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Business Segment
 12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]  
Segment Reporting

NOTE 26 – BUSINESS SEGMENTS

 

The Company segregates its businesses into the following major reportable segments of business: 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 the Company's organization, nature of its products, distribution channels and economic characteristics of the products were also considered in the determination of the reportable segments. The Company 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. The Company'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. These factors are reviewed on a periodical basis and may change if the conditions warrant.

 

Banking includes the Bank's branches and traditional banking products such as deposits and commercial, consumer and mortgage loans. Mortgage banking activities are carried out by the Bank's mortgage banking division, whose principal activity is to originate mortgage loans for the Company's own portfolio. As part of its mortgage banking activities, the Company may sell loans directly into the secondary market or securitize conforming loans into mortgage-backed securities.

 

Wealth Management is comprised of the Bank's trust division, Oriental Financial Services, Oriental Insurance, and CPC. The core operations of this segment are financial planning, money management and investment banking, brokerage services, insurance sales activity, corporate and individual trust and retirement services, as well as retirement plan administration services.

 

The Treasury segment encompasses all of the Company's asset/liability management activities, such as purchases and sales of investment securities, interest rate risk management, derivatives, and borrowings. Intersegment sales and transfers, if any, are accounted for as if the sales or transfers were to third parties, that is, at current market prices.

Following are the results of operations and the selected financial information by operating segment for the years ended December 31, 2014, 2013 and 2012:

 Year Ended December 31, 2014
    Wealth    Total Major    Consolidated
 Banking  Management Treasury  Segments  Eliminations  Total
 (In thousands)
Interest income$ 435,580 $ 174 $ 49,503 $ 485,257 $ - $ 485,257
Interest expense  (34,721)   -   (42,061)   (76,782)   -   (76,782)
Net interest income  400,859   174   7,442   408,475   -   408,475
Provision for non-covered loan and lease losses  (54,960)   -   -   (54,960)   -   (54,960)
Provision for covered loan and lease losses  (5,680)   -   -   (5,680)   -   (5,680)
Non-interest income (loss)  (13,389)   28,525   2,187   17,323   -   17,323
Non-interest expenses  (213,935)   (21,748)   (7,042)   (242,725)   -   (242,725)
Intersegment revenue  1,410   -   327   1,737   (1,737)   -
Intersegment expenses  (327)   (1,089)   (321)   (1,737)   1,737   -
Income before income taxes$ 113,978 $ 5,862 $ 2,593 $ 122,433 $ - $ 122,433
Total assets $ 6,454,015 $ 21,644 $ 1,940,504 $ 8,416,163   (967,054) $ 7,449,109
                  
                  
                  
 Year Ended December 31, 2013
    Wealth    Total Major    Consolidated
 Banking  Management Treasury  Segments  Eliminations  Total
 (In thousands)
Interest income$ 445,363 $ 354 $ 47,915 $ 493,632 $ - $ 493,632
Interest expense  (42,044)   -   (41,916)   (83,960)   -   (83,960)
Net interest income  403,319   354   5,999   409,672   -   409,672
Provision for non-covered loan and lease losses  (67,559)   -   -   (67,559)   -   (67,559)
Provision for covered loan and lease losses  (5,335)   -   -   (5,335)   -   (5,335)
Non-interest income (loss)  (17,438)   30,614   3,919   17,095   -   17,095
Non-interest expenses  (222,408)   (26,603)   (15,125)   (264,136)   -   (264,136)
Intersegment revenue  618   -   1,195   1,813   (1,813)   -
Intersegment expenses  -   (1,813)   -   (1,813)   1,813   -
Income before income taxes$ 91,197 $ 2,552 $ (4,012) $ 89,737 $ - $ 89,737
Total assets (1)$ 5,820,726 $ 23,280 $ 3,084,409 $ 8,928,415 $ (770,400) $ 8,158,015

During 2014, the classification of certain assets was revised to more accurately depict the nature of the underlying segments. This reclassification resulted in a reduction in banking segment total assets of approximately $1.190 billion, with a corresponding increase in treasury segment total assets of $830.9 million and a decrease in total assets eliminations of $358.8 million in 2013. The Company evaluated the impact of this reclassification on the total assets allocated to these segments and determined that the effect of this adjustment was not material to any previously reported results.

 Year Ended December 31, 2012
    Wealth    Total Major    Consolidated
 Banking  Management Treasury  Segments  Eliminations  Total
 (In thousands)
Interest income$ 165,492 $ - $ 95,316 $ 260,808 $ - $ 260,808
Interest expense  (22,232)   -   (81,286)   (103,518)   -   (103,518)
Net interest income  143,260   -   14,030   157,290   -   157,290
Provision for non-covered loan and lease losses  (13,854)   -   -   (13,854)   -   (13,854)
Provision for covered loan and lease losses, net  (9,827)   -   -   (9,827)   -   (9,827)
Non-interest income   (5,886)   25,155   6,786   26,055   -   26,055
Non-interest expenses  (90,183)   (28,718)   (12,907)   (131,808)   -   (131,808)
Intersegment revenue  1,594   -   -   1,594   (1,594)   -
Intersegment expenses  -   (1,183)   (411)   (1,594)   1,594   -
Income before income taxes$ 25,104 $ (4,746) $ 7,498 $ 27,856 $ - $ 27,856
Total assets$ 3,223,963 $ 18,875 $ 6,839,661 $ 10,082,499 $ (870,741) $ 9,211,758