OFG BANCORPOFG
OFG BANCORP New Standards Disclosure
New Accounting Updates Not Yet Adopted
Codification Improvements. In December 2025, FASB issued ASU 2025-12, which is intended to facilitate Codification updates for a broad range of Topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor improvements. The amendments in ASU 2025-12 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. An entity may elect to early adopt the amendments on an issue-by-issue basis, and it may apply certain amendments prospectively while applying others retrospectively. We will adopt this guidance when it becomes effective in 2028. We are currently evaluating the impact on our financial statements and disclosures.
Interim Reporting (Topic 270): Narrow-Scope Improvements. In December 2025, FASB issued ASU 2025-11, which is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides “interim financial statements and notes in accordance with GAAP.” The amendments aim to improve clarity and consistency without significantly changing existing practices. The amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. Entities may apply the ASU’s amendments either prospectively or retrospectively to any or all prior periods presented in the financial statements. We will adopt this guidance when it becomes effective in 2028. We are currently evaluating the impact on our financial statements and disclosures.
Financial Instruments—Credit Losses (Topic 326): Purchased Loans. In November 2025, the FASB issued ASU 2025-08, which amends the guidance in ASC 326 on the accounting for certain purchased loans. Under the ASU, entities must account for acquired loans (excluding credit cards) that meet certain criteria at acquisition (“purchased seasoned loans”) by recognizing them at their purchase price plus an allowance for expected credit losses called gross-up approach. The ASU’s amendments align the accounting for purchased seasoned loans with the treatment of financial assets purchased with more-than-insignificant credit deterioration since origination (“PCD assets”). The guidance is effective for annual reporting periods beginning after December 15, 2026, including interim reporting periods, and entities must apply it prospectively. We will adopt this guidance when it becomes effective in 2027. We are currently evaluating the impact on our financial statements and disclosures.
Disaggregation of Income Statement Expenses. In November 2024, the FASB issued ASU 2024-03, which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning
after December 15, 2027. Early adoption is permitted. We will adopt this guidance when it becomes effective in the annual period of 2027 on a prospective basis. We are currently evaluating the impact on our financial statements and disclosures.
New Accounting Updates Adopted in 2025
Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. In September 2025, the FASB issued ASU 2025-06, which amends the accounting and disclosure rules for internal use software costs under GAAP (specifically ASC 350-40). The ASU eliminates stage‑based guidance for internal‑use software development and introduces a principles‑based approach for capitalization. Under the new model, capitalization begins when management authorizes and commits funding for a project and it is probable the software will be completed and perform its intended function. The ASU also relocates website development guidance to Subtopic 350‑40 and requires enhanced disclosures about the nature of internal‑use software projects, amounts capitalized and expensed, amortization methods, and significant judgments. ASU 2025-06 is effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. We adopted ASU 2025-06 effective January 1, 2025, using the prospective transition method. Under this approach, eligible costs incurred for internal-use software can be capitalized when management has authorized and committed to funding the project and it is probable the project will be completed and the software used to perform its intended function; prior periods were not adjusted. The adoption of this ASU did not result in a cumulative-effect adjustment to retained earnings and is not expected to have a material impact on future periods.
Income Taxes—Improvements to Income Tax Disclosures. In December 2023, the FASB issued ASU 2023-09 to enhance income tax disclosures and address investor requests for more information about the tax risks and opportunities present in an entity’s worldwide operations. The ASU’s two primary enhancements require further disaggregation for existing disclosures for the ETR reconciliation and income taxes paid. More specifically, the amendments require entities to disclose: (i) a tabular ETR reconciliation, broken out into specific categories with certain reconciling items above a 5% threshold further broken out by nature and jurisdiction; and (ii) income taxes paid (net of refunds received), broken out between federal, state and foreign, and net amounts paid to an individual jurisdiction that exceed 5% of the total. The amendments in this update are effective for annual periods beginning after December 15, 2024. The amendments should be applied prospectively, but retrospective application is permitted. We adopted this guidance when it became effective, in the annual period of 2025 on a retrospective basis. We provided additional disaggregated income tax disclosures in accordance with this ASU. Refer to Note 17 – Income Taxes for the disclosures. This ASU did not impact our consolidated statement of operations, consolidated balance sheet, consolidated statement of cash flows, consolidated statement of comprehensive income, or consolidated statement of changes in equity.
Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. In July 2025, the FASB issued ASU 2025-05 which amends ASC 326-20 to provide a practical expedient (for all entities) and an accounting policy election (for all entities, other than public business entities, that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. The ASU is designed to reduce the cost and complexity of applying Topic 326 (credit losses) to current accounts receivable and current contracts assets arising from transactions accounted for under Topic 606 (revenue from contracts with customers). ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities should apply the new guidance prospectively. We adopted this guidance in 2025 on a prospective basis and the impact on our financial statements and disclosures was not material.
Codification Improvements—Amendments to Remove References to the Concepts Statements. In March 2024, the FASB issued ASU 2024-02, which removes various references to concept statements from the FASB Accounting Standards Codification. The ASU intends to simplify the FASB Accounting Standards Codification and distinguish between non-authoritative and authoritative guidance. For publicly listed business entities, the amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. The amendments were applied in 2025 on a prospective basis, and the impact on our financial statements and disclosures was not material.
Compensation—Stock Compensation. In March 2024, the FASB issued ASU 2024-01 to improve GAAP by adding an illustrative example to demonstrate how an entity should apply the scope guidance in paragraph 718-10-15-3 to determine whether profits interest and similar awards should be accounted for in accordance with Topic 718. The ASU 2024-01 is intended to reduce complexity and diversity in practice. For public business entities, the amendments are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. We adopted this guidance in 2025 on a prospective basis and the impact on our financial statements and disclosures was not material.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
About New Standards Disclosures
New accounting standards disclosures describe recently adopted pronouncements and those not yet effective, along with management's assessment of their expected impact. This section provides an early warning system for upcoming changes to how a company reports its financial results, often years before the new rules take effect.
Key signals: when management describes a not-yet-adopted standard's impact as "material" or "still being evaluated," it signals potential significant changes to reported metrics upon adoption. Watch for standards that affect a company's core operations — for example, revenue recognition changes for software companies or lease accounting changes for retailers with large store footprints. The transition method chosen (full retrospective versus modified retrospective) affects comparability with prior periods. Companies that delay adoption to the latest permitted date may be struggling with implementation complexity. Compare the disclosed impact assessments against peers in the same industry to gauge whether management's expectations are reasonable.