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SEGMENT INFORMATION
 6 Months Ended
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.