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Banking and Financial Service Revenues

12 Months Ended

Dec. 31, 2020

Banking and Financial Service Revenues [Abstract]

NOTE 29 – BANKING AND FINANCIAL SERVICE REVENUES

The following table presents the major categories of banking and financial service revenues for the years ended December 31, 2020, 2019 and 2018:

	Year Ended December 31,
	2020		2019		2018
	(In thousands)
Banking service revenues:
Checking accounts fees	$	8,577	$	6,003	$	5,878
Savings accounts fees		1,451		658		635
Electronic banking fees		47,542		32,282		32,431
Credit life commissions		254		531		541
Branch service commissions		1,462		1,491		1,581
Servicing and other loan fees		2,485		1,367		1,844
International fees		623		521		718
Miscellaneous income		185		13		10
Total banking service revenues		62,579		42,866		43,638

Wealth management revenue:
Insurance income		13,618		6,826		6,956
Broker fees		6,828		7,544		6,996
Trust fees		10,446		10,922		10,878
Retirement plan and administration fees		897		932		1,095
Investment banking fees		-		-		9
Total wealth management revenue		31,789		26,224		25,934

Mortgage banking activities:
Net servicing fees		12,120		3,854		5,024
Net gains on sale of mortgage loans and valuation		4,437		527		305
Other		(53)		(106)		(562)
Total mortgage banking activities		16,504		4,275		4,767
Total banking and financial service revenues	$	110,872	$	73,365	$	74,339

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.