U.S. Markets close in 6 hrs 24 mins
  • S&P 500

    4,589.72
    +23.24 (+0.51%)
     
  • Dow 30

    35,831.97
    +90.82 (+0.25%)
     
  • Nasdaq

    15,310.90
    +84.20 (+0.55%)
     
  • Russell 2000

    2,312.64
    +21.37 (+0.93%)
     
  • Gold

    1,798.00
    -8.80 (-0.49%)
     
  • EUR/USD

    1.1608
    -0.0007 (-0.0580%)
     
  • 10-Yr Bond

    1.6260
    -0.0090 (-0.55%)
     
  • Vix

    15.01
    -0.42 (-2.72%)
     
  • GBP/USD

    1.3793
    +0.0024 (+0.1766%)
     
  • USD/JPY

    114.1920
    +0.4930 (+0.4336%)
     
  • BTC-USD

    62,408.97
    -883.41 (-1.40%)
     
  • CMC Crypto 200

    1,500.93
    -4.23 (-0.28%)
     
  • FTSE 100

    7,272.34
    +49.52 (+0.69%)
     
  • Nikkei 225

    29,106.01
    +505.60 (+1.77%)
     

First Bancorp Reports Fourth Quarter and Annual Results

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·18 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

SOUTHERN PINES, N.C. , Jan. 27, 2021 /PRNewswire/ -- First Bancorp (NASDAQ - FBNC), the parent company of First Bank, announced today net income of $23.6 million , or $0.83 per diluted common share, for the three months ended December 31, 2020 compared to $20.9 million , or $0.71 per diluted common share, recorded in the fourth quarter of 2019.   For the year ended December 31, 2020 , the Company recorded net income of $81.5 million , or $2.81 per diluted common share compared to $92.0 million , or $3.10 per diluted common share, for 2019.

Earnings for 2020 were impacted by provisions for loan losses related to estimated losses arising from the economic impact of COVID-19.  For the three months ended December 31, 2020 , the Company recorded a provision for loan losses of $4.0 million compared to $3.2 million in the fourth quarter of 2019.  For the year ended December 31, 2020 , the Company recorded a provision for loan losses of $35.0 million compared to $2.3 million for 2019.  The impact of the higher provisions for loan losses were partially offset by higher noninterest income realized in 2020, as described further below.

The Company experienced high balance sheet growth during 2020, with total assets increasing by $1.1 billion , or 18.7%.  This growth was driven by a $1.3 billion , or 27.2%, increase in deposits during the year.

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2020 was $56.0 million , a 2.5% increase from the $54.7 million recorded in the fourth quarter of 2019.  Net interest income for the year ended December 31, 2020 amounted to $218.1 million , a 0.9% increase from the $216.2 million recorded in 2019.  The increases in net interest income for the periods presented were primarily due to growth in average interest-earning assets, which increased by approximately 13.1% in 2020.

The Company's net interest margin (a non-GAAP measure calculated by dividing tax-equivalent net interest income by average earning assets) for the fourth quarter of 2020 was 3.38%, which was 55 basis points lower than the 3.93% realized in the fourth quarter of 2019.  In the fourth quarter 2020, the Company realized approximately $500,000 in interest recoveries, which favorably impacted the net interest margin for the quarter by 3 basis points.  For the year ended December 31, 2020 , the Company's net interest margin was 3.56% compared to 4.00% for 2019. 

The lower 2020 margins were primarily due to the impact of lower interest rates and the lower incremental reinvestment rates realized from the funds provided by the high deposit growth.  For the year ended December 31, 2020 , the Company's interest-earning asset yield declined by 73 basis points compared to a 32 basis point decline in its cost of funds.  However, the higher amount of interest-earning assets more than offset the margin compression and resulted in higher net interest income for the three and twelve months ended December 31, 2020 , compared to the same periods of 2019.

The Company continued to have $241 million of PPP loans outstanding at December 31 , 2020.  The SBA began the forgiveness process in the fourth quarter of 2020, with the Company receiving $4 million in PPP forgiveness payoffs.  For the three and twelve months ended December 31, 2020 , the yield earned on those loans was 3.75% and 3.56%, which included $1.6 million and $4.1 million of amortization of origination fees, respectively.  The Company has $6.0 million in remaining deferred PPP origination fees that will be recognized over the lives of the loans, with accelerated amortization expected to result from the loan forgiveness process.

Provision for Loan Losses and Asset Quality

As permitted by COVID-19 relief legislation enacted in March 2020 and December 2020 , the Company has elected to defer the implementation of the Current Expected Credit Loss (CECL) methodology until January 1 , 2021.  Accordingly, the Company's allowance for loan losses at each period end is based on the Company's estimate of probable losses that have been incurred at the end of such period, including losses arising from the impact of COVID-19, in accordance with the pre-CECL methodology for determining loan losses. 

The Company recorded a provision for loan losses of $4.0 million in the fourth quarter of 2020 compared to $3.2 million in the fourth quarter of 2019.  For the year ended December 31, 2020 , the Company recorded a provision for loan losses of $35.0 million compared to $2.3 million for 2019.  The increases in 2020 were primarily related to estimated probable losses arising from the economic impact of COVID-19.  With the onset of the pandemic in March 2020 , the Company worked with many of its borrowers and provided the option of loan payment deferrals, with the Company deferring approximately $774 million loans at June 30 , 2020.  At December 31, 2020 , loans on deferral status amounted to $16.6 million , or 0.4% of total loans. 

Total net loan charge-offs for the fourth quarters of 2020 and 2019 amounted to $0.9 million and $1.0 million , respectively, or 0.07% and 0.09% of average loans on an annualized basis, respectively.  For the year ended December 31, 2020 and 2019, total net charge-offs were $4.0 million and $1.9 million , respectively, or 0.09% and 0.04%, respectively, of average loans.

Total nonperforming loans amounted to $44.6 million at December 31, 2020 , or 0.94% of total loans, compared to $33.9 million a year earlier, or 0.76% of total loans.

Noninterest Income

Total noninterest income was $20.0 million and $14.7 million for the three months ended December 31, 2020 and 2019, respectively.  For the years ended December 31, 2020 and 2019, total noninterest income was $81.3 million and $59.5 million , respectively.

Service charges on deposit accounts amounted to $2.9 million for the fourth quarter of 2020 compared to $3.4 million in the fourth quarter of 2019.  For 2020 and 2019, service charges on deposit accounts amounted to $11.1 million and $13.0 million , respectively.  The decreases were primarily due to fewer instances of overdraft fees.

Fees from presold mortgages amounted to $4.5 million for the fourth quarter of 2020 compared to $1.3 million in the fourth quarter of 2019.  For the years ended December 31, 2020 and 2019, fees from presold mortgages amounted to $14.2 million and $3.9 million , respectively.  The increases in 2020 were primarily due to higher mortgage loan origination volume arising from historically low mortgage loan interest rates.

For the fourth quarters of 2020 and 2019, SBA consulting fees amounted to $1.9 million and $1.0 million , respectively.  For 2020 and 2019, SBA consulting fees amounted to $8.6 million and $3.9 million , respectively.  The increases in 2020 were due to fees earned by the Company's SBA subsidiary, SBA Complete, related to assisting its third-party client banks with the PPP.  SBA Complete recorded approximately $0.9 million and $4.6 million in PPP fees for the three and twelve months ended December 31 , 2020.  At December 31, 2020 , SBA Complete also had $1.4 million in deferred revenue that will be recorded as income upon completing the forgiveness portion of the PPP.

During the second quarter of 2020, the Company sold approximately $220 million in mortgage-backed and commercial mortgage-backed securities at a gain of $8.0 million .  The securities sold were believed to be favorably impacted by historically low interest rates and Federal Reserve stimulus measures.

Noninterest Expenses

Noninterest expenses amounted to $41.9 million in the fourth quarter of 2020 compared to $39.9 million recorded in the fourth quarter of 2019, an increase of 5.0%.  For the years ended December 31, 2020 and 2019, noninterest expenses amounted to $161.3 million and $157.2 million , respectively, an increase of 2.6%.  The increases were primarily due to higher commission expense resulting from increases in mortgage loan volume in 2020.

Income Taxes

The Company's effective tax rate was 21.4% and 21.0% for the three and twelve months ended December 31, 2020 , respectively, compared to 20.4% and 20.8% for the three and twelve months ended December 31, 2019 , respectively.

Balance Sheet and Capital

Total assets at December 31, 2020 amounted to $7.3 billion , a 18.7% increase from a year earlier.  The growth was driven by an increase in deposits. 

Deposit growth for the fourth quarter of 2020 was $214 million , or 14.1% on an annualized basis.  Deposit growth for the year ended December 31, 2020 was $1.3 billion , or 27.2%.  In addition to deposits arising from PPP loans, this high deposit growth is believed to be due to a combination of stimulus funds and changes in customer behaviors during the pandemic.

Loans decreased in the fourth quarter by $83 million .   Loan growth for the year ended December 31, 2020 was $278 million , or 6.2%, which includes $241 million in PPP loans.  Loan growth in 2020 was impacted by a number of large commercial loan payoffs, as well as high levels of refinanced mortgage loans.

With the excess liquidity resulting from the high deposit growth, the Company reduced its level of borrowings by $239 million , or 79.4%, at December 31, 2020 compared to a year earlier.  The Company has also increased its holdings of investment securities to $1.6 billion at December 31, 2020 , an increase of $731 million , or 82.1%, compared to a year earlier.

The Company remains well-capitalized by all regulatory standards, with an estimated Total Risk-Based Capital Ratio at December 31, 2020 of 15.41%, an increase from the 14.89% reported at December 31 , 2019.  The Company's tangible common equity to tangible assets ratio was 9.08% at December 31, 2020 , a decrease of 112 basis points from a year earlier, which was impacted by the high balance sheet growth.

Comments of the CEO and Other Business Matters

Richard H. Moore , CEO of First Bancorp, commented, "Although our country continues to be in challenging times, we are pleased with our results for 2020.  Our balance sheet and capital levels remain strong and position us well for the future."  Mr. Moore also stated, "We remain committed to serving our communities with a high level of service during the ongoing pandemic, with almost all branch lobbies remaining open with safety precautions in place.  We've also experienced record levels of usage of our easy-to-use mobile banking app."

The following is additional discussion of business development and other miscellaneous matters affecting the Company during the fourth quarter of 2020:

  • On December 15, 2020 , the Company announced a quarterly cash dividend of $0.18 per share payable on January 25, 2021 to shareholders of record on December 31 , 2020. 

  • During the fourth quarter of 2020, the Company repurchased 131,413 shares of its common stock at an average stock price of $24.10 , which totaled $3.2 million .

  • The Company's Board of Directors has authorized a continuation of its share repurchase program with a maximum repurchase amount of $20 million and an expiration date of December 31, 2021 .

First Bancorp is a bank holding company headquartered in Southern Pines, North Carolina , with total assets of approximately $7.3 billion . Its principal activity is the ownership and operation of First Bank, a state-chartered community bank that operates 101 branches in North Carolina and South Carolina.  First Bank Insurance Services is a subsidiary of First Bank and provides insurance products and services to individuals and businesses throughout First Bank's market area.  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 .

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 - Page 1



Three Months Ended

December 31,

Percent

($ in thousands except per share data - unaudited)

2020


2019

Change

INCOME STATEMENT





Interest income





   Interest and fees on loans

$

53,099



56,030



   Interest on investment securities

5,481



5,209



   Other interest income

743



1,730



      Total interest income

59,323



62,969


(5.8)%

Interest expense





   Interest on deposits

2,921



6,552



   Interest on borrowings

396



1,761



      Total interest expense

3,317



8,313


(60.1)%

        Net interest income

56,006



54,656


2.5%

Total provision for loan losses

4,031



3,176


26.9%

Net interest income after provision for loan losses

51,975



51,480


1.0%

Noninterest income





   Service charges on deposit accounts

2,905



3,427



   Other service charges, commissions, and fees

5,214



4,859



   Fees from presold mortgage loans

4,458



1,267



   Commissions from sales of insurance and financial products

2,333



2,059



   SBA consulting fees

1,922



1,025



   SBA loan sale gains

2,432



1,227



   Bank-owned life insurance income

629



636



   Securities gains (losses), net





   Other gains (losses), net

103



162



      Total noninterest income

19,996



14,662


36.4%

Noninterest expenses





   Salaries expense

22,098



20,599



   Employee benefit expense

3,715



3,694



   Occupancy and equipment related expense

3,811



4,093



   Merger and acquisition expenses



(21)



   Intangibles amortization expense

995



1,121



   Foreclosed property losses (gains), net

263



40



   Other operating expenses

11,000



10,365



      Total noninterest expenses

41,882



39,891


5.0%

Income before income taxes

30,089



26,251


14.6%

Income tax expense

6,441



5,368


20.0%

Net income

$

23,648



20,883


13.2%






Earnings per common share - diluted

$

0.83



0.71


16.9%






ADDITIONAL INCOME STATEMENT INFORMATION





   Net interest income, as reported

$

56,006



54,656



   Tax-equivalent adjustment (1)

457



382



   Net interest income, tax-equivalent

$

56,463



55,038


2.6%



(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.







First Bancorp and Subsidiaries

Financial Summary - Page 2



Twelve Months Ended

December 31,

Percent

($ in thousands except per share data - unaudited)

2020


2019

Change

INCOME STATEMENT





Interest income





   Interest and fees on loans

$

213,099



220,784



   Interest on investment securities

21,154



20,888



   Other interest income

3,431



8,435



      Total interest income

237,684



250,107


(5.0)%

Interest expense





   Interest on deposits

16,301



25,050



   Interest on borrowings

3,261



8,853



      Total interest expense

19,562



33,903


(42.3)%

        Net interest income

218,122



216,204


0.9%

Total provision for loan losses

35,039



2,263


1,448.3%

Net interest income after provision for loan losses

183,083



213,941


(14.4)%

Noninterest income





   Service charges on deposit accounts

11,098



12,970



   Other service charges, commissions, and fees

20,097



19,481



   Fees from presold mortgage loans

14,183



3,944



   Commissions from sales of insurance and financial products

8,848



8,495



   SBA consulting fees

8,644



3,872



   SBA loan sale gains

7,973



8,275



   Bank-owned life insurance income

2,533



2,564



   Securities gains (losses), net

8,024



97



   Other gains (losses), net

(54)



(169)



      Total noninterest income

81,346



59,529


36.6%

Noninterest expenses





   Salaries expense

84,941



79,129



   Employee benefit expense

16,027



16,844



   Occupancy and equipment related expense

15,563



16,145



   Merger and acquisition expenses



192



   Intangibles amortization expense

3,956



4,858



   Foreclosed property losses (gains), net

547



939



   Other operating expenses

40,264



39,087



      Total noninterest expenses

161,298



157,194


2.6%

Income before income taxes

103,131



116,276


(11.3)%

Income tax expense

21,654



24,230


(10.6)%

Net income

$

81,477



92,046


(11.5)%






Earnings per common share - diluted

$

2.81



3.10


(9.4)%






ADDITIONAL INCOME STATEMENT INFORMATION





   Net interest income, as reported

$

218,122



216,204



   Tax-equivalent adjustment (1)

1,468



1,641



   Net interest income, tax-equivalent

$

219,590



217,845


0.8%



(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.







First Bancorp and Subsidiaries

Financial Summary - Page 3



Three Months Ended

December 31,

Twelve Months Ended

December 31,

PERFORMANCE RATIOS (annualized)

2020

2019

2020

2019

Return on average assets (1)

1.30

%

1.35

%

1.20

%

1.53

%

Return on average common equity (2)

10.58

%

9.78

%

9.32

%

11.32

%

Net interest margin - tax-equivalent (3)

3.38

%

3.93

%

3.56

%

4.00

%

Net (recoveries) charge-offs to average loans

0.07

%

0.09

%

0.09

%

0.04

%






COMMON SHARE DATA





Cash dividends declared - common

$

0.18


0.18


0.72


0.54


Stated book value - common

31.26


28.80


31.26


28.80


Tangible book value - common

22.35


20.30


22.35


20.30


Common shares outstanding at end of period

28,579,335


29,601,264


28,579,335


29,601,264


Weighted average shares outstanding - diluted

28,617,409


29,603,816


28,981,567


29,720,499







CAPITAL RATIOS





Tangible common equity to tangible assets

9.08

%

10.20

%

9.08

%

10.20

%

Common equity tier I capital ratio - estimated

13.22

%

13.28

%

13.22

%

13.28

%

Tier I leverage ratio - estimated

9.88

%

11.19

%

9.88

%

11.19

%

Tier I risk-based capital ratio - estimated

14.31

%

14.41

%

14.31

%

14.41

%

Total risk-based capital ratio - estimated

15.41

%

14.89

%

15.41

%

14.89

%






AVERAGE BALANCES ($ in thousands)





Total assets

$

7,240,685


6,159,232


6,765,998


6,027,047


Loans

4,771,446


4,419,982


4,702,743


4,346,331


Earning assets

6,640,732


5,560,099


6,160,100


5,448,400


Deposits

6,232,692


4,939,182


5,644,290


4,824,216


Interest-bearing liabilities

4,085,619


3,716,248


3,897,912


3,720,536


Shareholders' equity

889,481


847,317


874,532


812,823







(1)

Calculated by dividing annualized net income by average assets.

(2)

Calculated by dividing annualized net income by average common equity.

(3)

See note 1 on the first page of the Financial Summary for discussion of tax-equivalent adjustments.




TREND INFORMATION


($ in thousands except per share data)

For the Three Months Ended

INCOME STATEMENT

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Mar. 31, 2020

Dec. 31, 2019







Net interest income - tax-equivalent (1)

$

56,463


55,080


52,954


55,093


55,038


Taxable equivalent adjustment (1)

457


347


330


334


382


Net interest income

56,006


54,733


52,624


54,759


54,656


Provision for loan losses

4,031


6,120


19,298


5,590


3,176


Noninterest income

19,996


21,452


26,193


13,705


14,662


Noninterest expense

41,882


40,439


38,901


40,076


39,891


Income before income taxes

30,089


29,626


20,618


22,798


26,251


Income tax expense

6,441


6,329


4,266


4,618


5,368


Net income

23,648


23,297


16,352


18,180


20,883








Earnings per common share - diluted

0.83


0.81


0.56


0.62


0.71








Cash dividends declared per share

0.18


0.18


0.18


0.18


0.18




(1)

See note 1 on the first page of this Financial Summary for discussion of tax-equivalent adjustments.







First Bancorp and Subsidiaries

Financial Summary - Page 4









CONSOLIDATED BALANCE SHEETS  

($ in thousands - unaudited)





At Dec. 31,

2020


At Sept. 30,

2020


At Dec. 31,

2019


One Year

Change

Assets








Cash and due from banks

$

93,724



92,465



64,519



45.3

%

Interest-bearing deposits with banks

273,566



304,731



166,783



64.0

%

     Total cash and cash equivalents

367,290



397,196



...

231,302



58.8

%









Investment securities

1,620,683



1,278,906



889,877



82.1

%

Presold mortgages

42,271



34,028



19,712



114.4

%

SBA loans held for sale

6,077



15,012





n/m









Total loans

4,731,315



4,813,736



4,453,466



6.2

%

Allowance for loan losses

(52,388)



(49,226)



(21,398)



144.8

%

Net loans

4,678,927



4,764,510



4,432,068



5.6

%









Premises and equipment

120,502



118,568



114,859



4.9

%

Operating right-of-use lease assets

17,514



18,400



19,669



(11.0)

%

Intangible assets

254,638



255,489



251,585



1.2

%

Foreclosed real estate

2,424



2,741



3,873



(37.4)

%

Bank-owned life insurance

106,974



106,345



104,441



2.4

%

Other assets

72,451



73,073



76,253



(5.0)

%

Total assets

$

7,289,751



7,064,268



6,143,639



18.7

%









Liabilities








Deposits:








Noninterest-bearing checking accounts

$

2,210,012



2,121,354



1,515,977



45.8

%

Interest-bearing checking accounts

1,172,022



1,102,343



912,784



28.4

%

Money market accounts

1,581,364



1,524,710



1,173,107



34.8

%

Savings accounts

519,266



492,946



424,415



22.3

%

Brokered deposits

20,222



36,736



86,141



(76.5)

%

Internet time deposits

249



249



698



(64.3)

%

Other time deposits > $100,000

543,894



549,423



563,108



(3.4)

%

Other time deposits

226,567



232,465



255,125



(11.2)

%

Total deposits

6,273,596



6,060,226



4,931,355



27.2

%









Borrowings

61,829



61,816



300,671



(79.4)

%

Operating lease liabilities

17,868



18,716



19,855



(10.0)

%

Other liabilities

43,037



42,692



39,357



9.4

%

Total liabilities

6,396,330



6,183,450



5,291,238



20.9

%









Shareholders' equity








Common stock

400,582



403,351



429,514



(6.7)

%

Retained earnings

478,489



459,988



417,764



14.5

%

Stock in rabbi trust assumed in acquisition

(2,243)



(2,230)



(2,587)



(13.3)

%

Rabbi trust obligation

2,243



2,230



2,587



(13.3)

%

Accumulated other comprehensive income (loss)

14,350



17,479



5,123



180.1

%

Total shareholders' equity

893,421



880,818



852,401



4.8

%

Total liabilities and shareholders' equity

$

7,289,751



7,064,268



6,143,639



18.7

%


n/m - not meaningful




First Bancorp and Subsidiaries

Financial Summary - Page 5



For the Three Months Ended

YIELD INFORMATION

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

Mar. 31, 2020

Dec. 31, 2019







Yield on loans

4.42

%

4.38

%

4.41

%

4.93

%

5.03

%

Yield on securities

1.62

%

2.02

%

2.49

%

2.65

%

2.64

%

Yield on other earning assets

0.57

%

0.64

%

0.55

%

1.95

%

1.91

%

Yield on all interest-earning assets

3.55

%

3.71

%

3.80

%

4.46

%

4.49

%







Rate on interest bearing deposits

0.29

%

0.37

%

0.46

%

0.68

%

0.76

%

Rate on other interest-bearing liabilities

2.55

%

2.06

%

1.31

%

1.91

%

2.31

%

Rate on all interest-bearing liabilities

0.32

%

0.41

%

0.52

%

0.78

%

0.89

%

Total cost of funds

0.21

%

0.26

%

0.35

%

0.56

%

0.63

%







Net interest margin (1)

3.35

%

3.46

%

3.47

%

3.94

%

3.90

%







Net interest margin - tax-equivalent (2)

3.38

%

3.48

%

3.49

%

3.96

%

3.93

%







Average prime rate

3.25

%

3.25

%

3.25

%

4.42

%

4.83

%









(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. See note 1 on the first page of this Financial Summary for discussion of tax-equivalent adjustments.





For the Three Months Ended

NET INTEREST INCOME PURCHASE ACCOUNTING ADJUSTMENTS

($ in thousands)

Dec. 31, 2020


Sept. 30, 2020


June 30, 2020


Mar. 31, 2020


Dec. 31, 2019











Interest income - increased by accretion of loan discount on acquired loans

$

802



972



802



1,241



1,161


Interest income - increased by accretion of loan discount on retained portions of SBA loans

737



583



591



600



340


Interest expense - reduced by premium amortization of deposits

19



23



26



31



38


Interest expense - increased by discount accretion of borrowings

(45)



(45)



(45)



(45)



(45)


Impact on net interest income

$

1,513



1,533



1,374



1,827



1,494





First Bancorp and Subsidiaries

Financial Summary - Page 6


ASSET QUALITY DATA ($ in thousands)

Dec. 31, 2020


Sept. 30, 2020


June 30, 2020


Mar. 31, 2020


Dec. 31, 2019











Nonperforming assets










Nonaccrual loans

$

35,076



31,656



34,922



25,066



24,866


Troubled debt restructurings - accruing

9,497



9,896



9,867



9,747



9,053


Accruing loans > 90 days past due










Total nonperforming loans

44,573



41,552



44,789



34,813



33,919


Foreclosed real estate

2,424



2,741



2,987



3,487



3,873


Total nonperforming assets

$

46,997



44,293



47,776



38,300



37,792


Purchased credit impaired loans not included above (1)

$

8,591



9,616



9,742



9,839



12,664


Asset Quality Ratios










Net quarterly (recoveries) charge-offs to average loans - annualized

0.07

%


(0.06)

%


0.12

%


0.22

%


0.09

%

Nonperforming loans to total loans

0.94

%


0.86

%


0.94

%


0.76

%


0.76

%

Nonperforming assets to total assets

0.64

%


0.63

%


0.69

%


0.60

%


0.62

%

Allowance for loan losses to total loans

1.11

%


1.02

%


0.89

%


0.54

%


0.48

%



(1)

In the March 3, 2017 acquisition of Carolina Bank and the October 1, 2017 acquisition of Asheville Savings Bank, the Company acquired $19.3 million and $9.9 million, respectively, in purchased credit impaired loans in accordance with ASC 310-30 accounting guidance. These loans are excluded from the nonperforming loan amounts.




First Bancorp and Subsidiaries

Financial Summary - Page 7



For the Three Months Ended

NET INTEREST MARGIN, EXCLUDING LOAN DISCOUNT ACCRETION - RECONCILIATION

($ in thousands)

Dec. 31, 2020


Sept. 30, 2020


June 30, 2020


Mar. 31, 2020


Dec. 31, 2019











Net interest income, as reported

$

56,006



54,733



52,624



54,759



54,656


Tax-equivalent adjustment

457



347



330



334



382


Net interest income, tax-equivalent (A)

$

56,463



55,080



52,954



55,093



55,038


Average earning assets (B)

$

6,640,732



6,294,556



6,102,012



5,595,734



5,560,099


Tax-equivalent net interest margin, annualized - as reported - (A)/(B)

3.38

%


3.48

%


3.49

%


3.96

%


3.93

%











Net interest income, tax-equivalent

$

56,463



55,080



52,954



55,093



55,038


Loan discount accretion

1,539



1,555



1,393



1,841



1,501


Net interest income, tax-equivalent, excluding loan discount accretion (A)

$

54,924



53,525



51,561



53,252



53,537


Average earnings assets (B)

$

6,640,732



6,294,556



6,102,012



5,595,734



5,560,099


Tax-equivalent net interest margin, excluding impact of loan discount accretion, annualized - (A) / (B)

3.29

%


3.38

%


3.40

%


3.83

%


3.82

%

Note: The measure "tax-equivalent net interest margin, excluding impact of loan discount accretion" is a non-GAAP performance measure. Management of the Company believes that it is useful to calculate and present the Company's net interest margin without the impact of loan discount accretion for the reasons explained in the remainder of this Note. Loan discount accretion is a non-cash interest income adjustment that is related to 1) the Company's acquisition of loans and represents the portion of the fair value discount that was initially recorded on the acquired loans, and 2) the Company's origination of SBA loans and the subsequent sale of the guaranteed portions of the loans that results in a discount being recorded on the retained portion of the loans. These discounts are recognized into income over the lives of the loans. At December 31, 2020, the Company had a remaining loan discount balance on acquired loans of $8.9 million compared to $12.7 million at December 31, 2019. At December 31, 2020, the Company had a remaining loan discount balance on SBA loans of $7.3 million compared to $7.1 million at December 31, 2019. For the related loans that perform and pay down over time, the loan discount will also be reduced, with a corresponding increase to interest income. Therefore, management of the Company believes it is useful to also present this ratio to reflect the Company's net interest margin excluding this non-cash, temporary loan discount accretion adjustment to aid investors in comparing financial results between periods. The Company cautions that non-GAAP financial measures should be considered in addition to, but not as a substitute for, the Company's reported GAAP results.

(PRNewsfoto/First Bancorp)
(PRNewsfoto/First Bancorp)
Cision
Cision

View original content to download multimedia:http://www.prnewswire.com/news-releases/first-bancorp-reports-fourth-quarter-and-annual-results-301216616.html

SOURCE First Bancorp