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Business Segments
 9 Months Ended
Sep. 30, 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, OPC and OFG Reinsurance. The core operations of this segment are financial planning, money management and investment banking, brokerage services, investment advisory services, insurance, 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 and nine-month periods ended September 30, 2021 and 2020:

 

Quarter Ended September 30, 2021

 

 

 

 

Wealth

 

 

 

 

Total Major

 

 

 

 

Consolidated

 

Banking

 

Management

 

Treasury

 

Segments

 

Eliminations

 

Total

 

(In thousands)

Interest income

$

108,479

 

$

7

 

$

3,653

 

$

112,139

 

$

-

 

$

112,139

Interest expense

 

(8,946)

 

 

-

 

 

(488)

 

 

(9,434)

 

 

-

 

 

(9,434)

Net interest income

 

99,533

 

 

7

 

 

3,165

 

 

102,705

 

 

-

 

 

102,705

Recapture of credit losses, net

 

4,815

 

 

-

 

 

182

 

 

4,997

 

 

-

 

 

4,997

Non-interest income

 

24,348

 

 

8,079

 

 

90

 

 

32,517

 

 

-

 

 

32,517

Non-interest expenses

 

(72,463)

 

 

(5,245)

 

 

(1,216)

 

 

(78,924)

 

 

-

 

 

(78,924)

Intersegment revenue

 

616

 

 

-

 

 

-

 

 

616

 

 

(616)

 

 

-

Intersegment expenses

 

-

 

 

(318)

 

 

(298)

 

 

(616)

 

 

616

 

 

-

Income before income taxes

$

56,849

 

$

2,523

 

$

1,923

 

$

61,295

 

$

-

 

$

61,295

Income tax expense

 

19,614

 

 

-

 

 

10

 

 

19,624

 

 

-

 

 

19,624

Net income

$

37,235

 

$

2,523

 

$

1,913

 

$

41,671

 

$

-

 

$

41,671

Total assets

$

8,116,648

 

$

24,581

 

$

3,558,568

 

$

11,699,797

 

$

(1,092,932)

 

$

10,606,865

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine-Month Period Ended September 30, 2021

 

 

 

 

Wealth

 

 

 

 

Total Major

 

 

 

 

Consolidated

 

Banking

 

Management

 

Treasury

 

Segments

 

Eliminations

 

Total

 

(In thousands)

Interest income

$

327,167

 

$

25

 

$

9,392

 

$

336,584

 

$

-

 

$

336,584

Interest expense

 

(31,794)

 

 

-

 

 

(1,624)

 

 

(33,418)

 

 

-

 

 

(33,418)

Net interest income

 

295,373

 

 

25

 

 

7,768

 

 

303,166

 

 

-

 

 

303,166

Recapture of credit losses, net

 

5,964

 

 

-

 

 

1,014

 

 

6,978

 

 

-

 

 

6,978

Non-interest income

 

71,424

 

 

23,584

 

 

107

 

 

95,115

 

 

-

 

 

95,115

Non-interest expenses

 

(222,960)

 

 

(13,089)

 

 

(3,217)

 

 

(239,266)

 

 

-

 

 

(239,266)

Intersegment revenue

 

1,714

 

 

-

 

 

-

 

 

1,714

 

 

(1,714)

 

 

-

Intersegment expenses

 

-

 

 

(911)

 

 

(803)

 

 

(1,714)

 

 

1,714

 

 

-

Income before income taxes

$

151,515

 

$

9,609

 

$

4,869

 

$

165,993

 

$

-

 

$

165,993

Income tax expense

 

53,089

 

 

-

 

 

33

 

 

53,122

 

 

-

 

 

53,122

Net income

$

98,426

 

$

9,609

 

$

4,836

 

$

112,871

 

$

-

 

$

112,871

Total assets

$

8,116,648

 

$

24,581

 

$

3,558,568

 

$

11,699,797

 

$

(1,092,932)

 

$

10,606,865

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended September 30, 2020

 

 

 

 

Wealth

 

 

 

 

Total Major

 

 

 

 

Consolidated

 

Banking

 

Management

 

Treasury

 

Segments

 

Eliminations

 

Total

 

(In thousands)

Interest income

$

112,832

 

$

14

 

$

2,091

 

$

114,937

 

$

-

 

$

114,937

Interest expense

 

(14,092)

 

 

-

 

 

(1,312)

 

 

(15,404)

 

 

-

 

 

(15,404)

Net interest income

 

98,740

 

 

14

 

 

779

 

 

99,533

 

 

-

 

 

99,533

Provision (recapture) for credit losses, net

 

(14,461)

 

 

-

 

 

792

 

 

(13,669)

 

 

-

 

 

(13,669)

Non-interest income

 

23,994

 

 

7,323

 

 

9

 

 

31,326

 

 

-

 

 

31,326

Non-interest expenses

 

(76,988)

 

 

(5,138)

 

 

(1,318)

 

 

(83,444)

 

 

-

 

 

(83,444)

Intersegment revenue

 

769

 

 

-

 

 

-

 

 

769

 

 

(769)

 

 

-

Intersegment expenses

 

-

 

 

(225)

 

 

(544)

 

 

(769)

 

 

769

 

 

-

Income before income taxes

$

32,054

 

$

1,974

 

$

(282)

 

$

33,746

 

$

-

 

$

33,746

Income tax expense (benefit)

 

6,308

 

 

(13)

 

 

13

 

 

6,308

 

 

-

 

 

6,308

Net income

$

25,746

 

$

1,987

 

$

(295)

 

$

27,438

 

$

-

 

$

27,438

Total assets

$

9,367,141

 

$

33,006

 

$

1,725,221

 

$

11,125,368

 

$

(1,106,377)

 

$

10,018,991

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine-Month Period Ended September 30, 2020

 

 

 

 

Wealth

 

 

 

 

Total Major

 

 

 

 

Consolidated

 

Banking

 

Management

 

Treasury

 

Segments

 

Eliminations

 

Total

 

(In thousands)

Interest income

$

351,933

 

$

46

 

$

8,347

 

$

360,326

 

$

-

 

$

360,326

Interest expense

 

(44,307)

 

 

-

 

 

(6,325)

 

 

(50,632)

 

 

-

 

 

(50,632)

Net interest income

 

307,626

 

 

46

 

 

2,022

 

 

309,694

 

 

-

 

 

309,694

Provision for credit losses, net

 

(77,795)

 

 

-

 

 

(701)

 

 

(78,496)

 

 

-

 

 

(78,496)

Non-interest income

 

64,349

 

 

21,089

 

 

4,490

 

 

89,928

 

 

-

 

 

89,928

Non-interest expenses

 

(237,943)

 

 

(14,819)

 

 

(3,485)

 

 

(256,247)

 

 

-

 

 

(256,247)

Intersegment revenue

 

1,920

 

 

-

 

 

-

 

 

1,920

 

 

(1,920)

 

 

-

Intersegment expenses

 

-

 

 

(580)

 

 

(1,340)

 

 

(1,920)

 

 

1,920

 

 

-

Income before income taxes

$

58,157

 

$

5,736

 

$

986

 

$

64,879

 

$

-

 

$

64,879

Income tax expense

 

9,305

 

 

4,506

 

 

42

 

 

13,853

 

 

-

 

 

13,853

Net income

$

48,852

 

$

1,230

 

$

944

 

$

51,026

 

$

-

 

$

51,026

Total assets

$

9,367,141

 

$

33,006

 

$

1,725,221

 

$

11,125,368

 

$

(1,106,377)

 

$

10,018,991