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SEGMENT INFORMATION
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
SEGMENT INFORMATION [Text Block]
NOTE 21 –
 
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
 
September
 
30,
 
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 tables present information about the reportable segments for
 
the indicated periods:
(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 September 30, 2022:
Interest income
$
32,349
$
77,576
$
53,506
$
28,203
$
24,804
$
6,245
$
222,683
Net (charge) credit for transfer of funds
(8,011)
47,577
(30,645)
(8,447)
(474)
-
-
Interest expense
-
(6,745)
-
(4,929)
(2,836)
(263)
(14,773)
Net interest income
 
24,338
118,408
22,861
14,827
21,494
5,982
207,910
Provision for credit losses - expense (benefit)
 
2,092
16,705
(3,519)
(12)
(624)
1,141
15,783
Non-interest income (loss)
3,733
19,121
4,276
33
773
1,757
29,693
Direct non-interest expenses
6,489
42,080
9,295
942
8,479
7,097
74,382
Segment income (loss)
$
19,490
$
78,744
$
21,361
$
13,930
$
14,412
$
(499)
$
147,438
Average earnings assets
$
2,211,675
$
2,974,894
$
3,622,907
$
7,095,503
$
2,040,656
$
365,743
$
18,311,378
(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 September 30, 2021:
Interest income
$
35,722
$
68,883
$
48,558
$
19,342
$
20,847
$
6,820
$
200,172
Net (charge) credit for transfer of funds
(9,187)
13,094
(2,200)
(909)
(798)
-
-
Interest expense
-
(6,634)
-
(5,677)
(2,794)
(324)
(15,429)
Net interest income
 
26,535
75,343
46,358
12,756
17,255
6,496
184,743
Provision for credit losses expense - (benefit) expense
(10,210)
6,532
(8,332)
(9)
(1,158)
1,095
(12,082)
Non-interest income
5,921
17,544
3,894
61
965
1,561
29,946
Direct non-interest expenses
6,792
40,130
7,916
803
8,343
7,120
71,104
Segment income (loss)
$
35,874
$
46,225
$
50,668
$
12,023
$
11,035
$
(158)
$
155,667
Average earnings assets
$
2,446,111
$
2,590,938
$
3,655,172
$
8,751,623
$
2,177,681
$
425,872
$
20,047,397
(In thousands)
Mortgage
Banking
Consumer
(Retail)
Banking
Commercial
and Corporate
Banking
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
Nine-Month Period Ended September 30, 2022
Interest income
$
98,625
$
221,500
$
148,046
$
77,530
$
64,742
$
18,719
$
629,162
Net (charge) credit for transfer of funds
(22,173)
105,898
(53,391)
(29,101)
(1,233)
-
-
Interest expense
-
(17,047)
-
(14,727)
(6,845)
(823)
(39,442)
Net interest income
 
76,452
310,351
94,655
33,702
56,664
17,896
589,720
Provision for credit losses - (benefit) expense
(5,216)
42,904
(20,611)
(435)
(5,849)
1,191
11,984
Non-interest income (loss)
13,152
59,367
13,278
(130)
2,195
5,630
93,492
Direct non-interest expenses
19,076
121,897
27,202
2,732
25,195
20,835
216,937
Segment income
$
75,744
$
204,917
$
101,342
$
31,275
$
39,513
$
1,500
$
454,291
Average earnings assets
$
2,249,203
$
2,865,610
$
3,654,906
$
7,642,121
$
2,047,375
$
371,468
$
18,830,683
(In thousands)
Mortgage
Banking
Consumer
(Retail)
Banking
Commercial
and Corporate
Banking
Treasury and
Investments
United States
Operations
Virgin Islands
Operations
Total
Nine-Month Period Ended September 30, 2021
Interest income
$
109,727
$
200,853
$
153,849
$
48,812
$
61,830
$
21,202
$
596,273
Net (charge) credit for transfer of funds
(31,621)
20,050
(7,012)
22,216
(3,633)
-
-
Interest expense
-
(22,326)
-
(17,650)
(9,513)
(993)
(50,482)
Net interest income
 
78,106
198,577
146,837
53,378
48,684
20,209
545,791
Provision for credit losses - (benefit) expense
(9,966)
11,285
(53,263)
(136)
(535)
(874)
(53,489)
Non-interest income
19,174
51,513
11,930
202
3,008
4,959
90,786
Direct non-interest expenses
22,314
124,476
27,752
3,164
25,740
21,826
225,272
Segment income
$
84,932
$
114,329
$
184,278
$
50,552
$
26,487
$
4,216
$
464,794
Average earnings assets
$
2,555,476
$
2,508,777
$
3,855,854
$
7,535,752
$
2,120,144
$
438,024
$
19,014,027
The
 
following
 
table
 
presents
 
a
 
reconciliation
 
of
 
the
 
reportable
 
segment
 
financial
 
information
 
to
 
the
 
consolidated
 
totals
 
for
 
the
indicated periods:
Quarter Ended
Nine-Month Period Ended
September 30,
September 30,
2022
2021
2022
2021
(In thousands)
Net income:
 
Total income
 
for segments
$
147,438
$
155,667
$
454,291
$
464,794
Other operating expenses (1)
40,807
42,932
113,237
152,237
Income before income taxes
106,631
112,735
 
341,054
312,557
Income tax expense
32,028
37,057
109,156
105,171
Total consolidated
 
net income
$
74,603
$
75,678
$
231,898
$
207,386
Average assets:
Total average
 
earning assets for segments
 
$
18,311,378
$
20,047,397
$
18,830,683
$
19,014,027
Average non-earning
 
assets
 
835,740
1,024,385
873,911
1,105,223
Total consolidated
 
average assets
$
19,147,118
$
21,071,782
$
19,704,594
$
20,119,250
(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.