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REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended
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Dec. 31, 2022
REVENUE FROM CONTRACTS WITH CUSTOMERS [Abstract] |
REVENUE FROM CONTRACTS WITH CUSTOMERS [Text Block] | NOTE 26 – REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue Recognition In accordance with ASC Topic 606, “Revenue from Contracts with Customers” (“ASC Topic 606”), revenues are recognized when control of promised goods or services is transferred to customers and in an amount that reflects the consideration to which the Corporation expects to be entitled in exchange for those goods or services. At contract inception, once the contract is determined to be within the scope of ASC Topic 606, the Corporation assesses the goods or services that are promised within each contract, identifies the respective performance obligations, and assesses whether each promised good or service is distinct. The Corporation then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Disaggregation of Revenue The following tables summarize the Corporation’s revenue, which includes net interest income on financial instruments and non- interest income, disaggregated by type of service and business segment for the years ended December 31, 2022, 2021 and 2020: Year ended December 31, 2022: Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Net interest income (1) $ 98,920 $ 442,624 $ 109,822 $ 39,600 $ 80,485 $ 23,842 $ 795,293 Service charges and fees on deposit accounts - 21,906 12,412 - 607 2,898 37,823 Insurance commissions - 12,733 - - 15 995 13,743 Merchant-related income - 6,622 1,483 - 74 1,335 9,514 Credit and debit card fees - 29,061 85 - (7) 1,763 30,902 Other service charges and fees 341 4,558 3,397 - 2,113 684 11,093 Not in scope of ASC Topic 606 (1) 15,609 3,577 812 (74) 58 35 20,017 Total non-interest income 15,950 78,457 18,189 (74) 2,860 7,710 123,092 Total Revenue $ 114,870 $ 521,081 $ 128,011 $ 39,526 $ 83,345 $ 31,552 $ 918,385 Year ended December 31, 2021: Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Net interest income (1) $ 104,638 $ 281,703 $ 191,917 $ 59,331 $ 65,967 $ 26,373 $ 729,929 Service charges and fees on deposit accounts - 20,083 11,807 - 555 2,839 35,284 Insurance commissions - 11,166 - - 114 665 11,945 Merchant-related income - 6,279 1,079 - 51 1,055 8,464 Credit and debit card fees - 26,360 83 - 19 1,602 28,064 Other service charges and fees 771 4,185 2,640 - 1,825 556 9,977 Not in scope of ASC Topic 606 (1) 23,507 1,701 423 227 1,399 173 27,430 Total non-interest income 24,278 69,774 16,032 227 3,963 6,890 121,164 Total Revenue $ 128,916 $ 351,477 $ 207,949 $ 59,558 $ 69,930 $ 33,263 $ 851,093 Year ended December 31, 2020: Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Net interest income (1) $ 76,025 $ 220,678 $ 135,591 $ 87,879 $ 54,025 $ 26,124 $ 600,322 Service charges and fees on deposit accounts - 13,286 8,026 - 553 2,747 24,612 Insurance commissions - 8,754 - - 52 558 9,364 Merchant-related income - 4,516 478 - 41 809 5,844 Credit and debit card fees - 18,218 62 - 16 1,469 19,765 Other service charges and fees 342 2,900 2,260 184 1,800 1,508 8,994 Not in scope of ASC Topic 606 (1) (2) 21,727 3,288 1,780 13,524 2,168 160 42,647 Total non-interest income 22,069 50,962 12,606 13,708 4,630 7,251 111,226 Total Revenue $ 98,094 $ 271,640 $ 148,197 $ 101,587 $ 58,655 $ 33,375 $ 711,548 (1) Most of the Corporation’s revenue is not within the scope of ASC Topic 606. The guidance explicitly excludes net interest income from financial assets and liabilities, as well as other non-interest income from loans, leases, investment securities and derivative financial instruments. (2) For the year ended December 31, 2020, includes a $ 5.0 million benefit resulting from the final settlement of the Corporation’s business interruption insurance claim related to lost profits caused by Hurricanes Irma and Maria in 2017. This insurance recovery is presented as part of other non-interest income in the consolidated statements of income. For 2022, 2021, and 2020, most of the Corporation’s revenue within the scope of ASC Topic 606 was related to performance obligations satisfied at a point in time. The following is a discussion of the revenues under the scope of ASC Topic 606. Service Charges and Fees on Deposit Accounts Service charges and fees on deposit accounts relate to fees generated from a variety of deposit products and services rendered to customers. Charges primarily include, but are not limited to, overdraft fees, insufficient fund fees, dormant fees, and monthly service charges. Such fees are recognized concurrently with the event at the time of occurrence or on a monthly basis, in the case of monthly service charges. These depository arrangements are considered day-to-day contracts that do not extend beyond the services performed, as customers have the right to terminate these contracts with no penalty or, if any, nonsubstantive penalties. Insurance Commissions For insurance commissions, which include regular and contingent commissions paid to the Corporation’s insurance agency, the agreements contain a performance obligation related to the sale/issuance of the policy and ancillary administrative post-issuance support. The performance obligations are satisfied when the policies are issued, and revenue is recognized at that point in time. In addition, contingent commission income may be considered to be constrained, as defined under ASC Topic 606. Contingent commission income is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or payments are received, thus, is recorded in subsequent periods. For the years ended December 31, 2022, 2021 and 2020, the Corporation recognized contingent commission income at the time that payments were confirmed and constraints were released of $ 3.2 million, $ 3.3 million, and $ 3.3 million, respectively, which was related to the volume of insurance policies sold in the prior year. Card and processing income Card and processing income includes merchant-related income, and credit and debit card fees. For merchant-related income, the determination of income recognition included the consideration of a 2015 sale of merchant contracts that involved sales of point of sale (“POS”) terminals and a marketing alliance under a revenue-sharing agreement. The Corporation concluded that control of the POS terminals and merchant contracts was transferred to the customer at the contract’s inception. With respect to the related revenue-sharing agreement, the Corporation satisfies the marketing alliance performance obligation over the life of the contract, and recognizes the associated transaction price as the entity performs and any constraints over the variable consideration are resolved. Credit and debit card fees primarily represent revenues earned from interchange fees and ATM fees. Interchange and network revenues are earned on credit and debit card transactions conducted with payment networks. ATM fees are primarily earned as a result of surcharges assessed to non-FirstBank customers who use a FirstBank ATM. Such fees are generally recognized concurrently with the delivery of services on a daily basis. The Corporation offers products, primarily credit cards, that offer various rewards to reward program members, such as airline tickets, cash, or merchandise, based on account activity. The Corporation generally recognizes the cost of rewards as part of business promotion expenses when the rewards are earned by the customer and, at that time, records the corresponding reward liability. The Corporation determines the reward liability based on points earned to date that the Corporation expects to be redeemed and the average cost per point redemption. The reward liability is reduced as points are redeemed. In estimating the reward liability, the Corporation considers historical reward redemption behavior, the terms of the current reward program, and the card purchase activity. The reward liability is sensitive to changes in the reward redemption type and redemption rate, which is based on the expectation that the vast majority of all points earned will eventually be redeemed. The reward liability, which is included in other liabilities in the consolidated statements of financial condition, totaled $ 9.2 million and $ 8.8 million as of December 31, 2022 and 2021, respectively. Other Fees Other fees primarily include revenues generated from wire transfers, lockboxes, bank issuances of checks and trust fees recognized from transfer paying agent, retirement plan, and other trustee activities. Revenues are recognized on a recurring basis when the services are rendered and are included as part of other non-interest income in the consolidated statements of income. Contract Balances A contract liability is an entity’s obligation to transfer goods or services to a customer in exchange for consideration from the customer. FirstBank participates in a merchant revenue-sharing agreement with another entity to which the Bank sold its merchant contracts portfolio and related POS terminals and a growth agreement with an international card service association to expand the customer base and enhance product offerings. FirstBank recognizes the revenue under these agreements over time, as the Bank completes its performance obligations. The following table shows the balances of contract liabilities recognized in relation to these agreements and the amount of revenue recognized for the years ended December 31, 2022, 2021 and 2020: 2022 2021 2020 (In thousands) Beginning Balance $ 1,443 $ 2,151 $ 2,476 Less: Revenue recognized (602) (708) (325) Ending balance $ 841 $ 1,443 $ 2,151 As of December 31, 2022 and 2021 there were no contract assets recorded on the Corporation’s consolidated financial statements. Other Except for the contract liabilities noted above, the Corporation did not have any significant performance obligations as of December 31, 2022. The Corporation also did not have any material contract acquisition costs and did not make any significant judgments or estimates in recognizing revenue for financial reporting purposes.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI https://asc.fasb.org/topic&trid=49130388 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045 + Details
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