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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 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.
1


First Bancorp
INDEX
 
  Page
   
Item 2.02 – Results of Operations and Financial Condition
Item 9.01 – Financial Statements and Exhibits
   
Signatures
   

2


Item 2.02 - Results of Operations and Financial Condition
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
Exhibit 99.1 – News Release issued on January 24, 2023


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

3
EX-99.1 2 exhibit991newsreleasedated.htm EX-99.1 Document



fblogoa09.jpg

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 INFORMATION December 31, 2023 September 30, 2023 December 31, 2022
Yield on loans 5.39% 5.32% 4.62%
Yield on securities 1.76% 1.75% 1.74%
Yield on other earning assets 4.49% 4.58% 3.05%
   Yield on total interest-earning assets 4.38% 4.31% 3.64%
Rate on interest-bearing deposits 2.14% 1.95% 0.44%
Rate on other interest-bearing liabilities 6.02% 5.88% 4.58%
   Rate on total interest-bearing liabilities 2.43% 2.20% 0.60%
     Total cost of funds 1.64% 1.46% 0.36%
        Net interest margin (1) 2.85% 2.95% 3.29%
        Net interest margin - tax-equivalent (2) 2.88% 2.97% 3.32%
        Average prime rate 8.50% 8.43% 6.82%
(1) Calculated by dividing annualized net interest income by average earning assets for the period.
(2) Calculated by dividing annualized tax-equivalent net interest income by average earning assets for the period. The tax-equivalent amount reflects the tax benefit that the Company receives related to its tax-exempt loans and securities, which carry interest rates lower than similar taxable investments due to their tax-exempt status. This amount has been computed assuming a 23% tax rate and is reduced by the related nondeductible portion of interest expense.

Included in interest income for the fourth quarter of 2023 was total loan discount accretion of $2.9 million compared to $1.3 million for the fourth quarter of 2022, with the increase being primarily related to the GrandSouth acquisition. Loan discount accretion had an 10 basis points positive impact on the Company's NIM in the fourth quarter of 2023 compared to accretion contributing 5 basis points to NIM for the prior year quarter.

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, 2023 September 30, 2023 December 31, 2022
Interest income - increased by accretion of loan discount on acquired loans $ 2,464  2,766  886 
Interest income - increased by accretion of loan discount on retained portions of SBA loans 459  437  427 
Total interest income impact 2,923  3,203  1,313 
Interest expense - (increased) reduced by (discount accretion) premium amortization of deposits (495) (709) 70 
Interest expense - increased by discount accretion of borrowings (207) (215) (64)
Total net interest expense impact (702) (924)
     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, 2023 September 30, 2023 December 31, 2022
Nonperforming assets
Nonaccrual loans $ 32,208  26,884  28,514 
Modifications to borrowers in financial distress 11,719  10,723  — 
Troubled debt restructurings - accruing (1)
—  —  9,121 
Total nonperforming loans 43,927  37,607  37,635 
Foreclosed real estate 862  1,235  658 
Total nonperforming assets $ 44,789  38,842  38,293 
Asset Quality Ratios
Quarterly net charge-offs (recoveries) to average loans - annualized 0.09  % 0.11  % (0.02) %
Nonperforming loans to total loans 0.54  % 0.47  % 0.56  %
Nonperforming assets to total assets 0.37  % 0.32  % 0.36  %
Allowance for credit losses to total loans 1.35  % 1.35  % 1.36  %
(1) The Company implemented ASU 2022-02 effective January 1, 2023 eliminating TDR accounting.

Noninterest Income

Total noninterest income for the fourth quarter of 2023 was $14.5 million, a 0.1% decrease from the $14.6 million recorded for the fourth quarter of 2022 and a 4.2% decrease from the linked quarter. The GrandSouth acquisition was a primary factor driving increases from the prior year in Service Charges on Deposit Accounts related to the higher number of customer accounts and activity generating revenue. The reduction in Other Service Charges, Commissions and Fees from the linked quarter and the prior year quarter was driven by lower net bankcard revenues on reduced incentives received from Mastercard and higher processing fees.

Noninterest Expenses

Noninterest expenses amounted to $56.4 million for the fourth quarter of 2023 compared to $62.2 million for the linked quarter and $45.7 million for the fourth quarter of 2022. The $5.8 million or 9.4% reduction in noninterest expense from the linked quarter was driven by (1) annual adjustments to the Company's pension and SERP benefit plans which resulted in reducing expense approximately $2.2 million during the period, and (2) reduction in bonus and incentive accruals of $2.6 million related to performance results against goals.

The 23.5% increase in total noninterest expenses from the prior year period was related in large part to the acquisition of eight GrandSouth branch locations and related branch and support personnel. This transaction was the primary driver of (1) higher compensation expense which increased from the fourth quarter of 2022 by $3.4 million, or 11.2%; (2) higher occupancy and equipment expense which increased $1.5 million, or 34.2%; and (3) increased intangible amortization of $1.0 million, or 125.0%, related to the core deposit intangibles added with the GrandSouth acquisition.

In addition, other operating expenses increased $4.9 million, or 49.0%, from the fourth quarter of 2022, driven by: (1) approximately $1.6 million in higher data processing and software expense for the additional transactions and account volumes resulting from the GrandSouth transaction, combined with investments in new software systems; and (2) FDIC insurance increases totaling approximately $1.0 million related to the deposits acquired from GrandSouth and the general FDIC rate increase effective January 1, 2023. The remaining increase between the fourth quarter of 2022 and the fourth quarter of 2023 was primarily related to 2022 year end accrual reductions which resulted in lower expense in the fourth quarter of 2022 totaling approximately $3.6 million. The fourth quarter of 2023 also include year end adjustments to the Company's pension and SERP benefit plans which resulted in lower expense of approximately $1.6 million as compared the prior year period.

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, 2023 December 31, 2022 Change
4Q23 vs 4Q22
Total assets $ 12,026,195  10,579,187  13.7%
Investment securities, at amortized cost 3,143,756  3,325,652  (5.5)%
Loans 8,087,450  6,576,415  23.0%
Earning assets 11,477,007  10,161,108  13.0%
Deposits 10,131,094  9,275,909  9.2%
Interest-bearing liabilities 7,204,165  5,779,958  24.6%
Shareholders’ equity 1,280,812  1,003,031  27.7%

Total investment securities were $2.7 billion at December 31, 2023, an increase of $87.2 million from the linked quarter and a decrease of $133.1 million from December 31, 2022. The Company made no notable purchases of investment securities during 2023 and continues to utilize cash flows from amortizing investments to fund loan growth and fluctuations in deposits. The increase in balances experienced from the linked quarter was related to an improvement in the level of unrealized loss on available for sale securities which decreased $120.9 million from the linked quarter and decreased $43.3 million from the prior year end. Total unrealized loss on available for sale investment securities was $400.7 million at December 31, 2023. The Company has the intent to hold, and does not expect it will be required to sell, investments with unrealized losses until maturity or recovery of the amortized cost as market conditions change.

Total loans amounted to $8.2 billion at December 31, 2023, an increase of $123.1 million from the linked quarter and $1.5 billion, or 22.3%, from December 31, 2022. Excluding the GrandSouth acquisition, organic loan growth was $464.9 million for 2023, representing an annualized growth rate of 6.0%.

As presented below, our total loan portfolio mix has remained consistent. There were no notable concentrations in geographies or industries, including in office or hospitality categories at year end. The Company's exposure to non-owner occupied office loans represented approximately 5.6% of the total portfolio at December 31, 2023, with the largest loan being $27.2 million and an average loan outstanding amount of $1.3 million. Non-owner occupied office loans are generally in non-metro markets and the top 10 loans in this category represent less than 2% of the total loan portfolio.

5


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

December 31, 2023 September 30, 2023 December 31, 2022
($ in thousands) Amount Percentage Amount Percentage Amount Percentage
Commercial and industrial $ 905,862  11  % 893,910  11  % 641,941  %
Construction, development & other land loans 992,980  12  % 1,008,289  13  % 934,176  14  %
Commercial real estate - owner occupied 1,259,022  16  % 1,252,259  16  % 1,036,270  16  %
Commercial real estate - non-owner occupied 2,528,060  31  % 2,509,317  31  % 2,123,811  32  %
Multi-family real estate 421,376  % 405,161  % 350,180  %
Residential 1-4 family real estate 1,639,469  20  % 1,560,140  19  % 1,195,785  18  %
Home equity loans/lines of credit 335,068  % 331,108  % 323,726  %
Consumer loans 68,443  % 67,169  % 60,659  %
Loans, gross 8,150,280  100  % 8,027,353  100  % 6,666,548  100  %
Unamortized net deferred loan fees (178) (316) (1,403)
Total loans $ 8,150,102  8,027,037  6,665,145 

Total deposits were $10.0 billion at December 31, 2023, an increase of $804.1 million, or 8.7%, from December 31, 2022. The year-over-year change represents an increase in market deposits of $1.1 billion, resulting primarily from the GrandSouth acquisition, partially offset by intentional declines in brokered deposits of $249.3 million. Organic market deposits (excluding the acquired deposits and brokered deposits) contracted $203.9 million for the fourth quarter of 2023 and grew $16.8 million since the prior year end, which represents a growth rate of 0.2%.

The Company has a diversified and granular deposit base which has remained a stable source of funding. At quarter end, noninterest-bearing deposits accounted for 34% of total deposits, consistent with the linked quarter. As of December 31, 2023, the estimated insured deposits totaled $6.3 billion or 63.3% of total deposits. In addition, there were collateralized deposits at that date of $820.9 million such that approximately 71.5% of our total deposits were insured or collateralized at the current quarter end.

Our deposit mix has remained consistent historically and has not changed significantly with the addition of GrandSouth, with the exception of some shift to money market accounts, as presented in the table below.

December 31, 2023 September 30, 2023 December 31, 2022
($ in thousands) Amount Percentage Amount Percentage Amount Percentage
Noninterest-bearing checking accounts $ 3,379,876  34  % 3,503,050  34  % 3,566,003  39  %
Interest-bearing checking accounts 1,411,142  14  % 1,458,855  14  % 1,514,166  16  %
Money market accounts 3,653,506  36  % 3,635,523  36  % 2,416,146  26  %
Savings accounts 608,380  % 638,912  % 728,641  %
Other time deposits 610,887  % 626,870  % 464,343  %
Time deposits >$250,000 355,209  % 359,704  % 276,319  %
Total market deposits 10,019,000  100  % 10,222,914  100  % 8,965,618  97  %
Brokered deposits 12,599  —  % 12,489  —  % 261,911  %
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 RATIOS December 31, 2023 (estimated) September 30, 2023 December 31, 2022
Tangible common equity to tangible assets (non-GAAP) 7.42% 6.49% 6.39%
Common equity tier I capital ratio 13.20% 12.93% 13.02%
Tier I leverage ratio 10.91% 10.72% 10.51%
Tier I risk-based capital ratio 13.99% 13.71% 13.83%
Total risk-based capital ratio 15.54% 15.26% 15.09%


Liquidity

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

The Company's on-balance sheet liquidity ratio (net liquid assets as a percent of net liabilities) at December 31, 2023 was 14.6%. In addition, the Company had approximately $2.2 billion in available lines of credit at that date resulting in a total liquidity ratio of 30.4%.
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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 Ended For the Twelve Months Ended
($ in thousands, except per share data - unaudited) December 31, 2023 September 30, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Interest income
   Interest and fees on loans $ 109,811  106,514  76,509  418,668  278,027 
   Interest on investment securities 13,978  14,054  14,611  56,761  57,923 
   Other interest income 2,784  3,283  1,991  13,330  5,007 
      Total interest income 126,573  123,851  93,111  488,759  340,957 
Interest expense
   Interest on deposits 35,979  32,641  6,145  114,866  11,349 
   Interest on borrowings 8,110  6,508  2,594  27,235  4,754 
      Total interest expense 44,089  39,149  8,739  142,101  16,103 
        Net interest income 82,484  84,702  84,372  346,658  324,854 
Provision for loan losses 3,400  1,200  4,000  19,750  12,600 
(Reversal of) provision for unfunded commitments (450) (1,200) 1,000  (1,937) (200)
     Total provision for credit losses 2,950  —  5,000  17,813  12,400 
        Net interest income after provision for credit losses 79,534  84,702  79,372  328,845  312,454 
Noninterest income
   Service charges on deposit accounts 4,413  4,661  4,116  16,800  15,523 
   Other service charges, commissions, and fees 4,968  5,450  5,094  22,270  26,294 
   Fees from presold mortgage loans 325  325  151  1,613  2,102 
   Commissions from sales of financial products 1,577  1,207  1,708  5,503  5,195 
   SBA consulting fees 395  478  645  1,803  2,608 
   SBA loan sale gains 437  1,101  495  2,489  5,076 
   Bank-owned life insurance income 1,134  1,104  967  4,350  3,847 
   Other gains, net 1,293  851  1,382  2,662  7,340 
      Total noninterest income 14,542  15,177  14,558  57,490  67,985 
Noninterest expenses
   Salaries expense 26,985  29,394  24,652  114,377  96,321 
   Employee benefit expense 6,377  6,539  5,353  25,474  21,397 
   Occupancy and equipment related expense 5,948  5,003  4,433  20,990  18,604 
   Merger and acquisition expenses 189  —  303  13,695  5,072 
   Intangibles amortization expense 1,856  1,953  825  8,003  3,684 
   Other operating expenses 15,031  19,335  10,091  71,840  50,142 
      Total noninterest expenses 56,386  62,224  45,657  254,379  195,220 
Income before income taxes 37,690  37,655  48,273  131,956  185,219 
Income tax expense 8,016  7,762  9,840  27,825  38,283 
Net income $ 29,674  29,893  38,433  104,131  146,936 
Earnings per common share - diluted $ 0.72  0.73  1.08  2.53  4.12 


9




First Bancorp and Subsidiaries
Financial Summary
CONSOLIDATED BALANCE SHEETS
($ in thousands - unaudited) At December 31, 2023 At September 30, 2023 At December 31, 2022
Assets
Cash and due from banks $ 100,891  95,257  101,133 
Interest-bearing deposits with banks 136,964  178,332  169,185 
     Total cash and cash equivalents 237,855  273,589  270,318 
Investment securities 2,723,057  2,635,866  2,856,193 
Presold mortgages and SBA loans held for sale 2,667  8,060  1,282 
Loans 8,150,102  8,027,037  6,665,145 
Allowance for credit losses on loans (109,853) (108,198) (90,967)
Net loans 8,040,249  7,918,839  6,574,178 
Premises and equipment 150,957  151,981  134,187 
Operating right-of-use lease assets 17,063  17,604  18,733 
Goodwill and other intangible assets 511,608  513,629  376,938 
Bank-owned life insurance 183,897  182,764  164,592 
Other assets 247,589  275,628  228,628 
     Total assets $ 12,114,942  11,977,960  10,625,049 
Liabilities
Deposits:
     Noninterest-bearing checking accounts $ 3,379,876  3,503,050  3,566,003 
     Interest-bearing deposit accounts 6,651,723  6,732,353  5,661,526 
          Total deposits 10,031,599  10,235,403  9,227,529 
Borrowings 630,158  401,843  287,507 
Operating lease liabilities 17,833  18,348  19,391 
Other liabilities 62,972  64,683  59,026 
     Total liabilities 10,742,562  10,720,277  9,593,453 
Shareholders’ equity
Common stock 963,990  962,644  725,153 
Retained earnings 716,420  695,791  648,418 
Stock in rabbi trust assumed in acquisition (1,385) (1,375) (1,585)
Rabbi trust obligation 1,385  1,375  1,585 
Accumulated other comprehensive loss (308,030) (400,752) (341,975)
     Total shareholders’ equity 1,372,380  1,257,683  1,031,596 
Total liabilities and shareholders’ equity $ 12,114,942  11,977,960  10,625,049 


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First Bancorp and Subsidiaries
Financial Summary

TREND INFORMATION

For the Three Months Ended
December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022
PERFORMANCE RATIOS (annualized)
Return on average assets (1)
0.98  % 0.99  % 0.98  % 0.51  % 1.44  %
Return on average common equity (2)
9.19  % 9.10  % 8.97  % 4.83  % 15.20  %
Return on average tangible common equity (3)
15.33  % 15.05  % 14.79  % 8.16  % 20.96  %
COMMON SHARE DATA
Cash dividends declared - common $ 0.22  0.22  0.22  0.22  0.22 
Book value per common share $ 33.38  30.61  31.59  31.72  28.89 
Tangible book value per share (4)
$ 20.94  18.11  19.03  19.08  18.34 
Common shares outstanding at end of period 41,109,987  41,085,498  41,082,678  40,986,990  35,704,154 
Weighted average shares outstanding - diluted 41,207,945  41,199,058  41,129,100  41,112,692  35,614,972 
CAPITAL INFORMATION (estimates for current quarter)
Tangible common equity to tangible assets (5)
7.42  % 6.49  % 6.79  % 6.60  % 6.39  %
Common equity tier I capital ratio 13.20  % 12.93  % 12.75  % 12.53  % 13.02  %
Total risk-based capital ratio 15.54  % 15.26  % 15.09  % 14.88  % 15.09  %
(1) Calculated by dividing annualized net income by average assets.
(2) Calculated by dividing annualized net income by average common equity.
(3) Return on average tangible common equity is a non-GAAP financial measure. See Appendix A for components of the calculation and the reconciliation of average common equity to average TCE.
(4) Tangible book value per share is a non-GAAP financial measure. See Appendix B for a reconciliation of common equity to tangible common equity and Appendix C for the resulting calculation.
(5) Tangible common equity ratio is a non-GAAP financial measure. See Appendix B for a reconciliation of common equity to tangible common equity and Appendix D for the resulting calculation.
For the Three Months Ended
INCOME STATEMENT
($ in thousands except per share data)
December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022
Net interest income - tax-equivalent (1) $ 83,225  85,442  87,684  93,186  85,094 
Taxable equivalent adjustment (1) 741  740  699  700  722 
Net interest income 82,484  84,702  86,985  92,486  84,372 
Provision for loan losses 3,400  1,200  3,700  11,451  4,000 
(Reversal of) provision for unfunded commitments (450) (1,200) (1,339) 1,051  1,000 
Noninterest income 14,542  15,177  14,235  13,536  14,558 
Merger and acquisition costs 189  —  1,334  12,182  303 
Other noninterest expense 56,197  62,224  60,259  61,993  45,354 
Income before income taxes 37,690  37,655  37,266  19,345  48,273 
Income tax expense 8,016  7,762  7,863  4,184  9,840 
Net income 29,674  29,893  29,403  15,161  38,433 
Earnings per common share - diluted $ 0.72  0.73  0.71  0.37  1.08 
(1) This amount reflects the tax benefit that the Company receives related to its tax-exempt loans and securities, which carry interest rates lower than similar taxable investments due to their tax-exempt status. This amount has been computed assuming a 23% tax rate and is reduced by the related nondeductible portion of interest expense.

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APPENDIX A: Calculation of Return on TCE

For the Three Months Ended
($ in thousands) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022
Net Income
$ 29,674  29,893  29,403  15,161  38,433 
Average common equity 1,280,812  1,303,249  1,314,650  1,273,435  1,003,023 
    Less: Average goodwill and other intangibles (512,876) (515,111) (517,201) (519,639) (377,793)
Average tangible common equity $ 767,936  788,138  797,449  753,796  625,230 
Return on average common equity 9.19  % 9.10  % 8.97  % 4.83  % 15.20  %
Return on average tangible common equity 15.33  % 15.05  % 14.79  % 8.16  % 24.39  %


APPENDIX B: Reconciliation of Common Equity to TCE

For the Three Months Ended
($ in thousands) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022
Total shareholders' common equity
$ 1,372,380  1,257,683  1,297,642  1,299,961  1,031,596 
Less: Goodwill and other intangibles (511,608) (513,629) (515,847) (518,012) (376,938)
Tangible common equity $ 860,772  744,054  781,795  781,949  654,658 


APPENDIX C: Tangible Book Value Per Share

For the Three Months Ended
($ in thousands except per share data) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022
Tangible common equity (Appendix B) $ 860,772  744,054  781,795  781,949  654,658 
Common shares outstanding
41,109,987  41,085,498  41,082,678  40,986,990  35,704,154 
Tangible book value per common share $ 20.94  18.11  19.03  19.08  18.34 



APPENDIX D: TCE Ratio

For the Three Months Ended
($ in thousands) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022
Tangible common equity (Appendix B) $ 860,772  744,054  781,795  781,949  654,658 
Total assets
12,114,942  11,977,960  12,032,998  12,363,149  10,625,049 
Less: Goodwill and other intangibles (511,608) (513,629) (515,847) (518,012) (376,938)
Tangible assets ("TA") $ 11,603,334  11,464,331  11,517,151  11,845,137  10,248,111 
TCE to TA ratio 7.42  % 6.49  % 6.79  % 6.60  % 6.39  %
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