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SEGMENT INFORMATION
 12 Months Ended
Dec. 31, 2016
SEGMENT INFORMATION [Text Block]

NOTE 33 – SEGMENT INFORMATION

Based upon the Corporation’s organizational structure and the information provided to the Chief Executive Officer of the Corporation and, to a lesser extent, the Board of Directors, the operating segments are driven primarily by 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 December 31, 2016, 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 reporting 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 executed to manage and enhance liquidity. This segment lends funds to the Commercial and Corporate Banking, Mortgage Banking and Consumer (Retail) Banking segments to finance their lending activities and borrows from those segments. The Consumer (Retail) Banking and the United States Operations segments also lend funds to other segments. The interest rates charged or credited by Treasury and Investments, the Consumer (Retail) Banking, and the United States Operations 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 retail banking services. The Virgin Islands Operations segment consists of all banking activities conducted by the Corporation in the USVI and BVI, including commercial and retail 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 consolidated financial statements.

The Corporation evaluates the performance of the segments based on net interest income, the provision for loan and lease 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 allowance for loan and lease losses.

The following table presents information about the reportable segments for the years ended December 31, 2016, 2015, and 2014:
Mortgage BankingConsumer (Retail) BankingCommercial and Corporate BankingTreasury and InvestmentsUnited States OperationsVirgin Islands OperationsTotal
(In thousands)
For the year ended December 31, 2016:
Interest income$138,955$179,485$123,084$50,372$56,037$37,359$585,292
Net (charge) credit for transfer of funds(49,435)13,996(26,364)60,7871,016--
Interest expense-(24,787)-(57,924)(15,240)(3,223)(101,174)
Net interest income 89,520168,69496,72053,23541,81334,136484,118
(Provision) release for loan and lease losses(24,873)(34,246)(28,578)-1,369(405)(86,733)
Non-interest income19,53144,5357,8115,4233,5547,10087,954
Direct non-interest expenses(38,170)(112,787)(40,676)(4,047)(30,678)(27,596)(253,954)
Segment income$46,008$66,196$35,277$54,611$16,058$13,235$231,385
Average earnings assets$2,562,245$1,951,214$2,497,037$2,616,877$1,226,633$612,570$11,466,576

Mortgage BankingConsumer (Retail) BankingCommercial and Corporate BankingTreasury and InvestmentsUnited States OperationsVirgin Islands OperationsTotal
(In thousands)
For the year ended December 31, 2015:
Interest income$141,820$194,961$133,067$49,534$46,804$39,383$605,569
Net (charge) credit for transfer of funds(49,149)17,260(17,299)36,90812,280--
Interest expense-(23,774)-(60,221)(16,192)(3,116)(103,303)
Net interest income92,671188,447115,76826,22142,89236,267502,266
(Provision) release for loan and lease losses(30,017)(46,657)(101,604)-7,955(1,722)(172,045)
Non-interest income (loss)16,02741,85412,487(15,897)2,79510,61667,882
Direct non-interest expenses(37,345)(133,397)(42,470)(3,840)(28,674)(34,231)(279,957)
Segment income (loss)$41,336$50,247$(15,819)$6,484$24,968$10,930$118,146
Average earnings assets$2,607,230$1,951,047$2,891,988$2,740,120$1,024,939$646,966$11,862,290

Mortgage BankingConsumer (Retail) BankingCommercial and Corporate BankingTreasury and InvestmentsUnited States OperationsVirgin Islands OperationsTotal
(In thousands)
For the year ended December 31, 2014:
Interest income$115,997$215,170$163,242$54,223$44,882$40,435$633,949
Net (charge) credit for transfer of funds(37,375)17,629(12,364)20,46311,647--
Interest expense-(24,445)-(68,517)(19,273)(3,641)(115,876)
Net interest income78,622208,354150,8786,16937,25636,794518,073
(Provision) release for loan and lease losses(17,605)(79,932)(40,084)-27,650441(109,530)
Non-interest income13,51540,0185,2412642,4507,13968,627
Direct non-interest expenses(39,444)(126,290)(46,963)(5,368)(26,596)(39,319)(283,980)
Segment income $35,088$42,150$69,072$1,065$40,760$5,055$193,190
Average earnings assets$2,142,122$1,967,202$3,613,354$2,691,906$976,151$656,197$12,046,932

The following table presents a reconciliation of the reportable segment financial information to the consolidated totals:
Year Ended December 31,
201620152014
(In thousands)
Net income:
Total income for segments and other$231,385$118,146$193,190
Other non-interest income (loss) (1)-13,443(7,279)
Other operating expenses (2) (101,126)(103,873)(94,273)
Income before income taxes130,25927,71691,638
Income tax (expense) benefit (37,030)(6,419)300,649
Total consolidated net income$93,229$21,297$392,287
Average assets:
Total average earning assets for segments $11,466,576$11,862,290$12,046,932
Other average earning assets (1) --1,943
Average non-earning assets 923,566919,263598,570
Total consolidated average assets$12,390,142$12,781,553$12,647,445
(1)The bargain purchase gain on the acquisition of assets and assumption of deposits from Doral Bank in 2015 as well as the activities related to FirstBank's equity interest in CPG/GS are presented as Other non-interest income (loss) and the investment in CPG/GS is presented as Other average earning assets in the tables above.
(2)Expenses pertaining to corporate administrative functions that support the operating segments 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.

The following table presents revenues (interest income plus non-interest income) and selected balance sheet data by geography based on the location in which the transaction is originated:
201620152014
(In thousands)
Revenues:
Puerto Rico$568,180$575,016$588,744
United States60,60761,87958,979
Virgin Islands44,45949,99947,574
Total consolidated revenues$673,246$686,894$695,297
Selected Balance Sheet Information:
Total assets:
Puerto Rico$9,765,530$10,648,179$10,969,305
United States1,499,5481,202,3181,072,962
Virgin Islands657,377722,522685,568
Loans:
Puerto Rico$6,926,719$7,332,274$7,544,845
United States1,382,4401,125,501982,713
Virgin Islands627,720690,476649,813
Deposits:
Puerto Rico (1)$6,291,353$6,747,638$6,687,844
United States (2)1,564,8391,606,7231,836,430
Virgin Islands975,013983,763959,671
(1)For 2016, 2015, and 2014, includes $1.4 billion, $2.1 billion, and $2.9 billion, respectively, of brokered CDs allocated to Puerto Rico operations.
(2)For 2016 includes $60.1 million of brokered CDs allocated to the United States operations.