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First Bancorp (North Carolina)

First Bancorp Reports Third Quarter Results

SOUTHERN PINES, N.C. , Oct. 23, 2024 /PRNewswire/ -- First Bancorp (the "Company") (NASDAQ - FBNC), the parent company of First Bank, reported third quarter earnings today.  At the end of September, Hurricane Helene greatly impacted portions of our footprint in Western North Carolina and the upstate of South Carolina.  We quickly initiated a response for our associates, customers and communities in these areas, and our most important priority was and continues to be making sure our people are taken care of during this difficult time.  Our team rallied together to support our customers and the communities we serve.  While some of our facilities suffered damage during the storm, we have worked to restore service for our customers as quickly and fully as possible.  Richard H. Moore, CEO and Chairman of the Company, stated "I am proud of our Company and associates who responded quickly and poured out their hearts and resources to assist those who suffered devastating impacts.  We are here for our teammates, customers and communities and are committed to supporting them in this tremendous time of need.  In anticipation of our customers' potential challenges to recover from the storm, we took an additional $13 million in provision for credit losses during the quarter."

The Company announced net income of $18.7 million, or $0.45 per diluted common share, for the three months ended September 30, 2024 compared to $28.7 million, or $0.70 per diluted common share, for the three months ended June 30, 2024 ("linked quarter") and $29.9 million, or $0.73 per diluted common share, for the third quarter of 2023 ("like quarter").  These results include the potential impacts of Hurricane Helene of $13.4 million ($10.3 million after-taxes).  For the nine months ended September 30, 2024, the Company recorded net income of $72.7 million, or $1.76 per diluted common share, compared to $74.5 million, or $1.81 per diluted common share, for the nine months ended September 30, 2023.

For the third quarter, in accounting for the potential impacts of Hurricane Helene, we realized pre-tax impacts totaling $13.4 million, comprised of $13.0 million of provision for potential credit loss exposure in our footprint hardest hit by Helene, $300 thousand of estimated property damages and an additional $100 thousand of other impacts.  After considering the tax effect of these items, our net income was reduced by $10.3 million.  Before the impact from these items, our adjusted net income was $29.0 million, or $0.70 per diluted share, for the third quarter and $83.0 million, or $2.01 per diluted share, for the nine months ended September 30, 2024.

Third Quarter 2024 Highlights

  • Tax equivalent net interest margin ("NIM") increased 3 basis points to 2.90% for the third quarter of 2024, up from 2.87% for the linked quarter and down from 2.97% in the like quarter. For the nine months ended September 30, 2024, NIM fell to 2.86% from 3.12% in the same period in 2023. Due to the proximity to quarter end, the Federal Reserve rate reduction in mid-September had a minimal benefit to our third quarter NIM.
  • Earnings per share, ("EPS") was $0.45 per diluted share for the third quarter of 2024 and $1.76 per diluted share for the nine months ended September 30, 2024. Adjusted EPS for the third quarter of 2024 remained steady from the linked quarter at $0.70 per diluted share and increased to $2.01 per diluted share for the nine months ended September 30, 2024 from $1.81 per diluted share for the nine months ended September 30, 2023. See Appendix E for components of this calculation.
  • Net income was $18.7 million for the third quarter of 2024 and $72.7 million for the nine months ended September 30, 2024. Adjusted net income increased to $29.0 million for the third quarter of 2024 from $28.7 million in the linked quarter and to $83.0 million for the nine months ended September 30, 2024 from $74.5 million for the nine months ended September 30, 2023. See Appendix E for components of this calculation.
  • Capital grew during the quarter with a total common equity tier 1 ratio of 14.34% (estimated) and a total risk-based capital ratio of 16.44% (estimated) as of September 30, 2024, both increasing from the linked quarter.
  • Credit quality continues to be strong with a nonperforming assets ("NPA") to total assets ratio of 0.38% as of September 30, 2024, a 1 basis point increase from the linked quarter.
  • Loans totaled $8.0 billion at September 30, 2024, reflecting contractions of $56.3 million and $13.5 million for the quarter and year-over-year, respectively.
  • Noninterest-bearing demand accounts were 32% of total deposits at September 30, 2024, which is consistent with historical trends. During the third quarter of 2024, customer deposits grew $56.6 million and brokered deposits contracted $39.5 million leading to an increase in total deposits of $17.1 million.
  • Total loan yield increased to 5.51%, up 1 basis points from the linked quarter and 19 basis points from the like quarter.
  • Total cost of funds remained low at 1.81% for the quarter ended September 30, 2024, consistent with the linked quarter.
  • The on-balance sheet liquidity ratio was 17.7% at September 30, 2024, up from 16.3% for the linked quarter. Available off-balance sheet sources totaled $2.4 billion at September 30, 2024, resulting in a total liquidity ratio of 35.2%.

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2024 was $83.0 million compared to $81.1 million for the linked quarter, reflecting an increase of 2.4%.  Net interest income for the third quarter of 2024 decreased 2.0% from $84.7 million for the like quarter.  The increase in net interest income from the linked quarter was driven by an increase in the yields on earning assets, partially offset by an increase in the cost of interest-bearing liabilities.   The decline in net interest income from the like quarter was driven by an increase in the cost of funds, partially offset by an increase in earning assets. 

The Company's tax-equivalent NIM was 2.90%, an increase of 3 basis points compared to 2.87% for the linked quarter.  Increases in yields on assets and the benefit of asset mix changes and reduction in wholesale funding outpaced the increases in rates on liabilities, which resulted in the increase in net interest income and NIM as compared to the linked period.  While the total cost of funds remained consistent at 1.81% during the third quarter of 2024, loan yields rose from 5.50% for the linked quarter to 5.51% for the quarter ended September 30, 2024. 

For the Three Months Ended

YIELD INFORMATION


September 30,
2024


June 30, 2024


September 30,
2023








Yield on loans


5.51 %


5.50 %


5.32 %

Yield on securities


1.70 %


1.73 %


1.75 %

Yield on other earning assets


4.90 %


4.71 %


4.58 %

Yield on total interest-earning assets


4.55 %


4.52 %


4.31 %








Rate on interest-bearing deposits


2.59 %


2.54 %


1.95 %

Rate on borrowings


7.97 %


7.09 %


5.88 %

Rate on total interest-bearing liabilities


2.66 %


2.65 %


2.20 %

Total cost of funds


1.81 %


1.81 %


1.46 %








Net interest margin (1)


2.88 %


2.84 %


2.95 %

Net interest margin - tax-equivalent (2)


2.90 %


2.87 %


2.97 %

Average prime rate


8.43 %


8.50 %


8.43 %








(1)  Calculated by dividing annualized net interest income by average earning assets for the period.


(2)  Calculated by dividing annualized tax-equivalent net interest income by average earning assets for the period. The tax-equivalent amount reflects the tax benefit that the Company receives related to its tax-exempt loans and securities, which carry interest rates lower than similar taxable investments due to their tax-exempt status.  This amount has been computed assuming a 23% tax rate and is reduced by the related nondeductible portion of interest expense.

Included in interest income for the third quarter of 2024 was loan purchase accounting discount accretion of $2.0 million compared to $2.3 million for the linked quarter and $2.8 million for the like quarter, with the decreases related to the continued reduction of the loan portfolio acquired from GrandSouth Bancorporation ("GrandSouth") in January of 2023.  Loan discount accretion had positive impacts of 6 basis points, 6 basis points and 11 basis points, respectively, on the Company's NIM in the third quarter of 2024, the linked quarter and the like quarter. 

The following table presents the impact to net interest income of the purchase accounting adjustments for each period.

For the Three Months Ended

NET INTEREST INCOME PURCHASE ACCOUNTING ADJUSTMENTS

($ in thousands)


September 30,
2024


June 30, 2024


September 30,
2023








Interest income - increased by accretion of loan discount on acquired loans


$               2,003


$               2,303


$               2,766

Total interest income impact


2,003


2,303


2,766

Interest expense - increased by discount accretion on deposits


(174)


(224)


(709)

Interest expense - increased by discount accretion on borrowings


(193)


(190)


(215)

Total net interest expense impact


(367)


(414)


(924)

Total impact on net interest income


$               1,636


$               1,889


$               1,842

Provision for Credit Losses and Credit Quality

For the three months ended September 30, 2024 and September 30, 2023, the Company recorded $14.2 million and zero in provision for credit losses, respectively. The provision for the third quarter of 2024 was driven by an incremental provision of $13.0 million related to potential loan exposure from Hurricane Helene and net charge-offs of $2.1 million partially offset by generally improving updated economic forecasts, which are a key driver in the Company's CECL model, as well as a reduction in the level of unfunded commitments.  Within the portions of Western North and South Carolina that were significantly impacted by Hurricane Helene, the Company identified borrowers with approximately $750 million of loans outstanding.  Given that the storm impacted the area just prior to September 30, 2024 and recovery continues in many communities, the Company performed analyses to identify possible impacts from the storm and has reserved accordingly based upon the information available at this time.  The Company applied increased reserve rates based upon severe economic factors to the approximately $750 million of loans in the path of Helene.  Additionally, the Company performed an initial evaluation of the largest commercial loans in that population and applied incremental reserves to those loans that were suspected of having higher potential property damage or economic impact from the storm.  The incremental provision related to the potential exposure from Hurricane Helene added 16 basis points to the ACL as of September 30, 2024.

Asset quality remained strong with annualized net loan charge-offs of 0.11% for the third quarter of 2024.  Total NPAs remained at a low level at $45.9 million at September 30, 2024, or 0.38% of total assets, up slightly from  0.37% at June 30, 2024.  This is compared to $38.8 million, or 0.32% of total assets, at September 30, 2023 with the increase year-over-year being attributable primarily to activity in the SBA loan portfolio.

The following table presents the summary of NPAs and asset quality ratios for each period.

ASSET QUALITY DATA

($ in thousands)


September 30,
2024


June 30, 2024


September 30,
2023








Nonperforming assets







Nonaccrual loans


$          34,125


$          33,102


$          26,884

Modifications to borrowers in financial distress


10,262


10,495


10,723

Total nonperforming loans


44,387


43,597


37,607

Foreclosed real estate


1,519


1,150


1,235

Total nonperforming assets


$          45,906


$          44,747


$          38,842








Asset Quality Ratios







Quarterly net charge-offs to average loans - annualized


0.11 %


0.07 %


0.11 %

Nonperforming loans to total loans


0.55 %


0.54 %


0.47 %

Nonperforming assets to total assets


0.38 %


0.37 %


0.32 %

Allowance for credit losses to total loans


1.53 %


1.36 %


1.35 %

Noninterest Income

Total noninterest income for the third quarter of 2024 was $13.6 million, a 7.3% decrease from the $14.6 million recorded in the linked quarter and a 10.5% decrease from the $15.2 million recorded for the like quarter.  As compared to the linked and like quarters, noninterest income was lower primarily due to lower Other income, net of $1.5 million and $2.0 million, respectively. 

While the variance from the linked quarter was impacted by the sale of branch property, the variance from both the linked and like quarters was also impacted by the timing of the recognition of gain and loss from other investment activity, which does not include available for sale or held to maturity securities.

Noninterest Expenses

Noninterest expenses amounted to $59.9 million for the third quarter of 2024 compared to $58.3 million for the linked quarter and $62.2 million for the like quarter.  The $1.6 million, or 2.7%, increase in noninterest expense from the linked quarter was driven by a $2.1 million increase in Salaries incentives and commissions expense, partially driven by variable compensation. This increase in Salaries expense was partially offset by a $0.2 million reduction in Employee benefits expense and a $0.3 million reduction in Other operating expenses.  Occupancy and equipment related expenses for the third quarter of 2024 included $0.3 million of expenses related to the recovery from Hurricane Helene.

The primary contributor to the higher noninterest expense in the third quarter of 2023 was higher Other operating expenses of $2.4 million.

Balance Sheet

Total assets at September 30, 2024 amounted to $12.2 billion, an increase of $92.6 million, or 3.06% annualized, from the linked quarter and an increase of $175.5 million, or 1.46%, from a year earlier.  The increase from the linked quarter was primarily related to higher interest-bearing cash balances, partially offset by lower loan balances.  The increase from the like quarter was primarily related to higher interest-bearing cash balances, partially offset by intentional reductions in investment securities.

Quarterly average balances for key balance sheet accounts are presented below.

For the Three Months Ended

AVERAGE BALANCES

($ in thousands)


September
30, 2024


June 30,
2024


December
31, 2023


September
30, 2023


Change
3Q24 vs
2Q24


Change
3Q24 vs
3Q23














Total assets


$ 12,126,613


$ 12,055,281


$ 12,026,195


$ 12,005,778


0.6 %


1.0 %

Investment securities, at amortized cost


2,784,863


2,883,662


3,143,756


3,180,846


(3.4) %


(12.4) %

Loans


8,019,730


8,070,814


8,087,450


7,939,783


(0.6) %


1.0 %

Earning assets


11,489,227


11,462,112


11,477,007


11,405,307


0.2 %


0.7 %

Deposits


10,509,237


10,432,309


10,131,094


10,180,046


0.7 %


3.2 %

Interest-bearing liabilities


7,230,326


7,249,562


7,204,165


7,071,407


(0.3) %


2.2 %

Shareholders' equity


1,445,029


1,378,283


1,280,812


1,303,249


4.8 %


10.9 %

Driven by improvement in the unrealized loss on available for sale securities during the third quarter, total investment securities at carrying value increased to $2.4 billion at September 30, 2024.  This reflects an increase of $38.4 million from the linked quarter. Due to the intentional reductions in investment securities during the second quarter of 2024, total investment securities at carrying value fell $206.6 million from September 30, 2023.  During the third quarter of 2024, the Company made no purchases or sales of investment securities. Total unrealized loss on available for sale investment securities was $331.5 million at September 30, 2024, as compared to $410.1 million at June 30, 2024 and $521.7 million at September 30, 2023. 

Total loans amounted to $8.0 billion at September 30, 2024, a decrease of $56.3 million, or 2.8%, from  June 30, 2024 and a decrease of $13.5 million, or 0.2%, from September 30, 2023.  As presented below, our total loan portfolio mix has remained relatively consistent with the exception of Construction, development & other land loans, which, as a percentage of the loan portfolio, has fallen from 13% at September 30, 2023 to 9% at September 30, 2024 and Residential 1-4 family real estate,which, as a percentage of the loan portfolio, has increased from 19% at September 30, 2023 to 22% at September 30, 2024.  As of September 30, 2024, there were no notable concentrations in geographies or industries, including in office or hospitality categories, which are included in the "commercial real estate - non-owner occupied" category in the table below.  The Company's exposure to non-owner occupied office loans represented approximately 5.7% of the total portfolio at September 30, 2024, with the largest loan being $26.6 million and an average loan outstanding balance of $1.3 million.  Non-owner occupied office loans are generally in non-metro markets and the 10 largest loans in this category represent less than 2% of the total loan portfolio.

The following table presents the balance and portfolio percentage by loan category for each period.

LOAN PORTFOLIO


September 30, 2024


June 30, 2024


September 30, 2023

($ in thousands)


Amount


Percentage


Amount


Percentage


Amount


Percentage














Commercial and industrial


$      847,284


11 %


$      863,366


11 %


$      893,910


11 %

Construction, development & other land loans


760,949


9 %


764,418


9 %


1,008,289


13 %

Commercial real estate - owner occupied


1,226,050


15 %


1,250,267


16 %


1,252,259


16 %

Commercial real estate - non-owner occupied


2,572,901


32 %


2,561,803


32 %


2,509,317


31 %

Multi-family real estate


460,565


6 %


497,187


6 %


405,161


5 %

Residential 1-4 family real estate


1,737,133


22 %


1,729,050


21 %


1,560,140


19 %

Home equity loans/lines of credit


331,072


4 %


326,411


4 %


331,108


4 %

Consumer loans


76,787


1 %


76,638


1 %


67,169


1 %

Loans, gross


8,012,741


100 %


8,069,140


100 %


8,027,353


100 %

Unamortized net deferred loan fees


797




708




(316)



Total loans


$   8,013,538




$   8,069,848




$   8,027,037



Total deposits were $10.5 billion at September 30, 2024, an increase of $17.1 million, or 0.6%, from  June 30, 2024 and an increase of $269.5 million, or 2.6%, from September 30, 2023. The quarter-to-date deposit growth is comprised of organic growth of customer deposits of $56.6 million, partially offset by a contraction of $39.5 million in brokered deposits.

The Company has a diversified and granular deposit base which has remained a stable funding source with noninterest-bearing deposits comprising 32% of total deposits at September 30, 2024.  Our deposit mix has remained relatively consistent, with the exception of increased growth in money market accounts, as presented in the table below.

DEPOSIT PORTFOLIO


September 30, 2024


June 30, 2024


September 30, 2023

($ in thousands)


Amount


Percentage


Amount


Percentage


Amount


Percentage














Noninterest-bearing checking accounts


$   3,350,237


32 %


$   3,339,678


32 %


$   3,503,050


34 %

Interest-bearing checking accounts


1,426,356


13 %


1,400,071


13 %


1,458,855


14 %

Money market accounts


4,189,174


40 %


4,150,429


40 %


3,635,523


36 %

Savings accounts


541,501


5 %


558,126


5 %


638,912


6 %

Other time deposits


602,148


6 %


601,212


6 %


626,870


6 %

Time deposits >$250,000


385,995


4 %


389,281


4 %


359,704


4 %

Total customer deposits


10,495,411


100 %


10,438,797


100 %


10,222,914


100 %

Brokered deposits


9,518


— %


49,032


— %


12,489


— %

Total deposits


$ 10,504,929


100 %


$ 10,487,829


100 %


$ 10,235,403


100 %

As of September 30, 2024 and June 30, 2024, estimated insured deposits totaled $6.5 billion, or 61.8%, and $6.4 billion, or 61.3%, respectively, of total deposits.  In addition, at September 30, 2024 and June 30, 2024, there were collateralized deposits of $730.8 million and $762.2 million, respectively, such that approximately 68.7% and 68.6%, respectively, of our total deposits were insured or collateralized at the current quarter end.

Capital

The Company remains well-capitalized by all regulatory standards, with an estimated total risk-based capital ratio at September 30, 2024 of 16.44%, up from both the linked quarter ratio of 16.24% and like quarter ratio of 15.26%.  The increase in risk-based capital ratio was driven by increased shareholders' equity with additional impact from shifts in the balance sheet with the reduction in loans being more than offset by higher cash balances which carry a lower risk-weighting.

The Company has elected to exclude accumulated other comprehensive income ("AOCI") related primarily to available for sale securities from common equity tier 1 capital.  AOCI is included in the Company's tangible common equity ("TCE") to tangible assets ratio (a non-GAAP financial measure) which was 8.47% at September 30, 2024, an increase of 57 basis points from the linked quarter and an increase of 183 basis points from September 30, 2023.  The increases in TCE for the current quarter and year-over-year were driven by earnings and improvements in the level of unrealized losses on the available for sale investment portfolio for the period.  Refer to Appendix B for a reconciliation of common equity to TCE and Appendix D for a calculation of the TCE ratio.

CAPITAL RATIOS


September 30,
2024
(estimated)


June 30, 2024


September 30,
2023








Tangible common equity to tangible assets (non-GAAP)


8.47 %


7.90 %


6.64 %

Common equity tier I capital ratio


14.34 %


13.99 %


12.93 %

Tier I leverage ratio


11.29 %


11.24 %


10.72 %

Tier I risk-based capital ratio


15.16 %


14.79 %


13.71 %

Total risk-based capital ratio


16.44 %


16.24 %


15.26 %

Liquidity

Liquidity is evaluated as both on-balance sheet (primarily cash and cash-equivalents, unpledged securities and other marketable assets) and off-balance sheet (readily available lines of credit and other funding sources).  The Company continues to manage liquidity sources, including unused lines of credit, at levels believed to be adequate to meet its operating needs for the foreseeable future. 

The Company's on-balance sheet liquidity ratio (net liquid assets as a percent of net liabilities) at September 30, 2024 was 17.7%.  In addition, the Company had approximately $2.4 billion in available lines of credit at that date resulting in a total liquidity ratio of 35.2%. 

About First Bancorp

First Bancorp is a bank holding company headquartered in Southern Pines, North Carolina, with total assets of $12.2 billion. Its principal activity is the ownership and operation of First Bank, a state-chartered community bank that operates 113 branches in North Carolina and South Carolina.  Since 1935, First Bank has taken a tailored approach to banking, combining best-in-class financial solutions, helpful local expertise, and technology to manage a home or business.  First Bank also provides SBA loans to customers through its nationwide network of lenders.

Please visit our website at www.LocalFirstBank.com for more information.

First Bancorp's common stock is traded on The NASDAQ Global Select Market under the symbol "FBNC." Member FDIC, Equal Housing Lender.

Caution about Forward-Looking Statements: This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, which statements are inherently subject to risks and uncertainties.  Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results or otherwise are not statements of historical fact.  Such statements are often characterized by the use of qualifying words (and their derivatives) such as "expect," "believe," "estimate," "plan," "project," "anticipate," or other words or phrases concerning opinions or judgments of the Company and its management about future events.  Factors that could influence the accuracy of such forward-looking statements include, but are not limited to, the financial success or changing strategies of the Company's customers, the Company's level of success in integrating acquisitions, actions of government regulators, the level of market interest rates, and general economic conditions.  For additional information about the factors that could affect the matters discussed in this paragraph, see the "Risk Factors" section of the Company's most recent Annual Report on Form 10-K available at www.sec.gov.  Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements.  The Company is also not responsible for changes made to this press release by wire services, internet services or other media.

 

First Bancorp and Subsidiaries

Financial Summary


CONSOLIDATED INCOME STATEMENT




For the Three Months Ended


For the Nine Months Ended

($ in thousands, except per share data - unaudited)


September
30, 2024


June 30,
2024


September
30, 2023


September
30, 2024


September
30, 2023

Interest income











Interest and fees on loans


$      111,076


$      110,425


$      106,514


$      331,346


$      308,857

Interest on investment securities:











Taxable interest income


10,779


11,291


12,936


34,798


39,415

Tax-exempt interest income


1,116


1,117


1,118


3,350


3,368

Other, principally overnight investments


8,438


5,942


3,283


17,351


10,546

Total interest income


131,409


128,775


123,851


386,845


362,186

Interest expense











Interest on deposits


46,420


44,744


32,641


130,299


78,887

Interest on borrowings


1,946


2,963


6,508


13,114


19,125

Total interest expense


48,366


47,707


39,149


143,413


98,012

Net interest income


83,043


81,068


84,702


243,432


264,174

Provision for credit losses


14,200


541


—


15,941


14,864

Net interest income after provision for credit losses


68,843


80,527


84,702


227,491


249,310

Noninterest income











Service charges on deposit accounts


4,320


4,139


4,661


12,327


13,012

Other service charges and fees


5,555


5,361


5,450


16,439


16,677

Presold mortgage loan fees and gains on sale


690


588


325


1,616


1,288

Commissions from sales of financial products


1,371


1,377


1,207


4,068


3,926

SBA loan sale gains


1,108


1,336


1,101


3,339


2,052

Bank-owned life insurance income


1,205


1,179


1,104


3,548


3,216

Securities losses, net


—


(186)


—


(1,161)


—

Other Income, net


(670)


854


1,329


900


2,777

Total noninterest income


13,579


14,648


15,177


41,076


42,948

Noninterest expenses











Salaries incentives and commissions expense


29,955


27,809


29,394


85,406


87,391

Employee benefit expense


6,495


6,703


6,539


19,467


19,097

Total personnel expense


36,450


34,512


35,933


104,873


106,488

Occupancy and equipment expense


4,856


4,850


5,003


15,294


15,042

Merger and acquisition expenses


—


—


—


—


13,506

Intangibles amortization expense


1,614


1,669


1,953


5,042


6,147

Other operating expenses


16,930


17,260


19,335


52,119


56,809

Total noninterest expenses


59,850


58,291


62,224


177,328


197,992

Income before income taxes


22,572


36,884


37,655


91,239


94,266

Income tax expense


3,892


8,172


7,762


18,575


19,809

Net income


$         18,680


$         28,712


$         29,893


$         72,664


$         74,457

Earnings per common share:











Basic


$             0.45


$             0.70


$             0.73


$             1.76


$             1.82

Diluted


0.45


0.70


0.73


1.76


1.81

 

First Bancorp and Subsidiaries

Financial Summary


CONSOLIDATED BALANCE SHEETS


($ in thousands - unaudited)


September 30,
2024


June 30, 2024


December 31,
2023


September 30,
2023

Assets









Cash and due from banks, noninterest-bearing


$             74,034


$             90,468


$           100,891


$             95,257

Due from banks, interest-bearing


670,407


517,944


136,964


178,332

Total cash and cash equivalents


744,441


608,412


237,855


273,589










Securities available for sale


1,907,458


1,867,211


2,189,379


2,100,406

Securities held to maturity


521,801


523,600


533,678


535,460

Presold mortgages and SBA loans held for sale


9,888


7,247


2,667


8,060










Loans


8,013,538


8,069,848


8,150,102


8,027,037

Allowance for credit losses on loans


(122,718)


(110,058)


(109,853)


(108,198)

Net loans


7,890,820


7,959,790


8,040,249


7,918,839










Premises and equipment, net


144,868


147,110


150,957


151,981

Accrued interest receivable


14,146


14,576


17,063


17,604

Goodwill


503,216


504,830


508,257


513,629

Other intangible assets, net


32,890


35,605


37,351


34,414

Bank-owned life insurance


187,236


186,031


183,897


182,764

Other assets


196,666


206,393


213,589


241,214

Total assets


$      12,153,430


$      12,060,805


$      12,114,942


$      11,977,960










Liabilities









Deposits:









Noninterest-bearing deposits


$        3,350,237


$        3,339,678


$        3,379,876


$        3,503,050

Interest-bearing deposits


7,154,692


7,148,151


6,651,723


6,732,353

Total deposits


10,504,929


10,487,829


10,031,599


10,235,403










Borrowings


91,694


91,513


630,158


401,843

Accrued interest payable


5,566


5,728


5,699


5,511

Other liabilities


73,716


71,393


75,106


77,520

Total liabilities


10,675,905


10,656,463


10,742,562


10,720,277










Shareholders' equity









Common stock


970,450


967,239


963,990


962,644

Retained earnings


761,881


752,294


716,420


695,791

Stock in rabbi trust assumed in acquisition


(1,148)


(1,139)


(1,385)


(1,375)

Rabbi trust obligation


1,148


1,139


1,385


1,375

Accumulated other comprehensive loss


(254,806)


(315,191)


(308,030)


(400,752)

Total shareholders' equity


1,477,525


1,404,342


1,372,380


1,257,683

Total liabilities and shareholders' equity


$      12,153,430


$      12,060,805


$      12,114,942


$      11,977,960

 

First Bancorp and Subsidiaries

Financial Summary


TREND INFORMATION




For the Three Months Ended



September
30, 2024


June 30,
 2024


March 31,
 2024


December
31, 2023


September
30, 2023












PERFORMANCE RATIOS (annualized)











Return on average assets (1)


0.61 %


0.96 %


0.84 %


0.98 %


0.99 %

Return on average common equity (2)


5.48 %


8.75 %


7.78 %


9.68 %


9.90 %

Return on average tangible common equity (3)


8.30 %


13.60 %


12.13 %


15.76 %


15.98 %












COMMON SHARE DATA











Cash dividends declared - common


$          0.22


$          0.22


$          0.22


$          0.22


$          0.22

Book value per common share


$        35.74


$        34.10


$        33.44


$        33.38


$        30.61

Tangible book value per share (4)


$        23.91


$        22.19


$        21.49


$        21.39


$        18.57

Common shares outstanding at end of period


41,340,099


41,187,943


41,156,286


41,109,987


40,085,498

Weighted average shares outstanding - diluted


41,366,743


41,262,091


41,249,636


41,207,945


41,199,058












CAPITAL INFORMATION (estimates for current quarter)









Tangible common equity to tangible assets (5)


8.47 %


7.90 %


7.62 %


7.56 %


6.64 %

Common equity tier I capital ratio


14.34 %


13.99 %


13.50 %


13.20 %


12.93 %

Total risk-based capital ratio


16.44 %


16.24 %


15.85 %


15.54 %


15.26 %












(1) Calculated by dividing annualized net income by average assets.

(2) Calculated by dividing annualized tangible net income (net income adjusted for intangible asset amortization, net of tax), by average common equity.  See Appendix A for components of the calculation.

(3) Return on average tangible common equity is a non-GAAP financial measure.  See Appendix A for components of the calculation and the reconciliation of average common equity to average TCE.

(4) Tangible book value per share is a non-GAAP financial measure.  See Appendix B for a reconciliation of common equity to tangible common equity and Appendix C for the resulting calculation.

(5) Tangible common equity ratio is a non-GAAP financial measure.  See Appendix B for a reconciliation of common equity to tangible common equity and Appendix D for the resulting calculation.

 

For the Three Months Ended

INCOME STATEMENT

($ in thousands except per share data)


September
30, 2024


June 30,
2024


March 31,
2024


December
31, 2023


September
30, 2023












Net interest income - tax-equivalent (1)


$         83,765


$         81,848


$         80,005


$         83,225


$         85,442

Taxable equivalent adjustment (1)


722


733


731


741


740

Net interest income


83,043


81,115


79,274


82,484


84,702

Provision for credit losses


14,200


541


1,200


2,950


—

Noninterest income


13,579


14,601


12,896


14,542


15,177

Merger and acquisition expenses


—


—


—


189


—

Other noninterest expense


59,850


58,291


59,187


56,197


62,224

Income before income taxes


22,572


36,884


31,783


37,690


37,655

Income tax expense


3,892


8,172


6,511


8,016


7,762

Net income


18,680


28,712


25,272


29,674


29,893












Earnings per common share - diluted


$             0.45


$             0.70


$             0.61


$             0.72


$             0.73












(1) This amount reflects the tax benefit that the Company receives related to its tax-exempt loans and securities, which carry interest rates lower than similar taxable investments due to their tax-exempt status.  This amount has been computed assuming a 23% tax rate and is reduced by the related nondeductible portion of interest expense.

 

First Bancorp and Subsidiaries

Financial Summary


AVERAGE BALANCES AND NET INTEREST INCOME ANALYSIS - QUARTERS



For the Three Months Ended


September 30, 2024


June 30, 2024


September 30, 2023

($ in thousands)

Average

Volume


Average

Rate


Interest

Earned

or Paid


Average

Volume


Average

Rate


Interest

Earned

or Paid


Average

Volume


Average

Rate


Interest

Earned

or Paid

Assets


















Loans (1) (2)

$   8,019,730


5.51 %


$      111,076


$   8,070,815


5.50 %


$      110,425


$   7,939,783


5.32 %


$      106,514

Taxable securities

2,493,924


1.72 %


10,779


2,591,617


1.75 %


11,291


2,885,443


1.78 %


12,936

Non-taxable securities

290,939


1.53 %


1,116


292,045


1.54 %


1,117


295,403


1.50 %


1,118

Short-term investments, primarily interest-bearing cash

684,634


4.90 %


8,438


507,635


4.71 %


5,942


284,678


4.58 %


3,283

Total interest-earning assets

11,489,227


4.55 %


131,409


11,462,112


4.52 %


128,775


11,405,307


4.31 %


123,851

Cash and due from banks

84,060






84,674






94,963





Premises and equipment

146,448






149,643






152,415





Other assets

406,878






358,852






353,093





Total assets

$  12,126,613






$  12,055,281






$  12,005,778





Liabilities


















Interest-bearing checking

$   1,393,611


0.77 %


$          2,688


$   1,397,367


0.70 %


$          2,424


$   1,448,603


0.55 %


$          2,007

Money market deposits

4,173,884


3.32 %


34,878


4,004,175


3.26 %


32,411


3,530,532


2.63 %


23,397

Savings deposits

549,132


0.23 %


317


570,283


0.22 %


317


646,782


0.19 %


307

Other time deposits

626,341


3.00 %


4,726


738,290


3.30 %


6,053


646,798


2.48 %


4,037

Time deposits >$250,000

390,208


3.89 %


3,811


371,471


3.83 %


3,539


359,884


3.19 %


2,893

Total interest-bearing deposits

7,133,176


2.59 %


46,420


7,081,586


2.54 %


44,744


6,632,599


1.95 %


32,641

Borrowings

97,150


7.97 %


1,946


167,976


7.09 %


2,963


438,808


5.88 %


6,508

Total interest-bearing liabilities

7,230,326


2.66 %


48,366


7,249,562


2.65 %


47,707


7,071,407


2.20 %


39,149

Noninterest-bearing checking

3,376,061






3,350,723






3,547,447





Other liabilities

75,197






76,713






83,675





Shareholders' equity

1,445,029






1,378,283






1,303,249





Total liabilities and shareholders' equity

$  12,126,613






$  12,055,281






$  12,005,778





Net yield on interest-earning assets and net interest income



2.88 %


$        83,043




2.84 %


$        81,068




2.95 %


$        84,702

Net yield on interest-earning assets and net interest income – tax-equivalent (3)



2.90 %


$        83,765




2.87 %


$        81,801




2.97 %


$        85,442

Interest rate spread



1.89 %






1.87 %






2.11 %



Average prime rate



8.43 %






8.50 %






8.43 %




(1) Average loans include nonaccruing loans, the effect of which is to lower the average rate shown.  Interest earned includes recognized net loan fees, including late fees, prepayment fees, and net deferred loan (cost)/fee amortization in the amounts of $(342,000), $(271,000)and $52,000 for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively.

(2) Includes accretion of discount on acquired loans of $2.0 million, $2.3 million and $3.2 million for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively.

(3) Includes tax-equivalent adjustments of $722,000, $733,000 and $740,000 for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023, respectively, to reflect the tax benefit that we receive related to tax-exempt securities and tax-exempt loans, which carry interest rates lower than similar taxable investments/loans due to their tax-exempt status. This amount has been computed assuming a 23% tax rate and is reduced by the related nondeductible portion of interest expense.

 

First Bancorp and Subsidiaries

Financial Summary


AVERAGE BALANCES AND NET INTEREST INCOME ANALYSIS - YEAR-TO-DATE



For the Nine Months Ended


September 30, 2024


September 30, 2023

($ in thousands)

Average

Volume


Average

Rate


Interest

Earned

or Paid


Average

Volume


Average

Rate


Interest

Earned

or Paid

Assets












Loans (1) (2)

$   8,064,480


5.49 %


$      331,346


$   7,840,344


5.27 %


$      308,857

Taxable securities

2,633,093


1.77 %


34,798


2,943,798


1.79 %


39,415

Non-taxable securities

292,056


1.53 %


3,350


296,985


1.52 %


3,368

Short-term investments, primarily interest-bearing cash

490,782


4.72 %


17,351


337,701


4.18 %


10,546

Total interest-earning assets

11,480,411


4.50 %


386,845


11,418,828


4.24 %


362,186

Cash and due from banks

86,514






94,483





Premises and equipment

149,073






152,058





Other assets

381,806






369,968





Total assets

$  12,097,804






$  12,035,337





Liabilities












Interest-bearing checking

$   1,398,137


0.71 %


$          7,472


$   1,476,979


0.38 %


$          4,205

Money market deposits

3,961,707


3.21 %


95,102


3,253,840


2.15 %


52,263

Savings deposits

567,202


0.22 %


942


683,741


0.14 %


705

Other time deposits

694,469


3.12 %


16,235


773,755


2.56 %


14,807

Time deposits >$250,000

372,561


3.78 %


10,548


338,797


2.73 %


6,907

Total interest-bearing deposits

6,994,076


2.49 %


130,299


6,527,112


1.62 %


78,887

Borrowings

280,370


6.25 %


13,114


453,694


5.64 %


19,125

Total interest-bearing liabilities

7,274,446


2.63 %


143,413


6,980,806


1.88 %


98,012

Noninterest-bearing checking

3,346,669






3,665,313





Other liabilities

76,922






91,997





Shareholders' equity

1,399,767






1,297,221





Total liabilities and shareholders' equity

$  12,097,804






$  12,035,337





Net yield on interest-earning assets and net interest income



2.83 %


$      243,432




3.09 %


$      264,174

Net yield on interest-earning assets and net interest income – tax-equivalent (3)



2.86 %


$      245,618




3.12 %


$      266,313

Interest rate spread



1.87 %






2.36 %



Average prime rate



8.48 %






8.09 %




(1) Average loans include nonaccruing loans, the effect of which is to lower the average rate shown.  Interest earned includes recognized net loan fees, including late fees, prepayment fees, and net deferred loan (cost)/fee amortization in the amounts of $(716,000) and $458,000 for the nine months ended September 30, 2024 and September 30, 2023, respectively.

(2) Includes accretion of discount on acquired loans of $6.7 million and $10.4 million for the nine months ended September 30, 2024 and September 30, 2023, respectively.

(3) Includes tax-equivalent adjustments of $2.2 million and $2.1 million for the nine months ended September 30, 2024 and September 30, 2023, respectively, to reflect the tax benefit that we receive related to tax-exempt securities and tax-exempt loans, which carry interest rates lower than similar taxable investments/loans due to their tax-exempt status. This amount has been computed assuming a 23% tax rate and is reduced by the related nondeductible portion of interest expense.

 

Reconciliation of non-GAAP measures


APPENDIX A:  Calculation of Return on TCE




For the Three Months Ended

($ in thousands)


September
30, 2024


June 30,
2024


March 31,
2024


December
31, 2023


September
30, 2023












Net Income


$         18,680


$        28,712


$        25,272


$        29,674


$        29,893

Intangible asset amortization, net of taxes


1,240


1,283


1,352


1,575


2,634

Tangible Net income


$         19,920


$        29,995


$        26,624


$        31,249


$        32,527












Average common equity


$    1,445,029


$   1,378,284


$   1,375,490


$   1,280,812


$   1,303,249

Less: Average goodwill and other intangibles, net of related taxes


(489,987)


(491,318)


(492,733)


(494,127)


(495,743)

Average tangible common equity


$       955,042


$      886,966


$      882,757


$      786,685


$      807,506












Return on average common equity


5.48 %


8.75 %


7.78 %


9.68 %


9.90 %

Return on average tangible common equity


8.30 %


13.60 %


12.13 %


15.76 %


15.98 %


APPENDIX B:  Reconciliation of Common Equity to TCE




For the Three Months Ended

($ in thousands)


September
30, 2024


June 30,
2024


March 31,
2024


December
31, 2023


September
30, 2023












Total shareholders' common equity


$     1,477,525


$   1,404,342


$   1,376,099


$   1,372,380


$   1,257,683

Less: Goodwill and other intangibles, net of related taxes


(489,139)


(490,439)


(491,740)


(493,211)


(494,681)

Tangible common equity


$        988,386


$      913,903


$      884,359


$      879,169


$      763,002


APPENDIX C:  Tangible Book Value Per Share




For the Three Months Ended

($ in thousands except per share data)


September
30, 2024


June 30,
2024


March 31,
2024


December
31, 2023


September
30, 2023












Tangible common equity (Appendix B)


$        988,386


$      913,903


$      884,359


$      879,169


$      763,002












Common shares outstanding


41,340,099


41,187,943


41,156,286


41,109,987


41,085,498

Tangible book value per common share


$           23.91


$          22.19


$          21.49


$          21.39


$          18.57


APPENDIX D:  TCE Ratio




For the Three Months Ended

($ in thousands)


September
30, 2024


June 30,
2024


March 31,
2024


December
31, 2023


September
30, 2023












Tangible common equity (Appendix B)


$       988,386


$      913,903


$      884,359


$      879,169


$      763,002












Total assets


12,153,430


12,060,805


12,091,597


12,114,942


11,977,960

Less: Goodwill and other intangibles, net of related taxes


(489,139)


(490,439)


(491,740)


(493,211)


(494,681)

Tangible assets ("TA")


$  11,664,291


$  11,570,366


$  11,599,857


$  11,621,731


$  11,483,279

TCE to TA ratio


8.47 %


7.90 %


7.62 %


7.56 %


6.64 %

 

APPENDIX E:  Adjusted EPS - diluted




For the Three
Months Ended


For the Nine
Months Ended



September 30,
2024


September 30,
2024






Net income


$             18,680


$             72,664

Impact of Hurricane Helene





Provision for credit losses


13,000


13,000

Building repairs and maintenance


300


300

Other


96


96

Total


13,396


13,396

Less, tax impact


(3,102)


(3,102)

After-tax impact of Hurricane Helene


10,294


10,294

Adjusted net income


$             28,974


$             82,958






Weighted average shares outstanding - diluted


41,366,743


41,294,137






EPS - diluted


$                 0.45


$                 1.76

Adjusted EPS - diluted


$                 0.70


$                 2.01

 

 

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SOURCE First Bancorp