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SEGMENT INFORMATION | 6 Months Ended
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Jun. 30, 2023
SEGMENT INFORMATION [Abstract] |
SEGMENT INFORMATION | NOTE 20 – 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 June 30, 2023, the Corporation had six reportable segments: Mortgage Banking; Consumer (Retail) Banking; Commercial and Corporate 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 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 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 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, the Mortgage Banking, the Consumer (Retail) Banking, and the 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, to the audited consolidated financial statements included in the 2022 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: Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Banking Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Quarter ended June 30, 2023: Interest income $ 31,605 $ 86,989 $ 65,356 $ 29,528 $ 32,098 $ 6,628 $ 252,204 Net (charge) credit for transfer of funds (10,245) 86,144 (52,423) (22,739) (737) - - Interest expense - (30,536) - (9,578) (11,671) (604) (52,389) Net interest income (loss) 21,360 142,597 12,933 (2,789) 19,690 6,024 199,815 Provision for credit losses - (benefit) expense (3,829) 13,669 7,675 (16) 4,017 714 22,230 Non-interest income 3,062 20,221 8,145 1,680 1,155 2,008 36,271 Direct non-interest expenses 5,533 41,814 9,340 923 8,502 6,731 72,843 Segment income (loss) $ 22,718 $ 107,335 $ 4,063 $ (2,016) $ 8,326 $ 587 $ 141,013 Average earnings assets $ 2,144,340 $ 3,241,768 $ 3,770,463 $ 6,364,024 $ 2,038,621 $ 371,685 $ 17,930,901 Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Banking Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Quarter ended June 30, 2022: Interest income $ 33,205 $ 73,487 $ 47,513 $ 27,143 $ 21,081 $ 6,196 $ 208,625 Net (charge) credit for transfer of funds (6,870) 34,039 (16,134) (10,705) (330) - - Interest expense - (5,129) - (4,972) (2,063) (275) (12,439) Net interest income 26,335 102,397 31,379 11,466 18,688 5,921 196,186 Provision for credit losses - (benefit) expense (3,605) 15,055 (470) (35) (1,678) 736 10,003 Non-interest income (loss) 4,167 19,783 4,448 (51) 678 1,916 30,941 Direct non-interest expenses 5,681 40,546 9,048 905 8,237 6,765 71,182 Segment income $ 28,426 $ 66,579 $ 27,249 $ 10,545 $ 12,807 $ 336 $ 145,942 Average earnings assets $ 2,243,188 $ 2,860,086 $ 3,624,176 $ 7,769,754 $ 2,036,108 $ 370,590 $ 18,903,902 Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Banking Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Six-Month Period Ended June 30, 2023 Interest income $ 63,512 $ 170,163 $ 127,699 $ 56,994 $ 63,212 $ 13,020 $ 494,600 Net (charge) credit for transfer of funds (20,364) 163,879 (99,826) (42,278) (1,411) - - Interest expense - (53,701) - (18,163) (21,181) (855) (93,900) Net interest income 43,148 280,341 27,873 (3,447) 40,620 12,165 400,700 Provision for credit losses - (benefit) expense (4,335) 28,893 5,139 (25) 8,672 (612) 37,732 Non-interest income 6,136 42,255 12,320 1,840 2,002 4,236 68,789 Direct non-interest expenses 10,620 83,441 18,705 1,870 16,806 13,556 144,998 Segment income $ 42,999 $ 210,262 $ 16,349 $ (3,452) $ 17,144 $ 3,457 $ 286,759 Average earnings assets $ 2,157,626 $ 3,208,146 $ 3,742,205 $ 6,290,669 $ 2,053,154 $ 369,026 $ 17,820,826 Mortgage Banking Consumer (Retail) Banking Commercial and Corporate Banking Treasury and Investments United States Operations Virgin Islands Operations Total (In thousands) Six-Month Period Ended June 30, 2022 Interest income $ 66,276 $ 143,924 $ 94,540 $ 49,327 $ 39,938 $ 12,474 $ 406,479 Net (charge) credit for transfer of funds (14,162) 58,321 (22,746) (20,654) (759) - - Interest expense - (10,302) - (9,798) (4,009) (560) (24,669) Net interest income 52,114 191,943 71,794 18,875 35,170 11,914 381,810 Provision for credit losses - (benefit) expense (7,308) 26,199 (17,092) (423) (5,225) 50 (3,799) Non-interest income (loss) 9,419 40,246 9,002 (163) 1,422 3,873 63,799 Direct non-interest expenses 12,587 79,817 17,907 1,790 16,716 13,738 142,555 Segment income $ 56,254 $ 126,173 $ 79,981 $ 17,345 $ 25,101 $ 1,999 $ 306,853 Average earnings assets $ 2,268,279 $ 2,810,062 $ 3,662,720 $ 7,931,699 $ 2,050,791 $ 374,358 $ 19,097,909 The following table presents a reconciliation of the reportable segment financial information to the consolidated totals for the indicated periods: Quarter Ended June 30, Six-Month Period Ended June 30, 2023 2022 2023 2022 (In thousands) Net income: Total income for segments $ 141,013 $ 145,942 $ 286,759 $ 306,853 Other operating expenses (1) 40,074 37,144 83,187 72,430 Income before income taxes 100,939 108,798 203,572 234,423 Income tax expense 30,284 34,103 62,219 77,128 Total consolidated net income $ 70,655 $ 74,695 $ 141,353 $ 157,295 Average assets: Total average earning assets for segments $ 17,930,901 $ 18,903,902 $ 17,820,826 $ 19,097,909 Average non-earning assets 857,677 820,924 852,680 890,043 Total consolidated average assets $ 18,788,578 $ 19,724,826 $ 18,673,506 $ 19,987,952 (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.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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