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First Bancorp (FBNC) Reports Q3 2023 Earnings

  • First Bancorp (NASDAQ:FBNC) reported net income of $29.9 million for Q3 2023, up from $29.4 million in Q2 2023.

  • The company's total loans reached $8.0 billion, with a quarterly growth of $129.4 million.

  • First Bancorp's total deposits amounted to $10.2 billion, a year-over-year increase of 10.9%.

  • The company remains well-capitalized with a total risk-based capital ratio of 15.26% as of September 30, 2023.


First Bancorp (NASDAQ:FBNC), the parent company of First Bank, announced its third-quarter results on October 25, 2023. The company reported a net income of $29.9 million, or $0.73 per diluted common share, for the three months ended September 30, 2023. This is an increase from $29.4 million, or $0.71 per diluted common share, for the three months ended June 30, 2023. However, it is a decrease from $37.9 million, or $1.06 per diluted common share, recorded in the third quarter of 2022.

Financial Performance


For the nine months ended September 30, 2023, First Bancorp recorded net income of $74.5 million, or $1.81 per diluted common share, compared to $108.5 million, or $3.04 per diluted common share, for the same period in 2022. The financial results for the nine months ended September 30, 2023, include merger expenses totaling $13.5 million and an initial loan loss provision of $12.2 million for acquired loans.

Acquisition Impact


On January 1, 2023, First Bancorp completed its acquisition of GrandSouth Bancorporation. This acquisition contributed $1.02 billion in loans and $1.05 billion in deposits, impacting the financial comparisons for the periods presented.

Q3 2023 Highlights


Loans totaled $8.0 billion at the end of Q3 2023, with a quarterly growth of $129.4 million, an annualized growth rate of 6.5%. Total market deposits (exclusive of brokered deposits) grew $66.7 million for the quarter, an annualized growth rate of 2.6%. Noninterest-bearing demand accounts remained strong at 34% of total deposits at quarter end. The total loan yield increased to 5.32%, up 83 basis points from the third quarter of 2022.

Net Interest Income and Margin


Net interest income for the third quarter of 2023 was $84.7 million compared to $85.3 million recorded in the third quarter of 2022, a nominal decrease of 0.7%. The Companys tax-equivalent net interest margin (NIM) declined year-over-year with the third quarter of 2023 reporting a tax-equivalent NIM of 2.97% compared to 3.40% for the third quarter of 2022.

Asset Quality and Capital Strength


Asset quality remained strong with annualized net loan charge-offs of 0.11% for the third quarter of 2023. Total nonperforming assets (NPAs) amounted to $38.8 million at September 30, 2023, or 0.32% of total assets, down from 0.39% for the comparable period of 2022. The company remains well-capitalized with a total common equity tier 1 ratio of 12.93% (estimated) and a total risk-based capital ratio of 15.26% (estimated) as of September 30, 2023.

Outlook


Richard H. Moore, CEO and Chairman of the Company, expressed confidence in the company's ability to stay well-positioned for the remainder of the year and into next year, citing the company's stable deposit base, low loan-to-deposit ratio, strong credit quality, and minimal large office building credit exposure.

Explore the complete 8-K earnings release (here) from First Bancorp for further details.

This article first appeared on GuruFocus.

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