SOUTHERN
PINES, N.C., July 26,
2023 /PRNewswire/ -- First Bancorp (the "Company")
(NASDAQ - FBNC), the parent company of First Bank, announced today
net income of $29.4 million, or
$0.71 per diluted common share, for
the three months ended June 30, 2023
compared to $15.2 million, or
$0.37 per diluted common share, for
the three months ended March 31, 2023
("linked quarter") and $36.6 million,
or $1.03 per diluted common share,
recorded in the second quarter of 2022. For the six months
ended June 30, 2023, the Company
recorded net income of $44.6 million,
or $1.08 per diluted common share,
compared to $70.6 million, or
$1.98 per diluted common share, for
the six months ended June 30,
2022.
On January 1, 2023, the Company
completed its acquisition of GrandSouth Bancorporation
("GrandSouth"). The results for the first quarter of 2023
include merger expenses totaling $12.2
million and an initial loan loss provision of $12.2 million for acquired loans.
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.
Richard H. Moore, CEO and
Chairman of the Company, stated, "Our team worked hard this quarter
to enhance our strong balance sheet by growing loans selectively
and conservatively and also attracting deposits in a competitive
market. We maintained the same percentage of
noninterest-bearing deposits as compared to the first quarter of
2023, and our overall deposit base remains granular, diversified
and stable. Like all banks, our overall cost of deposits
trended upward with the increase in market rates, but remains well
below the cost of wholesale funding. We believe our credit
quality, liquidity and capital will also help us to stay
well-positioned for the remainder of this year."
Second Quarter 2023 Highlights
- Loans totaled $7.9 billion at
June 30, 2023, with growth for the
quarter of $98.7 million, an
annualized growth rate of 5.1%.
- Total market deposits (exclusive of brokered deposits) grew
$67.1 million for the quarter, an
annualized growth rate of 2.7%.
- Noninterest-bearing demand accounts remained strong at 36% of
total deposits at quarter end.
- Total loan yield increased to 5.26%, up 102 basis points from
the second quarter of 2022, with accretion on purchased loans
contributing 18 basis points to loan yield.
- The liquidity ratio was 17.3% at June
30, 2023. Available off-balance sheet sources increased
during the quarter to total $1.6
billion, resulting in a total liquidity ratio of 29.0%.
- Credit quality continued to be strong with a nonperforming
assets ("NPA") to total assets ratio of 0.30% as of June 30, 2023, down from 0.39% for the comparable
period of 2022.
- Capital remained strong with a total common equity tier 1 ratio
of 12.80% (estimated) and a total risk-based capital ratio of
15.15% (estimated) as of June 30,
2023.
Net Interest Income and Net Interest Margin
Net interest income for the second quarter of 2023 was
$87.0 million, an 11.1% increase from
the $78.3 million recorded in the
second quarter of 2022. The increase in net interest income
from the prior year period was driven by higher earning assets
related to both organic growth and the GrandSouth
acquisition. Average interest-earning assets for the second
quarter of 2023 increased 14.8% from the comparable period of
the prior year, with growth primarily in loans.
Somewhat offsetting the impact of the higher average earning
assets was the reduction in net interest margin ("NIM")
year-over-year. The Company's tax-equivalent NIM (calculated by
dividing tax-equivalent net interest income by average earning
assets) for the second quarter of 2023 was 3.08% compared to 3.18%
for the second quarter of 2022. The lower NIM was due to
rising market interest rates driving higher cost of funds which
outpaced the increase in loan yields over the same period.
While loan yields rose from 4.24% for the second quarter of 2022 to
5.26% for the current period, the total cost of funds increased
from 0.09% for the second quarter of 2022 to 1.29% for the quarter
ended June 30, 2023. There has been some stabilization
of the Company's cost of funds, but it is anticipated there may
continue to be some compression in the NIM given the percentage of
fixed rate loans in the Company's loan portfolio.
|
|
For the Three Months
Ended
|
YIELD
INFORMATION
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
|
|
|
|
|
|
Yield on
loans
|
|
5.26 %
|
|
5.22 %
|
|
4.24 %
|
Yield on
securities
|
|
1.77 %
|
|
1.78 %
|
|
1.69 %
|
Yield on other earning
assets
|
|
4.60 %
|
|
3.47 %
|
|
0.97 %
|
Yield on
all interest-earning assets
|
|
4.25 %
|
|
4.16 %
|
|
3.24 %
|
|
|
|
|
|
|
|
Rate on interest
bearing deposits
|
|
1.68 %
|
|
1.19 %
|
|
0.11 %
|
Rate on other
interest-bearing liabilities
|
|
5.68 %
|
|
5.34 %
|
|
3.52 %
|
Rate on
all interest-bearing liabilities
|
|
1.96 %
|
|
1.46 %
|
|
0.15 %
|
Total cost of
funds
|
|
1.29 %
|
|
0.94 %
|
|
0.09 %
|
|
|
|
|
|
|
|
Net
interest margin (1)
|
|
3.05 %
|
|
3.28 %
|
|
3.16 %
|
Net
interest margin - tax-equivalent (2)
|
|
3.08 %
|
|
3.31 %
|
|
3.18 %
|
Average
prime rate
|
|
8.16 %
|
|
7.69 %
|
|
3.94 %
|
|
|
|
|
|
|
|
(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 second quarter of 2023 was
total loan discount accretion of $3.6 million compared to $2.3 million for the second quarter of 2022,
with the increase being primarily related to the GrandSouth
acquisition. Loan discount accretion had a 13 basis point
positive impact on the Company's NIM in the second quarter of 2023
compared to accretion contributing 9 basis points to NIM for the
prior year quarter.
The following table presents the impact to net interest income
of the purchase accounting adjustments for each period.
|
|
For the Three Months
Ended
|
NET INTEREST INCOME
PURCHASE ACCOUNTING ADJUSTMENTS
($ in
thousands)
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
|
|
|
|
|
|
Interest income -
increased by accretion of loan discount on acquired
loans
|
|
$
3,159
|
|
3,118
|
|
1,545
|
Interest income -
increased by accretion of loan discount on retained portions of SBA
loans
|
|
426
|
|
448
|
|
730
|
Total interest income
impact
|
|
3,585
|
|
3,566
|
|
2,275
|
Interest expense -
(increased) reduced by (discount accretion) premium amortization of
deposits
|
|
(878)
|
|
(1,019)
|
|
168
|
Interest expense -
increased by discount accretion of borrowings
|
|
(84)
|
|
(82)
|
|
(53)
|
Total net interest
expense impact
|
|
(962)
|
|
(1,101)
|
|
115
|
Total impact on net interest
income
|
|
$
2,623
|
|
2,465
|
|
2,390
|
Provision for Credit Losses and Credit Quality
For the three months ended June 30,
2023, the Company recorded $3.7 million in provision for loan losses
while no provision was recognized for the second quarter of
2022. The provision for the current quarter was driven in
part by the loan growth experienced during the quarter, combined
with updated economic forecasts projecting some deterioration in
the key factors utilized in our CECL model calculation, primarily
the commercial real estate index.
The Company recorded a $1.3 million reversal of the provision for
unfunded commitments during the second quarter of 2023 related
primarily to a reduction in the amount of available lines of
credit. The reserve for unfunded commitments totaled
$13.0 million at June 30,
2023 and is included in the line item "Other Liabilities".
Asset quality remained strong with annualized net loan
charge-offs of 0.04% for the second quarter of 2023. Total
NPAs amounted to $35.8 million
at June 30, 2023, or 0.30% of total assets, up from
$31.1 million at the end of the
linked quarter, and down from $41.1 million, or 0.39% of total assets, at
June 30, 2022. The decline from June 30, 2022 was
due in part to the Company's adoption of ASU 2022-02 which
eliminated the accounting methodology for troubled debt
restructurings and replaced it with disclosures for loan
modification to borrowers experiencing financial difficulty as
presented in the following table.
ASSET QUALITY
DATA
($ in
thousands)
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
|
|
|
|
|
|
Nonperforming
assets
|
|
|
|
|
|
|
Nonaccrual
loans
|
|
$
29,876
|
|
28,059
|
|
28,715
|
Troubled debt
restructurings - accruing (1)
|
|
—
|
|
—
|
|
11,771
|
Modifications to
borrowers in financial distress
|
|
4,862
|
|
2,224
|
|
—
|
Total nonperforming
loans
|
|
34,738
|
|
30,283
|
|
40,486
|
Foreclosed real
estate
|
|
1,077
|
|
789
|
|
658
|
Total nonperforming
assets
|
|
$
35,815
|
|
31,072
|
|
41,144
|
|
|
|
|
|
|
|
Asset Quality
Ratios
|
|
|
|
|
|
|
Quarterly net
charge-offs (recoveries) to average loans - annualized
|
|
0.04 %
|
|
0.09 %
|
|
(0.01) %
|
Nonperforming loans to
total loans
|
|
0.44 %
|
|
0.39 %
|
|
0.65 %
|
Nonperforming assets to
total assets
|
|
0.30 %
|
|
0.25 %
|
|
0.39 %
|
Allowance for credit
losses to total loans
|
|
1.38 %
|
|
1.36 %
|
|
1.32 %
|
|
|
|
|
|
|
|
(1) The Company
implemented ASU 2022-02 effective January 1, 2023 eliminating TDR
accounting.
|
|
Noninterest Income
Total noninterest income for the second quarter of 2023 was
$14.2 million, a 17.5% decrease
from the $17.3 million recorded
for the second quarter of 2022 and a 5.2% increase from the linked
quarter. The primary factors driving fluctuations among the
periods presented were as follows:
- Increases in "Service charges on deposit accounts" between
periods was primarily driven by the higher number of customer
accounts related to the GrandSouth acquisition and organic
growth.
- The year-over-year decline in "Other service charges,
commissions and fees" was related to the lower interchange fees
beginning in July 2022 as a result of
the Durbin Amendment limitations becoming applicable to the
Company.
- Fees from presold mortgages continue to be lower in 2023 as
compared to the prior year as mortgage loan refinancing and
origination volumes were negatively impacted due to higher mortgage
interest rates.
- SBA loan sale gains were up from the linked quarter of 2023,
but continued to lag the 2022 results due primarily to slower loan
originations in the current year combined with lower premiums
available on SBA loan sales given the current market
conditions.
- Other gains for the second quarter and year to date period of
2022 included death benefits realized on bank-owned life insurance
policies. There were no large or unusual transactions in 2023
giving rise to gains or losses.
Noninterest Expenses
Noninterest expenses amounted to $61.6 million for the second quarter of 2023
compared to $74.2 million for
the linked quarter and $49.4 million for the second quarter of
2022. The 17.0% decrease in noninterest expenses from the
linked quarter was driven by merger and acquisition expenses of
$12.2 million incurred in the
first quarter of 2023 as compared to $1.3 million in the current
quarter.
The 24.7% increase in total noninterest expenses from the prior
year period was primarily driven by increased salary expense and
other facilities-related costs associated with the acquisition of
eight GrandSouth branch locations and related branch and support
personnel. Other operating expenses increased $5.4 million from the second quarter of 2022
driven by: (1) increases for data processing and software expense
for the additional processing volumes, integration of core
processing systems, and investments in new software systems; (2)
FDIC insurance increases related to the GrandSouth acquisition; and
(3) higher check fraud and other non-credit losses
experienced to date in 2023.
Balance Sheet
Total assets at June 30, 2023
amounted to $12.0 billion, down
$330.2 million from the linked
quarter and growing 13.9% from a year earlier. The decrease
from the linked quarter was related to lower cash and borrowing
balances as it was not necessary to renew maturing FHLB advances
during the quarter. The growth from a year earlier was driven
by the acquisition of GrandSouth, combined with organic loan and
deposit growth during the period. Quarterly average balances
for key balance sheet accounts are presented below.
|
|
For the Three Months
Ended
|
AVERAGE
BALANCES
($ in
thousands)
|
|
June 30,
2023
|
|
December 31,
2022
|
|
June 30,
2022
|
|
Change
2Q23 vs 2Q22
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$ 12,058,336
|
|
10,579,187
|
|
10,516,748
|
|
14.7 %
|
Investment securities,
at amortized cost
|
|
3,221,807
|
|
3,325,652
|
|
3,437,365
|
|
(6.3) %
|
Loans
|
|
7,850,522
|
|
6,576,415
|
|
6,149,174
|
|
27.7 %
|
Earning
assets
|
|
11,422,667
|
|
10,161,108
|
|
9,949,658
|
|
14.8 %
|
Deposits
|
|
10,181,040
|
|
9,275,909
|
|
9,337,615
|
|
9.0 %
|
Interest-bearing
liabilities
|
|
7,001,838
|
|
5,779,958
|
|
5,740,269
|
|
22.0 %
|
Shareholders'
equity
|
|
1,314,620
|
|
1,003,031
|
|
1,091,077
|
|
20.5 %
|
Total investment securities were $2.8
billion at June 30, 2023, a
decrease of $72.5 million from the
linked quarter and $321.4 million
from June 30, 2022. The
investment securities portfolio continues to decline as cash flows
from amortizing investments are utilized to fund loan growth and
fluctuations in deposits. The unrealized loss on available
for sale securities totaled $440.1
million, representing an increase of $31.4 million from the linked quarter but
essentially flat from year end. The Company has the intent
and ability to hold investments with unrealized losses until
maturity or recovery of the amortized cost as market conditions
change.
Total loans amounted to $7.9 billion at June 30, 2023, an
increase of $98.7 million from the
linked quarter and $1.7 billion, or
26.5%, from June 30, 2022. Excluding the GrandSouth
acquisition, organic loan growth was $212.4
million for 2023 year to date, representing an annualized
growth rate of 5.5%.
As presented below, our total loan portfolio mix has remained
consistent. There are no notable concentrations in
geographies or industries, including in office or hospitality
categories. The Company's exposure to non-owner occupied
office loans represents approximately 5.7% of the total portfolio
and the average size of these loans is $1.3
million. Non-owner occupied office loans are generally
in non-metro markets and the top 10 loans in this category
represent less than 2% of the total loan portfolio.
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
($ in
thousands)
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
Commercial and
industrial
|
|
$ 888,391
|
|
11 %
|
|
885,032
|
|
11 %
|
|
596,874
|
|
10 %
|
Construction,
development & other land loans
|
|
1,109,769
|
|
14 %
|
|
1,092,026
|
|
14 %
|
|
824,723
|
|
13 %
|
Commercial real estate
- owner occupied
|
|
1,222,189
|
|
16 %
|
|
1,200,744
|
|
16 %
|
|
1,014,551
|
|
16 %
|
Commercial real estate
- non owner occupied
|
|
2,423,262
|
|
31 %
|
|
2,429,941
|
|
31 %
|
|
1,991,292
|
|
32 %
|
Multi-family real
estate
|
|
392,120
|
|
5 %
|
|
395,573
|
|
5 %
|
|
332,479
|
|
5 %
|
Residential 1-4 family
real estate
|
|
1,461,068
|
|
18 %
|
|
1,386,580
|
|
18 %
|
|
1,097,810
|
|
18 %
|
Home equity loans/lines
of credit
|
|
334,566
|
|
4 %
|
|
342,287
|
|
4 %
|
|
325,617
|
|
5 %
|
Consumer
loans
|
|
67,077
|
|
1 %
|
|
68,056
|
|
1 %
|
|
60,627
|
|
1 %
|
Loans,
gross
|
|
7,898,442
|
|
100 %
|
|
7,800,239
|
|
100 %
|
|
6,243,973
|
|
100 %
|
Unamortized net
deferred loan fees
|
|
(813)
|
|
|
|
(1,276)
|
|
|
|
(803)
|
|
|
Total loans
|
|
$
7,897,629
|
|
|
|
7,798,963
|
|
|
|
6,243,170
|
|
|
Total deposits amounted to $10.2
billion at June 30, 2023, an
increase of $808.8 million, or 8.6%,
from June 30, 2022, primarily driven
by the GrandSouth acquisition. Organic market deposit growth
(excluding the acquired deposits and brokered deposits) was
$67.1 million for the second quarter
of 2023 and $154.0 million since year
end. Quarterly organic market growth represents an annualized
growth rate of 3.1%. During the second quarter of 2023, the
Company had several blocks of higher-priced brokered deposits
mature which were not replaced given the continued growth of core
deposits.
The Company has a diversified and granular deposit base which
has remained stable with continued growth in core deposits,
primarily noninterest-bearing checking accounts and money market
accounts. At quarter end, noninterest-bearing deposits
accounted for 36% of total deposits, consistent with the linked
quarter. As of June 30, 2023, the estimated total
insured or collateralized deposits were approximately
71%.
Our deposit mix has remained consistent historically and has not
significantly changed with the addition of GrandSouth as presented
in the table below.
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
($ in
thousands)
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
Noninterest-bearing
checking accounts
|
|
$
3,639,930
|
|
36 %
|
|
3,763,637
|
|
36 %
|
|
3,699,725
|
|
40 %
|
Interest-bearing
checking accounts
|
|
1,454,489
|
|
14 %
|
|
1,526,333
|
|
15 %
|
|
1,537,487
|
|
16 %
|
Money market
accounts
|
|
3,411,072
|
|
34 %
|
|
3,126,571
|
|
30 %
|
|
2,572,118
|
|
28 %
|
Savings
accounts
|
|
658,473
|
|
6 %
|
|
705,669
|
|
7 %
|
|
747,272
|
|
8 %
|
Other time
deposits
|
|
638,751
|
|
6 %
|
|
624,444
|
|
6 %
|
|
509,661
|
|
5 %
|
Time deposits
>$250,000
|
|
353,473
|
|
4 %
|
|
342,447
|
|
3 %
|
|
293,485
|
|
3 %
|
Total market
deposits
|
|
10,156,188
|
|
100 %
|
|
10,089,101
|
|
97 %
|
|
9,359,748
|
|
100 %
|
Brokered
deposits
|
|
12,381
|
|
— %
|
|
283,497
|
|
3 %
|
|
—
|
|
— %
|
Total
deposits
|
|
$ 10,168,569
|
|
100 %
|
|
10,372,598
|
|
100 %
|
|
9,359,748
|
|
100 %
|
Capital and Liquidity
The Company remains well-capitalized by all regulatory
standards, with an estimated total risk-based capital ratio at
June 30, 2023 of 15.15%, up from the linked quarter ratio of
14.88% and the 15.01% ratio reported at June 30,
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 to tangible assets
ratio ("TCE") which was 6.79% at June 30,
2023, an increase of 19 basis points from the linked quarter
and nine basis points from the prior year period. The
increase in TCE for the current quarter was driven by higher
earnings, while fluctuation in AOCI also impacted this ratio.
CAPITAL
RATIOS
|
|
June 30, 2023
(estimated)
|
|
March 31,
2023
|
|
June 30,
2022
|
|
|
|
|
|
|
|
Tangible common equity
to tangible assets (non-GAAP)
|
|
6.79 %
|
|
6.60 %
|
|
6.70 %
|
Common equity tier I
capital ratio
|
|
12.76 %
|
|
12.53 %
|
|
12.90 %
|
Tier I leverage
ratio
|
|
10.47 %
|
|
10.28 %
|
|
9.95 %
|
Tier I risk-based
capital ratio
|
|
13.55 %
|
|
13.32 %
|
|
13.76 %
|
Total risk-based
capital ratio
|
|
15.10 %
|
|
14.88 %
|
|
15.01 %
|
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 liquidity ratio (net liquid assets as a percent of
net liabilities) at June 30, 2023 was
17.3%. In addition, the Company had approximately
$1.6 billion in available lines of
credit at that date resulting in a total liquidity ratio of
29.0%. The increase in available lines during the second
quarter of 2023 was a result of additional loan and security
collateral being transferred to the FHLB and Federal Reserve Bank
to enhance the levels of off-balance sheet liquidity availability
to meet demands, as necessary.
First Bancorp is a bank holding company headquartered in
Southern Pines, North Carolina,
with total assets of $12.0 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
($ in thousands,
except per share data)
|
|
|
|
For the Three Months
Ended
|
|
For the Six Months
Ended
|
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
Interest
and fees on loans
|
|
$
102,963
|
|
99,380
|
|
65,077
|
|
202,343
|
|
129,279
|
Interest
on investment securities
|
|
14,183
|
|
14,546
|
|
14,489
|
|
28,729
|
|
28,747
|
Other
interest income
|
|
4,015
|
|
3,248
|
|
881
|
|
7,263
|
|
1,530
|
Total interest
income
|
|
121,161
|
|
117,174
|
|
80,447
|
|
238,335
|
|
159,556
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
Interest
on deposits
|
|
27,328
|
|
18,918
|
|
1,585
|
|
46,246
|
|
3,356
|
Interest
on borrowings
|
|
6,848
|
|
5,770
|
|
592
|
|
12,618
|
|
1,052
|
Total interest
expense
|
|
34,176
|
|
24,688
|
|
2,177
|
|
58,864
|
|
4,408
|
Net
interest income
|
|
86,985
|
|
92,486
|
|
78,270
|
|
179,471
|
|
155,148
|
Provision for loan
losses
|
|
3,700
|
|
11,451
|
|
—
|
|
15,151
|
|
3,500
|
(Reversal of) provision
for unfunded commitments
|
|
(1,339)
|
|
1,051
|
|
—
|
|
(288)
|
|
(1,500)
|
Total provision for credit
losses
|
|
2,361
|
|
12,502
|
|
—
|
|
14,863
|
|
2,000
|
Net
interest income after provision for credit losses
|
|
84,624
|
|
79,984
|
|
78,270
|
|
164,608
|
|
153,148
|
Noninterest
income
|
|
|
|
|
|
|
|
|
|
|
Service
charges on deposit accounts
|
|
4,114
|
|
3,894
|
|
3,700
|
|
8,008
|
|
7,241
|
Other
service charges, commissions, and fees
|
|
5,650
|
|
5,920
|
|
7,882
|
|
11,570
|
|
14,887
|
Fees from
presold mortgage loans
|
|
557
|
|
406
|
|
454
|
|
963
|
|
1,575
|
Commissions from sales of financial products
|
|
1,413
|
|
1,306
|
|
1,151
|
|
2,719
|
|
2,096
|
SBA
consulting fees
|
|
409
|
|
521
|
|
704
|
|
930
|
|
1,484
|
SBA loan
sale gains
|
|
696
|
|
255
|
|
841
|
|
951
|
|
4,102
|
Bank-owned
life insurance income
|
|
1,066
|
|
1,046
|
|
942
|
|
2,112
|
|
1,918
|
Other
gains, net
|
|
330
|
|
188
|
|
1,590
|
|
518
|
|
3,212
|
Total noninterest
income
|
|
14,235
|
|
13,536
|
|
17,264
|
|
27,771
|
|
36,515
|
Noninterest
expenses
|
|
|
|
|
|
|
|
|
|
|
Salaries
expense
|
|
28,676
|
|
29,321
|
|
23,799
|
|
57,997
|
|
47,253
|
Employee
benefit expense
|
|
6,165
|
|
6,393
|
|
6,310
|
|
12,558
|
|
11,888
|
Occupancy
and equipment related expense
|
|
4,972
|
|
5,067
|
|
4,636
|
|
10,039
|
|
9,324
|
Merger and
acquisition expenses
|
|
1,334
|
|
12,182
|
|
737
|
|
13,516
|
|
4,221
|
Intangibles amortization expense
|
|
2,049
|
|
2,145
|
|
953
|
|
4,194
|
|
1,970
|
Other
operating expenses
|
|
18,397
|
|
19,067
|
|
12,963
|
|
37,464
|
|
26,207
|
Total noninterest
expenses
|
|
61,593
|
|
74,175
|
|
49,398
|
|
135,768
|
|
100,863
|
Income before income
taxes
|
|
37,266
|
|
19,345
|
|
46,136
|
|
56,611
|
|
88,800
|
Income tax
expense
|
|
7,863
|
|
4,184
|
|
9,551
|
|
12,047
|
|
18,246
|
Net income
|
|
$
29,403
|
|
15,161
|
|
36,585
|
|
44,564
|
|
70,554
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted
|
|
$
0.71
|
|
0.37
|
|
1.03
|
|
1.08
|
|
1.98
|
First Bancorp and
Subsidiaries
Financial
Summary
|
|
CONSOLIDATED BALANCE
SHEETS
($ in
thousands)
|
|
|
|
At June 30,
2023
|
|
At March 31,
2023
|
|
At December 31,
2022
|
|
At June 30,
2022
|
Assets
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
101,215
|
|
102,691
|
|
101,133
|
|
85,139
|
Interest-bearing
deposits with banks
|
|
259,460
|
|
610,691
|
|
169,185
|
|
348,964
|
Total cash and cash
equivalents
|
|
360,675
|
|
713,382
|
|
270,318
|
|
434,103
|
|
|
|
|
|
|
|
|
|
Investment
securities
|
|
2,757,607
|
|
2,830,060
|
|
2,856,193
|
|
3,079,034
|
Presold mortgages and
SBA loans held for sale
|
|
4,953
|
|
5,884
|
|
1,282
|
|
5,293
|
|
|
|
|
|
|
|
|
|
Loans
|
|
7,897,629
|
|
7,798,963
|
|
6,665,145
|
|
6,243,170
|
Allowance for credit
losses on loans
|
|
(109,230)
|
|
(106,396)
|
|
(90,967)
|
|
(82,181)
|
Net loans
|
|
7,788,399
|
|
7,692,567
|
|
6,574,178
|
|
6,160,989
|
|
|
|
|
|
|
|
|
|
Premises and
equipment
|
|
152,443
|
|
152,790
|
|
134,187
|
|
135,143
|
Operating right-of-use
lease assets
|
|
18,375
|
|
18,898
|
|
18,733
|
|
19,707
|
Intangible
assets
|
|
515,847
|
|
518,012
|
|
376,938
|
|
379,615
|
Bank-owned life
insurance
|
|
181,659
|
|
180,730
|
|
164,592
|
|
163,831
|
Other assets
|
|
253,040
|
|
250,826
|
|
228,628
|
|
188,500
|
Total assets
|
|
$ 12,032,998
|
|
12,363,149
|
|
10,625,049
|
|
10,566,215
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
Noninterest-bearing checking
accounts
|
|
$
3,639,930
|
|
3,763,637
|
|
3,566,003
|
|
3,699,725
|
Interest-bearing deposit
accounts
|
|
6,528,639
|
|
6,608,961
|
|
5,661,526
|
|
5,660,023
|
Total deposits
|
|
10,168,569
|
|
10,372,598
|
|
9,227,529
|
|
9,359,748
|
|
|
|
|
|
|
|
|
|
Borrowings
|
|
481,658
|
|
606,481
|
|
287,507
|
|
67,445
|
Operating lease
liabilities
|
|
19,109
|
|
19,638
|
|
19,391
|
|
20,280
|
Other
liabilities
|
|
66,020
|
|
64,471
|
|
59,026
|
|
56,399
|
Total liabilities
|
|
10,735,356
|
|
11,063,188
|
|
9,593,453
|
|
9,503,872
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
|
Common stock
|
|
960,851
|
|
959,422
|
|
725,153
|
|
723,956
|
Retained
earnings
|
|
674,933
|
|
654,573
|
|
648,418
|
|
587,739
|
Stock in rabbi trust
assumed in acquisition
|
|
(1,365)
|
|
(1,608)
|
|
(1,585)
|
|
(1,573)
|
Rabbi trust
obligation
|
|
1,365
|
|
1,608
|
|
1,585
|
|
1,573
|
Accumulated other
comprehensive loss
|
|
(338,142)
|
|
(314,034)
|
|
(341,975)
|
|
(249,352)
|
Total shareholders'
equity
|
|
1,297,642
|
|
1,299,961
|
|
1,031,596
|
|
1,062,343
|
Total liabilities and
shareholders' equity
|
|
$ 12,032,998
|
|
12,363,149
|
|
10,625,049
|
|
10,566,215
|
First Bancorp and
Subsidiaries
Financial
Summary
|
|
TREND
INFORMATION
|
|
|
|
For the Three Months
Ended
|
|
|
June 30,
2023
|
|
March 31,
2023
|
|
December 31,
2022
|
|
September 30,
2022
|
|
June 30,
2022
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE
RATIOS (annualized)
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (1)
|
|
0.98 %
|
|
0.51 %
|
|
1.44 %
|
|
1.42 %
|
|
1.40 %
|
Return on average
common equity (2)
|
|
8.97 %
|
|
4.83 %
|
|
15.20 %
|
|
13.84 %
|
|
13.45 %
|
Return on average
tangible common equity (3)
|
|
14.79 %
|
|
8.16 %
|
|
20.96 %
|
|
21.25 %
|
|
20.66 %
|
|
|
|
|
|
|
|
|
|
|
|
COMMON SHARE
DATA
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
- common
|
|
$
0.22
|
|
0.22
|
|
0.22
|
|
0.22
|
|
0.22
|
Stated book value -
common
|
|
$
31.59
|
|
31.72
|
|
28.89
|
|
27.57
|
|
29.77
|
Tangible book value -
common (non-GAAP)
|
|
$
19.03
|
|
19.08
|
|
18.34
|
|
16.98
|
|
19.13
|
Common shares
outstanding at end of period
|
|
41,082,678
|
|
40,986,990
|
|
35,704,154
|
|
35,711,754
|
|
35,683,595
|
Weighted average shares
outstanding - diluted
|
|
41,129,100
|
|
41,112,692
|
|
35,614,972
|
|
35,703,446
|
|
35,642,471
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL INFORMATION
(estimates for current quarter)
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity
to tangible assets
|
|
6.79 %
|
|
6.60 %
|
|
6.39 %
|
|
5.98 %
|
|
6.70 %
|
Common equity tier I
capital ratio
|
|
12.80 %
|
|
12.53 %
|
|
13.02 %
|
|
12.76 %
|
|
12.90 %
|
Total risk-based
capital ratio
|
|
15.15 %
|
|
14.88 %
|
|
15.09 %
|
|
14.84 %
|
|
15.01 %
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated by
dividing annualized net income by average assets.
|
(2) Calculated by
dividing annualized net income by average common equity.
|
(3) Calculated by
dividing annualized net income by average tangible common
equity.
|
|
|
|
For the Three Months
Ended
|
INCOME
STATEMENT
($ in thousands
except per share data)
|
|
June 30,
2023
|
|
March 31,
2023
|
|
December 31,
2022
|
|
September 30,
2022
|
|
June 30,
2022
|
Net interest income -
tax-equivalent (1)
|
|
$
87,684
|
|
93,186
|
|
85,094
|
|
86,026
|
|
78,939
|
Taxable equivalent
adjustment (1)
|
|
699
|
|
700
|
|
722
|
|
692
|
|
669
|
Net interest
income
|
|
86,985
|
|
92,486
|
|
84,372
|
|
85,334
|
|
78,270
|
Provision for loan
losses
|
|
3,700
|
|
11,451
|
|
4,000
|
|
5,100
|
|
—
|
(Reversal of) provision
for unfunded commitments
|
|
(1,339)
|
|
1,051
|
|
1,000
|
|
300
|
|
—
|
Noninterest
income
|
|
14,235
|
|
13,536
|
|
14,558
|
|
16,912
|
|
17,264
|
Merger and acquisition
costs
|
|
1,334
|
|
12,182
|
|
303
|
|
548
|
|
737
|
Other noninterest
expense
|
|
60,259
|
|
61,993
|
|
45,354
|
|
48,152
|
|
48,661
|
Income before income
taxes
|
|
37,266
|
|
19,345
|
|
48,273
|
|
48,146
|
|
46,136
|
Income tax
expense
|
|
7,863
|
|
4,184
|
|
9,840
|
|
10,197
|
|
9,551
|
Net income
|
|
29,403
|
|
15,161
|
|
38,433
|
|
37,949
|
|
36,585
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted
|
|
$
0.71
|
|
0.37
|
|
1.08
|
|
1.06
|
|
1.03
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
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SOURCE First Bancorp