BANKING AND FINANCIAL SERVICE REVENUES

12 Months Ended

Dec. 31, 2022

Banking and Thrift, Interest [Abstract]

The following table presents the major categories of banking and financial service revenues for 2022, 2021 and 2020:


	Year Ended December 31,
		2022		2021		2020
	(In thousands)
Banking service revenues:
Checking accounts fees		$	8,933	$	8,593	$	8,577
Savings accounts fees		1,265		1,141		1,451
Electronic banking fees		54,639		55,968		47,542
Credit life commissions		724		469		254
Branch service commissions		1,456		1,467		1,462
Servicing and other loan fees		3,222		3,256		2,485
International fees		902		794		623
Miscellaneous income		20		18		185
Total banking service revenues		71,161		71,706		62,579

Wealth management revenue:
Insurance income		15,084		14,647		13,618
Broker fees		6,793		8,213		6,828
Trust fees		10,013		11,303		10,446
Retirement plan and administration fees		745		881		897

Total wealth management revenue		32,635		35,044		31,789

Mortgage banking activities:
Net servicing fees		18,258		16,818		12,120
Net gains on sale of mortgage loans and valuation		3,786		10,119		4,437
Loss on repurchased loans and other		(115)		(4,429)		(53)
Total mortgage banking activities		21,929		22,508		16,504
Total banking and financial service revenues		$	125,725	$	129,258	$	110,872

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

Service charges on checking and saving accounts is recognized as consumer periodic maintenance revenue once the service is rendered, while overdraft and late charges revenue are recorded after the contracted service has been provided.

Electronic banking fees are credit and debit card processing services, use of 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.

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 and sale of annuities are recorded once the sale has been completed.

Brokers 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 service provider who provides 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, an IRA trust, and retirement plans, which include investment management, payment of distributions, if any, safekeeping, custodial services of plan assets, servicing of Trust officers, on-going due diligence of the Trust, recordkeeping of transactions, and investment advisory services provided to a registered investment company. 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 collected on a monthly basis once the administrative service has been completed. Monthly fee does not include future services.

Retirement plan and administration fees are revenues related to the payment received from the clients of OPC for assistance with the planning, design and administration of retirement plans, acting as third-party administrator for such plans, and daily record keeping services of retirement plans. Fees are collected once the stand-alone transaction was completed at trade date. Fees do not cover future services, as a result there is no need to allocate the amount received to any other service.

Mortgage Banking Activities

Mortgage banking activities as servicing fees, gain on sale of mortgage loans and valuation, and other are out of the scope of ASC 606.