XML 58 R44.htm IDEA: XBRL DOCUMENT v3.20.4
SEGMENT INFORMATION
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
SEGMENT INFORMATION [Text Block]

NOTE 36 – 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 December 31, 2020, 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,” above.

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2020:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

128,043

 

$

240,725

 

$

155,254

 

$

55,003

 

$

84,169

 

$

29,788

 

$

692,982

Net (charge) credit for transfer of funds

 

(52,018)

 

 

18,771

 

 

(19,663)

 

 

59,074

 

 

(6,164)

 

 

-

 

 

-

Interest expense

 

-

 

 

(38,818)

 

 

-

 

 

(26,198)

 

 

(23,980)

 

 

(3,664)

 

 

(92,660)

Net interest income

 

76,025

 

 

220,678

 

 

135,591

 

 

87,879

 

 

54,025

 

 

26,124

 

 

600,322

Provision for credit losses

 

(22,518)

 

 

(54,094)

 

 

(74,607)

 

 

(2,774)

 

 

(12,592)

 

 

(4,400)

 

 

(170,985)

Non-interest income

 

22,069

 

 

50,962

 

 

12,606

 

 

13,708

 

 

4,630

 

 

7,251

 

 

111,226

Direct non-interest expenses

 

(33,054)

 

 

(131,133)

 

 

(28,631)

 

 

(3,449)

 

 

(33,782)

 

 

(28,815)

 

 

(258,864)

Segment income

$

42,522

 

$

86,413

 

$

44,959

 

$

95,364

 

$

12,281

 

$

160

 

$

281,699

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average earnings assets

$

2,241,753

 

$

2,202,595

 

$

3,039,786

 

$

4,232,144

 

$

2,026,619

 

$

458,608

 

$

14,201,505

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Banking

 

Consumer (Retail) Banking

 

Commercial and Corporate Banking

 

Treasury and Investments

 

United States Operations

 

Virgin Islands Operations

 

Total

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

120,981

 

$

216,066

 

$

148,224

 

$

63,175

 

$

97,406

 

$

30,045

 

$

675,897

Net (charge) credit for transfer of funds

 

(52,178)

 

 

66,675

 

 

(56,958)

 

 

47,477

 

 

(5,016)

 

 

-

 

 

-

Interest expense

 

-

 

 

(38,206)

 

 

-

 

 

(37,026)

 

 

(29,851)

 

 

(3,733)

 

 

(108,816)

Net interest income

 

68,803

 

 

244,535

 

 

91,266

 

 

73,626

 

 

62,539

 

 

26,312

 

 

567,081

(Provision) release for credit losses

 

(13,499)

 

 

(41,043)

 

 

17,977

 

 

-

 

 

(7,296)

 

 

4,048

 

 

(39,813)

Non-interest income (loss)

 

16,825

 

 

51,729

 

 

11,714

 

 

(225)

 

 

2,807

 

 

7,722

 

 

90,572

Direct non-interest expenses

 

(34,825)

 

 

(116,854)

 

 

(35,130)

 

 

(2,729)

 

 

(34,070)

 

 

(28,995)

 

 

(252,603)

Segment income

$

37,304

 

$

138,367

 

$

85,827

 

$

70,672

 

$

23,980

 

$

9,087

 

$

365,237

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average earnings assets

$

2,161,772

 

$

1,960,352

 

$

2,489,933

 

$

2,487,084

 

$

1,931,015

 

$

467,252

 

$

11,497,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Banking

 

Consumer (Retail) Banking

 

Commercial and Corporate Banking

 

Treasury and Investments

 

United States Operations

 

Virgin Islands Operations

 

Total

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

127,042

 

$

181,166

 

$

138,706

 

$

61,913

 

$

83,971

 

$

32,169

 

$

624,967

Net (charge) credit for transfer of funds

 

(47,653)

 

 

65,092

 

 

(60,031)

 

 

44,540

 

 

(1,948)

 

 

-

 

 

-

Interest expense

 

-

 

 

(28,325)

 

 

-

 

 

(44,825)

 

 

(22,967)

 

 

(3,467)

 

 

(99,584)

Net interest income

 

79,389

 

 

217,933

 

 

78,675

 

 

61,628

 

 

59,056

 

 

28,702

 

 

525,383

Provision for credit losses

 

(13,083)

 

 

(23,516)

 

 

(4,540)

 

 

-

 

 

(11,882)

 

 

(5,968)

 

 

(58,989)

Non-interest income

 

17,073

 

 

47,706

 

 

5,158

 

 

2,505

 

 

3,020

 

 

6,848

 

 

82,310

Direct non-interest expenses

 

(38,213)

 

 

(112,176)

 

 

(32,635)

 

 

(2,966)

 

 

(33,566)

 

 

(30,963)

 

 

(250,519)

Segment income (loss)

$

45,166

 

$

129,947

 

$

46,658

 

$

61,167

 

$

16,628

 

$

(1,381)

 

$

298,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average earnings assets

$

2,258,974

 

$

1,636,002

 

$

2,530,635

 

$

2,552,130

 

$

1,750,155

 

$

537,574

 

$

11,265,470

 

The following table presents a reconciliation of the reportable segment financial information to the consolidated totals for the indicated periods:

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

2020

 

2019

 

2018

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income:

 

 

 

 

 

 

 

 

 

Total income for segments and other

$

281,699

 

$

365,237

 

$

298,185

 

Other operating expenses (1)

 

(165,376)

 

 

(125,865)

 

 

(107,547)

 

Income before income taxes

 

116,323

 

 

239,372

 

 

190,638

 

Income tax expense (benefit)

 

14,050

 

 

71,995

 

 

(10,970)

 

Total consolidated net income

$

102,273

 

$

167,377

 

$

201,608

 

Average assets:

 

 

 

 

 

 

 

 

 

Total average earning assets for segments

$

14,201,505

 

$

11,497,408

 

$

11,265,470

 

Average non-earning assets

 

1,031,141

 

 

954,726

 

 

940,731

 

Total consolidated average assets

$

15,232,646

 

$

12,452,134

 

$

12,206,201

 

 

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.

 

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 was originated as of indicated dates:

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2019

 

2018

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Puerto Rico

$

678,370

 

$

628,489

 

$

581,269

 

United States

 

88,799

 

 

100,213

 

 

86,991

 

Virgin Islands

 

37,039

 

 

37,767

 

 

39,017

 

Total consolidated revenues

$

804,208

 

$

766,469

 

$

707,277

 

 

 

 

 

 

 

 

 

 

 

Selected Balance Sheet Information:

 

 

 

 

 

 

 

 

 

Total assets:

 

 

 

 

 

 

 

 

 

Puerto Rico

$

16,091,112

 

$

10,059,890

 

$

9,797,267

 

United States

 

2,117,966

 

 

2,048,260

 

 

1,940,633

 

Virgin Islands

 

583,993

 

 

503,116

 

 

505,661

 

Loans:

 

 

 

 

 

 

 

 

 

Puerto Rico

$

9,367,032

 

$

6,695,953

 

$

6,586,033

 

United States

 

1,993,797

 

 

1,879,346

 

 

1,834,088

 

Virgin Islands

 

466,749

 

 

466,383

 

 

481,188

 

Deposits:

 

 

 

 

 

 

 

 

 

Puerto Rico (1)

$

12,338,934

 

$

6,422,864

 

$

6,208,531

 

United States (2)

 

1,622,481

 

 

1,661,657

 

 

1,519,362

 

Virgin Islands

 

1,355,968

 

 

1,263,908

 

 

1,266,821

 

 

 

 

 

 

 

 

 

 

For 2020, 2019, and 2018, includes $109.0 million, $243.4 million, and $441.1 million, respectively, of brokered CDs allocated to Puerto Rico operations.For 2020, 2019, and 2018 includes $107.1 million, $191.7 million, and $114.5 million, respectively, of brokered CDs allocated to the United States operations.