SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2023

SEGMENT INFORMATION [Abstract]

SEGMENT INFORMATION [Text Block]

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 March 31, 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)

For the quarter ended March 31, 2023:

Interest income

$

31,907

$

83,174

$

62,343

$

27,466

$

31,114

$

6,392

$

242,396

Net (charge) credit for transfer of funds

(10,119)

77,735

(47,403)

(19,539)

(674)

-

-

Interest expense

-

(23,165)

-

(8,585)

(9,510)

(251)

(41,511)

Net interest income (loss)

21,788

137,744

14,940

(658)

20,930

6,141

200,885

Provision for credit losses - (benefit) expense

(506)

15,224

(2,536)

(9)

4,655

(1,326)

15,502

Non-interest income

3,074

22,034

4,175

160

847

2,228

32,518

Direct non-interest expenses

5,087

41,627

9,365

947

8,304

6,825

72,155

 Segment income (loss)

$

20,281

$

102,927

$

12,286

$

(1,436)

$

8,818

$

2,870

$

145,746

Average earnings assets

$

2,171,061

$

3,174,150

$

3,713,633

$

6,216,498

$

2,067,848

$

366,338

$

17,709,528

Mortgage

Banking

Consumer

(Retail) Banking

Commercial and

Corporate

Banking

Treasury and

Investments

United States

Operations

Virgin Islands

Operations

Total

(In thousands)

For the quarter ended March 31, 2022:

Interest income

$

33,071

$

70,437

$

47,027

$

22,184

$

18,857

$

6,278

$

197,854

Net (charge) credit for transfer of funds

(7,292)

24,282

(6,612)

(9,949)

(429)

-

-

Interest expense

-

(5,173)

-

(4,826)

(1,946)

(285)

(12,230)

Net interest income 

25,779

89,546

40,415

7,409

16,482

5,993

185,624

Provision for credit losses - (benefit) expense

(3,703)

11,144

(16,622)

(388)

(3,547)

(686)

(13,802)

Non-interest income (loss)

5,252

20,463

4,554

(112)

744

1,957

32,858

Direct non-interest expenses

6,906

39,271

8,859

885

8,479

6,973

71,373

 Segment income

$

27,828

$

59,594

$

52,732

$

6,800

$

12,294

$

1,663

$

160,911

Average earnings assets

$

2,293,648

$

2,759,482

$

3,664,104

$

8,145,949

$

2,065,638

$

378,169

$

19,306,990

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

Quarter Ended March 31,

2023

2022

(In thousands)

Net income: 

Total income for segments 

$

145,746

$

160,911

Other operating expenses

 (1)

43,113

35,286

Income before income taxes

102,633

125,625

Income tax expense

31,935

43,025

 Total consolidated net income

$

70,698

$

82,600

Average assets:

Total average earning assets for segments 

$

17,709,528

$

19,306,990

Average non-earning assets 

847,628

947,011

 Total consolidated average assets

$

18,557,156

$

20,254,001

(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.