OFG Bancorp (OFG)

Risks

• Most of our business is conducted in Puerto Rico, whose economic and government fiscal and liquidity challenges, as well as the impact of two major hurricanes in 2017 and earthquakes and a pandemic beginning in 2020, have adversely impacted and may continue to adversely impact us.
• Puerto Rico and the USVI are susceptible to earthquakes, hurricanes and major storms, the severity of which could be heightened by the effect of climate change, which could further deteriorate their economy and infrastructure.
• Changes in interest rates could adversely affect OFG’s results of operations and financial condition.
• Changes in the method pursuant to which the LIBOR and other benchmark rates are determined could adversely impact our business and results of operations.
• We are exposed to credit risk in connection with our loans to certain government agencies and municipalities of Puerto Rico, and the restructuring of Puerto Rico government’s debt could adversely affect the value of such loans.
• Heightened credit risk could require us to increase our provision for credit losses, which could have a material adverse effect on our results of operations and financial condition.
• We are subject to default and other risks in connection with mortgage loan originations.
• A continuing decline in the real estate market would likely result in an increase in delinquencies, defaults and foreclosures and in a reduction in loan origination activity, which would adversely affect our financial results.
• We may experience losses related to fraud and theft.
• We are subject to security and operational risks related to our use of technology, including the risk of cyber-attack or cyber theft.
• We rely on third parties to provide services and systems essential to the operation of our business, and any failure, interruption or termination of such services or systems could have a material adverse effect on our financial condition and results of operations.
• Non-Compliance with the USA Patriot Act, Bank Secrecy Act, or other laws and regulations could result in fines and other sanctions.
• Consumer protection laws and the Durbin Amendment may reduce our noninterest income.
• Our risk management policies, procedures and systems may be inadequate to mitigate all risks inherent in our various businesses.
• Our business could be adversely affected if we cannot maintain access to stable funding sources.
• Our ability to receive dividends from our subsidiaries could affect our liquidity and ability to pay dividends to our shareholders.
• Failure to keep pace with technological change could adversely affect OFG’s results of operations and financial condition.
• We operate in a highly regulated industry and may be adversely affected by changes in federal and local laws and regulations.
• Reputational risk and social factors may impact our results.
• Changes in accounting standards issued by the Financial Accounting Standards Board (“FASB”) or other standard-setting bodies may adversely affect our financial statements.
• Our goodwill and other intangible assets could be determined to be impaired in the future and could decrease OFG’s earnings.
• Legislative and other measures that may be taken by Puerto Rico governmental authorities could materially increase our tax burden or otherwise adversely affect our financial condition, results of operations or cash flows.