SOUTHERN PINES, N.C.,
Jan. 29, 2015 /PRNewswire/ -- First
Bancorp (NASDAQ - FBNC), the parent company of First Bank,
announced today net income available to common shareholders of
$6.9 million, or $0.34 per diluted common share, for the three
months ended December 31, 2014, an
increase of 25.9% compared to the $5.5
million, or $0.27 per diluted
common share, recorded in the fourth quarter of 2013. For the
year ended December 31, 2014, the
Company recorded net income available to common shareholders of
$24.1 million, or $1.19 per diluted common share, an increase of
21.8% compared to the $19.8 million,
or $0.98 per diluted common share,
for the year ended December 31,
2013. The higher earnings in both periods were primarily the
result of lower provisions for loan losses.
Net Interest Income and Net Interest Margin
Net interest income for the fourth quarter of 2014 amounted to
$30.9 million, a 12.3% decrease from
the $35.3 million recorded in the
fourth quarter of 2013. Net interest income for the year
ended December 31, 2014 amounted to
$131.6 million, a 3.6% decrease from
the $136.5 million recorded in
2013.
The Company's net interest margin (tax-equivalent net interest
income divided by average earning assets) in the fourth quarter of
2014 was 4.25% compared to 5.04% for the fourth quarter of
2013. For the year ended December 31,
2014, the Company's net interest margin was 4.58% compared
to 4.92% in 2013. The lower margins realized in 2014 were
primarily due to lower amounts of discount accretion on loans
purchased in failed-bank acquisitions and lower average asset
yields – see additional discussion below. As shown in the
accompanying tables, loan discount accretion amounted to
$2.2 million in the fourth quarter of
2014, compared to $5.6 million in the
fourth quarter of 2013. For 2014 as a whole, loan discount
accretion amounted to $16.0 million
compared to $20.2 million for
2013.
Excluding the effects of discount accretion on purchased loans,
the Company's net interest margin amounted to 3.96% for the fourth
quarter of 2014 compared to 4.25% for the fourth quarter of
2013. The lower margins realized in 2014 were due primarily
to lower loan yields and a higher mix of the Company's earning
assets being maintained in highly liquid accounts that earn
relatively little interest. See the Financial Summary for a
table that presents the impact of loan discount accretion, as well
as other purchase accounting adjustments affecting net interest
income. Also see the Financial Summary for a reconciliation
of the Company's net interest margin to the net interest margin
excluding loan discount accretion, and other information regarding
this ratio.
The Company's cost of funds has steadily declined from 0.33% in
the fourth quarter of 2013 to 0.27% in the fourth quarter of 2014,
which has had a positive impact on the Company's net interest
margin.
Provision for Loan Losses and Asset Quality
The Company recorded total provisions for loan losses of
$1.5 million in the fourth quarter of
2014 compared to $8.9 million for the
fourth quarter of 2013. For the year ended December 31, 2014, the Company recorded total
provisions for loan losses of $10.2
million compared to $30.6
million for 2013. As discussed below, lower provisions
in 2014 were recorded for both the non-covered and covered loan
portfolios – see explanation of the terms "non-covered" and
"covered" in the section below entitled "Note Regarding Components
of Earnings."
The provision for loan losses on non-covered loans amounted to
$1.3 million in the fourth quarter of
2014 compared to $5.0 million in the
fourth quarter of 2013. For 2014 as a whole, the provision
for loan losses on non-covered loans amounted to $7.1 million compared to $18.3 million for 2013. The lower
provisions recorded in 2014 were primarily a result of stable asset
quality trends.
The provision for loan losses on covered loans amounted to
$0.2 million in the fourth quarter of
2014 compared to $3.9 million in the
fourth quarter of 2013. For the year ended December 31, 2014, the provision for loan losses
on covered loans amounted to $3.1
million compared to $12.4
million for 2013. The decreases in 2014 have been
primarily due to lower levels of covered nonperforming loans during
the period and stabilization in the underlying collateral values of
nonperforming loans.
Total non-covered nonperforming assets amounted to $95.3 million at December
31, 2014 (3.09% of total non-covered assets) compared to
$82.0 million at December 31, 2013 (2.78% of total non-covered
assets). The increase in 2014 was due to the Company
transferring $14.8 million in
nonperforming assets from covered status to non-covered status on
July 1, 2014 upon the scheduled
expiration of a loss sharing agreement with the FDIC associated
with those assets.
Total covered nonperforming assets have declined in the past
year, amounting to $18.7 million at
December 31, 2014 compared to
$70.6 million at December 31, 2013. Over the past twelve
months, the Company has resolved a significant amount of covered
loans and has experienced strong property sales along the
North Carolina coast, which is
where most of the Company's covered assets are located. Also, as
discussed in the preceding paragraph, on July 1, 2014 the Company transferred $14.8 million in nonperforming assets from
covered status to non-covered status upon the expiration of a loss
sharing agreement.
Noninterest Income
Total noninterest income for the three months ended December 31, 2014 was $4.5
million compared to $6.3
million for the comparable period of 2013. For the
year ended December 31, 2014,
noninterest income amounted to $14.4
million compared to $23.5
million for 2013.
Core noninterest income for the fourth quarter of 2014 was
$7.4 million, an increase of 5.7%
over the $7.0 million reported for
the third quarter of 2013. For the year ended December 31, 2014, core noninterest income
amounted to $30.5 million, an 8.0%
increase from the $28.2 million
recorded in 2013. Core noninterest income includes i) service
charges on deposit accounts, ii) other service charges,
commissions, and fees, iii) fees from presold mortgages, iv)
commissions from financial product sales, and v) bank-owned life
insurance income.
The primary factors that resulted in the increases in core
noninterest income in 2014 were higher service charges on deposit
accounts, higher debit and credit card interchange fees and higher
commissions earned from financial product sales. Service
charges on deposit accounts increased primarily as a result of the
December 2013 introduction of a new
deposit product line-up that altered the fee structure of many
accounts. The increases in debit and credit card interchange
fees are due to growth in the number and usage of debit and credit
cards. The increases in commissions earned from financial
product sales is due to increased sales volume as a result of
increased emphasis on this division, including the hiring of
additional personnel over recent years.
Noncore components of noninterest income resulted in net losses
of $2.9 million in the fourth quarter
of 2014 compared to net losses of $0.7
million in the fourth quarter of 2013. For the years
ended December 31, 2014 and 2013, the
Company recorded net losses of $16.1
million and $4.7 million,
respectively, related to the noncore components of noninterest
income. The largest variances related to foreclosed property
gains/losses and indemnification asset income (expense) – see
discussion below.
The Company experienced losses on non-covered foreclosed
properties of $0.5 million for the
three months ended December 31, 2014
compared to $0.4 million in the
fourth quarter of 2013. For the full year of 2014, the
Company recorded losses on non-covered foreclosed properties of
$1.9 million compared to a gain of
$1.3 million in 2013. In 2014,
the Company incurred losses on several pieces of real estate that
the Company had held for a considerable amount of time that either
sold at a loss in 2014 or for which the Company recorded
write-downs due to declines in value. In 2013 the Company
experienced miscellaneous gains from sales of properties following
a stabilization in real estate market values.
Gains on covered foreclosed properties were $0.6 million and $4.1
million for the three months ended December 31, 2014 and 2013, respectively, while
losses of $1.9 million and gains of
$0.4 million were recorded for the
twelve months ended December 31, 2014
and 2013, respectively. Losses on covered foreclosed
properties have generally declined over the past several years as a
result of stabilization in property values and declining numbers of
foreclosed properties held by the Company. The gains realized
in 2013 were primarily the result of several sizeable gains related
to sales of properties along the North
Carolina coast that recovered in value.
Indemnification asset income (expense) is recorded to reflect
additional (decreased) amounts expected to be received from the
FDIC during the period related to covered assets. The three
primary items that result in recording indemnification asset income
(expense) are 1) income from loan discount accretion, which results
in indemnification expense, 2) provisions for loan losses on
covered loans, which result in indemnification income and 3)
foreclosed property gains (losses) on covered assets, which also
result in indemnification expense (income). In the fourth
quarter of 2014, the Company recorded $3.1
million in indemnification asset expense compared to
$4.5 million in indemnification asset
expense in the fourth quarter of 2013. The variance between
the fourth quarter of 2014 and the fourth quarter of 2013 is
primarily due to lower indemnification asset expense associated
with the lower loan discount accretion income recorded. For
the year ended December 31, 2014,
indemnification asset expense amounted to $12.8 million compared to indemnification asset
expense of $6.8 million for
2013. In 2014, the indemnification asset expense recorded in
connection with loan discount accretion was offset to a lesser
degree by indemnification asset income associated with provisions
for loan losses and foreclosed property losses than was the case in
2013. See additional discussion related to this matter in the
section below entitled "Note Regarding Components of Earnings."
During the years ended December 31,
2014 and 2013, the Company realized $0.8 million and $0.5
million in securities gains, respectively.
Noninterest Expenses
Noninterest expenses amounted to $23.0
million in the fourth quarter of 2014 compared to
$23.9 million recorded in the fourth
quarter of 2013. Noninterest expenses for the year ended
December 31, 2014 amounted to
$97.3 million compared to
$96.6 million recorded in
2013.
In connection with continued cost control and efficiency
efforts, the Company's number of full-time equivalent employees
declined by 6.6% during 2014. This resulted in a decrease in
personnel expense (salaries and employee benefits) in the fourth
quarter of 2014 compared to the fourth quarter of 2013.
Personnel expense amounted to $13.2
million in the fourth quarter of 2014 compared to
$14.3 million in the fourth quarter
of 2013. For the years ended December
31, 2014 and 2013, personnel expense amounted to
$55.2 million compared to
$54.8 million, respectively, an
increase of less than 1%.
Included in noninterest expenses for the three and twelve months
ended December 31, 2014 were
$0.1 million and $1.0 million, respectively, in charges related to
the closure and consolidation of nine bank branches.
Balance Sheet and Capital
Total assets at December 31, 2014
amounted to $3.2 billion, a 1.0%
increase from a year earlier. Total loans at December 31, 2014 amounted to $2.4 billion, a 2.7% decrease from a year
earlier, and total deposits amounted to $2.7
billion at December 31, 2014,
a 2.0% decrease from a year earlier.
Investment securities totaled $342.7
million at December 31, 2014
compared to $227.0 million at
December 31, 2013. In the
fourth quarter of 2014, the Company used a portion of its excess
cash balances to purchase approximately $125
million in investment securities. The higher yield
earned on those funds improved the Company's net interest income
for the quarter.
Non-covered loans amounted to $2.3
billion at December 31, 2014,
an increase of $15.7 million from
December 31, 2013. The increase
was due to the reclassification of $39.7
million in loans from covered status to non-covered status
in connection with the July 1, 2014
expiration of a loss sharing agreement. Loan growth has been
impacted by a relatively slow economic recovery in many of the
Company's market areas, as well as what is expected to be temporary
pressures from new internal loan processes designed to enhance loan
quality.
The lower amount of deposits at December
31, 2014 compared to December 31,
2013 was primarily due to declines in time deposits, with
increases in checking accounts offsetting a large portion of the
decline. Time deposits are generally one of the Company's
most expensive funding sources, and thus the shift from this
category benefited the Company's overall cost of funds.
The Company remains well-capitalized by all regulatory
standards, with a Total Risk-Based Capital Ratio at December 31, 2014 of 17.60% compared to the
10.00% minimum to be considered well-capitalized. The
Company's tangible common equity to tangible assets ratio was 7.90%
at December 31, 2014, an increase of
44 basis points from a year earlier.
Comments of the President and Other Business Matters
Richard H. Moore, President and
CEO of First Bancorp, commented on today's report, "I am pleased to
report the strong increase in earnings for 2014. For 2015, we
will continue to be focused on strategic initiatives that we expect
will result in increases in profitability and market share."
The following is a list of business development and other
miscellaneous matters affecting the Company:
- On December 5, 2014, the Company
completed the planned closure and consolidation of nine of its
branches. All branches were consolidated with other First
Bank branches near the closing location.
- On December 16, 2014, the Company
announced a quarterly cash dividend of $0.08
cents per share payable on January
23, 2015 to shareholders of record on December 31, 2014. This is the same
dividend rate as the Company declared in the fourth quarter of
2013.
- The Company is currently constructing a new branch facility at
4110 Bradham Drive, Jacksonville,
North Carolina. Upon completion, the First Bank branch
located on Western Boulevard will be closed and the accounts
serviced at that branch will be reassigned to the new and improved
branch. This is expected to occur in the second quarter of
2015 and is subject to regulatory approval.
Note Regarding Components of Earnings
The Company's results of operation are significantly affected by
the on-going accounting for two FDIC-assisted failed bank
acquisitions. In the discussion above, the term "covered" is
used to describe assets included as part of FDIC loss share
agreements, which generally result in the FDIC reimbursing the
Company for 80% of losses incurred on those assets. The term
"non-covered" refers to the Company's legacy assets, which are not
included in any type of loss share arrangement.
For covered loans that deteriorate in terms of repayment
expectations, the Company records immediate allowances through the
provision for loan losses. For covered loans that experience
favorable changes in credit quality compared to what was expected
at the acquisition date, including loans that payoff, the Company
records positive adjustments to interest income over the life of
the respective loan – also referred to as loan discount
accretion. For covered foreclosed properties that are sold at
gains or losses or that are written down to lower values, the
Company records the gains/losses within noninterest
income.
The adjustments discussed above are recorded within the income
statement line items noted without consideration of the FDIC loss
share agreements. Because favorable changes in covered assets
result in lower expected FDIC claims, and unfavorable changes in
covered assets result in higher expected FDIC claims, the FDIC
indemnification asset is adjusted to reflect those
expectations. The net increase or decrease in the
indemnification asset is reflected within noninterest income.
The adjustments noted above can result in volatility within
individual income statement line items. Because of the FDIC
loss share agreements and the associated indemnification asset,
pretax income resulting from amounts recorded as provisions for
loan losses on covered loans, discount accretion, and losses from
covered foreclosed properties is generally only impacted by 20% of
these amounts due to the corresponding adjustments made to the
indemnification asset.
First Bancorp is a bank holding company headquartered in
Southern Pines, North Carolina
with total assets of approximately $3.2
billion. Its principal activity is the ownership and
operation of First Bank, a state-chartered community bank that
operates 87 branches, with 74 branches operating in North Carolina, 6 branches in South Carolina (Cheraw, Dillon, Florence, and Latta), and 7 branches in Virginia (Abingdon, Blacksburg, Christiansburg, Fort Chiswell, Radford, Salem and Wytheville), where First Bank does business as
First Bank of Virginia. First Bank
also has loan production offices in Fayetteville, North Carolina, and Greenville, North Carolina. 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 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 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 the 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)
|
2014
|
|
2013
|
Change
|
|
|
|
|
|
|
INCOME
STATEMENT
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
|
|
|
Interest
and fees on loans
|
$
31,160
|
|
36,165
|
|
|
Interest
on investment securities
|
1,408
|
|
1,309
|
|
|
Other
interest income
|
259
|
|
116
|
|
|
Total interest
income
|
32,827
|
|
37,590
|
(12.7%)
|
|
Interest
expense
|
|
|
|
|
|
Interest
on deposits
|
1,602
|
|
2,059
|
|
|
Other,
primarily borrowings
|
302
|
|
255
|
|
|
Total interest
expense
|
1,904
|
|
2,314
|
(17.7%)
|
|
Net
interest income
|
30,923
|
|
35,276
|
(12.3%)
|
|
Provision for loan
losses – non-covered loans
|
1,285
|
|
4,965
|
(74.1%)
|
|
Provision for loan
losses – covered loans
|
191
|
|
3,931
|
(95.1%)
|
|
Total provision for
loan losses
|
1,476
|
|
8,896
|
(83.4%)
|
|
Net interest income
after provision for loan losses
|
29,447
|
|
26,380
|
11.6%
|
|
Noninterest
income
|
|
|
|
|
|
Service
charges on deposit accounts
|
3,261
|
|
3,173
|
|
|
Other
service charges, commissions, and fees
|
2,552
|
|
2,401
|
|
|
Fees
from presold mortgages
|
522
|
|
564
|
|
|
Commissions from financial product sales
|
748
|
|
563
|
|
|
Bank-owned life insurance income
|
355
|
|
334
|
|
|
Foreclosed property gains (losses) – non-covered
|
(460)
|
|
(354)
|
|
|
Foreclosed property gains (losses) – covered
|
598
|
|
4,105
|
|
|
FDIC
indemnification asset income (expense), net
|
(3,138)
|
|
(4,528)
|
|
|
Securities gains
|
−
|
|
(28)
|
|
|
Other
gains (losses)
|
54
|
|
56
|
|
|
Total noninterest
income
|
4,492
|
|
6,286
|
(28.5%)
|
|
Noninterest
expenses
|
|
|
|
|
|
Salaries
expense
|
11,284
|
|
12,039
|
|
|
Employee
benefit expense
|
1,939
|
|
2,223
|
|
|
Occupancy and equipment expense
|
2,841
|
|
2,910
|
|
|
Intangibles amortization
|
195
|
|
221
|
|
|
Other
operating expenses
|
6,730
|
|
6,542
|
|
|
Total noninterest
expenses
|
22,989
|
|
23,935
|
(4.0%)
|
|
Income before income
taxes
|
10,950
|
|
8,731
|
25.4%
|
|
Income
taxes
|
3,855
|
|
3,053
|
26.3%
|
|
Net income
|
7,095
|
|
5,678
|
25.0%
|
|
|
|
|
|
|
Preferred stock
dividends
|
(217)
|
|
(217)
|
|
|
|
|
|
|
|
Net income available
to common shareholders
|
$
6,878
|
|
5,461
|
25.9%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share – basic
|
$
0.35
|
|
0.28
|
25.0%
|
|
Earnings per common
share – diluted
|
0.34
|
|
0.27
|
25.9%
|
|
|
|
|
|
|
ADDITIONAL INCOME
STATEMENT INFORMATION
|
|
|
|
|
|
Net
interest income, as reported
|
$
30,923
|
|
35,276
|
|
|
Tax-equivalent adjustment (1)
|
376
|
|
386
|
|
|
Net
interest income, tax-equivalent
|
$
31,299
|
|
35,662
|
(12.2%)
|
|
|
|
|
|
|
|
|
|
(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 39% 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)
|
2014
|
|
2013
|
Change
|
|
|
|
|
|
|
INCOME
STATEMENT
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
|
|
|
Interest
and fees on loans
|
$
133,641
|
|
141,616
|
|
|
Interest
on investment securities
|
5,342
|
|
5,309
|
|
|
Other
interest income
|
849
|
|
586
|
|
|
Total interest
income
|
139,832
|
|
147,511
|
(5.2%)
|
|
Interest
expense
|
|
|
|
|
|
Interest
on deposits
|
7,072
|
|
9,960
|
|
|
Other,
primarily borrowings
|
1,151
|
|
1,025
|
|
|
Total interest
expense
|
8,223
|
|
10,985
|
(25.1%)
|
|
Net
interest income
|
131,609
|
|
136,526
|
(3.6%)
|
|
Provision for loan
losses – non-covered loans
|
7,087
|
|
18,266
|
(61.2%)
|
|
Provision for loan
losses – covered loans
|
3,108
|
|
12,350
|
(74.8%)
|
|
Total provision for
loan losses
|
10,195
|
|
30,616
|
(66.7%)
|
|
Net interest income
after provision for loan losses
|
121,414
|
|
105,910
|
14.6%
|
|
Noninterest
income
|
|
|
|
|
|
Service
charges on deposit accounts
|
13,706
|
|
12,752
|
|
|
Other
service charges, commissions, and fees
|
10,019
|
|
9,318
|
|
|
Fees
from presold mortgages
|
2,726
|
|
2,907
|
|
|
Commissions from financial product sales
|
2,733
|
|
2,132
|
|
|
Bank-owned life insurance income
|
1,311
|
|
1,120
|
|
|
Foreclosed property gains (losses) – non-covered
|
(1,924)
|
|
1,333
|
|
|
Foreclosed property gains (losses) – covered
|
(1,919)
|
|
367
|
|
|
FDIC
indemnification asset income (expense), net
|
(12,842)
|
|
(6,824)
|
|
|
Securities gains
|
786
|
|
532
|
|
|
Other
gains (losses)
|
(228)
|
|
(148)
|
|
|
Total noninterest
income
|
14,368
|
|
23,489
|
(38.8%)
|
|
Noninterest
expenses
|
|
|
|
|
|
Salaries
expense
|
46,071
|
|
45,120
|
|
|
Employee
benefit expense
|
9,086
|
|
9,644
|
|
|
Occupancy and equipment expense
|
11,293
|
|
11,487
|
|
|
Intangibles amortization
|
777
|
|
860
|
|
|
Other
operating expenses
|
30,024
|
|
29,508
|
|
|
Total noninterest
expenses
|
97,251
|
|
96,619
|
0.7%
|
|
Income before income
taxes
|
38,531
|
|
32,780
|
17.5%
|
|
Income
taxes
|
13,535
|
|
12,081
|
12.0%
|
|
Net income
|
24,996
|
|
20,699
|
20.8%
|
|
|
|
|
|
|
Preferred stock
dividends
|
(868)
|
|
(895)
|
|
|
|
|
|
|
|
Net income available
to common shareholders
|
$
24,128
|
|
19,804
|
21.8%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share – basic
|
$
1.22
|
|
1.01
|
20.8%
|
|
Earnings per common
share – diluted
|
1.19
|
|
0.98
|
21.4%
|
|
|
|
|
|
|
ADDITIONAL INCOME
STATEMENT INFORMATION
|
|
|
|
|
|
Net
interest income, as reported
|
$
131,609
|
|
136,526
|
|
|
Tax-equivalent adjustment (1)
|
1,502
|
|
1,511
|
|
|
Net
interest income, tax-equivalent
|
$
133,111
|
|
138,037
|
(3.6%)
|
|
|
|
|
|
|
|
|
(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 39% 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)
|
2014
|
2013
|
|
2014
|
2013
|
|
Return on average
assets (1)
|
0.85%
|
0.68%
|
|
0.75%
|
0.62%
|
|
Return on average
common equity (2)
|
8.56%
|
7.31%
|
|
7.73%
|
6.78%
|
|
Net interest margin –
tax-equivalent (3)
|
4.25%
|
5.04%
|
|
4.58%
|
4.92%
|
|
Net charge-offs to
average loans – non-covered
|
0.78%
|
0.74%
|
|
0.65%
|
0.72%
|
|
|
|
|
|
|
|
COMMON SHARE
DATA
|
|
|
|
|
|
|
Cash dividends
declared – common
|
$ 0.08
|
0.08
|
|
$ 0.32
|
0.32
|
|
Stated book value –
common
|
16.08
|
15.30
|
|
16.08
|
15.30
|
|
Tangible book value –
common
|
12.63
|
11.81
|
|
12.63
|
11.81
|
|
Common shares
outstanding at end of period
|
19,709,881
|
19,679,659
|
|
19,709,881
|
19,679,659
|
|
Weighted average
shares outstanding – basic
|
19,706,926
|
19,679,701
|
|
19,699,801
|
19,675,597
|
|
Weighted average
shares outstanding – diluted
|
20,440,533
|
20,409,489
|
|
20,434,007
|
20,404,303
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
|
|
|
|
|
Tangible equity to
tangible assets
|
10.15%
|
9.73%
|
|
10.15%
|
9.73%
|
|
Tangible common
equity to tangible assets
|
7.90%
|
7.46%
|
|
7.90%
|
7.46%
|
|
Tier I leverage
ratio
|
11.61%
|
11.18%
|
|
11.61%
|
11.18%
|
|
Tier I risk-based
capital ratio
|
16.35%
|
15.53%
|
|
16.35%
|
15.53%
|
|
Total risk-based
capital ratio
|
17.60%
|
16.79%
|
|
17.60%
|
16.79%
|
|
|
|
|
|
|
|
AVERAGE
BALANCES ($ in thousands)
|
|
|
|
|
|
|
Total
assets
|
$ 3,214,302
|
3,167,640
|
|
$ 3,219,915
|
3,208,458
|
|
Loans
|
2,411,117
|
2,453,186
|
|
2,434,331
|
2,419,679
|
|
Earning
assets
|
2,920,295
|
2,807,461
|
|
2,907,098
|
2,805,112
|
|
Deposits
|
2,691,076
|
2,732,721
|
|
2,723,758
|
2,779,032
|
|
Interest-bearing
liabilities
|
2,235,758
|
2,308,387
|
|
2,294,330
|
2,380,747
|
|
Shareholders'
equity
|
389,709
|
367,081
|
|
383,055
|
362,770
|
|
|
|
|
|
|
|
(1)
|
Calculated by
dividing annualized net income (loss) available to common
shareholders by average assets.
|
|
(2)
|
Calculated by
dividing annualized net income (loss) available to common
shareholders by average common equity.
|
|
(3)
|
See footnote 1 on
page 1 of Financial Summary for discussion of tax-equivalent
adjustments.
|
|
TREND
INFORMATION
|
|
($ in thousands
except per share data)
|
For the Three Months
Ended
|
|
INCOME
STATEMENT
|
December
31,
2014
|
September
30,
2014
|
June 30,
2014
|
March 31,
2014
|
December
31,
2013
|
|
|
|
|
|
|
|
Net interest income –
tax-equivalent (1)
|
$ 31,299
|
31,721
|
34,183
|
35,908
|
35,662
|
|
Taxable equivalent
adjustment (1)
|
376
|
378
|
375
|
373
|
386
|
|
Net interest
income
|
30,923
|
31,343
|
33,808
|
35,535
|
35,276
|
|
Provision for loan
losses – non-covered
|
1,285
|
1,279
|
1,158
|
3,365
|
4,965
|
|
Provision for loan
losses – covered
|
191
|
206
|
2,501
|
210
|
3,931
|
|
Noninterest
income
|
4,492
|
4,608
|
4,970
|
298
|
6,286
|
|
Noninterest
expense
|
22,989
|
25,931
|
24,780
|
23,551
|
23,935
|
|
Income before income
taxes
|
10,950
|
8,535
|
10,339
|
8,707
|
8,731
|
|
Income tax
expense
|
3,855
|
2,956
|
3,693
|
3,031
|
3,053
|
|
Net income
|
7,095
|
5,579
|
6,646
|
5,676
|
5,678
|
|
Preferred stock
dividends
|
(217)
|
(217)
|
(217)
|
(217)
|
(217)
|
|
Net income available
to common shareholders
|
6,878
|
5,362
|
6,429
|
5,459
|
5,461
|
|
|
|
|
|
|
|
Earnings per common
share – basic
|
0.35
|
0.27
|
0.33
|
0.28
|
0.28
|
|
Earnings per common
share – diluted
|
0.34
|
0.27
|
0.32
|
0.27
|
0.27
|
|
|
|
|
|
|
|
See footnote 1 on
page 1 of Financial Summary for discussion of tax-equivalent
adjustments.
|
|
First Bancorp and
Subsidiaries
Financial Summary
– Page 4
|
|
|
CONSOLIDATED
BALANCE SHEETS
($ in
thousands)
|
At Dec.
31,
2014
|
|
At Sept.
30,
2014
|
|
At Dec.
31,
2013
|
|
One Year
Change
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
$ 81,068
|
|
84,128
|
|
83,881
|
|
(3.4%)
|
|
Interest bearing
deposits with banks
|
172,016
|
|
252,386
|
|
139,393
|
|
23.4%
|
|
Total cash and cash
equivalents
|
253,084
|
|
336,514
|
|
223,274
|
|
13.4%
|
|
|
|
|
|
|
|
|
|
Investment
securities
|
342,721
|
|
213,075
|
|
227,036
|
|
51.0%
|
|
Presold
mortgages
|
6,019
|
|
5,761
|
|
5,422
|
|
11.0%
|
|
|
|
|
|
|
|
|
|
Loans –
non-covered
|
2,268,580
|
|
2,292,841
|
|
2,252,885
|
|
0.7%
|
|
Loans – covered by
FDIC loss share agreements
|
127,594
|
|
133,249
|
|
210,309
|
|
(39.3%)
|
|
Total loans
|
2,396,174
|
|
2,426,090
|
|
2,463,194
|
|
(2.7%)
|
|
Allowance for loan
losses – non-covered
|
(38,345)
|
|
(41,564)
|
|
(44,263)
|
|
(13.4%)
|
|
Allowance for loan
losses – covered
|
(2,281)
|
|
(2,567)
|
|
(4,242)
|
|
(46.2%)
|
|
Total allowance for loan
losses
|
(40,626)
|
|
(44,131)
|
|
(48,505)
|
|
(16.2%)
|
|
Net loans
|
2,355,548
|
|
2,381,959
|
|
2,414,689
|
|
(2.4%)
|
|
|
|
|
|
|
|
|
|
Premises and
equipment
|
75,113
|
|
74,871
|
|
77,448
|
|
(3.0%)
|
|
FDIC indemnification
asset
|
22,569
|
|
25,328
|
|
48,622
|
|
(53.6%)
|
|
Intangible
assets
|
67,893
|
|
68,087
|
|
68,669
|
|
(1.1%)
|
|
Foreclosed real
estate – non-covered
|
9,771
|
|
11,705
|
|
12,251
|
|
(20.2%)
|
|
Foreclosed real
estate – covered
|
2,350
|
|
3,237
|
|
24,497
|
|
(90.4%)
|
|
Bank-owned life
insurance
|
55,421
|
|
44,996
|
|
44,040
|
|
25.8%
|
|
Other
assets
|
27,894
|
|
30,078
|
|
39,122
|
|
(28.7%)
|
|
Total assets
|
$ 3,218,383
|
|
3,195,611
|
|
3,185,070
|
|
1.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
Non-interest bearing
checking accounts
|
$ 560,230
|
|
540,349
|
|
482,650
|
|
16.1%
|
|
Interest bearing checking
accounts
|
583,903
|
|
538,815
|
|
557,413
|
|
4.8%
|
|
Money market
accounts
|
548,255
|
|
545,137
|
|
547,556
|
|
0.1%
|
|
Savings accounts
|
180,317
|
|
178,260
|
|
169,023
|
|
6.7%
|
|
Brokered deposits
|
88,375
|
|
99,169
|
|
116,087
|
|
(23.9%)
|
|
Internet time
deposits
|
747
|
|
1,967
|
|
1,319
|
|
(43.4%)
|
|
Other time deposits >
$100,000
|
384,127
|
|
406,276
|
|
451,741
|
|
(15.0%)
|
|
Other time
deposits
|
349,952
|
|
369,039
|
|
425,230
|
|
(17.7%)
|
|
Total deposits
|
2,695,906
|
|
2,679,012
|
|
2,751,019
|
|
(2.0%)
|
|
|
|
|
|
|
|
|
|
Borrowings
|
116,394
|
|
116,394
|
|
46,394
|
|
150.9%
|
|
Other
liabilities
|
18,384
|
|
15,390
|
|
15,735
|
|
16.8%
|
|
Total liabilities
|
2,830,684
|
|
2,810,796
|
|
2,813,148
|
|
0.6%
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
|
Preferred
stock
|
70,787
|
|
70,787
|
|
70,787
|
|
0.0%
|
|
Common
stock
|
132,532
|
|
132,440
|
|
132,099
|
|
0.3%
|
|
Retained
earnings
|
184,958
|
|
179,656
|
|
167,136
|
|
10.7%
|
|
Accumulated other
comprehensive income (loss)
|
(578)
|
|
1,932
|
|
1,900
|
|
n/m
|
|
Total shareholders'
equity
|
387,699
|
|
384,815
|
|
371,922
|
|
4.2%
|
|
Total liabilities and
shareholders' equity
|
$ 3,218,383
|
|
3,195,611
|
|
3,185,070
|
|
1.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n/m = not
meaningful
|
|
|
|
|
|
|
|
|
First Bancorp and
Subsidiaries
Financial Summary
- Page 5
|
|
|
For the Three Months
Ended
|
|
YIELD
INFORMATION
|
December 31,
2014
|
September 30,
2014
|
June 30,
2014
|
March 31,
2014
|
December 31,
2013
|
|
|
|
|
|
|
|
Yield on
loans
|
5.13%
|
5.23%
|
5.65%
|
5.95%
|
5.85%
|
|
Yield on securities –
tax-equivalent (1)
|
2.95%
|
3.25%
|
3.00%
|
3.19%
|
2.96%
|
|
Yield on other
earning assets
|
0.38%
|
0.30%
|
0.33%
|
0.34%
|
0.36%
|
|
Yield on
all interest earning assets
|
4.51%
|
4.58%
|
4.95%
|
5.44%
|
5.37%
|
|
|
|
|
|
|
|
Rate on interest
bearing deposits
|
0.30%
|
0.32%
|
0.33%
|
0.34%
|
0.36%
|
|
Rate on other
interest bearing liabilities
|
1.03%
|
1.03%
|
1.02%
|
2.14%
|
2.18%
|
|
Rate on
all interest bearing liabilities
|
0.34%
|
0.35%
|
0.37%
|
0.38%
|
0.40%
|
|
Total cost of
funds
|
0.27%
|
0.28%
|
0.30%
|
0.31%
|
0.33%
|
|
|
|
|
|
|
|
Net
interest margin – tax-equivalent (2)
|
4.25%
|
4.30%
|
4.65%
|
5.13%
|
5.04%
|
|
Average
prime rate
|
3.25%
|
3.25%
|
3.25%
|
3.25%
|
3.25%
|
|
|
|
|
|
|
|
(1) See
footnote 1 on page 1 of Financial Summary for discussion of
tax-equivalent adjustments.
|
|
(2) Calculated by
dividing annualized tax-equivalent net interest income by average
earning assets for the period.
See footnote 1 on page 1 of
Financial Summary for discussion of tax-equivalent
adjustments.
|
|
|
For the Three Months
Ended
|
|
NET INTEREST
INCOME PURCHASE ACCOUNTING ADJUSTMENTS
($ in
thousands)
|
|
December 31,
2014
|
|
September 30,
2014
|
|
June 30,
2014
|
|
March 31,
2014
|
|
December 31,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income –
reduced by premium
amortization on loans
|
|
$
−
|
|
−
|
|
(49)
|
|
(49)
|
|
(49)
|
|
Interest income –
increased by accretion
of loan discount (1)
|
|
2,173
|
|
2,577
|
|
4,851
|
|
6,408
|
|
5,605
|
|
Interest expense –
reduced by premium
amortization of
deposits
|
|
−
|
|
−
|
|
4
|
|
3
|
|
5
|
|
Impact on net interest
income
|
|
$ 2,173
|
|
2,577
|
|
4,806
|
|
6,362
|
|
5,561
|
|
|
|
(1) Corresponding
indemnification asset expense is recorded for approximately 80% of
this amount, and therefore the net
effect is that pretax income is
positively impacted by 20% of the amounts in this line
item.
|
|
First Bancorp and
Subsidiaries
Financial Summary
- Page 6
|
|
|
ASSET QUALITY
DATA ($ in thousands)
|
Dec. 31,
2014
|
|
Sept. 30,
2014
|
|
June 30,
2014
|
|
March 31,
2014
|
|
Dec. 31,
2013
|
|
|
|
|
|
|
|
|
|
|
|
Non-covered
nonperforming assets
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
$ 50,066
|
|
53,620
|
|
47,533
|
|
44,129
|
|
41,938
|
|
Troubled debt
restructurings - accruing
|
35,493
|
|
31,501
|
|
27,250
|
|
26,335
|
|
27,776
|
|
Accruing loans > 90
days past due
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total non-covered
nonperforming loans
|
85,559
|
|
85,121
|
|
74,783
|
|
70,464
|
|
69,714
|
|
Foreclosed real
estate
|
9,771
|
|
11,705
|
|
9,346
|
|
11,740
|
|
12,251
|
|
Total non-covered
nonperforming assets
|
$ 95,330
|
|
96,826
|
|
84,129
|
|
82,204
|
|
81,965
|
|
|
|
|
|
|
|
|
|
|
|
Covered
nonperforming assets (1)
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
$ 10,508
|
|
10,478
|
|
20,938
|
|
31,986
|
|
37,217
|
|
Troubled debt
restructurings - accruing
|
5,823
|
|
6,273
|
|
8,193
|
|
7,429
|
|
8,909
|
|
Accruing loans > 90
days past due
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total covered nonperforming
loans
|
16,331
|
|
16,751
|
|
29,131
|
|
39,415
|
|
46,126
|
|
Foreclosed real
estate
|
2,350
|
|
3,237
|
|
9,934
|
|
19,504
|
|
24,497
|
|
Total covered
nonperforming assets
|
$ 18,681
|
|
19,988
|
|
39,065
|
|
58,919
|
|
70,623
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming
assets
|
$ 114,011
|
|
116,814
|
|
123,194
|
|
141,123
|
|
152,588
|
|
Asset Quality
Ratios – All Assets
|
|
|
|
|
|
|
|
|
|
|
Net quarterly
charge-offs to average loans - annualized
|
0.82%
|
|
0.51%
|
|
0.99%
|
|
0.65%
|
|
1.31%
|
|
Nonperforming loans
to total loans
|
4.25%
|
|
4.20%
|
|
4.27%
|
|
4.49%
|
|
4.70%
|
|
Nonperforming assets
to total assets
|
3.54%
|
|
3.66%
|
|
3.77%
|
|
4.26%
|
|
4.79%
|
|
Allowance for loan
losses to total loans
|
1.70%
|
|
1.82%
|
|
1.88%
|
|
1.97%
|
|
1.97%
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios – Based on Non-covered Assets only
|
|
|
|
|
|
|
|
|
|
|
Net quarterly
charge-offs to average non-covered loans - annualized
|
0.78%
|
|
0.60%
|
|
0.69%
|
|
0.52%
|
|
0.74%
|
|
Non-covered
nonperforming loans to non-covered loans
|
3.77%
|
|
3.71%
|
|
3.31%
|
|
3.12%
|
|
3.09%
|
|
Non-covered
nonperforming assets to total non-covered assets
|
3.09%
|
|
3.17%
|
|
2.73%
|
|
2.65%
|
|
2.78%
|
|
Allowance for loan
losses to non-covered loans
|
1.69%
|
|
1.81%
|
|
1.86%
|
|
1.98%
|
|
1.96%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Covered nonperforming
assets consist of assets that are included in loss-share agreements
with the FDIC.
|
|
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,
2014
|
|
Sept. 30,
2014
|
|
June 30,
2014
|
|
March 31,
2014
|
|
Dec. 31,
2013
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income,
as reported
|
$ 30,923
|
|
31,343
|
|
33,808
|
|
35,535
|
|
35,276
|
|
Tax-equivalent
adjustment
|
376
|
|
378
|
|
375
|
|
373
|
|
386
|
|
Net interest income,
tax-equivalent (A)
|
$ 31,299
|
|
31,721
|
|
34,183
|
|
35,908
|
|
35,662
|
|
Average earning
assets (B)
|
$ 2,920,295
|
|
2,924,705
|
|
2,946,586
|
|
2,836,806
|
|
2,807,461
|
|
Tax-equivalent net
interest
margin, annualized – as reported –
(A)/(B)
|
4.25%
|
|
4.30%
|
|
4.65%
|
|
5.13%
|
|
5.04%
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income,
tax-equivalent
|
$ 31,299
|
|
31,721
|
|
34,183
|
|
35,908
|
|
35,662
|
|
Loan discount
accretion
|
2,173
|
|
2,577
|
|
4,851
|
|
6,408
|
|
5,605
|
|
Net interest income,
tax-equivalent, excluding
loan discount accretion (A)
|
$ 29,126
|
|
29,144
|
|
29,332
|
|
29,500
|
|
30,057
|
|
Average earnings
assets (B)
|
$ 2,920,295
|
|
2,924,705
|
|
2,946,586
|
|
2,836,806
|
|
2,807,461
|
|
Tax-equivalent net
interest margin, excluding
impact of loan discount accretion,
annualized – (A) / (B)
|
3.96%
|
|
3.95%
|
|
3.99%
|
|
4.22%
|
|
4.25%
|
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 paragraph. Loan
discount accretion is a non-cash interest income adjustment related
to the Company's acquisition of two failed banks and represents the
portion of the fair value discount that was initially recorded on
the acquired loans that is being recognized into income over the
lives of the loans. At December 31,
2014, the Company had a remaining loan discount balance of
$20.8 million compared to
$39.6 million at December 31, 2013. 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.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/first-bancorp-reports-fourth-quarter-and-annual-results-300028202.html
SOURCE First Bancorp