REVENUE FROM CONTRACTS WITH CUSTOMERS

12 Months Ended

Dec. 31, 2024

REVENUE FROM CONTRACTS WITH CUSTOMERS [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

NOTE 24 – REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition

In accordance with ASC Topic 606, “Revenue from Contracts with Customers” (“ASC Topic 606”), revenues are recognized when

control of promised goods or services is transferred to customers and in an amount that reflects the consideration to which the

Corporation expects to be entitled in exchange for those goods or services. At contract inception, once the contract is determined to be

within the scope of ASC Topic 606, the Corporation assesses the goods or services that are promised within each contract, identifies

the respective performance obligations, and assesses whether each promised good or service is distinct. The Corporation then

recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the

performance obligation is satisfied.

Disaggregation of Revenue 

The following tables summarize the Corporation’s revenue, which includes net interest income on financial instruments that is

outside of ASC Topic 606 and non-interest income, disaggregated by type of service and business segment for the years ended

December 31, 2024, 2023 and 2022:

Year Ended December 31, 2024

Mortgage

Banking

Consumer

(Retail)

Banking

Commercial

and Corporate

Treasury and

Investments

United States

Operations

Virgin Islands

Operations

Total

(In thousands)

Net interest income (loss)

(1)

$

72,455

$

550,820

$

157,672

$

(112,151)

$

77,988

$

60,695

$

807,479

Service charges and fees on deposit accounts

-

30,608

4,538

-

613

3,060

38,819

Insurance commission income

-

12,781

-

-

178

611

13,570

Card and processing income

-

40,223

899

-

115

5,521

46,758

Other service charges and fees

189

7,238

751

-

2,649

611

11,438

Not in scope of ASC Topic 606

 (1)

13,318

5,389

808

455

34

133

20,137

 Total non-interest income

13,507

96,239

6,996

455

3,589

9,936

130,722

Total Revenue (Loss)

$

85,962

$

647,059

$

164,668

$

(111,696)

$

81,577

$

70,631

$

938,201

Year Ended December 31, 2023

Mortgage

Banking

Consumer

(Retail)

Banking

Commercial

and Corporate

Treasury and

Investments

United States

Operations

Virgin Islands

Operations

Total

(In thousands)

Net interest income (loss)

(1)

$

75,774

$

484,306

$

142,313

$

(31,944)

$

70,798

$

55,863

$

797,110

Service charges and fees on deposit accounts

-

29,946

4,553

-

648

2,895

38,042

Insurance commission income

-

11,906

-

-

202

655

12,763

Card and processing income

-

37,853

1,647

-

99

4,310

43,909

Other service charges and fees

289

8,049

849

-

2,485

893

12,565

Not in scope of ASC Topic 606

 (1)

10,924

4,854

4,004

2,125

3,405

103

25,415

 Total non-interest income

11,213

92,608

11,053

2,125

6,839

8,856

132,694

Total Revenue (Loss)

$

86,987

$

576,914

$

153,366

$

(29,819)

$

77,637

$

64,719

$

929,804

Year Ended December 31, 2022

Mortgage

Banking

Consumer

(Retail)

Banking

Commercial

and Corporate

Treasury and

Investments

United States

Operations

Virgin Islands

Operations

Total

(In thousands)

Net interest income (loss) (1)

$

78,098

$

463,203

$

143,776

$

(13,964)

$

74,168

$

50,012

$

795,293

Service charges and fees on deposit accounts

-

29,702

4,616

-

607

2,898

37,823

Insurance commission income

-

12,733

-

-

15

995

13,743

Card and processing income

-

35,042

1,501

-

67

3,806

40,416

Other service charges and fees

341

7,021

874

-

2,113

684

11,033

Not in scope of ASC Topic 606 (1)

15,357

4,359

283

(161)

204

35

20,077

 Total non-interest income (loss)

15,698

88,857

7,274

(161)

3,006

8,418

123,092

Total Revenue (Loss)

$

93,796

$

552,060

$

151,050

$

(14,125)

$

77,174

$

58,430

$

918,385

(1)

Most of the Corporation’s revenue is not within the scope of ASC Topic 606. The guidance explicitly excludes net interest income from financial assets and liabilities, as well as other non-interest income from loans, leases, investment securities and derivative

financial instruments.

For 2024, 2023, and 2022, most of the Corporation’s revenue within the scope of ASC Topic 606 was related to performance

obligations satisfied at a point in time. 

The following is a discussion of the revenues under the scope of ASC Topic 606. 

Service Charges and Fees on Deposit Accounts 

Service charges and fees on deposit accounts relate to fees generated from a variety of deposit products and services rendered to

customers. Charges primarily include, but are not limited to, overdraft fees, insufficient fund fees, dormant fees, and monthly service

charges. Such fees are recognized concurrently with the event at the time of occurrence or on a monthly basis, in the case of monthly

service charges. These depository arrangements are considered day-to-day contracts that do not extend beyond the services performed,

as customers have the right to terminate these contracts with no penalty or, if any, nonsubstantive penalties.

Insurance Commissions

For insurance commissions, which include regular and contingent commissions paid to the Corporation’s insurance agency, the

agreements contain a performance obligation related to the sale/issuance of the policy and ancillary administrative post-issuance

support. The performance obligations are satisfied when the policies are issued, and revenue is recognized at that point in time. In

addition, contingent commission income may be considered to be constrained, as defined under ASC Topic 606. Contingent

commission income is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of

cumulative revenue recognized will not occur or payments are received, thus, is recorded in subsequent periods. For the years ended

December 31, 2024, 2023, and 2022, the Corporation recognized contingent commission income at the time that payments were

confirmed and constraints were released of $

3.5

 million, $

2.5

 million, and $

3.2

 million, respectively, which was related to the volume

of insurance policies sold in the prior year. 

Card and processing income

Card and processing income includes merchant-related income, and credit and debit card fees. 

For merchant-related income, the determination of income recognition included the consideration of a 2015 sale of merchant

contracts that involved sales of point of sale (“POS”) terminals and a marketing alliance under a revenue-sharing agreement. The

Corporation concluded that control of the POS terminals and merchant contracts was transferred to the customer at the contract’s

inception. With respect to the related revenue-sharing agreement, the Corporation satisfies the marketing alliance performance

obligation over the life of the contract, and recognizes the associated transaction price as the entity performs and any constraints over

the variable consideration are resolved.

Credit and debit card fees primarily represent revenues earned from interchange fees and ATM fees. Interchange and network

revenues are earned on credit and debit card transactions conducted with payment networks. ATM fees are primarily earned as a result

of surcharges assessed to non-FirstBank customers who use a FirstBank ATM. Such fees are generally recognized concurrently with

the delivery of services on a daily basis.

The Corporation offers products, primarily credit cards, that offer various rewards to reward program members, such as airline

tickets, cash, or merchandise, based on account activity. The Corporation generally recognizes the cost of rewards as part of business

promotion expenses when the rewards are earned by the customer and, at that time, records the corresponding reward liability. The

Corporation determines the reward liability based on points earned to date that the Corporation expects to be redeemed and the

average cost per point redemption. The reward liability is reduced as points are redeemed. In estimating the reward liability, the

Corporation considers historical reward redemption behavior, the terms of the current reward program, and the card purchase activity. 

The reward liability is sensitive to changes in the reward redemption type and redemption rate, which is based on the expectation that

the vast majority of all points earned will eventually be redeemed. The reward liability, which is included in other liabilities in the

consolidated statements of financial condition, totaled $

9.4

 million and $

8.9

 million as of December 31, 2024 and 2023, respectively.

Other Fees

Other fees primarily include revenues generated from wire transfers, lockboxes, bank issuances of checks and trust fees recognized

from transfer paying agent, retirement plan, and other trustee activities. Revenues are recognized on a recurring basis when the

services are rendered and are included as part of other non-interest income in the consolidated statements of income.

Contract Balances

As of December 31, 2024 and 2023, there were

no

 contract assets recorded on the Corporation’s consolidated financial statements.

Moreover, the balances of contract liabilities as of such dates were not significant.

Other

The Corporation also did not have any material contract acquisition costs and did not make any significant judgments or estimates

in recognizing revenue for financial reporting purposes.