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SEGMENT INFORMATION
 3 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
SEGMENT INFORMATION [Text Block]

NOTE 22 – SEGMENT INFORMATION

 

Based upon the Corporation’s organizational structure and the information provided to the Chief Executive Officer, the operating segments are based primarily on the Corporation’s lines of business for its operations in Puerto Rico, the Corporation’s principal market, and by geographic areas for its operations outside of Puerto Rico. As of March 31, 2022, the Corporation had six reportable segments: Commercial and Corporate Banking; Mortgage Banking; Consumer (Retail) Banking; Treasury and Investments; United States Operations; and Virgin Islands Operations. Management determined the reportable segments based on the internal structure used to evaluate performance and to assess where to allocate resources. Other factors, such as the Corporation’s organizational chart, nature of the products, distribution channels, and the economic characteristics of the products, were also considered in the determination of the reportable segments.

 

The Commercial and Corporate Banking segment consists of the Corporation’s lending and other services for large customers represented by specialized and middle-market clients and the public sector. The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans, and floor plan financings, as well as other products, such as cash management and business management services. The Mortgage Banking segment consists of the origination, sale, and servicing of a variety of residential mortgage loans. The Mortgage Banking segment also acquires and sells mortgages in the secondary markets. In addition, the Mortgage Banking segment includes mortgage loans purchased from other local banks and mortgage bankers. The Consumer (Retail) Banking segment consists of the Corporation’s consumer lending and deposit-taking activities conducted mainly through its branch network and loan centers. The Treasury and Investments segment is responsible for the Corporation’s investment portfolio and treasury functions that are executed to manage and enhance liquidity. This segment lends funds to the Commercial and Corporate Banking, Mortgage Banking, Consumer (Retail) Banking, and United States Operations segments to finance their lending activities and borrows from those segments. The Consumer (Retail) Banking segment also lends funds to other segments. The interest rates charged or credited by the Treasury and Investments and the Consumer (Retail) Banking segments are allocated based on market rates. The difference between the allocated interest income or expense and the Corporation’s actual net interest income from centralized management of funding costs is reported in the Treasury and Investments segment. The United States Operations segment consists of all banking activities conducted by FirstBank in the United States mainland, including commercial and consumer banking services. The Virgin Islands Operations segment consists of all banking activities conducted by the Corporation in the USVI and BVI, including commercial and consumer banking services.

 

The accounting policies of the segments are the same as those referred to in Note 1 – Nature of Business and Summary of Significant Accounting Policies, in the audited consolidated financial statements, which are included in the 2021 Annual Report on Form 10-K.

 

The Corporation evaluates the performance of the segments based on net interest income, the provision for credit losses, non-interest income and direct non-interest expenses. The segments are also evaluated based on the average volume of their interest-earning assets less the ACL.

The following table presents information about the reportable segments for the quarters ended March 31, 2022 and 2021:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

Mortgage Banking

 

Consumer (Retail) Banking

 

Commercial and Corporate Banking

 

Treasury and Investments

 

United States Operations

 

Virgin Islands Operations

 

Total

For the quarter ended March 31, 2022:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

33,071

 

$

70,437

 

$

47,027

 

$

22,184

 

$

18,857

 

$

6,278

 

$

197,854

Net (charge) credit for transfer of funds

 

(7,292)

 

 

24,282

 

 

(6,612)

 

 

(9,949)

 

 

(429)

 

 

-

 

 

-

Interest expense

 

-

 

 

(5,173)

 

 

-

 

 

(4,826)

 

 

(1,946)

 

 

(285)

 

 

(12,230)

Net interest income

 

25,779

 

 

89,546

 

 

40,415

 

 

7,409

 

 

16,482

 

 

5,993

 

 

185,624

Provision for credit losses - (benefit) expense

 

(3,703)

 

 

11,144

 

 

(16,622)

 

 

(388)

 

 

(3,547)

 

 

(686)

 

 

(13,802)

Non-interest income

 

5,252

 

 

20,463

 

 

4,554

 

 

(112)

 

 

744

 

 

1,957

 

 

32,858

Direct non-interest expenses

 

6,906

 

 

39,271

 

 

8,859

 

 

885

 

 

8,479

 

 

6,973

 

 

71,373

Segment income

$

27,828

 

$

59,594

 

$

52,732

 

$

6,800

 

$

12,294

 

$

1,663

 

$

160,911

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average earning assets

$

2,293,648

 

$

2,759,482

 

$

3,664,104

 

$

8,145,949

 

$

2,065,638

 

$

378,169

 

$

19,306,990

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

Mortgage Banking

 

Consumer (Retail) Banking

 

Commercial and Corporate Banking

 

Treasury and Investments

 

United States Operations

 

Virgin Islands Operations

 

Total

For the quarter ended March 31, 2021:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

37,060

 

$

65,733

 

$

51,458

 

$

12,762

 

$

20,332

 

$

7,297

 

$

194,642

Net (charge) credit for transfer of funds

 

(11,820)

 

 

1,055

 

 

(2,477)

 

 

14,934

 

 

(1,692)

 

 

-

 

 

-

Interest expense

 

-

 

 

(8,305)

 

 

-

 

 

(6,113)

 

 

(3,617)

 

 

(342)

 

 

(18,377)

Net interest income

 

25,240

 

 

58,483

 

 

48,981

 

 

21,583

 

 

15,023

 

 

6,955

 

 

176,265

Provision for credit losses expense

 

(786)

 

 

3,962

 

 

(17,179)

 

 

(127)

 

 

(237)

 

 

(885)

 

 

(15,252)

Non-interest income

 

7,116

 

 

17,243

 

 

3,897

 

 

56

 

 

975

 

 

1,669

 

 

30,956

Direct non-interest expenses

 

7,997

 

 

41,091

 

 

11,538

 

 

1,234

 

 

8,294

 

 

7,405

 

 

77,559

Segment (loss) income

$

25,145

 

$

30,673

 

$

58,519

 

$

20,532

 

$

7,941

 

$

2,104

 

$

144,914

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average earning assets

$

2,658,887

 

$

2,442,174

 

$

4,029,377

 

$

6,259,344

 

$

2,078,660

 

$

449,532

 

$

17,917,974

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table presents a reconciliation of the reportable segment financial information to the consolidated totals for the indicated periods:

 

 

Quarter Ended

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

(In thousands)

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total income for segments

$

160,911

 

$

144,914

 

 

 

 

 

Other operating expenses (1)

 

35,286

 

 

55,742

 

 

 

 

 

Income before income taxes

 

125,625

 

 

89,172

 

 

 

 

 

Income tax expense

 

43,025

 

 

28,022

 

 

 

 

 

Total consolidated net income

$

82,600

 

$

61,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average earning assets for segments

$

19,306,990

 

$

17,917,974

 

 

 

 

 

Average non-earning assets

 

947,011

 

 

1,168,336

 

 

 

 

 

Total consolidated average assets

$

20,254,001

 

$

19,086,310

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Expenses pertaining to corporate administrative functions that support the operating segment, but are not specifically attributable to or managed by any segment, are not included in the reported financial results of the operating segments. The unallocated corporate expenses include certain general and administrative expenses and related depreciation and amortization expenses