FirstBanCorp, (the Corporation) is a publicly owned financial holding company. The Company provides a range of financial services for retail, commercial and institutional clients. As of December 31, 2009, the Corporation controlled three wholly owned subsidiaries: FirstBank, FirstBank Insurance Agency, Inc. (FirstBank Insurance Agency) and Grupo Empresas de Servicios Financieros (doing business as PR Finance Group). The Company operates in six segments: Commercial and Corporate Banking, Mortgage Banking, Consumer (Retail) Banking, Treasury and Investments, United States Operations and Virgin Islands Operations. On January 28, 2008, the Corporation completed the acquisition of Virgin Islands Community Bank (VICB).
Commercial and Corporate Banking
The Company’s Commercial and Corporate Banking segment consists of the Corporation’s lending and other services for the public sector and industries, such as healthcare, tourism, financial institutions, food and beverage, shopping centers and middle-market clients. The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans, and other products, such as cash management and business management services.
The Company’s Mortgage Banking segment conducts its operations through FirstBank and its mortgage origination subsidiary, FirstMortgage, Inc. (FirstMortgage). These operations consist of the origination, sale and servicing of a range of residential mortgage loans products. Originations are sourced through different channels, such as branches, mortgage bankers and real estate brokers, and in association with project developers. FirstMortgage focuses on originating residential real estate loans, some of which conform to Federal Housing Administration (FHA), Veterans Administration (VA) and Rural Development (RD) standards. Loans originated that meet FHA standards qualify for the federal agency’s insurance program whereas loans that meet VA and RD standards are guaranteed by their respective federal agencies. In December 2008, the Corporation obtained from the Government National Mortgage Association (GNMA) the necessary Commitment Authority to issue GNMA mortgage-backed securities. Under this program, during the year ended December 31, 2009, the Corporation completed the securitization of approximately $305.4 million of FHA/VA mortgage loans into GNMA mortgage-backed security (MBS).
Consumer (Retail) Banking
The Company’s Consumer (Retail) Banking segment consists of the Corporation’s consumer lending and deposit-taking activities conducted through its branch network and loan centers in Puerto Rico. Loans to consumers include auto, boat, lines of credit, and personal loans. 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.
Treasury and Investments
The Company’s Treasury and Investments segment is responsible for the Corporation’s treasury and investment management functions. In the treasury function, which includes funding and liquidity management, this segment sells funds to the Commercial and Corporate Banking, Mortgage Banking, and Consumer (Retail) Banking segments to finance their lending activities and purchases funds gathered by those segments. 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 in the United States mainland. The Corporation provides a range of banking services to individual and corporate customers in the state of Florida through its 10 branches and two lending centers.
Virgin Islands Operations
The Virgin Islands operations segment consists of all banking activities conducted by FirstBank in the U.S. and British Virgin Islands, including retail and commercial banking services. Loans to consumers include auto, boat, lines of credit, personal loans and residential mortgage loans. 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 serve as the funding sources for the lending activities.