false000081158900008115892024-01-242024-01-24

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 __________________
Form 8-K
__________________
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 24, 2024
 
First Bancorp
(Exact Name of Registrant as Specified in its Charter)
     
North Carolina 0-15572 56-1421916
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
     
       300 SW Broad Street,
Southern Pines, NC  28387
(Address of Principal Executive Offices)  (Zip Code)
 
(910) 246-2500
____________________
(Registrant’s telephone number, including area code)
 
Not Applicable
___________________
(Former Name or Former Address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:

Title of each class            Trading symbol            Name of each exchange on which registered:
Common Stock, No Par Value        FBNC                The Nasdaq Global Select Market
1

First Bancorp
INDEX
 
 Page
  
Item 2.02 – Results of Operations and Financial Condition3 
Item 9.01 – Financial Statements and Exhibits3 
  
Signatures3 
  
4 

2

Item 2.02 - Results of Operations and Financial Condition
On January 24, 2024, First Bancorp (the “Registrant” or “Company”) issued an earnings release to announce its financial results for the three month period ended December 31, 2023. The earnings release contains forward-looking statements regarding the Company and includes cautionary language identifying important factors that could cause actual results to differ materially from those anticipated. The earnings release is furnished as Exhibit 99.1. Consequently, it is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Such materials may only be incorporated by reference into another filing under the Exchange Act or Securities Act of 1933 if such subsequent filing specifically references this Form 8-K.



Item 9.01 – Financial Statements and Exhibits
(d) Exhibits


Disclosures About Forward Looking Statements
This news 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 statements 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. 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 the press release by wire services, internet services or other media.




Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
       
      First Bancorp
       
  January 24, 2024  
By:		  
/s/ Richard H. Moore
      Richard H. Moore
      Chief Executive Officer

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News Release

For Immediate Release:For More Information, Contact:
January 24, 2024
Hillary Kestler
704-644-4137

First Bancorp Reports Fourth Quarter and Annual Results

SOUTHERN PINES, N.C. - 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.

1

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 INFORMATIONDecember 31, 2023September 30, 2023December 31, 2022
Yield on loans5.39%5.32%4.62%
Yield on securities1.76%1.75%1.74%
Yield on other earning assets4.49%4.58%3.05%
   Yield on total interest-earning assets4.38%4.31%3.64%
Rate on interest-bearing deposits2.14%1.95%0.44%
Rate on other interest-bearing liabilities6.02%5.88%4.58%
   Rate on total interest-bearing liabilities2.43%2.20%0.60%
     Total cost of funds1.64%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 rate8.50%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.

2

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, 2023September 30, 2023December 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 loans459 437 427 
Total interest income impact2,923 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.

3

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

ASSET QUALITY DATA
($ in thousands)
December 31, 2023September 30, 2023December 31, 2022
Nonperforming assets
Nonaccrual loans$32,208 26,884 28,514 
Modifications to borrowers in financial distress11,719 10,723 — 
Troubled debt restructurings - accruing (1)
— — 9,121 
Total nonperforming loans43,927 37,607 37,635 
Foreclosed real estate862 1,235 658 
Total nonperforming assets$44,789 38,842 38,293 
Asset Quality Ratios
Quarterly net charge-offs (recoveries) to average loans - annualized0.09 %0.11 %(0.02)%
Nonperforming loans to total loans0.54 %0.47 %0.56 %
Nonperforming assets to total assets0.37 %0.32 %0.36 %
Allowance for credit losses to total loans1.35 %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.

4

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, 2023December 31, 2022Change
4Q23 vs 4Q22
Total assets$12,026,195 10,579,187 13.7%
Investment securities, at amortized cost3,143,756 3,325,652 (5.5)%
Loans8,087,450 6,576,415 23.0%
Earning assets11,477,007 10,161,108 13.0%
Deposits10,131,094 9,275,909 9.2%
Interest-bearing liabilities7,204,165 5,779,958 24.6%
Shareholders’ equity1,280,812 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.

5

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

December 31, 2023September 30, 2023December 31, 2022
($ in thousands)AmountPercentageAmountPercentageAmountPercentage
Commercial and industrial$905,862 11 %893,910 11 %641,941 9 %
Construction, development & other land loans992,980 12 %1,008,289 13 %934,176 14 %
Commercial real estate - owner occupied1,259,022 16 %1,252,259 16 %1,036,270 16 %
Commercial real estate - non-owner occupied2,528,060 31 %2,509,317 31 %2,123,811 32 %
Multi-family real estate421,376 5 %405,161 5 %350,180 5 %
Residential 1-4 family real estate1,639,469 20 %1,560,140 19 %1,195,785 18 %
Home equity loans/lines of credit335,068 4 %331,108 4 %323,726 5 %
Consumer loans68,443 1 %67,169 1 %60,659 1 %
Loans, gross8,150,280 100 %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, 2023September 30, 2023December 31, 2022
($ in thousands)AmountPercentageAmountPercentageAmountPercentage
Noninterest-bearing checking accounts$3,379,876 34 %3,503,050 34 %3,566,003 39 %
Interest-bearing checking accounts1,411,142 14 %1,458,855 14 %1,514,166 16 %
Money market accounts3,653,506 36 %3,635,523 36 %2,416,146 26 %
Savings accounts608,380 6 %638,912 6 %728,641 8 %
Other time deposits610,887 6 %626,870 6 %464,343 5 %
Time deposits >$250,000355,209 4 %359,704 4 %276,319 3 %
Total market deposits10,019,000 100 %10,222,914 100 %8,965,618 97 %
Brokered deposits12,599 — %12,489 — %261,911 3 %
Total deposits$10,031,599 100 %10,235,403 100 %9,227,529 100 %


6

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 RATIOSDecember 31, 2023 (estimated)September 30, 2023December 31, 2022
Tangible common equity to tangible assets (non-GAAP)7.42%6.49%6.39%
Common equity tier I capital ratio13.20%12.93%13.02%
Tier I leverage ratio10.91%10.72%10.51%
Tier I risk-based capital ratio13.99%13.71%13.83%
Total risk-based capital ratio15.54%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%.
7




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.

8

First Bancorp and Subsidiaries
Financial Summary
CONSOLIDATED INCOME STATEMENT
For the Three Months EndedFor the Twelve Months Ended
($ in thousands, except per share data - unaudited)December 31, 2023September 30, 2023December 31, 2022December 31, 2023December 31, 2022
Interest income
   Interest and fees on loans$109,811 106,514 76,509 418,668 278,027 
   Interest on investment securities13,978 14,054 14,611 56,761 57,923 
   Other interest income2,784 3,283 1,991 13,330 5,007 
      Total interest income126,573 123,851 93,111 488,759 340,957 
Interest expense
   Interest on deposits35,979 32,641 6,145 114,866 11,349 
   Interest on borrowings8,110 6,508 2,594 27,235 4,754 
      Total interest expense44,089 39,149 8,739 142,101 16,103 
        Net interest income82,484 84,702 84,372 346,658 324,854 
Provision for loan losses3,400 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 losses2,950 — 5,000 17,813 12,400 
        Net interest income after provision for credit losses79,534 84,702 79,372 328,845 312,454 
Noninterest income
   Service charges on deposit accounts4,413 4,661 4,116 16,800 15,523 
   Other service charges, commissions, and fees4,968 5,450 5,094 22,270 26,294 
   Fees from presold mortgage loans325 325 151 1,613 2,102 
   Commissions from sales of financial products1,577 1,207 1,708 5,503 5,195 
   SBA consulting fees395 478 645 1,803 2,608 
   SBA loan sale gains437 1,101 495 2,489 5,076 
   Bank-owned life insurance income1,134 1,104 967 4,350 3,847 
   Other gains, net1,293 851 1,382 2,662 7,340 
      Total noninterest income14,542 15,177 14,558 57,490 67,985 
Noninterest expenses
   Salaries expense26,985 29,394 24,652 114,377 96,321 
   Employee benefit expense6,377 6,539 5,353 25,474 21,397 
   Occupancy and equipment related expense5,948 5,003 4,433 20,990 18,604 
   Merger and acquisition expenses189 — 303 13,695 5,072 
   Intangibles amortization expense1,856 1,953 825 8,003 3,684 
   Other operating expenses15,031 19,335 10,091 71,840 50,142 
      Total noninterest expenses56,386 62,224 45,657 254,379 195,220 
Income before income taxes37,690 37,655 48,273 131,956 185,219 
Income tax expense8,016 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 


9



First Bancorp and Subsidiaries
Financial Summary
CONSOLIDATED BALANCE SHEETS
($ in thousands - unaudited)At December 31, 2023At September 30, 2023At December 31, 2022
Assets
Cash and due from banks$100,891 95,257 101,133 
Interest-bearing deposits with banks136,964 178,332 169,185 
     Total cash and cash equivalents237,855 273,589 270,318 
Investment securities2,723,057 2,635,866 2,856,193 
Presold mortgages and SBA loans held for sale2,667 8,060 1,282 
Loans8,150,102 8,027,037 6,665,145 
Allowance for credit losses on loans(109,853)(108,198)(90,967)
Net loans8,040,249 7,918,839 6,574,178 
Premises and equipment150,957 151,981 134,187 
Operating right-of-use lease assets17,063 17,604 18,733 
Goodwill and other intangible assets511,608 513,629 376,938 
Bank-owned life insurance183,897 182,764 164,592 
Other assets247,589 275,628 228,628 
     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 accounts6,651,723 6,732,353 5,661,526 
          Total deposits10,031,599 10,235,403 9,227,529 
Borrowings630,158 401,843 287,507 
Operating lease liabilities17,833 18,348 19,391 
Other liabilities62,972 64,683 59,026 
     Total liabilities10,742,562 10,720,277 9,593,453 
Shareholders’ equity
Common stock 963,990 962,644 725,153 
Retained earnings716,420 695,791 648,418 
Stock in rabbi trust assumed in acquisition(1,385)(1,375)(1,585)
Rabbi trust obligation1,385 1,375 1,585 
Accumulated other comprehensive loss(308,030)(400,752)(341,975)
     Total shareholders’ equity1,372,380 1,257,683 1,031,596 
Total liabilities and shareholders’ equity$12,114,942 11,977,960 10,625,049 


10

First Bancorp and Subsidiaries
Financial Summary

TREND INFORMATION

For the Three Months Ended
December 31, 2023September 30, 2023June 30, 2023March 31, 2023December 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)
$20.94 18.11 19.03 19.08 18.34 
Common shares outstanding at end of period41,109,987 41,085,498 41,082,678 40,986,990 35,704,154 
Weighted average shares outstanding - diluted41,207,945 41,199,058 41,129,100 41,112,692 35,614,972 
CAPITAL INFORMATION (estimates for current quarter)
Tangible common equity to tangible assets (5)
7.42 %6.49 %6.79 %6.60 %6.39 %
Common equity tier I capital ratio13.20 %12.93 %12.75 %12.53 %13.02 %
Total risk-based capital ratio15.54 %15.26 %15.09 %14.88 %15.09 %
(1) Calculated by dividing annualized net income by average assets.
(2) Calculated by dividing annualized net income by average common equity.
(3) Return on average tangible common equity is a non-GAAP financial measure. See Appendix A for components of the calculation and the reconciliation of average common equity to average TCE.
(4) Tangible book value per share is a non-GAAP financial measure. See Appendix B for a reconciliation of common equity to tangible common equity and Appendix C for the resulting calculation.
(5) Tangible common equity ratio is a non-GAAP financial measure. See Appendix B for a reconciliation of common equity to tangible common equity and Appendix D for the resulting calculation.
For the Three Months Ended
INCOME STATEMENT
($ in thousands except per share data)
December 31, 2023September 30, 2023June 30, 2023March 31, 2023December 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 income82,484 84,702 86,985 92,486 84,372 
Provision for loan losses3,400 1,200 3,700 11,451 4,000 
(Reversal of) provision for unfunded commitments(450)(1,200)(1,339)1,051 1,000 
Noninterest income14,542 15,177 14,235 13,536 14,558 
Merger and acquisition costs189 — 1,334 12,182 303 
Other noninterest expense56,197 62,224 60,259 61,993 45,354 
Income before income taxes37,690 37,655 37,266 19,345 48,273 
Income tax expense8,016 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.

11

APPENDIX A: Calculation of Return on TCE

For the Three Months Ended
($ in thousands)December 31, 2023September 30, 2023June 30, 2023March 31, 2023December 31, 2022
Net Income
$29,674 29,893 29,403 15,161 38,433 
Average common equity1,280,812 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 equity9.19 %9.10 %8.97 %4.83 %15.20 %
Return on average tangible common equity15.33 %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, 2023September 30, 2023June 30, 2023March 31, 2023December 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, 2023September 30, 2023June 30, 2023March 31, 2023December 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, 2023September 30, 2023June 30, 2023March 31, 2023December 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 ratio7.42 %6.49 %6.79 %6.60 %6.39 %
12
v3.23.4
Cover Page
Jan. 24, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jan. 24, 2024
Entity Registrant Name First Bancorp
Entity Incorporation, State or Country Code NC
Entity File Number 0-15572
Entity Tax Identification Number 56-1421916
Entity Address, Address Line One 300 SW Broad Street,
Entity Address, City or Town Southern Pines,
Entity Address, State or Province NC
Entity Address, Postal Zip Code 28387
City Area Code (910)
Local Phone Number 246-2500
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, No Par Value
Trading Symbol FBNC
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000811589
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