SEGMENT INFORMATION

9 Months Ended

Sep. 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 September 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 September 30,2023:

Interest income

$

31,208

$

90,976

$

68,138

$

32,146

$

33,560

$

7,377

$

263,405

Net (charge) credit for transfer of funds

(12,929)

96,836

(54,926)

(27,817)

(1,164)

-

-

Interest expense

-

(40,746)

-

(8,384)

(12,647)

(1,900)

(63,677)

Net interest income (loss)

18,279

147,066

13,212

(4,055)

19,749

5,477

199,728

Provision for credit losses - (benefit) expense

(3,288)

13,707

(7,235)

32

873

307

4,396

Non-interest income (loss)

3,021

20,170

4,468

(3)

847

1,793

30,296

Direct non-interest expenses

5,201

43,431

9,658

958

8,535

6,647

74,430

 Segment income (loss)

$

19,387

$

110,098

$

15,257

$

(5,048)

$

11,188

$

316

$

151,198

Average earnings assets

$

2,127,641

$

3,336,158

$

3,769,370

$

6,382,276

$

2,041,662

$

406,499

$

18,063,606

Mortgage

Banking

Consumer

(Retail) Banking

Commercial and

Corporate

Banking

Treasury and

Investments

United States

Operations

Virgin Islands

Operations

Total

(In thousands)

Quarter ended September 30,2022:

Interest income

$

32,349

$

77,576

$

53,506

$

28,203

$

24,804

$

6,245

$

222,683

Net (charge) credit for transfer of funds

(8,011)

47,577

(30,645)

(8,447)

(474)

-

-

Interest expense

-

(6,745)

-

(4,929)

(2,836)

(263)

(14,773)

Net interest income 

24,338

118,408

22,861

14,827

21,494

5,982

207,910

Provision for credit losses - expense (benefit) 

2,092

16,705

(3,519)

(12)

(624)

1,141

15,783

Non-interest income

3,733

19,121

4,276

33

773

1,757

29,693

Direct non-interest expenses

6,489

42,080

9,295

942

8,479

7,097

74,382

 Segment income (loss)

$

19,490

$

78,744

$

21,361

$

13,930

$

14,412

$

(499)

$

147,438

Average earnings assets

$

2,211,675

$

2,974,894

$

3,622,907

$

7,095,503

$

2,040,656

$

365,743

$

18,311,378

Mortgage

Banking

Consumer (Retail)

Banking

Commercial

and Corporate

Banking

Treasury and

Investments

United States

Operations

Virgin Islands

Operations

Total

(In thousands)

Nine-Month Period Ended September 30,2023

Interest income

$

94,720

$

261,139

$

195,837

$

89,140

$

96,772

$

20,397

$

758,005

Net (charge) credit for transfer of funds

(33,293)

260,715

(154,752)

(70,095)

(2,575)

-

-

Interest expense

-

(94,447)

-

(26,547)

(33,828)

(2,755)

(157,577)

Net interest income (loss)

61,427

427,407

41,085

(7,502)

60,369

17,642

600,428

Provision for credit losses - (benefit) expense

(7,623)

42,600

(2,096)

7

9,545

(305)

42,128

Non-interest income

9,157

62,425

16,788

1,837

2,849

6,029

99,085

Direct non-interest expenses

15,821

126,872

28,363

2,828

25,341

20,203

219,428

 Segment income (loss)

$

62,386

$

320,360

$

31,606

$

(8,500)

$

28,332

$

3,773

$

437,957

Average earnings assets

$

2,147,521

$

3,251,286

$

3,751,359

$

6,321,540

$

2,049,281

$

381,655

$

17,902,642

Mortgage

Banking

Consumer (Retail)

Banking

Commercial

and Corporate

Banking

Treasury and

Investments

United States

Operations

Virgin Islands

Operations

Total

(In thousands)

Nine-Month Period Ended September 30,2022

Interest income

$

98,625

$

221,500

$

148,046

$

77,530

$

64,742

$

18,719

$

629,162

Net (charge) credit for transfer of funds

(22,173)

105,898

(53,391)

(29,101)

(1,233)

-

-

Interest expense

-

(17,047)

-

(14,727)

(6,845)

(823)

(39,442)

Net interest income

76,452

310,351

94,655

33,702

56,664

17,896

589,720

Provision for credit losses - (benefit) expense

(5,216)

42,904

(20,611)

(435)

(5,849)

1,191

11,984

Non-interest income (loss)

13,152

59,367

13,278

(130)

2,195

5,630

93,492

Direct non-interest expenses

19,076

121,897

27,202

2,732

25,195

20,835

216,937

 Segment income

$

75,744

$

204,917

$

101,342

$

31,275

$

39,513

$

1,500

$

454,291

Average earnings assets

$

2,249,203

$

2,865,610

$

3,654,906

$

7,642,121

$

2,047,375

$

371,468

$

18,830,683

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

Quarter Ended September 30,

Nine-Month Period Ended September 30,

2023

2022

2023

2022

(In thousands)

Net income: 

Total income for segments 

$

151,198

$

147,438

$

437,957

$

454,291

Other operating expenses

 (1)

42,208

40,807

125,395

113,237

Income before income taxes

108,990

106,631

312,562

341,054

Income tax expense

26,968

32,028

89,187

109,156

 Total consolidated net income

$

82,022

$

74,603

$

223,375

$

231,898

Average assets:

Total average earning assets for segments 

$

18,063,606

$

18,311,378

$

17,902,642

$

18,830,683

Average non-earning assets 

832,374

835,740

845,837

873,911

 Total consolidated average assets

$

18,895,980

$

19,147,118

$

18,748,479

$

19,704,594

(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.