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Business Segment
 9 Months Ended
Sep. 30, 2018
Segment Reporting [Abstract]  
Segment Reporting

NOTE 23 – 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 quarters and nine-month periods ended September 30, 2018 and 2017:

Quarter Ended September 30, 2018
WealthTotal Major Consolidated
Banking ManagementTreasurySegments Eliminations Total
(In thousands)
Interest income$83,664$9$10,464$94,137$-$94,137
Interest expense(7,701)-(4,159)(11,860)-(11,860)
Net interest income75,96396,30582,277-82,277
Provision for loan and lease losses(14,478)-(123)(14,601)-(14,601)
Non-interest income12,1576,463-18,620-18,620
Non-interest expenses(46,049)(3,720)(1,172)(50,941)-(50,941)
Intersegment revenue616--616(616)-
Intersegment expenses-(273)(343)(616)616-
Income before income taxes$28,209$2,479$4,667$35,355$-$35,355
Income tax expense11,00196728712,255-12,255
Net income$17,208$1,512$4,380$23,100$-$23,100
Total assets$6,156,500$25,243$1,459,682$7,641,425$(984,751)$6,656,674
Quarter Ended September 30, 2017
WealthTotal Major Consolidated
Banking ManagementTreasurySegments Eliminations Total
(In thousands)
Interest income$82,162$13$8,180$90,355$-$90,355
Interest expense(6,342)-(3,535)(9,877)-(9,877)
Net interest income75,820134,64580,478-80,478
Provision for loan and lease losses(44,042)--(44,042)-(44,042)
Non-interest income10,3846,69583317,912-17,912
Non-interest expenses(43,819)(5,048)(1,602)(50,469)-(50,469)
Intersegment revenue431--431(431)-
Intersegment expenses-(324)(107)(431)431-
Income before income taxes$(1,226)$1,336$3,769$3,879$-$3,879
Income tax expense (benefit)(475)521514560-560
Net income$(751)$815$3,255$3,319$-$3,319
Total assets$5,605,922$23,148$1,620,919$7,249,989$(961,772)$6,288,217

Nine-Month Period Ended September 30, 2018
Wealth Total Major Consolidated
Banking ManagementTreasury Segments Eliminations Total
(In thousands)
Interest income$236,171$35$29,107$265,313$-$265,313
Interest expense(21,123)-(10,331)(31,454)-(31,454)
Net interest income215,0483518,776233,859-233,859
Provision for loan and lease losses, net(44,677)-(131)(44,808)-(44,808)
Non-interest income36,59019,2192855,837-55,837
Non-interest expenses(140,239)(12,288)(2,835)(155,362)-(155,362)
Intersegment revenue1,519--1,519(1,519)-
Intersegment expenses-(660)(859)(1,519)1,519-
Income before income taxes$68,241$6,306$14,979$89,526$-$89,526
Income tax expense26,6142,45978729,860-29,860
Net income$41,627$3,847$14,192$59,666$-$59,666
Total assets $6,156,500$25,243$1,459,682$7,641,425$(984,751)$6,656,674
Nine-Month Period Ended September 30, 2017
Wealth Total Major Consolidated
Banking ManagementTreasury Segments Eliminations Total
(In thousands)
Interest income$236,754$43$25,676$262,473$-$262,473
Interest expense(19,976)-(11,838)(31,814)-(31,814)
Net interest income216,7784313,838230,659-230,659
Provision for loan and lease losses, net(88,210)-(22)(88,232)-(88,232)
Non-interest income35,38718,9527,53361,872-61,872
Non-interest expenses(137,275)(13,368)(4,326)(154,969)-(154,969)
Intersegment revenue1,243-1401,383(1,383)-
Intersegment expenses(140)(889)(354)(1,383)1,383-
Income before income taxes$27,783$4,738$16,809$49,330$-$49,330
Income tax expense10,8361,8481,07313,757-13,757
Net income$16,947$2,890$15,736$35,573$-$35,573
Total assets$5,605,922$23,148$1,620,919$7,249,989$(961,772)$6,288,217