OFG BANCORP

Previous wording

OFG is a publicly-owned financial holding company that provides wide range of banking and financial services such as commercial, consumer, auto, and mortgage lending, financial planning, insurance sales, investment advisory and securities brokerage services, as well as corporate and individual trust services. OFG operates through three business segments: Banking, Wealth Management, and Treasury, and distinguishes itself based on quality service. OFG conducts its business through its main office in San Juan, Puerto Rico, forty-two branches in Puerto Rico and two branches in the U.S. Virgin Islands (the “USVI”). OFG has three subsidiaries with operations in Puerto Rico: the Bank, Oriental Financial Services and Oriental Insurance; two subsidiaries in the United States, OFG USA and OFG Ventures; and one subsidiary in the Cayman Islands, OFG Reinsurance. OFG’s long-term goal is to strengthen its banking and financial services franchise by expanding its lending businesses, increasing the level of integration in the marketing and delivery of banking and financial services, continuously improving our already effective asset-liability management, growing non-interest revenue from banking and financial services, as well as achieving greater operating efficiencies.

Current wording

OFG is a publicly-owned financial holding company that provides wide range of banking and financial services such as commercial, consumer, auto, and mortgage lending, financial planning, insurance sales, investment advisory and securities brokerage services, as well as corporate and individual trust services. It operates through three business segments: Banking, Wealth Management, and Treasury, and distinguishes itself based on quality service. OFG conducts its business through its main office in San Juan, Puerto Rico, forty-two branches in Puerto Rico and two branches in the U.S. Virgin Islands (the “USVI”). It has five subsidiaries with operations in Puerto Rico: the Bank, Oriental Financial Services, Oriental Insurance, OIB and OBPEF; two subsidiaries in the United States, OFG USA and OFG Ventures; and one subsidiary in the Cayman Islands, OFG Reinsurance. OFG’s long-term goal is to strengthen its banking and financial services franchise by expanding its lending businesses, increasing the level of integration in the marketing and delivery of banking and financial services, continuously improving our already effective asset-liability management, growing non-interest revenue from banking and financial services, as well as achieving greater operating efficiencies.

Previous wording

In January 2024, OFG announced that its Board of Directors approved the increase of its regular quarterly cash dividend to $0.25 per common share from $0.22 per share, beginning in the quarter ended March 31, 2024. The Board of Directors also approved a new $50.0 million stock repurchase program. The new stock repurchase program, which is open-ended, replaces the prior stock repurchase program, which had had been approved by the Board of Directors in January 2022 and had $17.2 million remaining of its $100.0 million repurchase parameters. At March 31, 2024, there have been no repurchases under this new program.

Current wording

In January 2024, OFG announced that its Board of Directors approved the increase of its regular quarterly cash dividend to $0.25 per common share from $0.22 per share, beginning in the quarter ended March 31, 2024. The Board of Directors also approved a new $50.0 million stock repurchase program. The new stock repurchase program, which is open-ended, replaces the prior stock repurchase program approved by the Board of Directors in January 2022, which had $17.2 million remaining of its $100.0 million repurchase parameters. During the six-month period ended June 30, 2024, OFG repurchased 669,200 shares for a total of $24.3 million at an average price of $36.28 per share.

Previous wording

We believe that Puerto Rico’s economy continues to demonstrate resiliency and growth and its private sector is expanding. The Puerto Rico Economic Activity Index, as published by the Economic Development Bank for Puerto Rico, increased 3.4% year-over-year in December 2023 and retail sales increased 4.5% year-over-year also in December 2023. According to the data published by Economic Development Bank for Puerto Rico, wages are rising, and labor participation is increasing. Total non-farm payroll employment in December 2023 increased 2.6% year-over-year and total employment rose 2.5% from July 2022 to December 2023. The inflow of federal stimulus and reconstruction funds for rebuilding infrastructure has continued, and we believe this inflow will stimulate the local economy. Nevertheless, OFG continues to pay attention to the potential impact of interest rate changes, inflation, and other economic factors, and global conflicts, all of which could impact our business and results of operations.

Current wording

We believe that Puerto Rico’s economy continues to demonstrate resiliency and growth and its private sector, including business investments, is expanding. The Puerto Rico Economic Activity Index, as published by the Economic Development Bank for Puerto Rico, slightly decreased 2.0% year-over-year as of April 2024. According to the data published by Economic Development Bank for Puerto Rico, wages are rising, and labor participation is increasing. Total non-farm payroll employment averaged 960,300 jobs in April, equivalent to an increase of 0.8% for that month, in a month-over-month basis, and an annual increase of 2.4%. The inflow of federal stimulus and reconstruction funds for rebuilding infrastructure has continued, and we believe this inflow will stimulate the local economy. Nevertheless, OFG continues to pay attention to the potential impact of interest rate changes, inflation, and other economic factors, and global conflicts, all of which could impact our business and results of operations.

Previous wording

We evaluate our critical accounting estimates and judgments on an ongoing basis and update them as necessary based on changing conditions. As part of OFG’s continuous enhancement to the allowance for credit losses methodology, during the quarter ended March 31, 2024, an assessment of the weight of probability scenarios for the US loan segment was performed and updated to use a higher probability level in the moderate recessionary scenario. This change in the allowance for credit losses is considered a change in accounting estimate as per ASC 250-10 provisions, where adjustments should be made prospectively. Apart from the foregoing change, there have been no material changes in the methods that we used to formulate these critical accounting estimates from those discussed in our 2023 Form 10-K.

Current wording

We evaluate our critical accounting estimates and judgments on an ongoing basis and update them as necessary based on changing conditions. As part of OFG’s continuous enhancement to the allowance for credit losses methodology, during the six-month period ended June 30, 2024, an assessment of the weight of probability scenarios for the US loan segment was performed and updated to use a higher probability level in the moderate recessionary scenario. This change in the allowance for credit losses is considered a change in accounting estimate as per ASC 250-10 provisions, where adjustments should be made prospectively. Apart from the foregoing change, there have been no material changes in the methods that we used to formulate these critical accounting estimates from those discussed in our 2023 Form 10-K.

Previous wording

Earnings per share diluted was $1.05 compared to $0.98 in the fourth quarter of 2023 and $0.96 in the first quarter of 2023. Total core revenues of $174.2 million compared to $175.6 million in the fourth quarter of 2023 and $164.4 million in the first quarter of 2023.

Current wording

Earnings per share dilutedof $1.08 compared to $1.05 in the first quarter of 2024 and $0.93 in the second quarter of 2023. Total core revenues of $179.4 million compared to $174.2 million in the first quarter of 2024 and $170.5 million in the second quarter of 2023.

Previous wording

Performance metrics: Net interest margin of 5.40%, return on average assets of 1.77%, return on average tangible common stockholders’ equity of 17.92%, and efficiency ratio of 52.49%.

Current wording

Performance metrics: Net interest margin of 5.51%, return on average assets of 1.82%, return on average tangible common stockholders’ equity of 18.24%, and efficiency ratio of 51.81%.

Previous wording

Total interest income of $183.4 million compared to $176.2 million in the fourth quarter of 2023 and $149.0 million in the first quarter of 2023. Compared to the fourth quarter of 2023, the first quarter of 2024 primarily reflected higher average balances and yields on investment securities, cash and loans. The first quarter of 2024 included one fewer day than the fourth quarter of 2023, which reduced interest income by about $1.4 million.

Current wording

Total Interest Income of $187.7 million compared to $183.4 million in the first quarter of 2024 and $158.0 million in the second quarter of 2023. Compared to the first quarter of 2024, the second quarter of 2024 primarily reflected higher average balances and yields on loans. The second quarter of 2024 also included $2.1 million from the recovery of a non-accrual U.S. commercial loan paid in full.

Previous wording

Pre-provision net revenues of $83.0 million compared to $88.2 million in the fourth quarter of 2023 and $74.6 million in the first quarter of 2023. The fourth quarter of 2023 included $8.8 million from a gain on the sale of nonperforming commercial loans and from annual insurance recognition revenues.

Current wording

Pre-Provision Net Revenues of $86.8 million compared to $83.0 million in the first quarter of 2024 and $80.8 million in the second quarter of 2023.

Previous wording

Credit quality: Net charge-offs of $19.8 million compared to $16.3 million in the fourth quarter of 2023 and $10.1 million in the first quarter of 2023. The first quarter of 2024 included $3.5 million from previously and fully reserved nonperforming PPP loans. The first quarter of 2024 early and total delinquency rates were 2.41% and 3.30%, respectively, lower than the fourth quarter of 2023 and pre-pandemic levels. The non-performing loan rate of 1.10% was the lowest over the last five quarters.

Current wording

Credit Quality: Net charge-offs of $15.0 million compared to $19.8 million in the first quarter of 2024 and $6.6 million in the second quarter of 2023. The second quarter of 2024 early and total delinquency rates were 2.81% and 3.71%, respectively. The nonperforming loan rate of 1.08% was the lowest in the last five quarters.

Previous wording

Effective Tax Rate of 26.8% compared to 31.9% in the fourth quarter of 2023 and first quarter of 2023. The first quarter of 2024 reflected expected 2024 effective tax rate of 28.5% due to higher forecasted business activities with preferential tax treatment under the Puerto Rico Internal Revenue Code of 2011, coupled with a $1.1 million discrete benefit for stock vested in the first quarter of 2024.

Current wording

Effective Tax Rate (“ETR”) of 28.2% compared to 26.8% in the first quarter of 2024 and 32.9% in the second quarter of 2023. The second quarter of 2024 reflected an expected 2024 ETR of 29.0% due to higher forecasted business activities with preferential tax treatment under the Puerto Rico tax code, coupled with a $0.8 million tax benefit credit in the second quarter of 2024 compared to $1.1 million discrete benefit for stock vested in in the first quarter of 2024.

Previous wording

Total borrowings and brokered depositsof $203.3 million compared to $363.0 million in the fourth quarter of 2023 and $226.8 million in the first quarter of 2023. Compared to the fourth quarter of 2023, the first quarter of 2024 reflected a reduced need for wholesale funding.

Current wording

Total Borrowings and Brokered Deposits of $201.2 million compared to $203.3 million in the first quarter of 2024 and $226.5 million in the second quarter of 2023.

Previous wording

Cash and cash equivalentsof $754.4 million compared to $748.2 million in the fourth quarter of 2023 and $847.5 million in the first quarter of 2023.

Current wording

Cash and Cash Equivalentsof$740.4 million compared to$754.4 million in the first quarter of 2024 and$799.0 million in the second quarter of 2023.

Previous wording

Capital: CET1 ratio of 14.45% compared to 14.12% in the fourth quarter of 2023 and 14.07% in the first quarter of 2023. The Tangible Common Equity ratio was 10.06% compared to 9.68% in the fourth quarter of 2023 and 9.85% in the first quarter of 2023. Tangible Book Value per share of $23.55 compared to $23.13 in the fourth quarter of 2023 and $20.57 in the first quarter of 2023. The first quarter of 2024 Tangible Book Value reflected increased retained earnings.

Current wording

Capital: CET1 ratio was 14.29% compared to 14.45% in the first quarter of 2024 and 14.03% in the second quarter of 2023. The Tangible Common Equity ratio was 10.09% compared to 10.06% in the first quarter of 2024 and 9.99% in the second quarter of 2023. Tangible Book Value of $24.18 per share compared to $23.55 in the first quarter of 2024 and $21.06 in the second quarter of 2023.

Previous wording

The following tables show major categories of interest-earning assets and interest-bearing liabilities, their respective interest income, expenses, yields and costs, and their impact on net interest income due to changes in volume and rates for the quarters ended March 31, 2024 and 2023.

Current wording

The following tables show major categories of interest-earning assets and interest-bearing liabilities, their respective interest income, expenses, yields and costs, and their impact on net interest income due to changes in volume and rates for the quarters and six-month periods ended June 30, 2024 and 2023.

Previous wording

Net interest income of $144.1 million increased $8.2 million from $135.9 million. Tax equivalent basis net interest income of $148.2 million increased $7.7 million, or 5.5%, from $140.5 million.

Current wording

Net interest income of $147.3 million increased $7.7 million from $139.6 million. Tax equivalent basis net interest income of $150.9 million increased $7.3 million, or 5.1%, from $143.6 million.

Previous wording

Interest rate spread decreased 59 basis points to 5.26% from 5.85% and net interest margin decreased 49 basis points to 5.40% from 5.89%.

Current wording

Interest rate spread decreased 48 basis points to 5.36% from 5.84% and net interest margin decreased 39 basis points to 5.51% from 5.90%.

Previous wording

•A $21.3 million increase in interest income from loans, primarily driven by: (i) higher interest income from commercial loans by $11.9 million, reflecting the upward repricing of variable rate loans and increased yields on new loans originated during 2024; (ii) higher interest income from auto loans by $8.6 million, mainly due to an increase in the average balance of this portfolio by approximately $302.6 million; and (iii) higher interest income from consumer loans by $2.4 million, mainly due to an increase in the average balance of this portfolio of approximately $73.4 million. These increases were partially offset by lower interest income from residential mortgage loans by $1.6 million, reflecting a decrease in the average balance of this portfolio by approximately $142.1 million, mainly from the securitization and sale of conforming loans;

Current wording

•A $18.7 million increase in interest income from loans, primarily driven by: (i) higher interest income from commercial loans by $11.3 million, reflecting the upward repricing of variable rate loans, increased yields on new loans originated during 2024 and a $2.1 million recovery of a non-accrual commercial US loan paid in full; (ii) higher interest income from auto loans by $7.8 million, mainly due to an increase in the average balance of this portfolio by $308.3 million; and (iii) higher interest income from consumer loans by $1.8 million, mainly due to an increase in the average balance of this portfolio by $56.5 million. These increases were partially offset by lower interest income from residential mortgage loans by $2.1 million, reflecting a decrease in the average balance of this portfolio by $137.3 million, mainly from regular paydowns and the securitization and sale of conforming loans; and

Previous wording

•A $11.6 million increase in interest income from investments securities, primarily related to higher yield by 105 basis points, which contributed to an increase in interest income of approximately $6.2 million and higher average volume of $657.6 million, resulting in an increase in interest income of approximately $5.4 million; and

Current wording

•A $11.2 million increase in interest income from investments securities, primarily related to higher yield by 97 basis points, which contributed to an increase in interest income of approximately $5.5 million and higher average volume of $693.0 million, resulting in an increase in interest income of approximately $5.7 million.

Previous wording

These increases were partially offset by higher interest expense of $26.2 million from (i) deposits of $24.3 million due to higher average cost of total deposits of 95 basis points and (ii) advances from the FHLB of $1.9 million related to a $156.6 million increase in the average balance.

Current wording

These increases were partially offset by higher interest expense of $48.2 million from (i) interest paid on deposits of $46.2 million due to higher average cost of total deposits of 89 basis points, reflecting a$1.2 billion deposit from an existing long-standing Puerto Rico government client received during the fourth quarter of 2023 with a variable interest rate, and (ii) $2.0 million interest expense on the $200.0 million two-year FHLB advance taken in late 2023.

Previous wording

OFG recorded non-interest income, net, in the amount of $30.3 million, compared to $28.9 million, an increase of 5.0%, or $1.4 million. The increase in non-interest income was mainly due to the net effect of:

Current wording

OFG recorded non-interest income, net, in the amount of $32.5 million, compared to $30.1 million, an increase of 8.0%, or $2.4 million. The increase in non-interest income was mainly due to the net effect of:

Previous wording

•A $795 thousand increase in mortgage banking activities mainly from favorable impact of $1.7 million in mortgage servicing rights valuation, partially offset by lower gains on sales in the current quarter driven by lower sales volume.

Current wording

These increases were partially offset by a $361 thousand decrease in mortgage banking activities mainly from unfavorable impact in mortgage servicing rights valuation and lower servicing fees, partially offset by gains on repurchased loan sales in the current quarter.

Previous wording

•A $987 thousand increase in wealth management revenue primarily reflecting: (i) a $405 thousand increase in insurance income from higher annuities and reinsurance income, (ii) a $318 thousand increase in trust division fees and (iii) a $308 thousand increase in broker-dealer fees related to higher market asset values; and

Current wording

•A $1.2 million increase in wealth management revenue primarily reflecting: (i) $519 thousand increase in broker-dealer fees related to higher market values of assets and investments advisory services fees, (ii) $449 thousand increase in insurance income related to $298 thousand from reinsurance income and $120 thousand in annuities income;

Previous wording

Non-interest expense was $91.4 million, representing an increase of 1.3% or $1.2 million, compared to $90.2 million. The increase in non-interest expense was mainly due to:

Current wording

Non-interest expense was $93.0 million, representing an increase of 4.6% or $4.1 million, compared to $88.9 million. The increase in non-interest expense was mainly due to:

Previous wording

•Increase of $1.3 million in compensation and employee benefits, as a result of higher salaries and benefits, including payroll taxes;

Current wording

•Increase of $626 thousand in compensation and employee benefits, as a result of higher salaries and benefits, including payroll taxes; and

Previous wording

The efficiency ratio was 52.49%, an improvement from 54.87%. The efficiency ratio measures how much of OFG’s revenues is used to pay operating expenses. OFG computes its efficiency ratio by dividing non-interest expenses by the sum of its net interest income and non-interest income, but excluding gains on the sale of investment securities, other gains and losses, and other income that may be considered volatile in nature. Management believes that the exclusion of those items permits consistent comparability. Amounts presented as part of non-interest income that were excluded from the adjusted efficiency ratio computation for the quarters ended March 31, 2024 and 2023 amounted to $289 thousand and $370 thousand, respectively.

Current wording

The efficiency ratio was 51.81%, an improvement from 52.13%. The efficiency ratio measures how much of OFG’s revenues is used to pay operating expenses. OFG computes its efficiency ratio by dividing non-interest expenses by the sum of its net interest income and non-interest income, but excluding gains on the sale of investment securities, other gains and losses, and other income that may be considered volatile in nature. Management believes that the exclusion of those items permits consistent comparability. Amounts presented as part of non-interest income that were excluded from the adjusted efficiency ratio computation for the quarters ended June 30, 2024 and 2023 amounted to $391 thousand and $786 thousand, respectively.

Previous wording

•Increase of $539 thousand in other expenses, primarily driven by a $940 thousand accrual recorded during the quarter related to regulatory examinations, offset by lower charitable contributions by $336 thousand; and

Current wording

•Increase of $858 thousand in other expenses, primarily driven by a $993 thousand accrual recorded during the current period related to regulatory examinations.

Previous wording

The increase in non-interest expense was partially offset by a decrease of $1.1 million in professional and service fees, mainly due to lower consulting expenses.

Current wording

The increase in non-interest expense was partially offset by, a decrease in professional and service fees of $1.3 million, reflecting lower balances in compliance-related expenses.

Previous wording

OFG segregates its businesses into the following segments: Banking, Wealth Management, and Treasury. Management established the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources. Other factors such as OFG’s organization, nature of its products, distribution channels and economic characteristics of its services were also considered in the determination of the reportable segments. OFG measures the performance of these reportable segments based on pre-established goals of different financial parameters such as net income, net interest income, loan production, and fees generated. OFG’s methodology for allocating non-interest expenses among segments is based on several factors such as revenue, employee headcount, occupied space, dedicated services or time, among others. Following are the results of operations and the selected financial information by operating segment for the quarters ended March 31, 2024 and 2023.

Current wording

OFG segregates its businesses into the following segments: Banking, Wealth Management, and Treasury. Management established the reportable segments based on the internal reporting used to evaluate performance and to assess where to allocate resources. Other factors such as OFG’s organization, nature of its products, distribution channels and economic characteristics of its services were also considered in the determination of the reportable segments. OFG measures the performance of these reportable segments based on pre-established goals of different financial parameters such as net income, net interest income, loan production, and fees generated. OFG’s methodology for allocating non-interest expenses among segments is based on several factors such as revenue, employee headcount, occupied space, dedicated services or time, among others. Following are the results of operations and the selected financial information by operating segment for the quarters and six-month periods ended June 30, 2024 and 2023.

Previous wording

Eliminations include interest income and expense for a time deposit opened by the Bank in Oriental Overseas, an international banking entity organized and licensed under Puerto Rico law, which operates as a unit within the Bank. The time deposit with a balance of $301.4 million and $414.6 million at March 31, 2024 and 2023, respectively, is included in the Treasury Segment with its corresponding interest expense, to fund Oriental Overseas operations, which is included in the Banking Segment with its corresponding interest income, and are eliminated in the consolidation. Interest income is accrued on the unpaid principal balance. The decrease in interest income and interest expense from the prior year was mainly as a result of lower interest rate and average balance.

Current wording

Eliminations include interest income and expense for a time deposit opened by the Bank in Oriental Overseas, an international banking entity organized and licensed under Puerto Rico law, which operates as a unit within the Bank. The time deposit with a balance of $302.4 million and $364.2 million at June 30, 2024 and 2023, respectively, to fund Oriental Overseas operations is included in the Treasury Segment with its corresponding interest expense, and the related interest income is included in the Banking Segment, and are eliminated in the consolidation. Interest income is accrued on the unpaid principal balance. The decrease in interest income and interest expense from the prior year period was mainly as a result of lower interest rate and average balance.

Previous wording

OFG’s banking segment net income before taxes decreased by $10.0 million from $47.4 million to $37.4 million, mainly reflecting:

Current wording

OFG’s banking segment net income before taxes decreased by $9.1 million from $49.2 million to $40.1 million, mainly due to:

Previous wording

•Increase of $23.5 million in interest expense primarily related to an increase in the average cost of deposits and borrowings;

Current wording

•Increase of $21.8 million in interest expense primarily related to an increase in the average cost of deposits, reflecting a$1.2 billion deposit from an existing long-standing Puerto Rico government client received during the fourth quarter of 2023 with a variable interest rate; and

Previous wording

•Decrease of $3.5 million in interest income related to Oriental Overseas’ time deposit from the Bank to fund its operations, eliminated in the consolidation, mainly as a result of lower interest rates and average in the current period.

Current wording

•Decrease of $3.9 million in interest income related to Oriental Overseas’ time deposit from the Bank to fund its operations, eliminated in the consolidation, mainly as a result of lower average in the current period.

Previous wording

•Increase of $18.6 million in interest income from loans, driven by increased yields on higher balances.

Current wording

•Increase of $15.7 million in interest income from loans, driven by increased yields on higher balances.

Previous wording

Wealth management segment revenue consists of commissions and fees from fiduciary activities, securities brokerage, and insurance and reinsurance activities. Net income before taxes from this segment decreased slightly from $2.9 million to $2.6 million. The decrease mostly reflected an increase in non-interest expenses of $567 thousand, mainly from higher salaries and employee benefits.

Current wording

Wealth management segment revenue consists of commissions and fees from fiduciary activities, securities brokerage, and insurance and reinsurance activities. Net income before taxes from this segment decreased slightly from $3.4 million to $2.8 million, mainly from higher salaries and employee benefits by $489 thousand.

Previous wording

Treasury segment net income before taxes increased by $13.2 million, mainly reflecting an increase in interest income from the purchases of investment securities during 2024 and 2023, higher yield in interest bearing cash and money market investments related to higher rates, and lower interest expense associated with inter-segment borrowing as a result of lower interest rates and average balance.

Current wording

Treasury segment net income before taxes increased by $15.1 million, mainly reflecting an increase in interest income from the purchases of investment securities during 2024 and late 2023 with higher yields, higher yield in interest bearing cash and money market investments related to higher interest rates, and lower interest expense associated with inter-segment borrowing as a result of lower average balance.

Previous wording

Income tax expense for the quarter ended March 31, 2024 increased $679 thousand to $18.2 million from $18.9 million. OFG maintained an effective tax rate (“ETR”) lower than the statutory rate for the quarters ended March 31, 2024 and 2023 of 26.8% and 29.0%, respectively. The current quarter reflected expected 2024 ETR of 28.5% due to higher forecasted business activities with preferential tax treatment under the Puerto Rico tax code, and a $1.1 million discrete benefit for stock vested in the current period.

Current wording

Income tax expense for the quarter ended June 30, 2024 decreased $1.5 million to $20.1 million from $21.6 million. OFG maintained an effective tax rate (“ETR”) lower than the statutory rate for the quarters ended June 30, 2024 and 2023 of 28.2% and 32.9%, respectively. The current quarter reflected expected 2024 ETR of 29.2% due to higher forecasted business activities with preferential tax treatment under the Puerto Rico tax code, coupled with a $800 thousand tax benefit credit in the second quarter of 2024.

Previous wording

At March 31, 2024, OFG’s total assets amounted to $11.159 billion, a decrease of $185.2 million, when compared to $11.344 billion at December 31, 2023.

Current wording

At June 30, 2024, OFG’s total assets amounted to $11.259 billion, a decrease of $85.4 million, when compared to $11.344 billion at December 31, 2023.

Previous wording

Cash and due from banks increased by $6.2 million to $749.7 million, reflecting the effect of $149.4 million sale of US Treasury securities, principal paydowns on mortgage-backed securities totaling $55.3 million, offset by loan funding and lower deposit balances.

Current wording

Cash and due from banks decreased by $8.2 million to $735.3 million, reflecting the effect of loan funding and lower deposit balances.

Previous wording

The investment portfolio decreased by $204.4 million or 7.6% primarily driven by the sale of a $149.4 million US Treasury securities available for sale, principal paydowns on mortgage-backed securities totaling $55.3 million and unfavorable market value adjustments of $17.5 million, offset by $17.4 million in mortgage loan securitization and $933 thousand new US Treasury securities available for sale. OFG’s investment strategy focuses on liquidity and highly liquid securities, considering their investment and the current market environment.

Current wording

The investment portfolio decreased by $210.8 million or 7.8% primarily driven by the maturity of $500 million in US Treasury securities, principal paydowns of $129 million, mainly on mortgage-backed securities, and the sale of $149.4 million of US Treasury securities available-for-sale. These decreases were offset by $545.4 million new available-for-sale US Treasury and mortgage-backed securities, and $38.1 million in mortgage loan securitization. OFG’s investment strategy focuses on liquidity and highly liquid securities, considering their investment and the current market environment.

Previous wording

OFG’s loan portfolio is comprised of commercial loans secured by real estate, other commercial and industrial loans, US commercial loans, residential mortgage loans, consumer loans, and auto loans. At March 31, 2024, OFG’s net loan portfolio increased by $9.8 million or 0.1% reflecting increases in retail auto and consumer loans, partially offset by regular paydowns of residential mortgage loans and securitization and sale of conforming loans as well as seasonal paydowns of commercial lines of credit.

Current wording

OFG’s loan portfolio is comprised of commercial loans secured by real estate, other commercial and industrial loans, US commercial loans, residential mortgage loans, consumer loans, and auto loans. At June 30, 2024, OFG’s net loan portfolio increased by $101.5 million or 1.4% reflecting increases in commercial, retail auto and consumer loans, partially offset by regular paydowns of residential mortgage loans and securitization and sale of conforming loans.