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BANKING AND FINANCIAL SERVICE REVENUES
 9 Months Ended
Sep. 30, 2024
Banking and Thrift, Interest [Abstract]  
BANKING AND FINANCIAL SERVICE REVENUES 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, 2024 and 2023:
Quarter Ended September 30,Nine-Month Period Ended September 30,
2024202320242023
(In thousands)(In thousands)
Banking service revenues:
Electronic banking fees$12,062 $13,447 $40,469 $40,416 
Checking accounts fees1,983 2,233 6,043 6,638 
Savings accounts fees317 333 932 993 
Credit life commissions93 90 170 314 
Branch service commissions281 352 903 1,098 
Servicing and other loan fees619 668 2,512 2,251 
International fees194 174 549 536 
Miscellaneous income5 6 16 10 
Total banking service revenues$15,554 $17,303 $51,594 $52,256 
Wealth management revenue:
Insurance income$3,979 $3,607 $11,968 $11,146 
Broker fees2,289 1,945 6,388 5,525 
Trust fees2,181 2,139 6,640 6,298 
Other fees— — — 36 
Total wealth management revenue$8,449 $7,691 $24,996 $23,005 
Mortgage banking activities:
Net servicing fees$1,852 $4,764 $9,904 $12,256 
Net gains on sale of mortgage loans and valuation611 450 1,983 2,009 
Net gain (loss) on repurchased loans and other(195)196 (62)268 
Total mortgage banking activities$2,268 $5,410 $11,825 $14,533 
Total banking and financial service revenues$26,271 $30,404 $88,415 $89,794 
OFG recognizes the revenue from banking services, wealth management and mortgage banking based on the nature and timing of revenue streams from contracts with customers:
Banking Service Revenues
Electronic banking fees are credit and debit card processing services, fees for using 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. During the quarter ended September 30, 2024, the Durbin Amendment became applicable to the Bank as a result of crossing the $10 billion asset threshold in December 31, 2023, which imposes limits on what banks may charge for debit card interchange fees.
Service charges on checking and saving accounts is recognized as consumer periodic maintenance revenue once the service is rendered, while overdraft and late charges revenues are recorded after the contracted service has been provided.
Other income as credit life and branch service commissions, servicing and other loan fees, international fees, and miscellaneous income 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 generated in the sale of insurance policies issued by unaffiliated insurance companies and sale of annuities are recorded once the sale has been completed. Reinsurance revenue is recorded based on earned premium confirmed by the fronting insurance company. Contingent insurance commissions are recorded once the paying insurance companies confirm the amounts earned.
Broker fees consist of two categories:
•Sales commissions generated by advisers 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 advisers’ clients’ accounts on OFG’s 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 provider of 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.
Trust fees are revenues related to fiduciary services provided to 401K retirement plans, IRA trusts, and retirement plans. These generally include payment for trustee services, distribution services, custodial services of plan assets, due diligence services, and investment advisory services. 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 generally collected on an annual or quarterly basis once the administrative service has been completed. Fees do not include future services.
Mortgage Banking Activities
Mortgage banking activities such as servicing fees and valuation of servicing asset, gain on sale of mortgage loans, and gain (loss) on repurchased loans and other are out of the scope of ASC 606.