Commercial and Corporate Banking
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. FirstBank has developed expertise
in a wide variety of industries. 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. A substantial portion of this portfolio is
secured by the underlying value of the real estate collateral and the personal
guarantees of the borrowers. This segment also includes the Corporation’s
broker-dealer activities, which are primarily concentrated in the underwriting
of municipal securities and financial advisory services.
Consumer (Retail) Banking
The Consumer (Retail) Banking segment consists of the Corporation’s consumer
lending and deposit-taking activities conducted mainly through FirstBank’s
branch network in Puerto Rico. Loans to consumers include auto, boat and personal
loans, credit cards, and lines of credit. Deposit products include interest
bearing and non-interest bearing checking and savings accounts, Individual Retirement
Accounts (IRA) and retail certificates of deposit. Retail deposits gathered
through each branch of FirstBank’s retail network serve as one of the
funding sources for the lending and investment activities.
Mortgage Banking
These operations consist of the origination, sale, securitization and servicing
of a variety of residential mortgage loan products and related hedging activities.
Originations are sourced through different channels such as FirstBank branches
and purchases from mortgage bankers, and in association with new project developers.
The Mortgage Banking segment focuses on originating residential real estate
loans, some of which conform to Federal Housing Administration (the “FHA”),
Veterans Administration (the “VA”) and Rural Development (the “RD”)
standards. Loans originated that meet the FHA’s standards qualify for
the FHA’s insurance program whereas loans that meet the standards of the
VA and RD are guaranteed by those respective federal agencies.
Mortgage loans that do not qualify under these programs are commonly referred
to as conventional loans. Conventional real estate loans can be conforming or
non-conforming. Conforming loans are residential real estate loans that meet
the standards for sale under the Fannie Mae (“FNMA”) and Freddie
Mac (“FHLMC”) programs whereas loans that do not meet the standards
are referred to as non-conforming residential real estate loans. The Corporation’s
strategy is to penetrate markets by providing customers with a variety of high
quality mortgage products to serve their financial needs through a faster and
simpler process and at competitive prices. The Mortgage Banking segment also
acquires and sells mortgages in the secondary markets. Residential real estate
conforming loans are sold to investors like FNMA and FHLMC. Most of the Corporation’s
residential mortgage loan portfolio consists of fixed-rate, fully amortizing,
full documentation loans. The Corporation obtained commitment authority to issue
Government National Mortgage Association (“GNMA”) mortgage-backed
securities and, under this program, the Corporation has been selling FHA/VA
mortgage loans into the secondary market.
Treasury and Investments
The Treasury and Investments segment is responsible for the Corporation’s
treasury and investment management functions. The treasury function, which includes
funding and liquidity management, lends funds to the Commercial and Corporate
Banking, Mortgage Banking and Consumer (Retail) Banking segments to finance
their respective lending activities and borrows from those segments and from
the United States Operations segment. Funds not gathered by the different business
units are obtained by the Treasury Division through wholesale channels, such
as brokered deposits, advances from the Federal Home Loan Bank (“FHLB”),
and repurchase agreements with investment securities, among others.
United States Operations
The United States Operations segment consists of all banking activities conducted
by FirstBank on the United States mainland. FirstBank provides a wide range
of banking services to individual and corporate customers primarily in southern
Florida through 10 branches. FirstBank’s success in attracting core deposits
in Florida has enabled it to become less dependent on brokered CDs. The United
States Operations segment offers an array of both retail and commercial banking
products and services. Consumer banking products include checking, savings and
money market accounts, retail certificates of deposit (“retail CDs”),
internet banking services, residential mortgages, home equity loans, lines of
credit, and automobile loans. Deposits gathered through FirstBank’s branches
in the United States also serve as one of the funding sources for lending and
investment activities in Puerto Rico.
The commercial banking services include checking, savings and money market accounts,
retail CDs, internet banking services, cash management services, remote data
capture, and automated clearing house, or ACH, transactions. Loan products include
the traditional commercial and industrial (“C&I”) and commercial
real estate products, such as lines of credit, term loans and construction loans.
Virgin Islands Operations
The Virgin Islands Operations segment consists of all banking activities conducted
by FirstBank in the USVI and BVI, including retail and commercial banking services,
with a total of 11 branches serving the islands in the USVI of St. Thomas, St.
Croix, and St. John, and the island of Tortola in the BVI. The Virgin Islands
Operations segment is driven by its consumer, commercial lending and deposit-taking
activities.
Loans to consumers include auto, boat, lines of credit, and personal and residential
mortgage loans. Deposit products include interest bearing and non-interest bearing
checking and savings accounts, IRAs, and retail CDs. Retail deposits gathered
through each branch serve as the funding sources for its own lending activities.