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Business Segments
 3 Months Ended
Mar. 31, 2021
Business Segments [Abstract]  
Business Segments

NOTE 24 – BUSINESS SEGMENTS

 

OFG 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 OFG’s organization, nature of its products, distribution channels and economic characteristics of the products were also considered in the determination of the reportable segments. OFG 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. OFG’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 OFG’s own portfolio. As part of its mortgage banking activities, OFG 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 OFG’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 quarters ended March 31, 2021 and 2020:

 

Quarter Ended March 31, 2021

 

 

 

 

Wealth

 

 

 

 

Total Major

 

 

 

 

Consolidated

 

Banking

 

Management

 

Treasury

 

Segments

 

Eliminations

 

Total

 

(In thousands)

Interest income

$

108,236

 

$

12

 

$

2,734

 

$

110,982

 

$

-

 

$

110,982

Interest expense

 

(12,136)

 

 

-

 

 

(642)

 

 

(12,778)

 

 

-

 

 

(12,778)

Net interest income

 

96,100

 

 

12

 

 

2,092

 

 

98,204

 

 

-

 

 

98,204

Provision for loan and lease losses, net

 

(6,588)

 

 

-

 

 

264

 

 

(6,324)

 

 

-

 

 

(6,324)

Non-interest income

 

22,867

 

 

7,531

 

 

9

 

 

30,407

 

 

-

 

 

30,407

Non-interest expenses

 

(73,874)

 

 

(2,829)

 

 

(963)

 

 

(77,666)

 

 

-

 

 

(77,666)

Intersegment revenue

 

553

 

 

-

 

 

-

 

 

553

 

 

(553)

 

 

-

Intersegment expenses

 

-

 

 

(291)

 

 

(262)

 

 

(553)

 

 

553

 

 

-

Income before income taxes

$

39,058

 

$

4,423

 

$

1,140

 

$

44,621

 

$

-

 

$

44,621

Income tax expense

 

14,236

 

 

-

 

 

12

 

 

14,248

 

 

-

 

 

14,248

Net income

$

24,822

 

$

4,423

 

$

1,128

 

$

30,373

 

$

-

 

$

30,373

Total assets

$

8,312,367

 

$

28,505

 

$

2,849,709

 

$

11,190,581

 

$

(1,037,239)

 

$

10,153,342

 

Quarter Ended March 31, 2020

 

 

 

 

Wealth

 

 

 

 

Total Major

 

 

 

 

Consolidated

 

Banking

 

Management

 

Treasury

 

Segments

 

Eliminations

 

Total

 

(In thousands)

Interest income

$

119,379

 

$

18

 

$

4,300

 

$

123,697

 

$

-

 

$

123,697

Interest expense

 

(15,889)

 

 

-

 

 

(2,707)

 

 

(18,596)

 

 

-

 

 

(18,596)

Net interest income

 

103,490

 

 

18

 

 

1,593

 

 

105,101

 

 

-

 

 

105,101

Provision for loan and lease losses, net

 

(47,131)

 

 

-

 

 

-

 

 

(47,131)

 

 

-

 

 

(47,131)

Non-interest income

 

19,544

 

 

7,375

 

 

4,531

 

 

31,450

 

 

-

 

 

31,450

Non-interest expenses

 

(82,545)

 

 

(3,724)

 

 

(1,053)

 

 

(87,322)

 

 

-

 

 

(87,322)

Intersegment revenue

 

457

 

 

-

 

 

-

 

 

457

 

 

(457)

 

 

-

Intersegment expenses

 

-

 

 

(154)

 

 

(303)

 

 

(457)

 

 

457

 

 

-

Income before income taxes

$

(6,185)

 

$

3,515

 

$

4,768

 

$

2,098

 

$

-

 

$

2,098

Income tax expense

 

(2,319)

 

 

1,318

 

 

1,298

 

 

297

 

 

-

 

 

297

Net income

$

(3,866)

 

$

2,197

 

$

3,470

 

$

1,801

 

$

-

 

$

1,801

Total assets

$

9,207,848

 

$

34,014

 

$

1,069,334

 

$

10,311,196

 

$

(1,072,625)

 

$

9,238,571