XML 42 R31.htm IDEA: XBRL DOCUMENT

Banking and Finanial Service Revenues

9 Months Ended

Sep. 30, 2020

Banking and Financial Service Reveues [Abstract]

NOTE 24 – BANKING AND FINANCIAL SERVICE REVENUES

The following table presents the major categories of banking and financial service revenues for the quarters and nine-month periods ended September 30, 2020 and 2019:

	Quarter Ended September 30,				Nine-Month Period Ended September 30,
	2020		2019		2020		2019
	(In thousands)
Banking service revenues:
Checking accounts fees	$	1,940	$	1,545	$	6,572	$	4,494
Savings accounts fees		354		187		1,192		484
Electronic banking fees		12,760		8,018		34,582		24,121
Credit life commissions		59		158		201		426
Branch service commissions		232		337		959		1,055
Servicing and other loan fees		742		433		1,551		1,069
International fees		157		127		454		393
Miscellaneous income		53		8		167		12
Total banking service revenues		16,297		10,813		45,678		32,054

Wealth management revenue:
Insurance income		2,486		1,576		7,308		4,505
Broker fees		1,746		1,913		5,128		5,637
Trust fees		2,788		2,895		7,818		8,307
Retirement plan and administration fees		252		227		670		713
Total wealth management revenue		7,272		6,611		20,924		19,162

Mortgage banking activities:
Net servicing fees		3,139		1,033		8,506		2,592
Net gains on sale of mortgage loans and valuation		1,368		124		2,187		375
Other		(590)		(39)		(470)		(14)
Total mortgage banking activities		3,917		1,118		10,223		2,953
Total banking and financial service revenues	$	27,486	$	18,542	$	76,825	$	54,169

Oriental recognizes the revenue from banking services, wealth management and mortgage banking based on the nature and timing of revenue streams from contracts with customer:

Banking Service Revenues

Electronic banking fees are credit and debit card processing services, use of the Bank’s ATMs by non-customers, debit card interchange income and service charges on deposit accounts. Revenue is recorded once the contracted service has been provided.

Service charges on checking and saving accounts as consumer periodic maintenance revenue is recognized once the service is rendered, while overdraft and late charges revenue are recorded after the contracted service has been provided.

Other income as credit life commissions, servicing and other loan fees, international fees, and miscellaneous fees recognized as banking services revenue are out of the scope of ASC 606 – Revenue from Contracts with Customers.

Wealth Management Revenue

Insurance income from commissions and sale of annuities are recorded once the sale has been completed.

Brokers fees consist of two categories:

 Sales commissions generated by advisors for their clients’ purchases and sales of securities and other investment products, which are collected once the stand-alone transactions are completed at trade date or as earned, and managed account fees which are fees charged to advisors’ clients’ accounts on the Company corporate advisory platform. These revenues do not cover future services, as a result there is no need to allocate the amount received to any other service.

 Fees for providing distribution services related to mutual funds, net of compensation paid to a service provider who provides such services, as well as trailer fees (also known as 12b-1 fees). These fees are considered variable and are recognized over time, as the uncertainty of the fees to be received is resolved as the net asset value of the mutual fund is determined and investor activity occurs. Fees do not cover future services, as a result there is no need to allocate the amount received to any other service.

Retirement plan and administration fees are revenues related to the payment received from the clients of OPC for assistance with the planning, design and administration of retirement plans, acting as third-party administrator for such plans, and daily record keeping services of retirement plans. Fees are collected once the stand-alone transaction was completed at trade date. Fees do not cover future services, as a result there is no need to allocate the amount received to any other service.

Trust fees are revenues related to fiduciary services provided to 401K retirement plans, a unit investment trust, and retirement plans, which include investment management, payment of distributions, if any, safekeeping, custodial services of plan assets, servicing of Trust officers, on-going due diligence of the Trust, and recordkeeping of transactions. Fees are billed based on services contracted. Negotiated fees are detailed in the contract. Fees collected in advance, are amortized over the term of the contract. Fees are collected on a monthly basis once the administrative service has been completed. Monthly fee does not include future services.

Investment banking fees as compensation fees are out of the scope of ASC 606.

Mortgage Banking Activities

Mortgage banking activities as servicing fees, gain on sale of mortgage loans valuation and other are out of the scope of ASC 606.