,554		260,627		272,793		283,160	(a)		352,555
Consumer			959		981		1,120		1,394			2,336
Auto			15,820		19,236		23,036		27,533			31,836
			1,527,187		1,605,118		1,702,993		1,772,019			1,891,641
Less:  Allowance for credit losses	(1)		(41,998)		(43,403)		(44,995)		(43,794)	(a)		(78,904)
Total PCD loans held for investment, net			1,485,189		1,561,715		1,657,998		1,728,225			1,812,737
Total loans held for investment			6,229,991		6,306,375		6,391,553		6,457,324			6,524,614
Mortgage loans held for sale			35,031		37,885		38,220		41,654			54,526
Other loans held for sale			17,463		9,780		2,306		2,281			-
Total loans, net		$	6,282,485	$	6,354,040	$	6,432,079	$	6,501,259		$	6,579,140
Loan Portfolio Summary:
Loans held for investment:
Mortgage		$	2,022,243	$	2,084,442	$	2,197,106	$	2,283,375		$	2,352,585
Commercial			2,194,358		2,164,493		2,099,895		2,119,297	(a)		2,137,577
Commercial Paycheck Protection Program (PPP Loans)	(23)		136,698		228,677		311,823		282,713			289,218
Consumer			374,631		382,456		396,193		414,946			436,882
Auto			1,682,933		1,638,024		1,588,509		1,561,802			1,543,665
			6,410,863		6,498,092		6,593,526		6,662,133			6,759,927
Less:  Allowance for credit losses			(180,872)		(191,717)		(201,973)		(204,809)	(a)		(235,313)
Total loans held for investment, net			6,229,991		6,306,375		6,391,553		6,457,324			6,524,614
Mortgage loans held for sale			35,031		37,885		38,220		41,654			54,526
Other loans held for sale			17,463		9,780		2,306		2,281			-
Total loans, net		$	6,282,485	$	6,354,040	$	6,432,079	$	6,501,259		$	6,579,140
(a) During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.
7

OFG Bancorp (NYSE: OFG)
Table 4-2: Information on Loan Portfolio and Production
		Quarter Ended										Nine-Months Ended
		September 30,		June 30,		March 31,		December 31,		September 30,		September 30,		September 30,
(Dollars in thousands) (unaudited)			2021		2021		2021		2020		2020		2021		2020
Loan production	(13)
Mortgage		$	85,535	$	103,837	$	95,851	$	97,656	$	93,650	$	285,223	$	148,382
Commercial			154,146		218,425		83,820		174,894		83,488		456,391		236,159
Commercial PPP Loans			16		32,712		126,266		-		10,318		158,994		296,738
US Loan Programs			100,066		109,522		44,841		49,221		90,878		254,429		173,714
Consumer			50,630		38,038		27,492		25,984		23,540		116,160		76,970
Auto			165,854		171,104		149,357		137,545		155,880		486,315		312,598
Total		$	556,247	$	673,638	$	527,627	$	485,300	$	457,754	$	1,757,512	$	1,244,561
8

OFG Bancorp (NYSE: OFG)
Table 5-1: Average Balances, Net Interest Income and Net Interest Margin
		2021 Q3						2021 Q2						2021 Q1						2020 Q4						2020 Q3
				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		$	2,699,144	$	986	0.14	%	$	2,519,406	$	706	0.11	%	$	2,204,431	$	595	0.11	%	$	2,091,458	$	613	0.12	%	$	1,929,024	$	613	0.13	%
Investment securities			714,669		3,216	1.80	%		608,930		2,696	1.77	%		518,038		2,176	1.68	%		470,997		1,986	1.69	%		502,671		2,278	1.81	%
Loans held for investment	(1)
Non-PCD loans			4,899,312		85,032	6.89	%		4,937,602		85,181	6.92	%		4,893,874		82,936	6.87	%		4,863,902		81,171	6.64	%		4,870,753		83,029	6.78	%
PCD loans			1,566,562		22,905	5.85	%		1,660,967		24,880	5.99	%		1,742,034		25,275	5.80	%		1,844,382		29,250	6.34	%		1,916,269		29,018	6.06	%
Total loans			6,465,874		107,937	6.62	%		6,598,569		110,061	6.69	%		6,635,908		108,211	6.61	%		6,708,284		110,421	6.55	%		6,787,022		112,047	6.57	%
Total interest-earning assets		$	9,879,687	$	112,139	4.50	%	$	9,726,905	$	113,463	4.68	%	$	9,358,377	$	110,982	4.81	%	$	9,270,739	$	113,020	4.85	%	$	9,218,717	$	114,938	4.96	%
Interest bearing liabilities:
Deposits
NOW accounts		$	2,754,985	$	2,288	0.33	%	$	2,542,018	$	2,259	0.36	%	$	2,397,673	$	2,393	0.40	%	$	2,344,903	$	2,258	0.38	%	$	2,227,687	$	2,247	0.40	%
Savings accounts			2,330,121		1,639	0.28	%		2,236,281		2,097	0.38	%		2,003,963		2,124	0.43	%		1,897,618		1,954	0.41	%		1,927,680		2,010	0.41	%
Time deposits			1,378,505		2,916	0.84	%		1,579,414		4,243	1.07	%		1,775,828		5,507	1.24	%		1,893,070		6,975	1.47	%		1,944,856		7,512	1.54	%
Brokered deposits			11,366		10	0.34	%		34,506		24	0.28	%		45,955		163	1.44	%		64,338		289	1.78	%		140,416		812	2.30	%
			6,474,977		6,853	0.42	%		6,392,219		8,623	0.54	%		6,223,419		10,187	0.66	%		6,199,929		11,476	0.74	%		6,240,639		12,581	0.80	%
Non-interest bearing deposit accounts			2,639,610		-	-			2,605,623		-	-			2,358,214		-	-			2,315,717		-	-			2,276,400		-	-
Fair value premium amortization and core deposit intangible amortization			-		1,838	-			-		1,837	-			-		1,837	-			-		2,037	-			-		2,039	-
Total deposits			9,114,587		8,691	0.38	%		8,997,842		10,460	0.46	%		8,581,633		12,024	0.56	%		8,515,646		13,513	0.63	%		8,517,039		14,620	0.68	%
Borrowings
Advances from FHLB and other borrowings			62,860		450	2.84	%		63,867		452	2.84	%		64,868		459	2.87	%		65,847		468	2.83	%		66,833		476	2.83	%
Subordinated capital notes			36,083		293	3.21	%		36,083		294	3.27	%		36,083		295	3.31	%		36,083		301	3.34	%		36,083		308	3.39	%
Total borrowings			98,943		743	2.98	%		99,950		746	2.99	%		100,951		754	3.03	%		101,930		769	3.01	%		102,916		784	3.03	%
Total interest-bearing liabilities		$	9,213,530	$	9,434	0.41	%	$	9,097,792	$	11,206	0.49	%	$	8,682,584	$	12,778	0.60	%	$	8,617,576	$	14,282	0.66	%	$	8,619,955	$	15,404	0.71	%
Interest rate spread				$	102,705	4.09	%			$	102,257	4.19	%			$	98,204	4.21	%			$	98,738	4.19	%			$	99,534	4.25	%
Net interest margin						4.12	%					4.22	%					4.26	%					4.24	%					4.30	%
Core deposits: (Non-GAAP)
Deposits
NOW accounts		$	2,754,985	$	2,288	0.33	%	$	2,542,018	$	2,259	0.36	%	$	2,397,673	$	2,393	0.40	%	$	2,344,903	$	2,258	0.38	%	$	2,227,687	$	2,247	0.40	%
Savings accounts			2,330,121		1,639	0.28	%		2,236,281		2,097	0.38	%		2,003,963		2,124	0.43	%		1,897,618		1,954	0.41	%		1,927,680		2,010	0.41	%
Time deposits			1,378,505		2,916	0.84	%		1,579,414		4,243	1.07	%		1,775,828		5,507	1.24	%		1,893,070		6,975	1.47	%		1,944,856		7,512	1.54	%
			6,463,611		6,843	0.42	%		6,357,713		8,599	0.54	%		6,177,464		10,024	0.66	%		6,135,591		11,187	0.73	%		6,100,223		11,769	0.77	%
Non-interest bearing deposit accounts			2,639,610		-	-			2,605,623		-	-			2,358,214		-	-			2,315,717		-	-			2,276,400		-	-
Total core deposits		$	9,103,221	$	6,843	0.30	%	$	8,963,336	$	8,599	0.38	%	$	8,535,678	$	10,024	0.47	%	$	8,451,308	$	11,187	0.53	%	$	8,376,623	$	11,769	0.56	%
9

OFG Bancorp (NYSE: OFG)
Table 5-2: Average Balances, Net Interest Income and Net Interest Margin (Continued)
	2021 YTD						2020 YTD
			Interest						Interest
	Average		Income/		Yield/		Average		Income/		Yield/
(Dollars in thousands) (unaudited)	Balance		Expense		Rate		Balance		Expense		Rate
Interest earning assets:
Cash equivalents	$	2,476,139	$	2,287	0.12	%	$	1,423,781	$	3,760	0.35	%
Investment securities		614,599		8,088	1.75	%		679,201		9,552	1.88	%
Loans held for investment
Non-PCD loans		4,910,218		253,149	6.89	%		4,780,966		254,343	7.09	%
PCD loans		1,655,882		73,060	5.88	%		1,990,938		92,671	6.21	%
Total loans		6,566,100		326,209	6.64	%		6,771,904		347,014	6.83	%
Total interest-earning assets	$	9,656,838	$	336,584	4.66	%	$	8,874,886	$	360,326	5.41	%
Interest bearing liabilities:
Deposits
NOW accounts	$	2,566,201	$	6,940	0.36	%	$	2,092,973	$	6,772	0.43	%
Savings accounts		2,191,316		5,859	0.36	%		1,845,253		6,426	0.46	%
Time deposits		1,576,460		12,664	1.07	%		1,991,432		23,480	1.57	%
Brokered deposits		30,482		197	0.86	%		203,779		3,844	2.51	%
		6,364,459		25,660	0.54	%		6,133,437		40,522	0.88	%
Non-interest bearing deposit accounts		2,535,422		-	-			1,987,211		-	-	%
Fair value premium amortization and core deposit intangible amortization		-		5,515	-			-		6,163	-
Total deposits		8,899,881		31,175	0.47	%		8,120,648		46,685	0.77	%
Borrowings
Securities sold under agreements to repurchase		-		-	-	%		67,956		1,335	2.62	%
Advances from FHLB and other borrowings		63,858		1,362	2.85	%		73,150		1,521	2.77	%
Subordinated capital notes		36,083		881	3.26	%		36,083		1,091	4.02	%
Total borrowings		99,941		2,243	3.00	%		177,189		3,947	2.97	%
Total interest-bearing liabilities	$	8,999,822	$	33,418	0.50	%	$	8,297,837	$	50,632	0.81	%
Interest rate spread			$	303,166	4.16	%			$	309,694	4.60	%
Net interest margin					4.20	%					4.65	%
Core deposits: (Non-GAAP)
Deposits
NOW accounts	$	2,566,201	$	6,940	0.36	%	$	2,092,973	$	6,772	0.43	%
Savings accounts		2,191,316		5,859	0.36	%		1,845,253		6,426	0.46	%
Time deposits		1,576,460		12,664	1.07	%		1,991,432		23,480	1.57	%
		6,333,977		25,463	0.54	%		5,929,658		36,678	0.83	%
Non-interest bearing deposit accounts		2,535,422		-	-	%		1,987,211		-	-	%
Total core deposits	$	8,869,399	$	25,463	0.38	%	$	7,916,869	$	36,678	0.62	%
10

OFG Bancorp (NYSE: OFG)
Table 6-1: Loan Information and Performance Statistics (1)
		2021			2021		2021		2020			2020
(Dollars in thousands) (unaudited)		Q3			Q2		Q1		Q4			Q3
Net Charge-offs	(21)
Non-PCD
Mortgage:
Charge-offs		$	160		$	268	$	787	$	225		$	56
Recoveries			(419)			(193)		(615)		(79)			(269)
Total mortgage			(259)			75		172		146			(213)
Commercial:
Charge-offs			7,518	(a)		653		68		413			298
Recoveries			(558)			(996)		(430)		(334)			(253)
Total commercial			6,960			(343)		(362)		79			45
Consumer:
Charge-offs			2,370			2,897		4,469		6,456			5,114
Recoveries			(894)			(697)		(565)		(1,832)			(663)
Total consumer			1,476			2,200		3,904		4,624			4,451
Auto:
Charge-offs			4,989			5,170		9,083		12,071			10,123
Recoveries			(5,874)			(5,997)		(5,817)		(5,928)			(5,950)
Total auto			(885)			(827)		3,266		6,143			4,173
Total		$	7,292		$	1,105	$	6,980	$	10,992		$	8,456
PCD
Mortgage:
Charge-offs		$	1,008		$	1,742	$	2,590	$	1,344		$	1,677
Recoveries			(641)			(184)		(146)		(63)			(89)
Total mortgage			367			1,558		2,444		1,281			1,588
Commercial:
Charge-offs			68			6		43		33,061	(a)		293
Recoveries			(1,316)			(430)		(436)		(234)			(91)
Total commercial			(1,248)			(424)		(393)		32,827			202
Consumer:
Charge-offs			-			-		22		21			60
Recoveries			(219)			(33)		(21)		(200)			1
Total consumer			(219)			(33)		1		(179)			61
Auto:
Charge-offs			124			226		456		574			474
Recoveries			(265)			(314)		(383)		(681)			(211)
Total auto			(141)			(88)		73		(107)			263
Total		$	(1,241)		$	1,013	$	2,125	$	33,822		$	2,114
Total Net Charge-offs		$	6,051		$	2,118	$	9,105	$	44,814		$	10,570
Net Charge-off Rates	(21)
Mortgage			0.02%			0.30%		0.47%		0.25%			0.24%
Commercial			0.97%	(a)		-0.13%		-0.13%		5.45%	(a)		0.04%
Consumer			1.26%			2.17%		3.78%		4.09%			3.94%
Auto			-0.25%			-0.23%		0.85%		1.56%			1.17%
Total			0.37%	(a)		0.13%		0.55%		2.67%	(a)		0.62%
Average Loans Held For Investment	(21)
Mortgage		$	2,047,272		$	2,147,927	$	2,243,303	$	2,305,495		$	2,325,756
Commercial			2,360,642			2,443,407		2,405,419		2,416,703			2,484,977
Consumer			400,582			400,365		413,191		434,565			457,620
Auto			1,657,378			1,606,870		1,573,995		1,551,521			1,518,669
Total		$	6,465,874		$	6,598,569	$	6,635,908	$	6,708,284		$	6,787,022
(a) During 3Q 2021, the Company charged-off $6.5 million for a previously reserved amount on a commercial loan. During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.
11

OFG Bancorp (NYSE: OFG)
Table 6-2: Loan Information and Performance Statistics (Excludes PCD Loans) (1)
		2021		2021		2021		2020		2020
(Dollars in thousands) (unaudited)		Q3		Q2		Q1		Q4		Q3
Early Delinquency (30 - 89 days past due)
Mortgage		$	15,233	$	15,512	$	17,350	$	22,339	$	16,783
Commercial			4,150		3,715		3,911		8,043		5,151
Consumer			4,985		5,929		8,250		12,230		12,032
Auto			76,262		66,068		75,449		88,357		87,912
Total		$	100,630	$	91,224	$	104,960	$	130,969	$	121,878
Early Delinquency Rates (30 - 89 days past due)
Mortgage			2.03%		2.04%		2.19%		2.71%		1.98%
Commercial			0.21%		0.20%		0.21%		0.44%		0.29%
Consumer			1.33%		1.55%		2.09%		2.96%		2.77%
Auto			4.57%		4.08%		4.82%		5.76%		5.81%
Total			2.06%		1.86%		2.15%		2.68%		2.50%
Total Delinquency (30 days and over past due)
Mortgage:
Traditional, Non traditional, and Loans under Loss Mitigation		$	58,146	$	59,848	$	62,827	$	67,671	$	51,123
GNMA's buy-back option program			19,944		28,118		40,777		56,193		62,651
Total mortgage			78,090		87,966		103,604		123,864		113,774
Commercial			13,742		21,549		26,065		30,604		35,596
Consumer			6,987		8,244		11,042		17,147		17,080
Auto			87,672		73,259		86,918		108,842		109,735
Total		$	186,491	$	191,018	$	227,629	$	280,457	$	276,185
Total Delinquency Rates (30 days and over past due)
Mortgage:
Traditional, Non traditional, and Loans under Loss Mitigation			7.74%		7.87%		7.94%		8.22%		6.03%
GNMA's buy-back option program			2.65%		3.70%		5.15%		6.82%		7.39%
Total mortgage			10.39%		11.57%		13.10%		15.04%		13.42%
Commercial			0.70%		1.13%		1.43%		1.67%		1.99%
Consumer			1.87%		2.16%		2.79%		4.15%		3.93%
Auto			5.26%		4.53%		5.55%		7.09%		7.26%
Total			3.82%		3.90%		4.65%		5.74%		5.67%
Nonperforming Assets	(14)
Mortgage		$	51,612	$	52,773	$	50,933	$	46,967	$	40,477
Commercial			28,472		37,858		42,778		41,999		44,941
Consumer			2,203		2,466		2,900		4,987		5,206
Auto			12,055		7,606		11,842		20,766		22,583
Total nonperforming loans			94,342		100,703		108,453		114,719		113,207
Foreclosed real estate			13,904		15,093		15,598		11,596		19,456
Other repossessed assets			1,528		1,725		2,768		1,816		1,918
Total nonperforming assets		$	109,775	$	117,521	$	126,819	$	128,131	$	134,581
Nonperforming Loan Rates
Mortgage			6.87%		6.94%		6.44%		5.70%		4.78%
Commercial			1.46%		1.99%		2.34%		2.29%		2.52%
Consumer			0.59%		0.65%		0.73%		1.21%		1.20%
Auto			0.72%		0.47%		0.76%		1.35%		1.49%
Total loans			1.93%		2.06%		2.22%		2.35%		2.33%
12

OFG Bancorp (NYSE: OFG)
Table 6-3: Loan Information and Performance Statistics (1)
		2021			2021		2021		2020			2020
(Dollars in thousands) (unaudited)		Q3			Q2		Q1		Q4			Q3
Nonperforming PCD Loans	(14)
Mortgage		$	2,030		$	2,067	$	958	$	1,003		$	1,003
Commercial			36,798	(a)		34,502		34,906		36,470	(a)		79,631
Consumer			-			-		-		1			4
Total nonperforming loans		$	38,828		$	36,569	$	35,864	$	37,474		$	80,638
Nonperforming PCD Loan Rates
Mortgage			0.16%			0.16%		0.07%		0.07%			0.07%
Commercial			15.36%	(a)		13.24%		12.80%		12.88%	(a)		22.59%
Consumer			0.00%			0.00%		0.00%		0.07%			0.17%
Total			2.54%	(a)		2.28%		2.11%		2.11%	(a)		4.26%
Total PCD Loans Held for Investment	(21)
Mortgage		$	1,270,854		$	1,324,274	$	1,406,044	$	1,459,932		$	1,504,914
Commercial			239,554			260,627		272,793		283,160			352,555
Consumer			959			981		1,120		1,394			2,336
Total loans		$	1,511,367		$	1,585,882	$	1,679,957	$	1,744,486		$	1,859,805
		2021			2021		2021		2020			2020
(Dollars in thousands) (unaudited)		Q3			Q2		Q1		Q4			Q3
Total Nonperforming Loans	(14)
Mortgage		$	53,642		$	54,840	$	51,891	$	47,970		$	41,480
Commercial			65,270	(a)		72,360		77,684		78,469	(a)		124,572
Consumer			2,203			2,466		2,900		4,988			5,210
Auto			12,055			7,606		11,842		20,766			22,583
Total nonperforming loans		$	133,170		$	137,272	$	144,317	$	152,193		$	193,845
Total Nonperforming Loan Rates
Mortgage			2.65%			2.63%		2.36%		2.10%			1.76%
Commercial			2.80%	(a)		3.02%		3.22%		3.27%	(a)		5.13%
Consumer			0.59%			0.64%		0.73%		1.20%			1.19%
Auto			0.72%			0.46%		0.75%		1.33%			1.46%
Total			2.08%	(a)		2.11%		2.19%		2.28%	(a)		2.87%
Total Loans Held for Investment	(21)
Mortgage		$	2,022,243		$	2,084,442	$	2,197,106	$	2,283,375		$	2,352,585
Commercial			2,331,056			2,393,170		2,411,718		2,402,010			2,426,795
Consumer			374,631			382,456		396,193		414,946			436,882
Auto			1,682,933			1,638,024		1,588,509		1,561,802			1,543,665
Total loans		$	6,410,863		$	6,498,092	$	6,593,526	$	6,662,133		$	6,759,927
(a) During 3Q 2021, the Company charged-off $6.5 million for a previously reserved amount on a commercial loan. During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.
13

OFG Bancorp (NYSE: OFG)
Table 7: Allowance for Credit Losses (1)
	Quarter Ended September 30, 2021
(Dollars in thousands) (unaudited)	Mortgage		Commercial		Consumer		Auto		Total
Allowance for credit losses Non-PCD:
Balance at beginning of period	$	16,368	$	43,523	$	19,065	$	69,358	$	148,314
Provision (recapture) for credit losses		240		(3,323)		259		676		(2,148)
Charge-offs		(160)		(7,518)		(2,370)		(4,989)		(15,037)
Recoveries		419		558		894		5,874		7,745
Balance at end of period	$	16,867	$	33,240	$	17,848	$	70,919	$	138,874
Allowance for credit losses PCD:
Balance at beginning of period	$	30,108	$	12,756	$	38	$	501	$	43,403
Provision (recapture) for credit losses		649		(2,838)		(220)		(237)		(2,646)
Charge-offs		(1,008)		(68)		-		(124)		(1,200)
Recoveries		641		1,316		219		265		2,441
Balance at end of period	$	30,390	$	11,166	$	37	$	405	$	41,998
Allowance for credit losses summary:
Balance at beginning of period	$	46,476	$	56,279	$	19,103	$	69,859	$	191,717
Provision (recapture) for credit losses		889		(6,161)		39		439		(4,794)
Charge-offs		(1,168)		(7,586)		(2,370)		(5,113)		(16,237)
Recoveries		1,060		1,874		1,113		6,139		10,186
Balance at end of period	$	47,257	$	44,406	$	17,885	$	71,324	$	180,872
Allowance coverage ratio		2.34%		1.90%		4.77%		4.24%		2.82%
Allowance coverage ratio excluding PPP loans (Non-GAAP)		2.34%		2.02%		4.77%		4.24%		2.88%
14

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.
	2021			2021			2021		2020		2020
(Dollars in thousands) (unaudited)	Q3			Q2			Q1		Q4		Q3
Stockholders' Equity to Non-GAAP Tangible Common Equity
Total stockholders' equity	$	1,053,665	(a)(b)	$	1,079,997	(a)	$	1,108,423	$	1,085,975	$	1,064,322
Less:  Intangible assets		(124,614)			(127,064)			(129,514)		(131,965)		(134,719)
Noncumulative perpetual preferred stock		-	(a)		(24,000)	(a)		(92,000)		(92,000)		(92,000)
Noncumulative perpetual preferred stock issuance costs		-	(a)		7,453	(a)		10,130		10,130		10,130
Tangible common equity	$	929,051		$	936,386		$	897,039	$	872,140	$	847,733
Common shares outstanding at end of period		49,977			51,661			51,579		51,387		51,345
Tangible book value per common share (Non-GAAP)	$	18.59		$	18.13		$	17.39	$	16.97	$	16.51
Total Assets to Tangible Assets
Total assets	$	10,606,865		$	10,461,813		$	10,153,342	$	9,826,011	$	10,018,991
Less:  Intangible assets		(124,614)			(127,064)			(129,514)		(131,965)		(134,719)
Tangible assets (Non-GAAP)	$	10,482,251		$	10,334,749		$	10,023,828	$	9,694,046	$	9,884,272
Non-GAAP TCE Ratio
Tangible common equity	$	929,051		$	936,386		$	897,039	$	872,140	$	847,733
Tangible assets		10,482,251			10,334,749			10,023,828		9,694,046		9,884,272
TCE ratio		8.86%			9.06%			8.95%		9.00%		8.58%
Average Equity to Non-GAAP Average Tangible Common Equity
Average total stockholders' equity	$	1,068,618	(a)(b)	$	1,083,452	(a)	$	1,101,046	$	1,083,423	$	1,062,460
Less:  Average noncumulative perpetual preferred stock		(3,391)	(a)		(44,923)	(a)		(92,000)		(92,000)		(92,000)
Average noncumulative perpetual preferred stock issuance costs		1,134	(a)		8,306	(a)		10,130		10,130		10,130
Average total common stockholders' equity	$	1,066,361		$	1,046,835		$	1,019,176	$	1,001,553	$	980,590
Less:  Average intangible assets		(125,723)			(128,311)			(130,767)		(133,542)		(136,138)
Average tangible common equity	$	940,638		$	918,524		$	888,409	$	868,011	$	844,452
(a) During 3Q 2021, the Company redeemed Series D Preferred Stock. During 2Q 2021, the Company redeemed Series A and B Preferred Stock.
(b) During 3Q 2021, the Company repurchased $40.2 million common stock from of our $50.0 million share buyback program.
15

OFG Bancorp (NYSE: OFG)
Table 8-2: Reconciliation of GAAP to Non-GAAP Measures and Calculation of Regulatory Capital Measures (Continued)
		BASEL III
		Standardized
		2021			2021			2021		2020		2020
(Dollars in thousands) (unaudited)		Q3			Q2			Q1		Q4		Q3
Regulatory Capital Metrics
Common equity Tier 1 capital		$	931,884	(b)	$	957,238		$	919,856	$	894,074	$	862,636
Tier 1 capital			966,884	(a)(b)		1,008,785	(a)		1,036,726		1,010,944		979,506
Total risk-based capital	(15)		1,053,184	(a)(b)		1,094,786	(a)		1,121,830		1,096,764		1,065,744
Risk-weighted assets			6,893,254			6,861,890			6,782,685		6,837,846		6,875,108
Regulatory Capital Ratios
Common equity Tier 1 capital ratio	(16)		13.52%			13.95%			13.56%		13.08%		12.55%
Tier 1 risk-based capital ratio	(17)		14.03%			14.70%			15.28%		14.78%		14.25%
Total risk-based capital ratio	(18)		15.28%			15.95%			16.54%		16.04%		15.50%
Leverage ratio	(19)		9.33%			9.84%			10.48%		10.30%		10.00%
Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach
Total stockholders' equity	(1)	$	1,053,665	(a)(b)	$	1,079,997	(a)	$	1,108,423	$	1,085,975	$	1,064,322
Plus: CECL transition adjustment	(20)		29,111			31,471			33,637		34,646		33,494
Less:  Noncumulative perpetual preferred stock			-	(a)		(24,000)	(a)		(92,000)		(92,000)		(92,000)
Noncumulative perpetual preferred stock issuance costs			-	(a)		7,453	(a)		10,130		10,130		10,130
Unrealized gains on available-for-sale securities, net of income tax			(9,330)			(8,408)			(7,146)		(12,091)		(9,453)
Unrealized losses on cash flow hedges, net of income tax			710			808			916		1,069		1,185
			1,074,156			1,087,321			1,053,960		1,027,729		1,007,678
Less:    Disallowed goodwill			(86,069)			(86,069)			(86,069)		(86,069)		(86,069)
Disallowed other intangible assets, net			(26,938)			(28,555)			(30,172)		(32,073)		(33,810)
Disallowed deferred tax assets, net			(29,265)			(15,459)			(17,863)		(15,513)		(25,163)
Common equity Tier 1 capital			931,884			957,238			919,856		894,074		862,636
Plus:  Qualifying noncumulative perpetual preferred stock			-	(a)		24,000	(a)		92,000		92,000		92,000
Qualifying noncumulative perpetual preferred stock issuance costs			-	(a)		(7,453)	(a)		(10,130)		(10,130)		(10,130)
Subordinated capital notes			35,000			35,000			35,000		35,000		35,000
Tier 1 capital			966,884			1,008,785			1,036,726		1,010,944		979,506
Plus tier 2 capital:  Qualifying allowance for loan and lease losses			86,300			86,001			85,104		85,820		86,238
Total risk-based capital		$	1,053,184		$	1,094,786		$	1,121,830	$	1,096,764	$	1,065,744
(a) During 3Q 2021, the Company redeemed Series D Preferred Stock. During 2Q 2021, the Company redeemed Series A and B Preferred Stock.
(b) During 3Q 2021, the Company repurchased $40.2 million common stock from of our $50.0 million share buyback program.
16

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 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.
(23)	PPP loans are fully guaranteed by the SBA and risk-weighted at 0%.
17