BANKING AND FINANCIAL SERVICE REVENUES

12 Months Ended

Dec. 31, 2024

Banking and Thrift, Interest [Abstract]

The following table presents the major categories of banking and financial service revenues for 2024, 2023 and 2022:


	Year Ended December 31,
		2024		2023		2022
	(In thousands)
Banking service revenues:
Electronic banking fees		$	52,275	$	54,109	$	54,639
Checking accounts fees		8,102		8,924		8,933
Savings accounts fees		1,233		1,334		1,265
Credit life commissions		134		318		724
Branch service commissions		1,323		1,538		1,456
Servicing and other loan fees		3,090		3,120		3,222
International fees		748		720		902
Miscellaneous income		18		15		20
Total banking service revenues		$	66,923	$	70,078	71,161

Wealth management revenue:
Insurance income		$	17,991	$	17,178	15,084
Broker fees		8,781		7,375		6,793
Trust fees		8,850		8,402		10,013
Other fees		—		35		745

Total wealth management revenue		$	35,622	$	32,990	32,635

Mortgage banking activities:
Net servicing fees		$	17,291	$	15,077	18,258
Net gains on sale of mortgage loans and valuation		2,026		2,993		3,786
Net (loss) gain on repurchased loans and other		(681)		717		(115)
Total mortgage banking activities		$	18,636	$	18,787	21,929
Total banking and financial service revenues		$	121,181	$	121,855	$	125,725

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. In 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 service 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 other 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 (loss) gain on repurchased loans and other are out of the scope of ASC 606.