SOUTHERN
PINES, N.C., Jan. 24,
2024 /PRNewswire/ -- First Bancorp (the "Company")
(NASDAQ - FBNC), the parent company of First Bank, announced today
net income of $29.7 million, or
$0.72 per diluted common share, for
the three months ended December 31,
2023 compared to $29.9
million, or $0.73 per diluted
common share, for the three months ended September 30, 2023 ("linked quarter") and
$38.4 million, or $1.08 per diluted common share, recorded in the
fourth quarter of 2022. For the twelve months ended
December 31, 2023, the Company
recorded net income of $104.1
million, or $2.53 per diluted
common share, compared to $146.9
million, or $4.12 per diluted
common share, for the twelve months ended December 31, 2022.
On January 1, 2023, the Company
completed its acquisition of GrandSouth Bancorporation
("GrandSouth"). Comparisons for the financial periods
presented are impacted by the GrandSouth acquisition which
contributed $1.02 billion in loans
and $1.05 billion in deposits.
The results for the twelve months ended December 31, 2023 include merger expenses
totaling $13.7 million and an initial
loan loss provision of $12.2 million
for acquired loans.
Richard H. Moore, CEO and
Chairman of the Company, stated, "This past year, our Company had
great success maintaining and strengthening our core banking
relationships with our customers at a time when many banks
struggled to do so. In 2024, we will continue to do what we
do best – serve our customers and our communities – all while
managing risk and taking advantage of any opportunities that come
our way. I am proud of our steady and solid performance in
2023 and look forward to continued growth in 2024."
Fourth Quarter 2023 Highlights
- Loans totaled $8.2 billion at
December 31, 2023, with growth for
the quarter of $123.1 million, an
annualized growth rate of 6.1%.
- Noninterest-bearing demand accounts remained strong at 34% of
total deposits at quarter end, consistent with the linked quarter
end.
- Total loan yield increased to 5.39%, up 77 basis points from
the fourth quarter of 2022, with accretion on purchased loans
contributing 15 basis points to loan yield.
- While deposit and borrowing rates increased during the quarter,
total cost of funds remained low at 1.64% for the quarter ended
December 31, 2023.
- The on-balance sheet liquidity ratio was 14.6% at December 31, 2023. Available off-balance sheet
sources totaled $2.2 billion at
quarter end, resulting in a total liquidity ratio of 30.4%.
- Credit quality continued to be strong with a nonperforming
assets ("NPA") to total assets ratio of 0.37% as of December 31, 2023.
- Capital remained strong with a total common equity tier 1 ratio
of 13.20% (estimated) and a total risk-based capital ratio of
15.54% (estimated) as of December 31,
2023.
Net Interest Income and Net Interest Margin
Net interest income for the fourth quarter of 2023 was
$82.5 million compared to
$84.4 million recorded in the fourth
quarter of 2022, a decrease of 2.2%. Net interest income for
the fourth quarter decreased 2.6% from the $84.7 million reported for the linked
quarter.
Average interest-earning assets for the fourth quarter of 2023
increased 13.0% from the comparable period of the prior year, with
growth primarily in loans resulting from both organic growth and
the GrandSouth acquisition. Despite the higher level of earning
assets, the market-driven increases in rates on liabilities
occurred at a more rapid pace than the increase in yields on
assets, which resulted in the reduction in net interest income and
net interest margin ("NIM") as compared to the prior
periods.
The Company's tax-equivalent NIM (calculated by dividing
tax-equivalent net interest income by average earning assets)
declined year-over-year with the fourth quarter of 2023 reporting a
tax-equivalent NIM of 2.88% compared to 3.32% for the fourth
quarter of 2022. While loan yields rose from 4.62% for the
fourth quarter of 2022 to 5.39% for the fourth quarter of 2023, the
total cost of funds increased from 0.36% for the fourth quarter of
2022 to 1.64% for the quarter ended December 31,
2023.
There has been some deceleration of the pace of increase of the
Company's cost of funds, primarily in the rate on interest-bearing
deposits which increased 19 basis points as compared to the linked
quarter, while the third quarter of 2023 realized a 27 basis point
increase as compared to the second quarter of 2023.
|
|
For the Three Months
Ended
|
YIELD
INFORMATION
|
|
December 31,
2023
|
|
September 30,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
Yield on
loans
|
|
5.39 %
|
|
5.32 %
|
|
4.62 %
|
Yield on
securities
|
|
1.76 %
|
|
1.75 %
|
|
1.74 %
|
Yield on other earning
assets
|
|
4.49 %
|
|
4.58 %
|
|
3.05 %
|
Yield on
total interest-earning assets
|
|
4.38 %
|
|
4.31 %
|
|
3.64 %
|
|
|
|
|
|
|
|
Rate on
interest-bearing deposits
|
|
2.14 %
|
|
1.95 %
|
|
0.44 %
|
Rate on other
interest-bearing liabilities
|
|
6.02 %
|
|
5.88 %
|
|
4.58 %
|
Rate on
total interest-bearing liabilities
|
|
2.43 %
|
|
2.20 %
|
|
0.60 %
|
Total cost of
funds
|
|
1.64 %
|
|
1.46 %
|
|
0.36 %
|
|
|
|
|
|
|
|
Net
interest margin (1)
|
|
2.85 %
|
|
2.95 %
|
|
3.29 %
|
Net
interest margin - tax-equivalent (2)
|
|
2.88 %
|
|
2.97 %
|
|
3.32 %
|
Average
prime rate
|
|
8.50 %
|
|
8.43 %
|
|
6.82 %
|
|
|
|
|
|
|
|
(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 fourth quarter of 2023 was
total loan discount accretion of $2.9 million compared to $1.3 million for the fourth quarter of 2022,
with the increase being primarily related to the GrandSouth
acquisition. Loan discount accretion had an 10 basis points
positive impact on the Company's NIM in the fourth quarter of 2023
compared to accretion contributing 5 basis points to NIM for the
prior year quarter.
The following table presents the impact to net interest income
of the purchase accounting adjustments for each period.
|
|
For the Three Months
Ended
|
NET INTEREST INCOME
PURCHASE ACCOUNTING ADJUSTMENTS
($ in
thousands)
|
|
December 31,
2023
|
|
September 30,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
Interest income -
increased by accretion of loan discount on acquired
loans
|
|
$
2,464
|
|
2,766
|
|
886
|
Interest income -
increased by accretion of loan discount on retained portions
of SBA loans
|
|
459
|
|
437
|
|
427
|
Total interest income
impact
|
|
2,923
|
|
3,203
|
|
1,313
|
Interest expense -
(increased) reduced by (discount accretion) premium amortization of
deposits
|
|
(495)
|
|
(709)
|
|
70
|
Interest expense -
increased by discount accretion of borrowings
|
|
(207)
|
|
(215)
|
|
(64)
|
Total net interest
expense impact
|
|
(702)
|
|
(924)
|
|
6
|
Total impact on net interest
income
|
|
$
2,221
|
|
2,279
|
|
1,319
|
Provision for Credit Losses and Credit Quality
For the three months ended December 31,
2023 and December 31, 2022, the Company recorded
$3.4 million and $4.0 million in provision for loan losses,
respectively. The provision for the current quarter was
driven by continued slow-down in prepayment speed estimates which
are a key assumption in the CECL model, combined with loan growth
and net charge-offs experienced during the quarter. In
addition, lower loss driver assumptions resulted in some offsetting
reductions to the Allowance for Credit Losses reserve
estimate.
During the fourth quarter of 2023, the Company recorded a
$0.5 million reversal of the
provision for unfunded commitments, compared to a provision for
unfunded commitments of $1.0 million for the fourth quarter of 2022.
The current quarter's reversal related primarily to a reduction in
the amount of available borrowings under lines of credit.
Also contributing was the lower loss driver assumptions noted
above. The reserve for unfunded commitments totaled
$11.4 million at
December 31, 2023 and is included in the line item "Other
Liabilities".
The combination of the above provisions for credit losses and
unfunded commitments resulted in an income statement impact of
$3.0 million for the fourth quarter
of 2023 as compared to $5.0 million
for the fourth quarter of 2022.
Asset quality remained strong with annualized net loan
charge-offs of 0.09% for the fourth quarter of 2023. Total
NPAs remained at a low level at $44.8 million at December 31, 2023, or
0.37% of total assets. This is compared to $38.3 million, or 0.36% of total assets, at
December 31, 2022 with the increase year-over-year being
attributable primarily to activity from acquired loan portfolios
and the SBA loan portfolio. Nonaccrual loans increased
$5.3 million from the linked
quarter related in large part to one SBA loan which is
guaranteed.
The following table presents the summary of NPAs and asset
quality ratios for each period.
ASSET QUALITY
DATA
($ in
thousands)
|
|
December 31,
2023
|
|
September 30,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
Nonperforming
assets
|
|
|
|
|
|
|
Nonaccrual
loans
|
|
$
32,208
|
|
26,884
|
|
28,514
|
Modifications to
borrowers in financial distress
|
|
11,719
|
|
10,723
|
|
—
|
Troubled debt
restructurings - accruing (1)
|
|
—
|
|
—
|
|
9,121
|
Total nonperforming
loans
|
|
43,927
|
|
37,607
|
|
37,635
|
Foreclosed real
estate
|
|
862
|
|
1,235
|
|
658
|
Total nonperforming
assets
|
|
$
44,789
|
|
38,842
|
|
38,293
|
|
|
|
|
|
|
|
Asset Quality
Ratios
|
|
|
|
|
|
|
Quarterly net
charge-offs (recoveries) to average loans - annualized
|
|
0.09 %
|
|
0.11 %
|
|
(0.02) %
|
Nonperforming loans to
total loans
|
|
0.54 %
|
|
0.47 %
|
|
0.56 %
|
Nonperforming assets to
total assets
|
|
0.37 %
|
|
0.32 %
|
|
0.36 %
|
Allowance for credit
losses to total loans
|
|
1.35 %
|
|
1.35 %
|
|
1.36 %
|
|
|
|
|
|
|
|
(1) The Company
implemented ASU 2022-02 effective January 1, 2023 eliminating TDR
accounting.
|
|
Noninterest Income
Total noninterest income for the fourth quarter of 2023 was
$14.5 million, a 0.1% decrease
from the $14.6 million recorded
for the fourth quarter of 2022 and a 4.2% decrease from the linked
quarter. The GrandSouth acquisition was a primary factor
driving increases from the prior year in Service Charges on Deposit
Accounts related to the higher number of customer accounts and
activity generating revenue. The reduction in Other Service
Charges, Commissions and Fees from the linked quarter and the prior
year quarter was driven by lower net bankcard revenues on reduced
incentives received from Mastercard and higher processing fees.
Noninterest Expenses
Noninterest expenses amounted to $56.4 million for the fourth quarter of 2023
compared to $62.2 million for
the linked quarter and $45.7 million for the fourth quarter of
2022. The $5.8 million or 9.4%
reduction in noninterest expense from the linked quarter was driven
by (1) annual adjustments to the Company's pension and SERP benefit
plans which resulted in reducing expense approximately $2.2 million during the period, and (2) reduction
in bonus and incentive accruals of $2.6
million related to performance results against
goals.
The 23.5% increase in total noninterest expenses from the prior
year period was related in large part to the acquisition of eight
GrandSouth branch locations and related branch and support
personnel. This transaction was the primary driver of (1)
higher compensation expense which increased from the fourth quarter
of 2022 by $3.4 million, or 11.2%;
(2) higher occupancy and equipment expense which increased
$1.5 million, or 34.2%; and (3)
increased intangible amortization of $1.0
million, or 125.0%, related to the core deposit intangibles
added with the GrandSouth acquisition.
In addition, other operating expenses increased $4.9 million, or 49.0%, from the fourth quarter
of 2022, driven by: (1) approximately $1.6
million in higher data processing and software expense for
the additional transactions and account volumes resulting from the
GrandSouth transaction, combined with investments in new software
systems; and (2) FDIC insurance increases totaling approximately
$1.0 million related to the deposits
acquired from GrandSouth and the general FDIC rate increase
effective January 1, 2023. The
remaining increase between the fourth quarter of 2022 and the
fourth quarter of 2023 was primarily related to 2022 year end
accrual reductions which resulted in lower expense in the fourth
quarter of 2022 totaling approximately $3.6
million. The fourth quarter of 2023 also include year
end adjustments to the Company's pension and SERP benefit plans
which resulted in lower expense of approximately $1.6 million as compared the prior year
period.
Balance Sheet
Total assets at December 31, 2023 amounted to $12.1 billion, an increase of $137.0 million from the linked quarter and
growing 14.0% from a year earlier. The increase from the
linked quarter was primarily related to higher loan and borrowing
balances, somewhat offset by lower deposit balances. The
growth from a year earlier was driven by the acquisition of
GrandSouth, combined with organic loan and deposit growth during
the period.
Quarterly average balances for key balance sheet accounts are
presented below.
|
|
For the Three Months
Ended
|
AVERAGE
BALANCES
($ in
thousands)
|
|
December 31,
2023
|
|
December 31,
2022
|
|
Change
4Q23 vs 4Q22
|
|
|
|
|
|
|
|
Total assets
|
|
$ 12,026,195
|
|
10,579,187
|
|
13.7 %
|
Investment securities,
at amortized cost
|
|
3,143,756
|
|
3,325,652
|
|
(5.5) %
|
Loans
|
|
8,087,450
|
|
6,576,415
|
|
23.0 %
|
Earning
assets
|
|
11,477,007
|
|
10,161,108
|
|
13.0 %
|
Deposits
|
|
10,131,094
|
|
9,275,909
|
|
9.2 %
|
Interest-bearing
liabilities
|
|
7,204,165
|
|
5,779,958
|
|
24.6 %
|
Shareholders'
equity
|
|
1,280,812
|
|
1,003,031
|
|
27.7 %
|
Total investment securities were $2.7 billion at December 31, 2023, an
increase of $87.2 million from
the linked quarter and a decrease of $133.1
million from December 31, 2022. The Company made
no notable purchases of investment securities during 2023 and
continues to utilize cash flows from amortizing investments to fund
loan growth and fluctuations in deposits. The increase in
balances experienced from the linked quarter was related to an
improvement in the level of unrealized loss on available for sale
securities which decreased $120.9
million from the linked quarter and decreased $43.3 million from the prior year end.
Total unrealized loss on available for sale investment securities
was $400.7 million at
December 31, 2023. The Company has the intent to hold,
and does not expect it will be required to sell, investments with
unrealized losses until maturity or recovery of the amortized cost
as market conditions change.
Total loans amounted to $8.2 billion at December 31, 2023, an
increase of $123.1 million from the
linked quarter and $1.5 billion, or
22.3%, from December 31, 2022. Excluding the GrandSouth
acquisition, organic loan growth was $464.9 million for 2023, representing an
annualized growth rate of 6.0%.
As presented below, our total loan portfolio mix has remained
consistent. There were no notable concentrations in
geographies or industries, including in office or hospitality
categories at year end. The Company's exposure to non-owner
occupied office loans represented approximately 5.6% of the total
portfolio at December 31, 2023, with the largest loan being
$27.2 million and an average loan
outstanding amount of $1.3 million. Non-owner occupied
office loans are generally in non-metro markets and the top 10
loans in this category represent less than 2% of the total loan
portfolio.
The following table presents the balance and portfolio
percentage by loan category for each period.
|
|
December 31,
2023
|
|
September 30,
2023
|
|
December 31,
2022
|
($ in
thousands)
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
|
$ 905,862
|
|
11 %
|
|
893,910
|
|
11 %
|
|
641,941
|
|
9 %
|
Construction,
development & other land loans
|
|
992,980
|
|
12 %
|
|
1,008,289
|
|
13 %
|
|
934,176
|
|
14 %
|
Commercial real estate
- owner occupied
|
|
1,259,022
|
|
16 %
|
|
1,252,259
|
|
16 %
|
|
1,036,270
|
|
16 %
|
Commercial real estate
- non-owner occupied
|
|
2,528,060
|
|
31 %
|
|
2,509,317
|
|
31 %
|
|
2,123,811
|
|
32 %
|
Multi-family real
estate
|
|
421,376
|
|
5 %
|
|
405,161
|
|
5 %
|
|
350,180
|
|
5 %
|
Residential 1-4 family
real estate
|
|
1,639,469
|
|
20 %
|
|
1,560,140
|
|
19 %
|
|
1,195,785
|
|
18 %
|
Home equity loans/lines
of credit
|
|
335,068
|
|
4 %
|
|
331,108
|
|
4 %
|
|
323,726
|
|
5 %
|
Consumer
loans
|
|
68,443
|
|
1 %
|
|
67,169
|
|
1 %
|
|
60,659
|
|
1 %
|
Loans,
gross
|
|
8,150,280
|
|
100 %
|
|
8,027,353
|
|
100 %
|
|
6,666,548
|
|
100 %
|
Unamortized net
deferred loan fees
|
|
(178)
|
|
|
|
(316)
|
|
|
|
(1,403)
|
|
|
Total loans
|
|
$
8,150,102
|
|
|
|
8,027,037
|
|
|
|
6,665,145
|
|
|
Total deposits were $10.0 billion at December 31, 2023, an
increase of $804.1 million, or
8.7%, from December 31, 2022. The year-over-year change
represents an increase in market deposits of $1.1 billion, resulting primarily from the
GrandSouth acquisition, partially offset by intentional declines in
brokered deposits of $249.3
million. Organic market deposits (excluding the
acquired deposits and brokered deposits) contracted $203.9 million for the fourth quarter of
2023 and grew $16.8 million
since the prior year end, which represents a growth rate of
0.2%.
The Company has a diversified and granular deposit base which
has remained a stable source of funding. At quarter end,
noninterest-bearing deposits accounted for 34% of total deposits,
consistent with the linked quarter. As of December 31,
2023, the estimated insured deposits totaled $6.3 billion or 63.3% of total deposits. In
addition, there were collateralized deposits at that date of
$820.9 million such that
approximately 71.5% of our total deposits were insured or
collateralized at the current quarter end.
Our deposit mix has remained consistent historically and has not
changed significantly with the addition of GrandSouth, with the
exception of some shift to money market accounts, as presented in
the table below.
|
|
December 31,
2023
|
|
September 30,
2023
|
|
December 31,
2022
|
($ in
thousands)
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
checking accounts
|
|
$
3,379,876
|
|
34 %
|
|
3,503,050
|
|
34 %
|
|
3,566,003
|
|
39 %
|
Interest-bearing
checking accounts
|
|
1,411,142
|
|
14 %
|
|
1,458,855
|
|
14 %
|
|
1,514,166
|
|
16 %
|
Money market
accounts
|
|
3,653,506
|
|
36 %
|
|
3,635,523
|
|
36 %
|
|
2,416,146
|
|
26 %
|
Savings
accounts
|
|
608,380
|
|
6 %
|
|
638,912
|
|
6 %
|
|
728,641
|
|
8 %
|
Other time
deposits
|
|
610,887
|
|
6 %
|
|
626,870
|
|
6 %
|
|
464,343
|
|
5 %
|
Time deposits
>$250,000
|
|
355,209
|
|
4 %
|
|
359,704
|
|
4 %
|
|
276,319
|
|
3 %
|
Total market
deposits
|
|
10,019,000
|
|
100 %
|
|
10,222,914
|
|
100 %
|
|
8,965,618
|
|
97 %
|
Brokered
deposits
|
|
12,599
|
|
— %
|
|
12,489
|
|
— %
|
|
261,911
|
|
3 %
|
Total
deposits
|
|
$ 10,031,599
|
|
100 %
|
|
10,235,403
|
|
100 %
|
|
9,227,529
|
|
100 %
|
Capital
The Company remains well-capitalized by all regulatory
standards, with an estimated total risk-based capital ratio at
December 31, 2023 of 15.54%, up from the linked quarter ratio
of 15.26% and 15.09% reported at December 31, 2022.
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 which was 7.42% at December 31, 2023, an
increase of 93 basis points from the linked quarter and an increase
of 103 basis points from the prior year period. The increases
in TCE for the current quarter and year-over-year were driven by
the improvement in the AOCI level related to the decrease in the
unrealized loss on available for sale securities, as well as
earnings for the year. Refer to Appendix B for a
reconciliation of common equity to TCE.
CAPITAL
RATIOS
|
|
December 31,
2023
(estimated)
|
|
September 30,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
Tangible common equity
to tangible assets (non-GAAP)
|
|
7.42 %
|
|
6.49 %
|
|
6.39 %
|
Common equity tier I
capital ratio
|
|
13.20 %
|
|
12.93 %
|
|
13.02 %
|
Tier I leverage
ratio
|
|
10.91 %
|
|
10.72 %
|
|
10.51 %
|
Tier I risk-based
capital ratio
|
|
13.99 %
|
|
13.71 %
|
|
13.83 %
|
Total risk-based
capital ratio
|
|
15.54 %
|
|
15.26 %
|
|
15.09 %
|
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 or
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 December 31, 2023 was 14.6%. In addition,
the Company had approximately $2.2
billion in available lines of credit at that date resulting
in a total liquidity ratio of 30.4%.
About First Bancorp
First Bancorp is a bank holding company headquartered in
Southern Pines, North Carolina,
with total assets of $12.1 billion. Its principal activity is the
ownership and operation of First Bank, a state-chartered community
bank that operates 118 branches in North
Carolina and South Carolina. First Bank also provides
SBA loans to customers through its nationwide network of lenders -
for more information on First Bank's SBA lending capabilities,
please visit www.firstbanksba.com. First Bancorp's common
stock is traded on The NASDAQ Global Select Market under the symbol
"FBNC."
Please visit our website at www.LocalFirstBank.com.
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 Twelve Months
Ended
|
($ in thousands,
except per share data - unaudited)
|
|
December 31,
2023
|
|
September 30,
2023
|
|
December 31,
2022
|
|
December 31,
2023
|
|
December 31,
2022
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
Interest
and fees on loans
|
|
$
109,811
|
|
106,514
|
|
76,509
|
|
418,668
|
|
278,027
|
Interest
on investment securities
|
|
13,978
|
|
14,054
|
|
14,611
|
|
56,761
|
|
57,923
|
Other
interest income
|
|
2,784
|
|
3,283
|
|
1,991
|
|
13,330
|
|
5,007
|
Total interest
income
|
|
126,573
|
|
123,851
|
|
93,111
|
|
488,759
|
|
340,957
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Interest
on deposits
|
|
35,979
|
|
32,641
|
|
6,145
|
|
114,866
|
|
11,349
|
Interest
on borrowings
|
|
8,110
|
|
6,508
|
|
2,594
|
|
27,235
|
|
4,754
|
Total interest
expense
|
|
44,089
|
|
39,149
|
|
8,739
|
|
142,101
|
|
16,103
|
Net
interest income
|
|
82,484
|
|
84,702
|
|
84,372
|
|
346,658
|
|
324,854
|
Provision for loan
losses
|
|
3,400
|
|
1,200
|
|
4,000
|
|
19,750
|
|
12,600
|
(Reversal of) provision
for unfunded commitments
|
|
(450)
|
|
(1,200)
|
|
1,000
|
|
(1,937)
|
|
(200)
|
Total provision for credit
losses
|
|
2,950
|
|
—
|
|
5,000
|
|
17,813
|
|
12,400
|
Net
interest income after provision for credit losses
|
|
79,534
|
|
84,702
|
|
79,372
|
|
328,845
|
|
312,454
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
Service
charges on deposit accounts
|
|
4,413
|
|
4,661
|
|
4,116
|
|
16,800
|
|
15,523
|
Other
service charges, commissions, and fees
|
|
4,968
|
|
5,450
|
|
5,094
|
|
22,270
|
|
26,294
|
Fees from
presold mortgage loans
|
|
325
|
|
325
|
|
151
|
|
1,613
|
|
2,102
|
Commissions from sales of financial products
|
|
1,577
|
|
1,207
|
|
1,708
|
|
5,503
|
|
5,195
|
SBA
consulting fees
|
|
395
|
|
478
|
|
645
|
|
1,803
|
|
2,608
|
SBA loan
sale gains
|
|
437
|
|
1,101
|
|
495
|
|
2,489
|
|
5,076
|
Bank-owned
life insurance income
|
|
1,134
|
|
1,104
|
|
967
|
|
4,350
|
|
3,847
|
Other
gains, net
|
|
1,293
|
|
851
|
|
1,382
|
|
2,662
|
|
7,340
|
Total noninterest
income
|
|
14,542
|
|
15,177
|
|
14,558
|
|
57,490
|
|
67,985
|
Noninterest
expenses
|
|
|
|
|
|
|
|
|
|
|
Salaries
expense
|
|
26,985
|
|
29,394
|
|
24,652
|
|
114,377
|
|
96,321
|
Employee
benefit expense
|
|
6,377
|
|
6,539
|
|
5,353
|
|
25,474
|
|
21,397
|
Occupancy
and equipment related expense
|
|
5,948
|
|
5,003
|
|
4,433
|
|
20,990
|
|
18,604
|
Merger and
acquisition expenses
|
|
189
|
|
—
|
|
303
|
|
13,695
|
|
5,072
|
Intangibles amortization expense
|
|
1,856
|
|
1,953
|
|
825
|
|
8,003
|
|
3,684
|
Other
operating expenses
|
|
15,031
|
|
19,335
|
|
10,091
|
|
71,840
|
|
50,142
|
Total noninterest
expenses
|
|
56,386
|
|
62,224
|
|
45,657
|
|
254,379
|
|
195,220
|
Income before income
taxes
|
|
37,690
|
|
37,655
|
|
48,273
|
|
131,956
|
|
185,219
|
Income tax
expense
|
|
8,016
|
|
7,762
|
|
9,840
|
|
27,825
|
|
38,283
|
Net income
|
|
$
29,674
|
|
29,893
|
|
38,433
|
|
104,131
|
|
146,936
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted
|
|
$
0.72
|
|
0.73
|
|
1.08
|
|
2.53
|
|
4.12
|
First Bancorp and
Subsidiaries
Financial
Summary
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
($ in thousands -
unaudited)
|
|
At December 31,
2023
|
|
At September 30,
2023
|
|
At December 31,
2022
|
Assets
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
100,891
|
|
95,257
|
|
101,133
|
Interest-bearing
deposits with banks
|
|
136,964
|
|
178,332
|
|
169,185
|
Total cash and cash
equivalents
|
|
237,855
|
|
273,589
|
|
270,318
|
|
|
|
|
|
|
|
Investment
securities
|
|
2,723,057
|
|
2,635,866
|
|
2,856,193
|
Presold mortgages and
SBA loans held for sale
|
|
2,667
|
|
8,060
|
|
1,282
|
|
|
|
|
|
|
|
Loans
|
|
8,150,102
|
|
8,027,037
|
|
6,665,145
|
Allowance for credit
losses on loans
|
|
(109,853)
|
|
(108,198)
|
|
(90,967)
|
Net loans
|
|
8,040,249
|
|
7,918,839
|
|
6,574,178
|
|
|
|
|
|
|
|
Premises and
equipment
|
|
150,957
|
|
151,981
|
|
134,187
|
Operating right-of-use
lease assets
|
|
17,063
|
|
17,604
|
|
18,733
|
Goodwill and other
intangible assets
|
|
511,608
|
|
513,629
|
|
376,938
|
Bank-owned life
insurance
|
|
183,897
|
|
182,764
|
|
164,592
|
Other assets
|
|
247,589
|
|
275,628
|
|
228,628
|
Total assets
|
|
$ 12,114,942
|
|
11,977,960
|
|
10,625,049
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Noninterest-bearing checking
accounts
|
|
$
3,379,876
|
|
3,503,050
|
|
3,566,003
|
Interest-bearing deposit
accounts
|
|
6,651,723
|
|
6,732,353
|
|
5,661,526
|
Total deposits
|
|
10,031,599
|
|
10,235,403
|
|
9,227,529
|
|
|
|
|
|
|
|
Borrowings
|
|
630,158
|
|
401,843
|
|
287,507
|
Operating lease
liabilities
|
|
17,833
|
|
18,348
|
|
19,391
|
Other
liabilities
|
|
62,972
|
|
64,683
|
|
59,026
|
Total liabilities
|
|
10,742,562
|
|
10,720,277
|
|
9,593,453
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
Common stock
|
|
963,990
|
|
962,644
|
|
725,153
|
Retained
earnings
|
|
716,420
|
|
695,791
|
|
648,418
|
Stock in rabbi trust
assumed in acquisition
|
|
(1,385)
|
|
(1,375)
|
|
(1,585)
|
Rabbi trust
obligation
|
|
1,385
|
|
1,375
|
|
1,585
|
Accumulated other
comprehensive loss
|
|
(308,030)
|
|
(400,752)
|
|
(341,975)
|
Total shareholders'
equity
|
|
1,372,380
|
|
1,257,683
|
|
1,031,596
|
Total liabilities and
shareholders' equity
|
|
$ 12,114,942
|
|
11,977,960
|
|
10,625,049
|
First Bancorp and
Subsidiaries
Financial
Summary
|
|
TREND
INFORMATION
|
|
|
|
For the Three Months
Ended
|
|
|
December 31,
2023
|
|
September 30,
2023
|
|
June 30,
2023
|
|
March 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE
RATIOS (annualized)
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (1)
|
|
0.98 %
|
|
0.99 %
|
|
0.98 %
|
|
0.51 %
|
|
1.44 %
|
Return on average
common equity (2)
|
|
9.19 %
|
|
9.10 %
|
|
8.97 %
|
|
4.83 %
|
|
15.20 %
|
Return on average
tangible common equity (3)
|
|
15.33 %
|
|
15.05 %
|
|
14.79 %
|
|
8.16 %
|
|
20.96 %
|
|
|
|
|
|
|
|
|
|
|
|
COMMON SHARE
DATA
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
- common
|
|
$
0.22
|
|
0.22
|
|
0.22
|
|
0.22
|
|
0.22
|
Book value per common
share
|
|
$
33.38
|
|
30.61
|
|
31.59
|
|
31.72
|
|
28.89
|
Tangible book value per
share (4)
|
|
$
20.94
|
|
18.11
|
|
19.03
|
|
19.08
|
|
18.34
|
Common shares
outstanding at end of period
|
|
41,109,987
|
|
41,085,498
|
|
41,082,678
|
|
40,986,990
|
|
35,704,154
|
Weighted average shares
outstanding - diluted
|
|
41,207,945
|
|
41,199,058
|
|
41,129,100
|
|
41,112,692
|
|
35,614,972
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL INFORMATION
(estimates for current quarter)
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity
to tangible assets (5)
|
|
7.42 %
|
|
6.49 %
|
|
6.79 %
|
|
6.60 %
|
|
6.39 %
|
Common equity tier I
capital ratio
|
|
13.20 %
|
|
12.93 %
|
|
12.75 %
|
|
12.53 %
|
|
13.02 %
|
Total risk-based
capital ratio
|
|
15.54 %
|
|
15.26 %
|
|
15.09 %
|
|
14.88 %
|
|
15.09 %
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated by
dividing annualized net income by average assets.
|
(2) Calculated by
dividing annualized net income by average common equity.
|
(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)
|
|
December 31,
2023
|
|
September 30,
2023
|
|
June 30,
2023
|
|
March 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income -
tax-equivalent (1)
|
|
$
83,225
|
|
85,442
|
|
87,684
|
|
93,186
|
|
85,094
|
Taxable equivalent
adjustment (1)
|
|
741
|
|
740
|
|
699
|
|
700
|
|
722
|
Net interest
income
|
|
82,484
|
|
84,702
|
|
86,985
|
|
92,486
|
|
84,372
|
Provision for loan
losses
|
|
3,400
|
|
1,200
|
|
3,700
|
|
11,451
|
|
4,000
|
(Reversal of) provision
for unfunded commitments
|
|
(450)
|
|
(1,200)
|
|
(1,339)
|
|
1,051
|
|
1,000
|
Noninterest
income
|
|
14,542
|
|
15,177
|
|
14,235
|
|
13,536
|
|
14,558
|
Merger and acquisition
costs
|
|
189
|
|
—
|
|
1,334
|
|
12,182
|
|
303
|
Other noninterest
expense
|
|
56,197
|
|
62,224
|
|
60,259
|
|
61,993
|
|
45,354
|
Income before income
taxes
|
|
37,690
|
|
37,655
|
|
37,266
|
|
19,345
|
|
48,273
|
Income tax
expense
|
|
8,016
|
|
7,762
|
|
7,863
|
|
4,184
|
|
9,840
|
Net income
|
|
29,674
|
|
29,893
|
|
29,403
|
|
15,161
|
|
38,433
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted
|
|
$
0.72
|
|
0.73
|
|
0.71
|
|
0.37
|
|
1.08
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
APPENDIX A:
Calculation of Return on TCE
|
|
|
|
For the Three Months
Ended
|
($ in
thousands)
|
|
December 31,
2023
|
|
September 30,
2023
|
|
June 30,
2023
|
|
March 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$ 29,674
|
|
29,893
|
|
29,403
|
|
15,161
|
|
38,433
|
|
|
|
|
|
|
|
|
|
|
|
Average common
equity
|
|
1,280,812
|
|
1,303,249
|
|
1,314,650
|
|
1,273,435
|
|
1,003,023
|
Less: Average goodwill and other intangibles
|
|
(512,876)
|
|
(515,111)
|
|
(517,201)
|
|
(519,639)
|
|
(377,793)
|
Average tangible common
equity
|
|
$
767,936
|
|
788,138
|
|
797,449
|
|
753,796
|
|
625,230
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
common equity
|
|
9.19 %
|
|
9.10 %
|
|
8.97 %
|
|
4.83 %
|
|
15.20 %
|
Return on average
tangible common equity
|
|
15.33 %
|
|
15.05 %
|
|
14.79 %
|
|
8.16 %
|
|
24.39 %
|
APPENDIX B:
Reconciliation of Common Equity to TCE
|
|
|
|
For the Three Months
Ended
|
($ in
thousands)
|
|
December 31,
2023
|
|
September 30,
2023
|
|
June 30,
2023
|
|
March 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
common equity
|
|
$
1,372,380
|
|
1,257,683
|
|
1,297,642
|
|
1,299,961
|
|
1,031,596
|
Less: Goodwill and
other intangibles
|
|
(511,608)
|
|
(513,629)
|
|
(515,847)
|
|
(518,012)
|
|
(376,938)
|
Tangible common
equity
|
|
$ 860,772
|
|
744,054
|
|
781,795
|
|
781,949
|
|
654,658
|
APPENDIX C:
Tangible Book Value Per Share
|
|
|
|
For the Three Months
Ended
|
($ in thousands
except per share data)
|
|
December 31,
2023
|
|
September 30,
2023
|
|
June 30,
2023
|
|
March 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity
(Appendix B)
|
|
$
860,772
|
|
744,054
|
|
781,795
|
|
781,949
|
|
654,658
|
|
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding
|
|
41,109,987
|
|
41,085,498
|
|
41,082,678
|
|
40,986,990
|
|
35,704,154
|
Tangible book value per
common share
|
|
$
20.94
|
|
18.11
|
|
19.03
|
|
19.08
|
|
18.34
|
APPENDIX D:
TCE Ratio
|
|
|
|
For the Three Months
Ended
|
($ in
thousands)
|
|
December 31,
2023
|
|
September 30,
2023
|
|
June 30,
2023
|
|
March 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity
(Appendix B)
|
|
$
860,772
|
|
744,054
|
|
781,795
|
|
781,949
|
|
654,658
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
12,114,942
|
|
11,977,960
|
|
12,032,998
|
|
12,363,149
|
|
10,625,049
|
Less: Goodwill and
other intangibles
|
|
(511,608)
|
|
(513,629)
|
|
(515,847)
|
|
(518,012)
|
|
(376,938)
|
Tangible assets
("TA")
|
|
$
11,603,334
|
|
11,464,331
|
|
11,517,151
|
|
11,845,137
|
|
10,248,111
|
TCE to TA
ratio
|
|
7.42 %
|
|
6.49 %
|
|
6.79 %
|
|
6.60 %
|
|
6.39 %
|
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SOURCE First Bancorp