UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): April 21, 2021

OFG BANCORP

(Exact Name of Registrant as Specified in Its Charter)

Commonwealth of Puerto Rico

(State or Other Jurisdiction of Incorporation)

001-12647

66-0538893

(Commission File Number)

(IRS Employer Identification No.)

Oriental Center, 15

Floor

254 Munoz Rivera Avenue

San Juan, Puerto Rico

00918

(Address of Principal Executive Offices)

(Zip Code)

(787) 771-6800

(Registrant’s Telephone Number,

Including Area Code)

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended

to simultaneously satisfy the filing obligation of

the registrant under any of the following provisions:

☐

Written communications pursuant to Rule 425

under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17

CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b)

under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c)

under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which

registered

Common shares, par value $1.00 per share

OFG

New York Stock

Exchange

7.125% Noncumulative Monthly Income Preferred

Stock, Series A ($25.00 liquidation preference

per share)

OFG.PRA

New York Stock

Exchange

7.0% Noncumulative Monthly Income Preferred

Stock, Series B ($25.00 liquidation preference

per share)

OFG.PRB

New York Stock

Exchange

7.125% Noncumulative Perpetual Preferred Stock,

Series D ($25.00 liquidation preference per

share)

OFG.PRD

New York Stock

Exchange

Indicate by check mark whether the registrant is an emerging

growth company as defined in Rule 405 of the

Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities

Exchange Act of 1934 (17 CFR

§240.12b-2).

Emerging growth company

☐

If an emerging growth company,

indicate by check mark if the registrant has elected not to

use the extended

transition period for complying with any new or revised financial accounting

standards provided pursuant to Section

13(a) of the Exchange Act.

☐

Item 2.02. Results of Operations and Financial Condition.

On April 21,

2021, OFG Bancorp (the “Company”) announced the results for

the quarter ended March 31, 2021.

A copy of the Company’s press

release is attached as an exhibit to this report.

Item 9.01. Financial Statements and Exhibits.

(d)

Exhibits

Exhibit No.

Description of Document

Press release by the Company dated April 21, 2021.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,

the Company has duly caused this report to

be signed on its behalf by the undersigned hereunto duly authorized.

OFG BANCORP

Date: April 21,

2021

By:

/s/ Maritza Arizmendi

Maritza Arizmendi

Executive Vice President and

Chief Financial Officer

ofg8kexhibit991q21

Exhibit 99

OFG Bancorp Reports 1Q21 Results

SAN JUAN, Puerto Rico, April 21,

2021 – OFG Bancorp (NYSE: OFG), the financial holding company

for Oriental Bank, reported

results for the first quarter ended March 31, 2021.

CEO Comment

José Rafael

Fernández, Chief

Executive Officer,

said: “First

quarter results

reflected strong

core performance

based on

the

continued success of

our strategies

focusing on agility

and service. Our results

also reflected the

federal stimulus, increased

liquidity, and an improving Puerto Rico economy as more people get vaccinated.

“We benefitted

from strong

new loan

generation and

deposit growth,

significantly reduced

cost of

funds, a more

efficient

operating structure, and the release of some COVID-related loan reserves.

“We followed

up last

year’s efforts

to help

small businesses

and their

employees with

another $126

million in

Paycheck

Protection Program

loans. Our

proprietary PPP

portal enables

clients to

apply for

funds, receive

them, and then

apply for

forgiveness, quickly and easily, and all online.

“Performance metrics

improved with

a loan yield

of 6.61%,

return on

average assets

of 1.21%, return

on average

tangible

common stockholders’ equity

of 13.11%, and

an efficiency ratio

of 60.84%. Credit

metrics also improved

as net charge

-offs,

delinquency rates, and loan deferrals all fell.

“Our capital

strategies are

working well.

In January,

we increased

the regular

quarterly cash

dividend 14%.

In March,

announced the redemption of all three outstanding series of preferred

stock, which will improve our capital structure, enable

us to effectively deploy excess

liquidity, and increase net income available

to shareholders. As of 1Q21, we more than earned

back all

the tangible

book value

per common

share dilution

involved in

the Scotiabank

acquisition significantly

ahead of

schedule.

“As Puerto Rico

and USVI continue experiencing stronger signs of economic

revival, at OFG we

are strategically

well-

positioned to benefit from and play a

major part in this long-awaited development. Thanks

to all our team members who are

más que

listo

(more than

ready) to

help our

customers achieve

their goals

and aspirations

through the

pandemic and

beyond.”

1Q21 Highlights

Earnings:

EPS diluted was $0.56 compared to $0.42 in 4Q20 and $0.00 in 1Q20, which was the first quarter

to be impacted by

the pandemic.

Revenues:

Total

core revenues were $127.7

million compared to $132.8 million in 4Q20. 4Q20 benefited

from $3.9 million in

seasonal annual

insurance commissions,

$2.0 million

in mortgage

sales held

back from

3Q20, and

$3.1 million

interest

income from

acquired loan

pre-payments. 1Q21

included $1.6

million in

interest income

from unamortized

yield from

approximately $92 million of forgiven PPP loans and benefitted from $1.4 million lower cost of deposits.

Expenses:

Non-interest expenses

were $77.7

million compared

to $89.0

million in

4Q20 and

$87.3 million

in 1Q20.

4Q20

included $10.1

million in

merger and

restructuring expenses.

1Q21 reflected

previously-announced cost

savings as

well as

$1.8 million primarily in gains

on sales as well

as improved valuations of

foreclosed properties. The efficiency

ratio improved

to 60.84% from 67.06% in 4Q20 and 66.49% in 1Q20.

Pre-Provision Net Revenues:

PPNR was $50.9 million compared to $44.1 million in 4Q20 and $49.2 million in 1Q20.

Provision:

Provision for

credit losses was

$6.3 million compared

to $14.2 million

in 4Q20 and

$47.1 million in

1Q20. 1Q21

included a

$3.7 million

release of

last year’s

COVID-19 related

loan reserves

and $3.5

million for

a commercial

loan in

workout prior to the pandemic. 1Q20 included $34.1 million related to the pandemic.

Loan Generation

and Balances:

New loan

originations totaled

$527.6 million

($401.4 million

excluding PPP),

compared to

$485.3 million in 4Q20

and $280.8 million in

1Q20. In addition to

PPP loans, 1Q21 was

driven year-over-year by

increases in

mortgage, auto, and

commercial lending. Net loans

were $6.43 billion at

3/31/21 compared to $6.50

billion at 12/31/20 and

$6.54 billion at 3/31/20. Net interest margin was 4.26% compared to 4.24% in 4Q20 and 4.94% in 1Q20.

Deposit Balances and Cost of Funds:

Customer deposits at 3/31/21 were

$8.72 billion compared to $8.37

billion at 12/31/20

and $7.56

billion at

3/31/20. Cost

of funds

was 48

bps compared

to 53

bps in

4Q20 and

69 bps

in 1Q20.

Total

interest

expense was $12.8 million compared to $14.3 million in 4Q20 and $18.6 million in 1Q20.

Asset Quality:

Net charge-offs were $9.1

million compared to $44.8 million in 4Q20

and $24.0 million in 1Q20. The

nonperforming loan

rate was

2.22% compared

to 2.35%

in 4Q20

and 2.07%

in 1Q20.

Total delinquency

rate was

2.15%

compared to 2.68% in 4Q20 and 3.16% in 1Q20.

Capital:

Tangible book

value per

share was

$17.39 compared

to $16.97

in 4Q20

and $15.60

in 1Q20.

The CET1

ratio was

13.56% compared to 13.08% in 4Q20 and 11.69% in 1Q20.

Conference Call, Financial Supplement & Presentation

A conference

call to discuss

1Q21 results, outlook

and related matters

will be held

today at

10:00 AM ET.

Phone (888) 562-

3356 or

(973) 582-

Conference

ID: 319-4111.

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

March 31, 2021,

and the 1Q21

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-

and 8-2

in OFG’s

above-mentioned Financial

Supplement for

a reconciliation

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) the potential impact

of damages

from future

hurricanes, earthquakes

and other

natural disasters

in Puerto

Rico; (v)

the fiscal

and monetary

policies of the federal

government and its agencies;

(vi) the performance of

the stock and bond

markets; (vii) competition

the financial

services industry;

(viii) possible

legislative, tax

or regulatory

changes; and

(ix) 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-

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

circumstances after the date of such statements.

About OFG Bancorp

Now in its 57

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

www.ofgbancorp.com.

#

Contacts

Puerto Rico & USVI:

Idalis Montalvo (

idalis.montalvo@orientalbank.com

) at (787) 777-2847

US:

Gary Fishman (

gfishman@ofgbancorp.com

) and Steven Anreder (

sanreder@ofgbancorp.com

) at (212) 532-3232

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 March 31, 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

Financial and Statistical Summary - Consolidated

Table

Consolidated Statements of Operations

Table

Consolidated Statements of Financial

Condition

Table

Information on Loan Portfolio

and Production

5-6

Table

Average Balances, Net Interest

Income and Net Interest Margin

Table

Loan Information and Performance

Statistics

8-10

Table

Allowance for Credit Losses

Table

Reconciliation of GAAP to Non-GAAP Measures

and Calculation of Regulatory Capital

12-13

Table

Notes to Financial Summary,

Selected Metrics, Loans, and Consolidated

Financial Statements (Tables

1-8)

OFG Bancorp (NYSE: OFG)

Table 1: Financial and

Statistical Summary - Consolidated

2021

2020

(Dollars in thousands, except per share data) (unaudited)

Statement of Operations

Net interest income

98,204

98,738

99,533

105,060

105,101

Non-interest income, net (core)

(2)

29,452

34,047

27,486

23,106

26,233

Total core revenues

127,656

132,785

127,019

128,166

131,334

Non-interest expense

77,666

89,039

83,444

85,481

87,322

Pre-provision net revenues

(22)

50,945

44,123

47,415

46,731

49,229

Total provision for credit losses

6,324

14,176

13,669

17,696

(e)

47,131

(e)

Net income before income taxes

44,621

29,947

33,746

29,035

2,098

Income tax expense

14,248

6,646

6,308

7,248

297

Net income available to common stockholders

29,118

21,673

25,810

20,159

173

Common Share Statistics

Earnings (loss) per common share - basic

(3)

0.57

0.42

0.50

0.39

Earnings (loss) per common share - diluted

(4)

0.56

0.42

0.50

0.39

Average common shares outstanding

51,397

51,350

51,342

51,336

51,404

Average common shares outstanding and equivalents

51,616

51,618

51,527

51,470

51,713

Cash dividends per common share

0.08

0.07

Book value per common share (period end)

19.90

19.54

19.13

18.69

18.33

(d)

Tangible book value per common share (period end)

(5)

17.39

16.97

16.51

16.01

15.60

(d)

Balance Sheet (Average Balances)

Loans

(6)

6,635,908

(b)

6,708,284

(b)

6,787,022

(b)

6,840,650

(b)

6,687,875

(d)

Interest-earning assets

9,358,377

9,270,739

9,218,717

8,845,744

8,556,421

Total assets

10,004,323

9,921,254

9,918,381

9,512,129

9,326,627

Core deposits

8,535,678

8,451,308

8,376,623

7,852,495

7,516,438

Total deposits

8,581,633

8,515,646

8,517,039

8,088,106

7,752,446

Interest-bearing deposits

6,223,419

6,199,929

6,240,639

6,105,014

6,053,482

Borrowings

100,951

101,930

102,916

157,669

271,800

Stockholders' equity

1,101,046

1,083,423

1,062,460

1,037,195

1,043,481

(d)

Common stockholders' equity

1,019,176

1,001,553

980,590

955,325

961,611

(d)

Performance Metrics

Net interest margin

(7)

4.26%

4.24%

4.30%

4.78%

4.94%

Return on average assets

(8)

1.21%

0.94%

1.11%

0.92%

0.08%

Return on average tangible common stockholders' equity

(9)

13.11%

9.99%

12.23%

9.88%

0.08%

Efficiency ratio

(10)

60.84%

67.06%

65.69%

66.70%

66.49%

Full-time equivalent employees, period end

2,238

2,275

2,332

2,373

2,449

Credit Quality Metrics

(1)(21)

Allowance for loan and lease losses

201,973

204,809

(a)

235,313

232,701

230,755

(d)(e)

Allowance as a % of loans held for investment

3.06%

(b)

3.07%

(a)(b)

3.48%

(b)

3.35%

(b)

3.41%

Net charge-offs

9,105

44,814

(a)

10,570

15,750

24,034

Net charge-off rate

(11)

0.55%

2.67%

(a)

0.62%

0.92%

1.44%

Early delinquency rate (30 - 89 days past due)

2.15%

2.68%

2.50%

2.64%

3.16%

Total delinquency rate (30 days and over)

4.65%

5.74%

5.67%

5.56%

6.38%

Capital Ratios (Non-GAAP)

(12)(20)

Leverage ratio

10.48%

10.30%

10.00%

10.16%

10.14%

(c)(d)

Common equity Tier 1 capital ratio

13.56%

13.08%

12.55%

12.03%

11.69%

(c)(d)

Tier 1 risk-based capital ratio

15.28%

14.78%

14.25%

13.71%

13.36%

(c)(d)

Total risk-based capital ratio

16.54%

16.04%

15.50%

14.96%

14.62%

(c)(d)

Tangible common equity ("TCE") ratio

8.95%

9.00%

8.58%

8.39%

8.80%

(a) During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.

(b) At June 30, 2020, September 30, 2020, December 31, 2020 and March 31, 2021, the

Company had PPP loans amounting to $278.1 million, $289.2 million, $282.7 million

and

$336.7 million, respectively. These loans are fully guaranteed by the SBA and risk-weighted at 0%.

increased common equity tier 1 (CET1) capital threshold deductions from 10 percent

to 25 percent and removed the aggregate 15 percent CET1 threshold deduction.

(d) 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, the adjustment amounting to $50.5 million was made through the allowance and loan balances with

no impact in

capital. The Company elected to phase-in the January 1, 2020 (“day 1”) impact to retained earnings to regulatory capital over the five-year transition period beginning in 2020.

(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.

OFG Bancorp (NYSE: OFG)

Table 2: Consolidated

Statements of Operations

Quarter Ended

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands, except per share data) (unaudited)

2021

2020

Interest income:

Loans

(1)

Non-PCD loans

82,936

81,171

83,029

83,832

87,482

PCD loans

25,275

29,250

29,018

(b)

34,700

(b)

28,953

Total interest income from

loans

108,211

110,421

112,047

118,532

116,435

Investment securities

2,771

2,600

2,890

3,160

7,262

Total interest income

110,982

113,021

114,937

121,692

123,697

Interest expense:

Deposits

Core deposits

11,861

13,225

13,808

13,999

15,034

Brokered deposits

163

288

812

1,446

1,586

Total deposits

12,024

13,513

14,620

15,445

16,620

Borrowings

754

770

784

1,187

1,976

Total interest expense

12,778

14,283

15,404

16,632

18,596

Net interest income

98,204

98,738

99,533

105,060

105,101

Provision for credit losses, excluding PCD loans

(1)

2,998

15,464

13,845

15,227

40,951

Provision (recapture) for credit losses on PCD loans

(1)

3,326

(1,288)

(176)

2,469

6,180

Total provision for credit losses

6,324

14,176

13,669

17,696

(d)

47,131

(d)

Net interest income after provision for loan and lease losses

91,880

84,562

85,864

87,364

57,970

Non-interest income:

Banking service revenues

16,493

16,901

16,297

13,668

15,713

Wealth management revenues

7,388

10,865

(a)

7,272

6,366

7,286

Mortgage banking activities

5,571

6,281

3,917

3,072

3,234

Total banking and financial service revenues

29,452

34,047

27,486

23,106

26,233

Bargain purchase from Scotiabank PR & USVI acquisition

3,465

(c)

3,462

(c)

409

(c)

Other income, net

955

377

375

584

4,808

(f)

Total non-interest income, net

30,407

34,424

31,326

27,152

31,450

Non-interest expense:

Compensation and employee benefits

32,618

30,921

31,955

34,506

35,544

Occupancy, equipment and infrastructure costs

13,128

12,064

11,943

11,837

11,439

General and administrative expenses

30,201

33,454

33,452

31,181

37,345

Net (gain) loss on sale of foreclosed real estate and other repossessed assets

(1,770)

(300)

(866)

316

(193)

Credit related expenses

1,720

1,304

2,189

2,602

2,715

Merger and restructuring charges

10,092

(e)

2,681

(e)

3,006

(e)

304

COVID 19 expenses

1,769

1,504

2,090

2,033

168

Total non-interest expense

77,666

89,039

83,444

85,481

87,322

Income before income taxes

44,621

29,947

33,746

29,035

2,098

Income tax expense

14,248

6,646

6,308

7,248

297

Net income

30,373

23,301

27,438

21,787

1,801

Less:

dividends on preferred stock

(1,255)

(1,628)

Net income available to common shareholders

29,118

21,673

25,810

20,159

173

(a) During 4Q 2020, the Company recognized annual insurance contingent commissions amounting to $4.0 million.

(b) 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.

by $0.4 million, $3.5 million and $3.5 million,

respectively, as part of remeasurement period adjustments.

(d) 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.

(e) 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, $2.7

million during 3Q 2020, and $10.1 million during 4Q 2020.

(f) 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.

OFG Bancorp (NYSE: OFG)

Table 3: Consolidated

Statements of Financial Condition

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands) (unaudited)

2021

2020

Cash and cash equivalents

2,409,416

2,155,577

2,283,050

1,900,037

1,325,941

Investments:

Trading securities

Investment securities available-for-sale, at fair value,

with amortized cost of $462,115 ( December 31, 2020 - $432,175;

September 30, 2020 - $412,899; June 30, 2020 - $529,985;

March 31, 2020 - $648,565; no allowance for credit

losses for any period)

Mortgage-backed securities

457,673

432,935

329,719

340,192

355,637

US treasury notes

10,946

10,983

91,531

197,340

298,986

Other investment securities

2,390

2,520

2,565

2,707

2,837

Total investment securities available-for-sale

471,009

446,438

423,815

540,239

657,460

Mortgage-backed securities held-to-maturity, at amortized cost,

no allowance for credit losses

126,767

Federal Home Loan Bank (FHLB) stock, at cost

8,233

8,278

8,322

8,366

10,301

Other investments

5,557

3,962

2,205

1,076

973

Total investments

611,589

458,700

434,364

549,703

668,763

Loans, net

6,432,079

6,501,259

6,579,140

6,739,243

6,541,174

Other assets:

Prepaid expenses

58,348

61,416

54,583

40,119

44,633

Deferred tax asset, net

154,540

162,478

178,957

186,730

196,129

Foreclosed real estate and repossessed properties

18,366

13,412

21,374

26,152

30,388

Premises and equipment, net

83,756

83,786

83,270

82,234

81,834

Goodwill

86,069

Right of use assets

32,714

31,383

35,900

34,692

36,844

Core deposit, customer relationship intangible and other intangibles

43,445

45,896

48,650

51,406

54,174

Servicing asset

47,911

47,295

47,242

47,926

49,287

Accounts receivable and other assets

175,109

178,740

166,392

188,408

(a)

123,335

Total assets

10,153,342

9,826,011

10,018,991

9,932,719

9,238,571

Deposits:

Demand deposits

4,885,311

4,613,309

4,682,991

4,370,419

3,711,492

Savings accounts

2,142,573

1,920,325

1,919,859

1,978,118

1,829,054

Time deposits

1,693,924

1,832,891

1,933,517

1,975,223

2,023,211

Brokered deposits

34,954

49,115

96,090

218,166

255,514

Total deposits

8,756,762

8,415,640

8,632,457

8,541,926

7,819,271

Borrowings:

Securities sold under agreements to repurchase

50,103

Advances from FHLB and other borrowings

65,013

66,268

66,781

68,340

77,601

Subordinated capital notes

36,083

Total borrowings

101,096

102,351

102,864

104,423

163,787

Other liabilities:

Derivative liabilities

1,465

1,712

1,895

2,078

2,059

Acceptances outstanding

24,389

33,349

18,291

20,034

11,763

Lease liability

34,017

32,566

37,029

35,694

37,702

Accrued expenses and other liabilities

127,190

154,418

162,133

187,280

181,395

Total liabilities

9,044,919

8,740,036

8,954,669

8,891,435

8,215,977

Stockholders' equity:

Preferred stock

92,000

Common stock

59,885

Additional paid-in capital

622,935

622,652

621,978

621,860

621,206

Legal surplus

106,165

103,269

101,233

98,347

95,945

Retained earnings

322,202

300,096

284,053

264,725

250,557

Treasury stock, at cost

(100,994)

(102,949)

(103,095)

(103,121)

(103,289)

Accumulated other comprehensive (loss) income, net

6,230

11,022

8,268

7,588

6,290

Total stockholders' equity

1,108,423

1,085,975

1,064,322

1,041,284

1,022,594

Total liabilities and stockholders' equity

10,153,342

9,826,011

10,018,991

9,932,719

9,238,571

(a) During 2Q 2020, the Company offered several deferral programs to clients impacted by the Covid-19, which contributed to the increase of accrued interest receivable by

approximately $40 million.

OFG Bancorp (NYSE: OFG)

Table 4-1: Information

on Loan Portfolio and

Production

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands) (unaudited)

2021

2020

Non-PCD:

(1)

Mortgage

791,062

823,443

847,671

874,286

887,950

Commercial

1,827,102

1,836,137

1,785,022

1,918,424

1,910,192

Commercial Paycheck Protection Program (PPP Loans)

311,823

282,713

289,218

278,059

Consumer

395,073

413,552

434,546

458,714

481,710

Auto

1,565,473

1,534,269

1,511,829

1,454,987

1,487,701

4,890,533

4,890,114

4,868,286

4,984,470

4,767,553

Less:

Allowance for credit losses

(156,978)

(161,015)

(156,409)

(151,507)

(149,961)

Total non- PCD loans held for investment, net

4,733,555

4,729,099

4,711,877

4,832,963

4,617,592

PCD:

(1)

Mortgage

1,406,044

1,459,932

1,504,914

1,541,637

1,561,557

Commercial

272,793

283,160

(a)

352,555

386,046

391,158

Consumer

1,120

1,394

2,336

2,950

3,350

Auto

23,036

27,533

31,836

37,409

42,466

1,702,993

1,772,019

1,891,641

1,968,042

1,998,531

Less:

Allowance for credit losses

(1)

(44,995)

(43,794)

(a)

(78,904)

(81,194)

(80,794)

Total PCD loans held for investment, net

1,657,998

1,728,225

1,812,737

1,886,848

1,917,737

Total loans held for investment

6,391,553

6,457,324

6,524,614

6,719,811

6,535,329

Mortgage loans held for sale

38,220

41,654

54,526

19,432

5,845

Other loans held for sale

2,306

2,281

Total loans, net

6,432,079

6,501,259

6,579,140

6,739,243

6,541,174

Loan Portfolio Summary:

Loans held for investment:

Mortgage

2,197,106

2,283,375

2,352,585

2,415,923

2,449,507

Commercial

2,411,718

2,402,010

2,426,795

2,582,529

2,301,350

Consumer

396,193

414,946

436,882

461,664

485,060

Auto

1,588,509

1,561,802

1,543,665

1,492,396

1,530,167

6,593,526

6,662,133

6,759,927

6,952,512

6,766,084

Less:

Allowance for credit losses

(201,973)

(204,809)

(235,313)

(232,701)

(230,755)

Total loans held for investment, net

6,391,553

6,457,324

6,524,614

6,719,811

6,535,329

Mortgage loans held for sale

38,220

41,654

54,526

19,432

5,845

Other loans held for sale

2,306

2,281

Total loans, net

6,432,079

6,501,259

6,579,140

6,739,243

6,541,174

(a) During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.

OFG Bancorp (NYSE: OFG)

Table 4-2: Information

on Loan Portfolio and

Production

Quarter Ended

March 31,

December 31,

September 30,

June 30,

March 31,

(Dollars in thousands) (unaudited)

2021

2020

Loan production

(13)

Mortgage

95,851

97,656

93,650

23,744

30,988

Commercial

83,820

174,894

83,488

98,558

54,113

Commercial PPP Loans

126,266

10,318

286,420

US Loan Programs

44,841

49,221

90,878

35,711

47,125

Consumer

27,492

25,984

23,540

14,231

39,199

Auto

149,357

137,545

155,880

47,374

109,344

Total

527,627

485,300

457,754

506,038

280,769

OFG Bancorp (NYSE: OFG)

Table 5: Average

Balances, Net Interest

Income and Net Interest Margin

2021 Q1

2020 Q4

2020 Q3

2020 Q2

2020 Q1

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

2,204,431

595

0.11

2,091,458

613

0.12

1,929,024

613

0.13

1,393,187

359

0.10

943,581

2,788

1.19

Investment securities

518,038

2,176

1.68

470,997

1,986

1.69

502,671

2,278

1.81

611,907

2,801

1.83

924,965

4,474

1.93

Loans held for investment

(1)

Non-PCD loans

4,893,874

82,936

6.87

4,863,902

81,171

6.64

4,870,753

83,029

6.78

4,857,281

83,832

6.94

4,613,878

87,482

7.63

PCD loans

1,742,034

25,275

5.80

1,844,382

29,250

6.34

1,916,269

29,018

6.06

1,983,369

34,700

7.00

2,073,997

28,953

5.58

Total loans

6,635,908

108,211

6.61

6,708,284

110,421

6.55

6,787,022

112,047

6.57

6,840,650

118,532

6.97

6,687,875

116,435

7.00

Total interest-earning assets

9,358,377

110,982

4.81

9,270,739

113,020

4.85

9,218,717

114,938

4.96

8,845,744

121,692

5.53

8,556,421

123,697

5.81

Interest bearing liabilities:

Deposits

NOW accounts

2,397,673

2,393

0.40

2,344,903

2,258

0.38

2,227,687

2,247

0.40

2,069,247

2,138

0.42

1,980,505

2,389

0.48

Savings accounts

2,003,963

2,124

0.43

1,897,618

1,954

0.41

1,927,680

2,010

0.41

1,809,517

1,976

0.44

1,797,658

2,440

0.55

Time deposits

1,775,828

5,507

1.26

1,893,070

6,975

1.47

1,944,856

7,512

1.54

1,990,639

7,835

1.58

2,039,311

8,131

1.60

Brokered deposits

45,955

163

1.44

64,338

289

1.78

140,416

812

2.30

235,611

1,446

2.47

236,008

1,586

2.70

6,223,419

10,187

0.66

6,199,929

11,476

0.74

6,240,639

12,581

0.80

6,105,014

13,395

0.88

6,053,482

14,546

0.97

Non-interest bearing deposit accounts

2,358,214

2,315,717

2,276,400

1,983,092

1,698,964

Fair value premium amortization and

core deposit intangible amortization

1,837

2,037

2,039

2,051

2,074

Total deposits

8,581,633

12,024

0.57

8,515,646

13,513

0.63

8,517,039

14,620

0.68

8,088,106

15,446

0.77

7,752,446

16,620

0.86

Borrowings

Securities sold under agreements to

repurchase

46,154

334

2.91

158,462

1,002

2.54

Advances from FHLB and other

borrowings

64,868

459

2.87

65,847

468

2.83

66,833

476

2.83

75,432

505

2.69

77,255

539

2.81

Subordinated capital notes

36,083

295

3.31

36,083

301

3.34

36,083

308

3.39

36,083

347

3.87

36,083

435

4.85

Total borrowings

100,951

754

3.03

101,930

769

3.01

102,916

784

3.03

157,669

1,186

3.03

271,800

1,976

2.92

Total interest-bearing liabilities

8,682,584

12,778

0.60

8,617,576

14,282

0.66

8,619,955

15,404

0.71

8,245,775

16,632

0.81

8,024,246

18,596

0.93

Interest rate spread

98,204

4.21

98,738

4.19

99,534

4.25

105,060

4.72

105,101

4.88

Net interest margin

4.26

4.24

4.30

4.78

4.94

Core deposits: (Non-GAAP)

Deposits

NOW accounts

2,397,673

2,393

0.40

2,344,903

2,258

0.38

2,227,687

2,247

0.40

2,069,247

2,138

0.42

1,980,505

2,389

0.48

Savings accounts

2,003,963

2,124

0.43

1,897,618

1,954

0.41

1,927,680

2,010

0.41

1,809,517

1,976

0.44

1,797,658

2,440

0.55

Time deposits

1,775,828

5,507

1.26

1,893,070

6,975

1.47

1,944,856

7,512

1.54

1,990,639

7,835

1.58

2,039,311

8,131

1.60

6,177,464

10,024

0.66

6,135,591

11,187

0.73

6,100,223

11,769

0.77

5,869,403

11,949

0.82

5,817,474

12,960

0.91

Non-interest bearing deposit accounts

2,358,214

2,315,717

2,276,400

1,983,092

1,698,964

Total core deposits

8,535,678

10,024

0.48

8,451,308

11,187

0.53

8,376,623

11,769

0.56

7,852,495

11,949

0.61

7,516,438

12,960

0.69

OFG Bancorp (NYSE: OFG)

Table 6-1: Loan Information

and Performance Statistics

(1)

2021

2020

(Dollars in thousands) (unaudited)

Net Charge-offs

(21)

Non-PCD

Mortgage:

Charge-offs

787

225

185

418

Recoveries

(615)

(79)

(269)

(9)

(249)

Total mortgage

173

146

(213)

176

169

Commercial:

Charge-offs

413

298

497

3,771

Recoveries

(430)

(334)

(253)

(631)

(1,522)

Total commercial

(363)

(134)

2,249

Consumer:

Charge-offs

4,469

6,456

5,114

4,187

6,015

Recoveries

(565)

(1,832)

(663)

(443)

(644)

Total consumer

3,903

4,624

4,451

3,744

5,371

Auto:

Charge-offs

9,083

12,071

10,123

13,300

13,053

Recoveries

(5,817)

(5,928)

(5,950)

(3,405)

(4,211)

Total auto

3,266

6,143

4,173

9,895

8,842

Total

6,980

10,992

8,456

13,681

16,631

PCD

Mortgage:

Charge-offs

2,590

1,344

1,677

2,178

5,143

Recoveries

(146)

(63)

(89)

(580)

(122)

Total mortgage

2,444

1,281

1,588

1,598

5,021

Commercial:

Charge-offs

33,061

(a)

293

386

2,357

Recoveries

(436)

(234)

(91)

(286)

(375)

Total commercial

(393)

32,827

202

100

1,982

Consumer:

Charge-offs

431

Recoveries

(21)

(200)

(30)

(63)

Total consumer

(179)

368

Auto:

Charge-offs

456

574

474

600

375

Recoveries

(383)

(681)

(211)

(229)

(343)

Total auto

(107)

263

371

Total

2,125

33,822

(a)

2,114

2,069

7,403

Total Net Charge-offs

9,105

44,814

10,570

15,750

24,034

Net Charge-off Rates

(21)

Mortgage

0.47%

0.25%

0.24%

0.30%

0.86%

Commercial

-0.13%

5.45%

(a)

0.04%

-0.01%

0.76%

Consumer

3.78%

4.09%

3.94%

3.12%

4.63%

Auto

0.85%

1.56%

1.17%

2.72%

2.31%

Total

0.55%

2.67%

(a)

0.62%

0.92%

1.44%

Average Loans Held For Investment

(21)

Mortgage

2,243,303

2,305,495

2,325,756

2,366,600

2,414,685

Commercial

2,405,419

2,416,703

2,484,977

2,484,573

2,239,684

Consumer

413,191

434,565

457,620

479,957

496,313

Auto

1,573,995

1,551,521

1,518,669

1,509,521

1,537,193

Total

6,635,908

6,708,284

6,787,022

6,840,651

6,687,875

(a) During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.

Table 6-2: Loan Information

and Performance Statistics

(Excludes PCD Loans) (1)

OFG Bancorp (NYSE: OFG)

2021

2020

(Dollars in thousands) (unaudited)

Early Delinquency (30 - 89 days past due)

Mortgage

17,350

22,339

16,783

15,665

20,518

Commercial

3,911

8,043

5,151

7,704

6,074

Consumer

8,250

12,230

12,032

18,254

13,127

Auto

75,449

88,357

87,912

89,825

110,959

Total

104,960

130,969

121,878

131,448

150,678

Early Delinquency Rates (30 - 89 days past due)

Mortgage

2.19%

2.71%

1.98%

1.79%

2.31%

Commercial

0.21%

0.44%

0.29%

0.40%

0.32%

Consumer

2.09%

2.96%

2.77%

3.98%

2.73%

Auto

4.82%

5.76%

5.81%

6.17%

7.46%

Total

2.15%

2.68%

2.50%

2.64%

3.16%

Total Delinquency (30 days and over past due)

Mortgage:

Traditional, Non traditional, and Loans under Loss Mitigation

62,827

67,671

51,123

40,719

46,768

GNMA's buy-back option program

40,777

56,193

62,651

75,091

75,314

Total mortgage

103,604

123,864

113,774

115,810

122,082

Commercial

26,065

30,604

35,596

38,258

33,746

Consumer

11,042

17,147

17,080

22,796

16,808

Auto

86,918

108,842

109,735

100,027

131,715

Total

227,629

280,457

276,185

276,891

304,351

Total Delinquency Rates (30 days and over past due)

Mortgage:

Traditional, Non traditional, and Loans under Loss Mitigation

7.94%

8.22%

6.03%

4.66%

5.27%

GNMA's buy-back option program

5.15%

6.82%

7.39%

8.59%

8.48%

Total mortgage

13.10%

15.04%

13.42%

13.25%

13.75%

Commercial

1.43%

1.67%

1.99%

1.77%

Consumer

2.79%

4.15%

3.93%

4.97%

3.49%

Auto

5.55%

7.09%

7.26%

6.87%

8.85%

Total

4.65%

5.74%

5.67%

5.56%

6.38%

Nonperforming Assets

(14)

Mortgage

50,933

46,967

40,477

30,491

31,073

Commercial

42,778

41,999

44,941

44,187

42,668

Consumer

2,900

4,987

5,206

4,933

3,690

Auto

11,842

20,766

22,583

10,539

21,147

Total nonperforming loans

108,453

114,719

113,207

90,150

98,578

Foreclosed real estate

15,598

11,596

19,456

24,792

27,292

Other repossessed assets

2,768

1,816

1,918

1,360

3,096

Total nonperforming assets

126,819

128,131

134,581

116,302

128,966

Nonperforming Loan Rates

Mortgage

6.44%

5.70%

4.78%

3.49%

3.50%

Commercial

2.34%

2.29%

2.52%

2.30%

2.23%

Consumer

0.73%

1.21%

1.20%

1.08%

0.77%

Auto

0.76%

1.35%

1.49%

0.72%

1.42%

Total loans

2.22%

2.35%

2.33%

1.81%

2.07%

OFG Bancorp (NYSE: OFG)

Table 6-3: Loan Information

and Performance Statistics

(1)

2021

2020

(Dollars in thousands) (unaudited)

Nonperforming PCD Loans

(14)

Mortgage

958

1,003

1,373

1,341

Commercial

34,906

36,470

(a)

79,631

81,064

82,411

Consumer

Total nonperforming loans

35,864

37,474

(a)

80,638

82,449

83,762

Nonperforming PCD Loan Rates

Mortgage

0.07%

0.09%

Commercial

12.80%

12.88%

(a)

22.59%

21.00%

21.07%

Consumer

0.00%

0.07%

0.17%

0.41%

0.30%

Total

2.11%

(a)

4.26%

4.19%

Total PCD Loans Held for Investment

(21)

Mortgage

1,406,044

1,459,932

1,504,914

1,541,637

1,561,557

Commercial

272,793

283,160

352,555

386,046

391,158

Consumer

1,120

1,394

2,336

2,950

3,350

Total loans

1,679,957

1,744,486

1,859,805

1,930,633

1,956,065

2021

2020

(Dollars in thousands) (unaudited)

Total Nonperforming Loans

(14)

Mortgage

51,891

47,970

41,480

31,864

32,414

Commercial

77,684

78,469

(a)

124,572

125,251

125,079

Consumer

2,900

4,988

5,210

4,945

3,700

Auto

11,842

20,766

22,583

10,539

21,147

Total nonperforming loans

144,317

152,193

(a)

193,845

172,599

182,340

Total Nonperforming Loan Rates

Mortgage

2.36%

2.10%

1.76%

1.32%

Commercial

3.22%

3.27%

(a)

5.13%

4.85%

5.44%

Consumer

0.73%

1.20%

1.19%

1.07%

0.76%

Auto

0.75%

1.33%

1.46%

0.71%

1.38%

Total

2.19%

2.28%

(a)

2.87%

2.48%

2.69%

Total Loans Held for Investment

(21)

Mortgage

2,197,106

2,283,375

2,352,585

2,415,923

2,449,507

Commercial

2,411,718

2,402,010

2,426,795

2,582,529

2,301,350

Consumer

396,193

414,946

436,882

461,664

485,060

Auto

1,588,509

1,561,802

1,543,665

1,492,396

1,530,167

Total loans

6,593,526

6,662,133

6,759,927

6,952,512

6,766,084

(a) During 4Q 2020, the Company charged-off $31.2 million for two commercial PCD loans.

OFG Bancorp (NYSE: OFG)

Table 7: Allowance

for Credit Losses (1)

Quarter Ended March 31, 2021

(Dollars in thousands) (unaudited)

Mortgage

Commercial

Consumer

Auto

Total

Allowance for credit losses Non-PCD:

Balance at beginning of period

19,687

45,779

25,253

70,296

161,015

(Recapture) provision for credit losses

(2,480)

1,542

(158)

4,039

2,943

Charge-offs

(787)

(68)

(4,469)

(9,083)

(14,407)

Recoveries

615

430

565

5,817

7,427

Balance at end of period

17,035

47,683

21,191

71,069

156,978

Allowance for credit losses PCD:

Balance at beginning of period

26,388

16,406

943

43,794

Provision (recapture) for credit losses

5,994

(2,492)

(4)

(172)

3,326

Charge-offs

(2,590)

(43)

(22)

(456)

(3,111)

Recoveries

146

436

383

986

Balance at end of period

29,938

14,307

698

44,995

Allowance for credit losses summary:

Balance at beginning of period

46,075

62,185

25,310

71,239

204,809

Provision (recapture) for credit losses

3,514

(950)

(162)

3,867

6,269

Charge-offs

(3,377)

(111)

(4,491)

(9,539)

(17,518)

Recoveries

761

866

586

6,200

8,413

Balance at end of period

46,973

61,990

21,243

71,767

201,973

Allowance coverage ratio

2.14%

2.57%

5.36%

4.52%

3.06%

Allowance coverage ratio excluding PPP loans (Non-GAAP)

2.14%

2.95%

5.36%

4.52%

3.22%

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

2020

(Dollars in thousands) (unaudited)

Stockholders' Equity to Non-GAAP Tangible Common Equity

Total stockholders' equity

1,108,423

1,085,975

1,064,322

1,041,284

1,022,594

Less:

Intangible assets

(129,514)

(131,965)

(134,719)

(137,475)

(140,243)

Noncumulative perpetual preferred stock

(92,000)

Noncumulative perpetual preferred stock issuance costs

10,130

Tangible common equity

897,039

872,140

847,733

821,939

800,481

Common shares outstanding at end of period

51,579

51,387

51,345

51,342

51,327

Tangible book value per common share (Non-GAAP)

17.39

16.97

16.51

16.01

15.60

Total Assets to Tangible

Assets

Total assets

10,153,342

9,826,011

10,018,991

9,932,719

9,238,571

Less:

Intangible assets

(129,514)

(131,965)

(134,719)

(137,475)

(140,243)

Tangible assets (Non-GAAP)

10,023,828

9,694,046

9,884,272

9,795,244

9,098,328

Non-GAAP TCE Ratio

Tangible common equity

897,039

872,140

847,733

821,939

800,481

Tangible assets

10,023,828

9,694,046

9,884,272

9,795,244

9,098,328

TCE ratio

8.95%

9.00%

8.58%

8.39%

8.80%

Average Equity to Non-GAAP Average Tangible

Common Equity

Average total stockholders' equity

1,101,046

1,083,423

1,062,460

1,037,195

1,043,481

Less:

Average noncumulative perpetual preferred stock

(92,000)

Average noncumulative perpetual preferred stock issuance costs

10,130

Average total common stockholders' equity

1,019,176

1,001,553

980,590

955,325

961,611

Less:

Average intangible assets

(130,767)

(133,542)

(136,138)

(139,094)

(141,875)

Average tangible common equity

888,409

868,011

844,452

816,231

819,736

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

2020

(Dollars in thousands) (unaudited)

Regulatory Capital Metrics

Common equity Tier 1 capital

919,856

894,074

862,636

836,899

816,356

Tier 1 capital

1,036,726

1,010,944

979,506

953,769

933,226

Total risk-based capital

(15)

1,121,832

1,096,764

1,065,744

1,040,987

1,020,748

Risk-weighted assets

6,782,921

6,837,846

6,875,108

6,957,906

6,983,626

(a)

Regulatory Capital Ratios

Common equity Tier 1 capital ratio

(16)

13.56%

13.08%

12.55%

12.03%

11.69%

Tier 1 risk-based capital ratio

(17)

15.28%

14.78%

14.25%

13.71%

13.36%

Total risk-based capital ratio

(18)

16.54%

16.04%

15.50%

14.96%

14.62%

Leverage ratio

(19)

10.48%

10.30%

10.00%

10.16%

10.14%

Common Equity Tier 1 Capital Ratio Under Basel III Standardized Approach

Total stockholders' equity

(1)

1,108,423

1,085,975

1,064,322

1,041,284

1,022,594

Plus: CECL transition adjustment

(20)

33,637

34,646

33,494

32,269

31,882

Less:

Noncumulative perpetual preferred stock

(92,000)

Noncumulative perpetual preferred stock issuance costs

10,130

Unrealized gains on available-for-sale securities, net of income tax

(7,146)

(12,091)

(9,453)

(8,885)

(7,576)

Unrealized losses on cash flow hedges, net of income tax

916

1,069

1,185

1,297

1,286

1,053,960

1,027,729

1,007,678

984,095

966,316

Less:

Disallowed goodwill

(86,069)

Disallowed other intangible assets, net

(30,172)

(32,073)

(33,810)

(35,563)

(37,241)

Disallowed deferred tax assets, net

(17,863)

(15,513)

(25,163)

(25,564)

(26,650)

(a)

Common equity Tier 1 capital

919,856

894,074

862,636

836,899

816,356

Plus:

Qualifying noncumulative perpetual preferred stock

92,000

Qualifying noncumulative perpetual preferred stock issuance costs

(10,130)

Subordinated capital notes

35,000

Tier 1 capital

1,036,726

1,010,944

979,506

953,769

933,226

Plus tier 2 capital:

Qualifying allowance for loan and lease losses

85,106

85,820

86,238

87,218

87,522

Total risk-based capital

1,121,832

1,096,764

1,065,744

1,040,987

1,020,748

(a) During 1Q 2020, the Company early implemented Simplifications to the Capital Rule, which

increased common equity tier 1 (CET1) capital threshold deductions from 10 percent

to 25 percent and removed the aggregate 15 percent CET1 threshold deduction.

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.