SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2024

SEGMENT INFORMATION [Abstract]

SEGMENT INFORMATION

NOTE 19 – SEGMENT INFORMATION

Based upon the Corporation’s organizational structure and the information provided to the Chief Executive Officer and

management, 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, 2024, 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. 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 the 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 2023 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 March 31,2024:

Interest income

$

31,443

$

94,795

$

72,112

$

28,058

$

34,765

$

7,332

$

268,505

Net (charge) credit for transfer of funds

(15,620)

96,251

(57,184)

(21,472)

(1,975)

-

-

Interest expense

-

(42,099)

-

(13,118)

(14,542)

(2,226)

(71,985)

Net interest income (loss)

15,823

148,947

14,928

(6,532)

18,248

5,106

196,520

Provision for credit losses - (benefit) expense

(260)

15,418

(2,439)

(69)

82

(565)

12,167

Non-interest income 

3,019

23,406

4,501

83

901

2,073

33,983

Direct non-interest expenses

6,705

42,645

10,339

1,071

9,110

6,591

76,461

 Segment income (loss)

$

12,397

$

114,290

$

11,529

$

(7,451)

$

9,957

$

1,153

$

141,875

Average earning assets

$

2,126,465

$

3,472,998

$

4,022,173

$

5,900,314

$

2,087,816

$

413,219

$

18,022,985

Mortgage

Banking

Consumer

(Retail) Banking

Commercial and

Corporate

Banking

Treasury and

Investments

United States

Operations

Virgin Islands

Operations

Total

(In thousands)

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 earning assets

$

2,171,061

$

3,174,150

$

3,713,633

$

6,216,498

$

2,067,848

$

366,338

$

17,709,528

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

Quarter Ended March 31,

2024

2023

(In thousands)

Net income: 

Total income for segments 

$

141,875

$

145,746

Other non-interest expenses

 (1)

44,462

43,113

Income before income taxes

97,413

102,633

Income tax expense

23,955

31,935

 Total consolidated net income

$

73,458

$

70,698

Average assets:

Total average earning assets for segments 

$

18,022,985

$

17,709,528

Average non-earning assets 

835,314

847,628

 Total consolidated average assets

$

18,858,299

$

18,557,156

(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.