Fourth Quarter Results Driven by Improving Net
Interest Margin, Earning Asset Growth, and Core Deposit Growth
The First Bancorp (Nasdaq: FNLC), parent company of First
National Bank, today announced operating results for the three
months and year ended December 31, 2024. Fourth quarter unaudited
net income was $7.3 million, an increase of 9.0% from the fourth
quarter of 2023. Earnings per share on a fully diluted basis for
the fourth quarter of 2024 were $0.65, up $0.05 or 8.5% from the
prior year period. For the twelve months ended December 31, 2024
unaudited net income was $27.0 million, a decrease of 8.4% from the
$29.5 million reported for the twelve months ended December 31,
2023. Earnings per common share on a fully diluted basis were down
$0.24 to $2.43 per share, a decrease of 8.9% from the prior
year.
Fourth Quarter Notable Items:
- Total loans increased $33.7 million, an annualized growth rate
of 5.9%
- Core deposits increased $33.0 million
- Net Interest Income up 7.0% from 3Q2024, and up 10.7% from
4Q2023
- Net Interest Margin increased 10 basis points from 3Q2024 and 8
basis points from 4Q2023
- Efficiency Ratio improved to 53.39%
- Quarterly shareholder dividend of $0.36 per share
CEO COMMENTS "The First
Bancorp concluded 2024 with annual earnings of $27.0 million,"
commented Tony C. McKim, the Company’s President and Chief
Executive Officer. "While down from the prior year we are
encouraged by the improvements in net interest income posted in the
second half of the year, driven by a steadily increasing net
interest margin. Pre-Tax, Pre-Provision (PTPP) (non-GAAP) Return on
Average Assets for 2024 was 1.09% and PTPP Return on Average
Tangible Common Equity was 15.12%. We experienced strong earning
asset growth during the year with total loans increasing $211.5
million, or 9.9%, while maintaining favorable asset quality."
Mr. McKim continued, "Results for the fourth quarter of 2024
continued the performance improvement noted in our third quarter
report. PTPP net income in the fourth quarter was $9.8 million, up
$1.3 million or 15.5% from the linked quarter, with nearly all of
the increase coming in net interest income, which increased $1.2
million, or 7.0%, in the fourth quarter to $17.6 million, as
compared to $16.4 million earned in the third quarter. Non-interest
income increased $314,000 period-to-period primarily attributable
to debit card revenue. Operating expenses for the fourth quarter
increased modestly from the third quarter, up $145,000 or 1.2%.
"We began the past year with a continuance of the margin
contraction from 2023, and reached a low-point in the second
quarter of 2024, with resulting impact on our bottom line. Through
the combined effects of new asset pricing, legacy asset re-pricing,
and funding cost stabilization, our net interest margin has
increased in each of the past two quarters, and has led to improved
net income performance. We expect this positive trend to continue
with further gradual margin improvement in coming quarters. The
Bank's over 280 employees continue to provide best in class service
to their customers and communities. In 2024 we extended over $600
million in new loans, opened in excess of 8,200 new deposit
accounts, expanded the volume and reach of our digital banking
services, and saw 10% growth in assets under management at First
National Wealth Management. I continue to be impressed each and
every day by the commitment of our team."
FINANCIAL RESULTS FOR THE QUARTER ENDED
DECEMBER 31, 2024 Net Income was $7.3 million, or $0.65
per diluted share, for the three months ended December 31, 2024.
Results compare to the linked quarter for which net income was $7.6
million and diluted earnings per share were $0.68, with third
quarter earnings having been influenced by a reverse provision to
the Allowance for Credit Losses. On a PTPP basis, earnings for the
fourth quarter were $9.8 million, an increase of $1.3 million or
15.5% from the linked quarter's $8.5 million. The current quarter
also compares favorably to the fourth quarter of 2023, with net
income up $602,000, or 9.0%, diluted earnings per share up $0.05,
or 8.5%, and PTPP net income up $1.1 million, or 12.2%. Drivers of
fourth quarter 2024 results are discussed in the following
sections:
Net Interest Income Net interest income was $17.6 million
for the three months ended December 31, 2024, an increase of $1.2
million, or 7.0%, from the third quarter of 2024, and an increase
of $1.7 million, or 10.7% from the fourth quarter of 2023. Net
interest margin of 2.42% for the fourth quarter was an improvement
of 10 basis points from the 2.32% margin earned in the third
quarter, and an 8 basis point improvement from the 2.34% margin
earned in the fourth quarter of 2023. The average tax-equivalent
yield on earning assets fell 3 basis in the fourth quarter of 2024
to 5.25%, while the average cost of liability funding fell 15 basis
points to 3.33%.
Provision For Credit Losses Total provision for credit
losses was $1.16 million in the fourth quarter of 2024, compared to
a reverse provision of $638,000 in the third quarter, and a
provision of $683,000 in the fourth quarter of 2023. The current
period total consisted of a $1.25 million provision for credit
losses on loans, coupled with reverse provisions of $28,000 and
$54,000 for credit losses on held to maturity securities and
off-balance sheet commitments, respectively. Provision for credit
losses on loans increased from prior periods due to loan growth and
identification in the fourth quarter of specific reserve
requirements on two credits which were moved to individually
analyzed status.
Non-Interest Income Total non-interest income was $4.4
million for the three months ended December 31, 2024, up $314,000
from the third quarter. The linked quarter increase was centered in
Debit Card revenue which grew $207,000 and Mortgage Banking revenue
which increased $89,000. As compared to the fourth quarter of 2023,
total non-interest income increased $329,000 centered in Wealth
Management revenue growth of $135,000, or 11.9%, an increase in
Mortgage Banking revenue of $80,000, and an increase in other
operating income of $75,000.
Non-Interest Expense Non-interest expense totaled $12.1
million for the three months ended December 31, 2024, a modest
increase of $145,000 from the third quarter, and up $958,000 from
the prior year period. As compared to the linked quarter, employee
salaries and benefits increased $336,000 while other operating
expenses decreased $225,000. The Company's efficiency ratio for the
fourth quarter of 2024 was 53.39%, improved from 56.37% in the
linked quarter and 54.08% a year ago.
Loans, Total Assets & Funding Total assets at
December 31, 2024 were $3.15 billion, up $205.3 million from the
prior year end. Earning assets increased $211.8 million
year-over-year, as loan balances grew $211.5 million, and
investments declined by $19.1 million. Loan portfolio growth in
2024 was led by commercial loans which increased $141.6 million,
including CRE term and construction loans which increased $68.5
million, and C&I loans which increased $50.8 million.
Residential mortgage loans increased $36.0 million year-over-year,
and home equity loan balances increased by $19.0 million in the
same time period. The loan portfolio grew $33.7 million in the
fourth quarter with growth concentrated within the CRE and
residential segments.
Total deposits at December 31, 2024 were $2.73 billion, up
$125.6 million or 4.8% from December 31, 2023, and up $22.5 million
since September 30, 2024. Core deposits increased $81.0 million for
the year centered in money market and NOW account balances, and
increased $33.0 million in the fourth quarter. Borrowed funds
increased $76.6 million year-to-year, principally in Federal Home
Loan Bank term advances, and decreased $4.7 million in the quarter.
Uninsured deposits were an estimated 18.6% of total deposits as of
December 31, 2024, and 69% of uninsured deposits were fully
collateralized. Available day-one liquidity was in excess of $790
million, sufficient to cover approximately 156% of estimated
uninsured deposits.
ASSET QUALITY Asset quality
continues to be stable and favorable. As of December 31, 2024, the
ratio of non-performing assets to total assets was 0.14%, a modest
increase from ratios of 0.07% and 0.08% as of December 31, 2023 and
September 30, 2024, respectively. The ratio of non-performing loans
to total loans stood at 0.18%, up modestly from 0.10% a year ago
and 0.11% last quarter. Net charge-offs continued to be very low
ending 2024 at 0.02% of total loans, compared to 0.01% in 2023 and
0.03% in 2022. Past due loans were 0.40% of total loans as of
December 31, 2024, up from 0.18% of total loans at December 31,
2023, and from 0.14% at September 30, 2024.
The allowance for loan losses stood at 1.06% of total loans as
of December 31, 2024, down from 1.13% of total loans at December
31, 2023, and up from 1.04% at September 30, 2024. The provision
for credit losses on loans was $1.30 million in 2024, including
$1.25 million in the fourth quarter, as compared to $1.33 million
and $911,000, respectively in 2023. Management considers the
allowance to be at an appropriate level given the strong asset
quality metrics at year-end.
CAPITAL The Company’s
capital position remained strong as of December 31, 2024, with an
estimated total risk-based capital ratio of 13.21%, and an
estimated leverage capital ratio of 8.47%. These compare to 13.66%
and 8.61% respectively as of December 31, 2023, the modest
decreases being the result of earning asset growth. The Company's
tangible book value was $19.87 per share as of December 31, 2024,
an increase from $19.12 a year earlier, and down from $20.27 as of
September 30, 2024. The linked quarter per share decrease is
attributable to an increase in unrealized losses in the Company's
available for sale investments resulting from changes in market
interest rates.
DIVIDEND On December 19,
2024, the Company's Board of Directors declared a fourth quarter
dividend of $0.36 per share. The fourth quarter dividend represents
a payout to shareholders of 54.71% of earnings per share for the
period and was paid on January 16, 2025 to shareholders of record
as of January 6, 2025.
ABOUT THE FIRST BANCORP The
First Bancorp, the parent company of First National Bank, is based
in Damariscotta, Maine. Founded in 1864, First National Bank is a
full-service community bank with $3.13 billion in assets. The Bank
provides a complete array of commercial and retail banking services
through eighteen locations in mid-coast and eastern Maine. First
National Wealth Management, a division of the Bank, provides
investment management and trust services to individuals,
businesses, and municipalities. More information about The First
Bancorp, First National Bank and First National Wealth Management
may be found at www.thefirst.com.
The First Bancorp
Consolidated Balance Sheets (Unaudited)
In thousands of dollars, except per share
data
December 31, 2024
December 31, 2023
Assets
Cash and due from banks
$
27,636
$
31,942
Interest-bearing deposits in other
banks
22,100
3,488
Securities available for sale
274,680
282,053
Securities to be held to maturity
369,704
385,235
Restricted equity securities, at cost
7,203
3,385
Loans
2,340,940
2,129,454
Less allowance for credit losses
24,871
24,030
Net loans
2,316,069
2,105,424
Accrued interest receivable
13,976
11,894
Premises and equipment
27,855
28,684
Other real estate owned
173
—
Goodwill
30,646
30,646
Other assets
61,931
63,947
Total assets
$
3,151,973
$
2,946,698
Liabilities
Demand deposits
$
292,255
$
289,104
NOW deposits
676,107
634,543
Money market deposits
376,627
305,931
Savings deposits
265,451
299,837
Certificates of deposit
702,632
646,818
Certificates $100,000 to $250,000
225,106
251,192
Certificates $250,000 and over
187,073
172,237
Total deposits
2,725,251
2,599,662
Borrowed funds
146,278
69,652
Other liabilities
27,951
34,305
Total Liabilities
2,899,480
2,703,619
Shareholders' equity
Common stock
112
111
Additional paid-in capital
71,832
70,071
Retained earnings
222,823
211,925
Net unrealized loss on securities
available for sale
(42,671
)
(39,575
)
Net unrealized loss on securities
transferred from available for sale to held to maturity
(47
)
(56
)
Net unrealized gain on cash flow hedging
derivative instruments
157
300
Net unrealized gain on postretirement
costs
287
303
Total shareholders' equity
252,493
243,079
Total liabilities & shareholders'
equity
$
3,151,973
$
2,946,698
Common Stock
Number of shares authorized
18,000,000
18,000,000
Number of shares issued and
outstanding
11,155,528
11,098,057
Book value per common share
$
22.63
$
21.90
Tangible book value per common share
$
19.87
$
19.12
The First Bancorp
Consolidated Statements of Income
(Unaudited)
For the year ended
For the quarter ended
In thousands of dollars, except per share
data
December 31, 2024
December 31, 2023
December 31, 2024
September 30, 2024
December 31, 2023
Interest income
Interest and fees on loans
$
129,440
$
108,274
$
33,899
$
33,498
$
29,414
Interest on deposits with other banks
550
517
360
56
217
Interest and dividends on investments
18,842
19,383
4,740
4,733
5,191
Total interest income
148,832
128,174
38,999
38,287
34,822
Interest expense
Interest on deposits
79,411
61,004
20,300
20,118
18,620
Interest on borrowed funds
5,511
1,963
1,146
1,767
349
Total interest expense
84,922
62,967
21,446
21,885
18,969
Net interest income
63,910
65,207
17,553
16,402
15,853
Credit loss (reduction) expense
525
1,184
1,164
(638
)
683
Net interest income after provision for
credit losses
63,385
64,023
16,389
17,040
15,170
Non-interest income
Investment management and fiduciary
income
4,963
4,654
1,274
1,232
1,139
Service charges on deposit accounts
2,048
1,887
496
511
488
Mortgage origination and servicing
income
794
813
282
193
202
Debit card income
5,456
5,384
1,572
1,365
1,541
Other operating income
3,094
2,699
812
821
737
Total non-interest income
16,355
15,437
4,436
4,122
4,107
Non-interest expense
Salaries and employee benefits
24,230
21,942
6,462
6,126
5,522
Occupancy expense
3,373
3,319
841
823
825
Furniture and equipment expense
5,622
5,391
1,440
1,416
1,382
FDIC insurance premiums
2,391
1,962
629
636
533
Amortization of identified intangibles
26
26
6
7
6
Other operating expense
11,514
11,118
2,767
2,992
2,919
Total non-interest expense
47,156
43,758
12,145
12,000
11,187
Income before income taxes
32,584
35,702
8,680
9,162
8,091
Applicable income taxes
5,539
6,184
1,398
1,591
1,411
Net Income
$
27,045
$
29,518
$
7,282
$
7,571
$
6,680
Basic earnings per share
$
2.45
$
2.68
$
0.66
$
0.69
$
0.61
Diluted earnings per share
$
2.43
$
2.66
$
0.65
$
0.68
$
0.60
The First Bancorp
Selected
Financial Data (Unaudited)
As of and for the year
ended
As of and for the quarter
ended
Dollars in thousands, except for per share
amounts
December 31, 2024
December 31, 2023
December 31, 2024
September 30, 2024
December 31, 2023
Summary of Operations
Interest Income
$
148,832
$
128,174
$
38,999
$
38,287
$
34,822
Interest Expense
84,922
62,967
21,446
21,885
18,969
Net Interest Income
63,910
65,207
17,553
16,402
15,853
Credit loss (reduction) expense
525
1,184
1,164
(638
)
683
Non-Interest Income
16,355
15,437
4,436
4,122
4,107
Non-Interest Expense
47,156
43,757
12,145
12,000
11,186
Net Income
27,045
29,519
7,282
7,571
6,680
Per Common Share Data
Basic Earnings per Share
$
2.45
$
2.68
$
0.66
$
0.69
$
0.61
Diluted Earnings per Share
2.43
2.66
0.65
0.68
0.60
Cash Dividends Declared
1.43
1.39
0.36
0.36
0.35
Book Value per Common Share
22.63
21.90
22.63
23.03
21.90
Tangible Book Value per Common Share
19.87
19.12
19.87
20.27
19.12
Market Value
27.35
28.22
27.35
26.32
28.22
Financial Ratios
Return on Average Equity1
10.83
%
12.59
%
11.27
%
11.86
%
11.35
%
Return on Average Tangible Common
Equity1
12.35
%
14.50
%
12.81
%
13.50
%
13.08
%
Return on Average Assets1
0.89
%
1.03
%
0.92
%
0.98
%
0.90
%
Average Equity to Average Assets
8.19
%
8.18
%
8.17
%
8.24
%
7.92
%
Average Tangible Equity to Average
Assets
7.18
%
7.10
%
7.19
%
7.24
%
6.87
%
Net Interest Margin Tax-Equivalent1
2.29
%
2.49
%
2.42
%
2.32
%
2.34
%
Dividend Payout Ratio
58.44
%
51.87
%
54.71
%
52.55
%
57.38
%
Allowance for Credit Losses/Total
Loans
1.06
%
1.13
%
1.06
%
1.04
%
1.13
%
Non-Performing Loans to Total Loans
0.18
%
0.10
%
0.18
%
0.11
%
0.10
%
Non-Performing Assets to Total Assets
0.14
%
0.07
%
0.14
%
0.08
%
0.07
%
Efficiency Ratio
56.66
%
52.43
%
53.39
%
56.37
%
54.08
%
At Period End
Total Assets
$
3,151,973
$
2,946,698
$
3,151,973
$
3,142,563
$
2,946,698
Total Loans
2,340,940
2,129,454
2,340,940
2,307,253
2,129,454
Total Investment Securities
651,587
670,673
651,587
669,076
670,673
Total Deposits
2,725,251
2,599,662
2,725,251
2,702,718
2,599,662
Total Shareholders' Equity
252,493
243,079
252,493
256,783
243,079
1Annualized using a 366-day basis for 2024
and a 365-day basis for 2023
Use of Non-GAAP Financial Measures
Certain information in this release contains financial
information determined by methods other than in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”). Management uses these “non-GAAP” measures in its
analysis of the Company's performance (including for purposes of
determining the compensation of certain executive officers and
other Company employees) and believes that these non-GAAP financial
measures provide a greater understanding of ongoing operations and
enhance comparability of results with prior periods and with other
financial institutions, as well as demonstrating the effects of
significant gains and charges in the current period, in light of
the disclosure practices employed by many other publicly-traded
financial institutions. The Company believes that a meaningful
analysis of its financial performance requires an understanding of
the factors underlying that performance. Management believes that
investors may use these non-GAAP financial measures to analyze
financial performance without the impact of unusual items that may
obscure trends in the Company's underlying performance. These
disclosures should not be viewed as a substitute for operating
results determined in accordance with GAAP, nor are they
necessarily comparable to non-GAAP performance measures that may be
presented by other companies.
In several places net interest income is calculated on a fully
tax-equivalent basis. Specifically included in interest income was
tax-exempt interest income from certain investment securities and
loans. An amount equal to the tax benefit derived from this
tax-exempt income has been added back to the interest income total
which, as adjusted, increased net interest income accordingly.
Management believes the disclosure of tax-equivalent net interest
income information improves the clarity of financial analysis, and
is particularly useful to investors in understanding and evaluating
the changes and trends in the Company's results of operations.
Other financial institutions commonly present net interest income
on a tax-equivalent basis. This adjustment is considered helpful in
the comparison of one financial institution's net interest income
to that of another institution, as each will have a different
proportion of tax-exempt interest from its earning assets.
Moreover, net interest income is a component of a second financial
measure commonly used by financial institutions, net interest
margin, which is the ratio of net interest income to average
earning assets. For purposes of this measure as well, other
financial institutions generally use tax-equivalent net interest
income to provide a better basis of comparison from institution to
institution. The Company follows these practices.
The following table provides a reconciliation of tax-equivalent
financial information to the Company's consolidated financial
statements, which have been prepared in accordance with GAAP. A
21.0% tax rate was used in both 2024 and 2023.
For the years ended
For the quarters ended
In thousands of dollars
December 31, 2024
December 31, 2023
December 31, 2024
September 30, 2024
December 31, 2023
Net interest income as presented
$
63,910
$
65,207
$
17,553
$
16,402
$
15,853
Effect of tax-exempt income
2,780
2,644
708
717
679
Net interest income, tax equivalent
$
66,690
$
67,851
$
18,261
$
17,119
$
16,532
The Company presents its efficiency ratio using non-GAAP
information which is most commonly used by financial institutions.
The GAAP-based efficiency ratio is non-interest expenses divided by
net interest income plus non-interest income from the Consolidated
Statements of Income. The non-GAAP efficiency ratio excludes
securities losses and other-than-temporary impairment charges from
non-interest expenses, excludes securities gains from non-interest
income, and adds the tax-equivalent adjustment to net interest
income. The following table provides a reconciliation between the
GAAP and non-GAAP efficiency ratio:
For the years ended
For the quarters ended
In thousands of dollars
December 31, 2024
December 31, 2023
December 31, 2024
September 30, 2024
December 31, 2023
Non-interest expense, as presented
$
47,156
$
43,758
$
12,145
$
12,000
$
11,187
Net interest income, as presented
63,910
65,207
17,553
16,402
15,853
Effect of tax-exempt interest income
2,780
2,644
708
717
679
Non-interest income, as presented
16,355
15,437
4,436
4,122
4,107
Effect of non-interest tax-exempt
income
185
176
49
45
45
Adjusted net interest income plus
non-interest income
$
83,230
$
83,464
$
22,746
$
21,286
$
20,684
Non-GAAP efficiency ratio
56.66
%
52.43
%
53.39
%
56.37
%
54.08
%
GAAP efficiency ratio
58.75
%
54.26
%
55.23
%
58.47
%
56.05
%
The Company presents certain information based upon average
tangible common equity instead of total average shareholders'
equity. The difference between these two measures is the Company's
intangible assets, specifically goodwill from prior acquisitions.
Management, banking regulators and many stock analysts use the
tangible common equity ratio and the tangible book value per common
share in conjunction with more traditional bank capital ratios to
compare the capital adequacy of banking organizations with
significant amounts of goodwill or other intangible assets,
typically stemming from the use of the purchase accounting method
in accounting for mergers and acquisitions. The following table
provides a reconciliation of average tangible common equity to the
Company's consolidated financial statements, which have been
prepared in accordance with U.S. generally accepted accounting
principles:
For the years ended
For the quarters ended
In thousands of dollars
December 31, 2024
December 31, 2023
December 31, 2024
September 30, 2024
December 31, 2023
Average shareholders' equity as
presented
$
249,786
$
234,480
$
257,034
$
253,911
$
233,405
Less intangible assets
(30,817
)
(30,843
)
(30,827
)
(30,827
)
(30,853
)
Tangible average shareholders' equity
$
218,969
$
203,637
$
226,207
$
223,084
$
202,552
To provide period-to-period comparison of operating results
prior to consideration of credit loss provision and income taxes,
the non-GAAP measure of Pre-Tax, Pre-Provision Net Income is
presented. The following table provides a reconciliation to Net
Income:
For the years ended
For the quarters ended
In thousands of dollars
December 31, 2024
December 31, 2023
December 31, 2024
September 30, 2024
December 31, 2023
Net Income, as presented
$
27,045
$
29,518
$
7,282
$
7,571
$
6,680
Add: credit loss (reduction) expense
525
1,184
1,164
(638
)
683
Add: income taxes
5,539
6,184
1,398
1,591
1,411
Pre-Tax, pre-provision net income
$
33,109
$
36,886
$
9,844
$
8,524
$
8,774
Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained
herein, statements contained in this release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements involve
a number of risks, uncertainties and other factors that could cause
actual results and events to differ materially, as discussed in the
Company's filings with the Securities and Exchange Commission.
Category: Earnings Source: The First Bancorp
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version on businesswire.com: https://www.businesswire.com/news/home/20250122652689/en/
The First Bancorp Richard M. Elder, EVP, Chief Financial Officer
207-563-3195 rick.elder@thefirst.com
First Bancorp (NASDAQ:FNLC)
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First Bancorp (NASDAQ:FNLC)
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From Jan 2024 to Jan 2025
