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Business Segments
 12 Months Ended
Dec. 31, 2020
Business Segments [Abstract]  
Business Segments

NOTE 30 – BUSINESS SEGMENTS

 

Oriental 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 Oriental’s organization, nature of its products, distribution channels and economic characteristics of the products were also considered in the determination of the reportable segments. Oriental 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. Oriental’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 Oriental’s own portfolio. As part of its mortgage banking activities, Oriental 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 OPC. 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 Oriental’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, 2020, 2019 and 2018:

 

Year Ended December 31, 2020

 

 

 

 

Wealth

 

 

 

 

Total Major

 

 

 

 

Consolidated

 

Banking

 

Management

 

Treasury

 

Segments

 

Eliminations

 

Total

 

(In thousands)

Interest income

$

462,493

 

$

59

 

$

10,795

 

$

473,347

 

$

-

 

$

473,347

Interest expense

 

(57,811)

 

 

-

 

 

(7,104)

 

 

(64,915)

 

 

-

 

 

(64,915)

Net interest income

 

404,682

 

 

59

 

 

3,691

 

 

408,432

 

 

-

 

 

408,432

Provision for loan and lease losses, net

 

(92,237)

 

 

-

 

 

(435)

 

 

(92,672)

 

 

-

 

 

(92,672)

Non-interest income

 

87,810

 

 

32,043

 

 

4,499

 

 

124,352

 

 

-

 

 

124,352

Non-interest expenses

 

(320,997)

 

 

(20,240)

 

 

(4,049)

 

 

(345,286)

 

 

-

 

 

(345,286)

Intersegment revenue

 

2,443

 

 

-

 

 

-

 

 

2,443

 

 

(2,443)

 

 

-

Intersegment expenses

 

-

 

 

(1,164)

 

 

(1,279)

 

 

(2,443)

 

 

2,443

 

 

-

Income before income taxes

$

81,701

 

$

10,698

 

$

2,427

 

$

94,826

 

$

-

 

$

94,826

Income tax expense

 

15,939

 

 

4,506

 

 

54

 

 

20,499

 

 

-

 

 

20,499

Net income

$

65,762

 

$

6,192

 

$

2,373

 

$

74,327

 

$

-

 

$

74,327

Total assets

$

8,478,326

 

$

32,893

 

$

2,436,029

 

$

10,947,248

 

$

(1,121,237)

 

$

9,826,011

 

Year Ended December 31, 2019

 

 

 

 

Wealth

 

 

 

 

Total Major

 

 

 

 

Consolidated

 

Banking

 

Management

 

Treasury

 

Segments

 

Eliminations

 

Total

 

(In thousands)

Interest income

$

337,448

 

$

69

 

$

36,278

 

$

373,795

 

$

-

 

$

373,795

Interest expense

 

(36,023)

 

 

-

 

 

(14,979)

 

 

(51,002)

 

 

-

 

 

(51,002)

Net interest income

 

301,425

 

 

69

 

 

21,299

 

 

322,793

 

 

-

 

 

322,793

Provision for loan and lease losses, net

 

(96,504)

 

 

-

 

 

(288)

 

 

(96,792)

 

 

-

 

 

(96,792)

Non-interest income

 

47,517

 

 

26,649

 

 

8,327

 

 

82,493

 

 

-

 

 

82,493

Non-interest expenses

 

(211,755)

 

 

(17,163)

 

 

(4,326)

 

 

(233,244)

 

 

-

 

 

(233,244)

Intersegment revenue

 

2,207

 

 

-

 

 

-

 

 

2,207

 

 

(2,207)

 

 

-

Intersegment expenses

 

-

 

 

(652)

 

 

(1,555)

 

 

(2,207)

 

 

2,207

 

 

-

Income before income taxes

$

42,890

 

$

8,903

 

$

23,457

 

$

75,250

 

$

-

 

$

75,250

Income tax expense

 

16,084

 

 

3,339

 

 

1,986

 

 

21,409

 

 

-

 

 

21,409

Net income

$

26,806

 

$

5,564

 

$

21,471

 

$

53,841

 

$

-

 

$

53,841

Total assets

$

7,486,314

 

$

33,369

 

$

2,865,186

 

$

10,384,869

 

$

(1,087,208)

 

$

9,297,661

 

Year Ended December 31, 2018

 

 

 

 

Wealth

 

 

 

 

Total Major

 

 

 

 

Consolidated

 

Banking

 

Management

 

Treasury

 

Segments

 

Eliminations

 

Total

 

(In thousands)

Interest income

$

320,084

 

$

46

 

$

40,289

 

$

360,419

 

$

-

 

$

360,419

Interest expense

 

(29,746)

 

 

-

 

 

(14,779)

 

 

(44,525)

 

 

-

 

 

(44,525)

Net interest income

 

290,338

 

 

46

 

 

25,510

 

 

315,894

 

 

-

 

 

315,894

Provision for non-covered loan and lease losses

 

(55,885)

 

 

-

 

 

(223)

 

 

(56,108)

 

 

-

 

 

(56,108)

Non-interest income

 

53,592

 

 

26,457

 

 

46

 

 

80,095

 

 

-

 

 

80,095

Non-interest expenses

 

(186,460)

 

 

(16,440)

 

 

(4,181)

 

 

(207,081)

 

 

-

 

 

(207,081)

Intersegment revenue

 

2,126

 

 

-

 

 

-

 

 

2,126

 

 

(2,126)

 

 

-

Intersegment expenses

 

-

 

 

(788)

 

 

(1,338)

 

 

(2,126)

 

 

2,126

 

 

-

Income before income taxes

$

103,711

 

$

9,275

 

$

19,814

 

$

132,800

 

$

-

 

$

132,800

Income tax expense (benefit)

 

40,447

 

 

3,617

 

 

4,326

 

 

48,390

 

 

-

 

 

48,390

Net income

$

63,264

 

$

5,658

 

$

15,488

 

$

84,410

 

$

-

 

$

84,410

Total assets

$

5,863,067

 

$

25,757

 

$

1,708,455

 

$

7,597,279

 

$

(1,013,927)

 

$

6,583,352