SOUTHERN PINES, N.C.,
July 27, 2015 /PRNewswire/
-- First Bancorp (NASDAQ: FBNC), the parent company of First
Bank, announced today net income available to common shareholders
of $6.0 million, or $0.30 per diluted common share, for the three
months ended June 30, 2015, a
decrease of 6.2% compared to the $6.4
million, or $0.32 per diluted
common share, recorded in the second quarter of 2014. The
lower earnings recorded in the second quarter of 2015 were
primarily due to a lower amount of discount accretion on loans
purchased in failed-bank acquisitions, which was partially offset
by a lower provision for loan losses.
For the six months ended June 30,
2015, the Company recorded net income available to common
shareholders of $12.8 million, or
$0.63 per diluted common share, an
increase of 7.7% compared to the $11.9
million, or $0.59 per diluted
common share, for the six months ended June
30, 2014. The higher earnings were primarily the
result of a lower provision for loan losses.
Net Interest Income and Net Interest Margin
Net interest income for the second quarter of 2015 amounted to
$29.6 million, a 12.4% decrease from
the $33.8 million recorded in the
second quarter of 2014. Net interest income for the first six
months of 2015 amounted to $59.3
million, a 14.5% decrease from the $69.3 million recorded in the comparable period
of 2014.
The Company's net interest margin (tax-equivalent net interest
income divided by average earning assets) in the second quarter of
2015 was 4.15% compared to 4.65% for the second quarter of
2014. For the six month period ended June 30, 2015, the Company's net interest margin
was 4.17% compared to 4.89% for the same period in 2014. The
4.15% net interest margin for the second quarter of 2015 was a four
basis point decrease from the 4.19% margin realized in the first
quarter of 2015. The lower margins were primarily due to
lower amounts of discount accretion on loans purchased in
failed-bank acquisitions – see additional discussion below.
As shown in the accompanying tables, loan discount accretion
amounted to $1.1 million in the
second quarter of 2015, $1.6 million
in the first quarter of 2015, and $4.9
million in the second quarter of 2014. For the first
six months of 2015, loan discount accretion amounted to
$2.7 million compared to $11.3 million for the first six months of
2014. The lower amount of accretion is due to the continued
winding down of the unaccreted discount amount that resulted from
failed-bank acquisitions in 2009 and 2011.
Excluding the effects of discount accretion on purchased loans,
the Company's net interest margin has remained stable, amounting to
3.99% for the second quarter of 2015, 3.98% for the first quarter
of 2015, and 3.99% for the second quarter of 2014. The
Company continues to experience lower loan yields due to the
prolonged low interest rate environment, but began to invest its
excess cash balances into higher yielding investment securities
late in the fourth quarter of 2014, which has partially offset the
lower loan yields. Investment securities totaled $380 million at June 30,
2015 compared to $172 million
at June 30, 2014. 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 0.30% in
the second quarter of 2014 to 0.24% in the second quarter of 2015,
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
$0.8 million in the second quarter of
2015 compared to $3.7 million in the
second quarter of 2014. For the six months ended June 30, 2015, the Company recorded total
provisions for loan losses of $0.7
million compared to $7.2
million for the same period of 2014. As discussed
below, the Company records provisions for loan losses related to
both 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
$1.0 million in the second quarter of
2015 compared to $1.2 million in the
second quarter of 2014. For the first six months of 2015, the
provision for loan losses on non-covered loans amounted to
$1.1 million compared to $4.5 million for the same period of 2014.
The lower provisions recorded in 2015 were primarily a result of
continued favorable credit quality trends and generally improving
economic trends.
The Company recorded a negative provision for loan losses on
covered loans (reduction of allowance for loan losses) of
$0.2 million in the second quarter of
2015 compared to a $2.5 million
provision for loan losses in the second quarter of 2014. For
the six months ended June 30, 2015,
the Company recorded a negative provision for loan losses on
covered loans of $0.4 million
compared to a $2.7 million provision
for loan losses in the comparable period of 2014. The
negative provisions in 2015 primarily resulted from lower levels of
covered nonperforming loans, minimal net charge-offs, and declining
levels of total covered loans.
Total non-covered nonperforming assets amounted to $86.1 million at June 30,
2015 (2.78% of total non-covered assets), $95.3 million at December
31, 2014 (3.09% of total non-covered assets), and
$84.1 million at June 30, 2014 (2.73% of total non-covered
assets). The increase in non-covered nonperforming assets
when comparing June 30, 2014 to
December 31, 2014 and June 30, 2015 was primarily 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 share agreement with the FDIC associated with
those assets.
Total covered nonperforming assets have declined in the past
year, amounting to $13.2 million at
June 30, 2015, $18.7 million at December
31, 2014 and $39.1 million at
June 30, 2014. 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
share agreement.
Noninterest Income
Total noninterest income was $5.0
million for each of the three month periods ended
June 30, 2015 and June 30, 2014. For the six months ended
June 30, 2015, noninterest income
amounted to $9.5 million compared to
$5.3 million for the six months ended
June 30, 2014.
Core noninterest income for the second quarter of 2015 was
$7.4 million, a decrease of 5.0% from
the $7.8 million reported for the
second quarter of 2014. For the first six months of 2015,
core noninterest income amounted to $14.6
million, a 4.5% decrease from the $15.3 million recorded in the comparable period
of 2014. 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 reason for the decrease in core
noninterest income in 2015 was lower service charges on deposit
accounts, which declined from $3.4
million in the second quarter of 2014 to $2.9 million in the second quarter of 2015.
For the six months ended June 30,
2015, service charges on deposit accounts amounted to
$5.8 million, which is a $1.2 million decrease from the $7.0 million recorded in the comparable period of
2014. After the elimination of free checking for most
customers with low balances in late 2013, monthly fees earned on
deposit accounts have gradually declined over the past several
quarters as a result of more customers meeting the requirements to
have the monthly service charge waived. Fewer instances of
fees earned from customers overdrawing their accounts have also
impacted this line item.
Noncore components of noninterest income resulted in a net
decrease to income of $2.4 million in
the second quarter of 2015 compared to a net decrease to income of
$2.9 million in the second quarter of
2014. For the six months ended June
30, 2015 and 2014, the Company recorded net decreases
to income of $5.1 million and
$10.0 million, respectively, related
to the noncore components of noninterest income. The largest
variances in noncore noninterest income related to gains (losses)
on covered foreclosed properties and indemnification asset income
(expense) – see discussion below.
Gains on covered foreclosed properties were $0.3 million and $0.5
million for the three and six months ended June 30, 2015, respectively, compared to losses
of $1.2 million and $3.3 million recorded for the three and six
months ended June 30, 2014.
Losses on covered foreclosed properties have generally declined in
recent quarters as a result of significantly lower levels of
covered foreclosed properties held by the Company and stabilization
in property values.
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 second
quarter of 2015, the Company recorded $1.8
million in indemnification asset expense compared to
$1.6 million in indemnification asset
expense in the second quarter of 2014. For the six months
ended June 30, 2015, indemnification
asset expense amounted to $4.2
million compared to $6.5
million in indemnification asset expense for the same period
of 2014. These variances are primarily due to lower
indemnification asset expense associated with the lower loan
discount accretion income recorded in the three and six months
ended June 30, 2015. See
additional discussion related to this matter in the section below
entitled "Note Regarding Components of Earnings."
Noninterest Expenses
Noninterest expenses amounted to $24.3
million in the second quarter of 2015 compared to
$24.8 million recorded in the second
quarter of 2014. Noninterest expenses for the six months
ended June 30, 2015 amounted to
$48.0 million compared to
$48.3 million recorded in the first
half of 2014. The decreases in 2015 were mainly due to
decreases in miscellaneous items of other operating expense.
Balance Sheet and Capital
Total assets at June 30, 2015
amounted to $3.2 billion, a 1.7%
decrease from a year earlier. Total loans at June 30, 2015 amounted to $2.4 billion, a 0.9% decrease from a year
earlier, and total deposits amounted to $2.7
billion at June 30, 2015, a
3.7% decrease from a year earlier.
Investment securities totaled $379.7
million at June 30, 2015
compared to $171.9 million at
June 30, 2014. Over the past
three quarters, the Company has used a portion of its excess cash
balances to purchase investment securities.
Non-covered loans amounted to $2.3
billion at June 30, 2015, an
increase of $41.4 million from
June 30, 2014. The increase was
partially 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 share
agreement. Non-covered loans increased $23.4 million, or 4.1% on an annualized basis,
during the second quarter of 2015 as a result of ongoing internal
initiatives to drive loan growth. Loans covered by FDIC loss
share agreements are expected to continue to decline as those loans
continue to pay down.
The decline in total deposits at June 30,
2015 compared to June 30, 2014
was primarily due to decreases in retail time deposits ("other time
deposits > $100,000" and "other
time deposits" in the accompanying tables) and brokered deposits,
with increases in checking accounts and other retail deposit
accounts offsetting a portion of the decline. Time deposits
are generally one of the Company's most expensive funding sources,
and thus the shift from this category has benefited the Company's
overall cost of funds.
On June 25, 2015, the Company
redeemed $32 million (32,000 shares)
of the outstanding Non-Cumulative Perpetual Preferred Stock, Series
B ("SBLF Stock") that had been issued to the United States Secretary of the Treasury in
September 2011 related to the
Company's participation in the Small Business Lending Fund. The
shares were redeemed at their liquidation value of $1,000 per share plus accrued dividends.
The Company continues to have outstanding $31.5 million (31,500 shares) of SBLF Stock.
The Company remains well-capitalized by all regulatory
standards, with a Total Risk-Based Capital Ratio at June 30, 2015 of 16.14% compared to the 10.00%
minimum to be considered well-capitalized. The Company's
tangible common equity to tangible assets ratio was 8.24% at
June 30, 2015, an increase of 67
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, "Today's
earnings report reflects another strong quarter for our
Company. Earnings exceeded $5
million for the ninth consecutive quarter, and asset quality
continues to improve. Also, we experienced solid growth in
loans during the quarter."
The following is a list of business development and other
miscellaneous matters affecting the Company:
- On June 16, 2015, the Company
announced a quarterly cash dividend of $0.08 per share payable on July 24, 2015 to shareholders of record on
June 30, 2015. This is the same
dividend rate as the Company declared in the second quarter of
2014.
- On May 18, 2015, the Company
opened a new branch facility at 4110 Bradham Drive, Jacksonville, North Carolina. The First Bank
branch located on Western Boulevard in Jacksonville was closed and the accounts
serviced at that branch were reassigned to the new and improved
branch.
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 pay off, 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 73 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
June 30,
|
Percent
|
|
($ in thousands
except per share data – unaudited)
|
2015
|
|
2014
|
Change
|
|
|
|
|
|
|
INCOME
STATEMENT
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
|
|
|
Interest
and fees on loans
|
$
28,953
|
|
34,376
|
|
|
Interest
on investment securities
|
2,121
|
|
1,347
|
|
|
Other
interest income
|
186
|
|
232
|
|
|
Total interest
income
|
31,260
|
|
35,955
|
(13.1%)
|
|
Interest
expense
|
|
|
|
|
|
Interest
on deposits
|
1,340
|
|
1,850
|
|
|
Interest
on borrowings
|
315
|
|
297
|
|
|
Total interest
expense
|
1,655
|
|
2,147
|
(22.9%)
|
|
Net
interest income
|
29,605
|
|
33,808
|
(12.4%)
|
|
Provision for loan
losses – non-covered loans
|
1,001
|
|
1,158
|
(13.6%)
|
|
Provision (reversal)
for loan losses – covered loans
|
(160)
|
|
2,501
|
n/m
|
|
Total provision for
loan losses
|
841
|
|
3,659
|
(77.0%)
|
|
Net interest income
after provision for loan losses
|
28,764
|
|
30,149
|
(4.6%)
|
|
Noninterest
income
|
|
|
|
|
|
Service
charges on deposit accounts
|
2,881
|
|
3,446
|
|
|
Other
service charges, commissions, and fees
|
2,771
|
|
2,562
|
|
|
Fees
from presold mortgages
|
731
|
|
790
|
|
|
Commissions from financial product sales
|
665
|
|
706
|
|
|
Bank-owned life insurance income
|
383
|
|
318
|
|
|
Foreclosed property gains (losses) – non-covered
|
(580)
|
|
(551)
|
|
|
Foreclosed property gains (losses) – covered
|
254
|
|
(1,173)
|
|
|
FDIC
indemnification asset income (expense), net
|
(1,828)
|
|
(1,578)
|
|
|
Securities gains
|
−
|
|
786
|
|
|
Other
gains (losses)
|
(273)
|
|
(336)
|
|
|
Total noninterest
income
|
5,004
|
|
4,970
|
0.7%
|
|
Noninterest
expenses
|
|
|
|
|
|
Salaries
expense
|
11,581
|
|
11,366
|
|
|
Employee
benefit expense
|
2,298
|
|
2,286
|
|
|
Occupancy and equipment expense
|
2,761
|
|
2,828
|
|
|
Intangibles amortization
|
180
|
|
194
|
|
|
Other
operating expenses
|
7,480
|
|
8,106
|
|
|
Total noninterest
expenses
|
24,300
|
|
24,780
|
(1.9%)
|
|
Income before income
taxes
|
9,468
|
|
10,339
|
(8.4%)
|
|
Income
taxes
|
3,224
|
|
3,693
|
(12.7%)
|
|
Net income
|
6,244
|
|
6,646
|
(6.0%)
|
|
|
|
|
|
|
Preferred stock
dividends
|
(212)
|
|
(217)
|
|
|
|
|
|
|
|
Net income available
to common shareholders
|
$
6,032
|
|
6,429
|
(6.2%)
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share – basic
|
$
0.30
|
|
0.33
|
(9.1%)
|
|
Earnings per common
share – diluted
|
0.30
|
|
0.32
|
(6.3%)
|
|
|
|
|
|
|
ADDITIONAL INCOME
STATEMENT INFORMATION
|
|
|
|
|
|
Net
interest income, as reported
|
$
29,605
|
|
33,808
|
|
|
Tax-equivalent adjustment (1)
|
402
|
|
375
|
|
|
Net
interest income, tax-equivalent
|
$
30,007
|
|
34,183
|
(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 38% tax rate and is reduced by
the related nondeductible portion of interest expense.
|
|
|
n/m = not
meaningful
|
|
First Bancorp and
Subsidiaries
|
|
Financial Summary
– Page 2
|
|
|
|
|
Six Months
Ended
June 30,
|
Percent
|
|
($ in thousands
except per share data – unaudited)
|
2015
|
|
2014
|
Change
|
|
|
|
|
|
|
INCOME
STATEMENT
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
|
|
|
Interest
and fees on loans
|
$
58,394
|
|
70,462
|
|
|
Interest
on investment securities
|
3,943
|
|
2,818
|
|
|
Other
interest income
|
381
|
|
351
|
|
|
Total interest
income
|
62,718
|
|
73,631
|
(14.8%)
|
|
Interest
expense
|
|
|
|
|
|
Interest
on deposits
|
2,798
|
|
3,741
|
|
|
Other,
primarily borrowings
|
612
|
|
547
|
|
|
Total interest
expense
|
3,410
|
|
4,288
|
(20.5%)
|
|
Net
interest income
|
59,308
|
|
69,343
|
(14.5%)
|
|
Provision for loan
losses – non-covered loans
|
1,105
|
|
4,523
|
(75.6%)
|
|
Provision (reversal)
for loan losses – covered loans
|
(428)
|
|
2,711
|
n/m
|
|
Total provision for
loan losses
|
677
|
|
7,234
|
(90.6%)
|
|
Net interest income
after provision for loan losses
|
58,631
|
|
62,109
|
(5.6%)
|
|
Noninterest
income
|
|
|
|
|
|
Service
charges on deposit accounts
|
5,773
|
|
7,019
|
|
|
Other
service charges, commissions, and fees
|
5,313
|
|
4,929
|
|
|
Fees
from presold mortgages
|
1,539
|
|
1,397
|
|
|
Commissions from financial product sales
|
1,226
|
|
1,300
|
|
|
Bank-owned life insurance income
|
754
|
|
645
|
|
|
Foreclosed property gains (losses) – non-covered
|
(1,075)
|
|
(707)
|
|
|
Foreclosed property gains (losses) – covered
|
492
|
|
(3,290)
|
|
|
FDIC
indemnification asset income (expense), net
|
(4,220)
|
|
(6,494)
|
|
|
Securities gains
|
−
|
|
786
|
|
|
Other
gains (losses)
|
(269)
|
|
(317)
|
|
|
Total noninterest
income
|
9,533
|
|
5,268
|
81.0%
|
|
Noninterest
expenses
|
|
|
|
|
|
Salaries
expense
|
23,078
|
|
23,014
|
|
|
Employee
benefit expense
|
4,481
|
|
4,597
|
|
|
Occupancy and equipment expense
|
5,586
|
|
5,636
|
|
|
Intangibles amortization
|
360
|
|
388
|
|
|
Other
operating expenses
|
14,509
|
|
14,696
|
|
|
Total noninterest
expenses
|
48,014
|
|
48,331
|
(0.7%)
|
|
Income before income
taxes
|
20,150
|
|
19,046
|
5.8%
|
|
Income
taxes
|
6,918
|
|
6,724
|
2.9%
|
|
Net income
|
13,232
|
|
12,322
|
7.4%
|
|
|
|
|
|
|
Preferred stock
dividends
|
(429)
|
|
(434)
|
|
|
|
|
|
|
|
Net income available
to common shareholders
|
$
12,803
|
|
11,888
|
7.7%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share – basic
|
$
0.65
|
|
0.60
|
8.3%
|
|
Earnings per common
share – diluted
|
0.63
|
|
0.59
|
6.8%
|
|
|
|
|
|
|
ADDITIONAL INCOME
STATEMENT INFORMATION
|
|
|
|
|
|
Net
interest income, as reported
|
$
59,308
|
|
69,343
|
|
|
Tax-equivalent adjustment (1)
|
792
|
|
749
|
|
|
Net
interest income, tax-equivalent
|
$
60,100
|
|
70,092
|
(14.3%)
|
|
|
|
|
|
|
|
|
|
(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 38% tax rate and is reduced by
the related nondeductible portion of interest expense.
|
|
|
n/m = not
meaningful
|
|
First Bancorp and
Subsidiaries
|
|
Financial Summary
– Page 3
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
PERFORMANCE
RATIOS (annualized)
|
2015
|
2014
|
|
2015
|
2014
|
|
Return on average
assets (1)
|
0.76%
|
0.79%
|
|
0.81%
|
0.74%
|
|
Return on average
common equity (2)
|
7.42%
|
8.32%
|
|
7.98%
|
7.79%
|
|
Net interest margin –
tax-equivalent (3)
|
4.15%
|
4.65%
|
|
4.17%
|
4.89%
|
|
Net charge-offs to
average loans – non-covered
|
0.81%
|
0.69%
|
|
0.83%
|
0.61%
|
|
|
|
|
|
|
|
COMMON SHARE
DATA
|
|
|
|
|
|
|
Cash dividends
declared – common
|
$ 0.08
|
0.08
|
|
$ 0.16
|
0.16
|
|
Stated book value –
common
|
16.51
|
15.75
|
|
16.51
|
15.75
|
|
Tangible book value –
common
|
13.10
|
12.28
|
|
13.10
|
12.28
|
|
Common shares
outstanding at end of period
|
19,780,017
|
19,705,381
|
|
19,780,017
|
19,705,381
|
|
Weighted average
shares outstanding – basic
|
19,778,640
|
19,698,581
|
|
19,750,316
|
19,693,382
|
|
Weighted average
shares outstanding – diluted
|
20,508,955
|
20,434,263
|
|
20,481,466
|
20,428,861
|
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
|
|
|
|
|
Tangible equity to
tangible assets
|
9.47%
|
9.78%
|
|
9.47%
|
9.78%
|
|
Tangible common
equity to tangible assets
|
8.24%
|
7.57%
|
|
8.24%
|
7.57%
|
|
Tier I leverage
ratio
|
11.29%
|
11.15%
|
|
11.29%
|
11.15%
|
|
Tier I risk-based
capital ratio
|
14.89%
|
15.88%
|
|
14.89%
|
15.88%
|
|
Total risk-based
capital ratio
|
16.14%
|
17.14%
|
|
16.14%
|
17.14%
|
|
|
|
|
|
|
|
AVERAGE
BALANCES ($ in thousands)
|
|
|
|
|
|
|
Total
assets
|
$ 3,199,270
|
3,259,550
|
|
$ 3,196,920
|
3,219,199
|
|
Loans
|
2,389,735
|
2,438,364
|
|
2,390,403
|
2,448,866
|
|
Earning
assets
|
2,901,770
|
2,946,586
|
|
2,906,251
|
2,891,696
|
|
Deposits
|
2,667,649
|
2,751,466
|
|
2,668,311
|
2,745,330
|
|
Interest-bearing
liabilities
|
2,180,746
|
2,354,768
|
|
2,195,524
|
2,324,453
|
|
Shareholders'
equity
|
394,699
|
380,542
|
|
393,436
|
378,480
|
|
|
|
|
|
|
|
(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
|
June 30,
2015
|
March 31,
2015
|
December 31,
2014
|
September 30,
2014
|
June 30,
2014
|
|
|
|
|
|
|
|
Net interest income –
tax-equivalent (1)
|
$ 30,007
|
30,093
|
31,299
|
31,721
|
34,183
|
|
Taxable equivalent
adjustment (1)
|
402
|
390
|
376
|
378
|
375
|
|
Net interest
income
|
29,605
|
29,703
|
30,923
|
31,343
|
33,808
|
|
Provision for loan
losses – non-covered
|
1,001
|
104
|
1,285
|
1,279
|
1,158
|
|
Provision (reversal)
for loan losses – covered
|
(160)
|
(268)
|
191
|
206
|
2,501
|
|
Noninterest
income
|
5,004
|
4,529
|
4,492
|
4,608
|
4,970
|
|
Noninterest
expense
|
24,300
|
23,714
|
22,989
|
25,931
|
24,780
|
|
Income before income
taxes
|
9,468
|
10,682
|
10,950
|
8,535
|
10,339
|
|
Income tax
expense
|
3,224
|
3,694
|
3,855
|
2,956
|
3,693
|
|
Net income
|
6,244
|
6,988
|
7,095
|
5,579
|
6,646
|
|
Preferred stock
dividends
|
(212)
|
(217)
|
(217)
|
(217)
|
(217)
|
|
Net income available
to common shareholders
|
6,032
|
6,771
|
6,878
|
5,362
|
6,429
|
|
|
|
|
|
|
|
Earnings per common
share – basic
|
0.30
|
0.34
|
0.35
|
0.27
|
0.33
|
|
Earnings per common
share – diluted
|
0.30
|
0.33
|
0.34
|
0.27
|
0.32
|
|
|
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 -
unaudited)
|
At June 30,
2015
|
|
At March 31,
2015
|
|
At Dec.
31,
2014
|
|
At June
30,
2014
|
|
One
Year
Change
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
$ 75,151
|
|
84,208
|
|
81,068
|
|
92,633
|
|
(18.9%)
|
|
Interest bearing
deposits with banks
|
103,241
|
|
160,279
|
|
172,016
|
|
314,649
|
|
(67.2%)
|
|
Total cash and cash
equivalents
|
178,392
|
|
244,487
|
|
253,084
|
|
407,282
|
|
(56.2%)
|
|
|
|
|
|
|
|
|
|
|
|
Investment
securities
|
379,695
|
|
343,123
|
|
336,705
|
|
171,941
|
|
120.8%
|
|
Presold
mortgages
|
4,934
|
|
8,273
|
|
6,019
|
|
5,926
|
|
(16.7%)
|
|
|
|
|
|
|
|
|
|
|
|
Loans –
non-covered
|
2,298,955
|
|
2,275,570
|
|
2,268,580
|
|
2,257,530
|
|
1.8%
|
|
Loans – covered by
FDIC loss share agreements
|
113,824
|
|
119,829
|
|
127,594
|
|
176,855
|
|
(35.6%)
|
|
Total loans
|
2,412,779
|
|
2,395,399
|
|
2,396,174
|
|
2,434,385
|
|
(0.9%)
|
|
Allowance for loan
losses – non-covered
|
(30,155)
|
|
(33,770)
|
|
(38,345)
|
|
(41,966)
|
|
(28.1%)
|
|
Allowance for loan
losses – covered
|
(1,935)
|
|
(2,226)
|
|
(2,281)
|
|
(3,830)
|
|
(49.5%)
|
|
Total allowance for loan
losses
|
(32,090)
|
|
(35,996)
|
|
(40,626)
|
|
(45,796)
|
|
(29.9%)
|
|
Net loans
|
2,380,689
|
|
2,359,403
|
|
2,355,548
|
|
2,388,589
|
|
(0.3%)
|
|
|
|
|
|
|
|
|
|
|
|
Premises and
equipment
|
75,087
|
|
75,573
|
|
75,113
|
|
76,705
|
|
(2.1%)
|
|
FDIC indemnification
asset
|
11,982
|
|
18,452
|
|
22,569
|
|
29,406
|
|
(59.3%)
|
|
Intangible
assets
|
67,532
|
|
67,712
|
|
67,893
|
|
68,281
|
|
(1.1%)
|
|
Foreclosed real
estate – non-covered
|
9,954
|
|
8,978
|
|
9,771
|
|
9,346
|
|
6.5%
|
|
Foreclosed real
estate – covered
|
1,945
|
|
2,055
|
|
2,350
|
|
9,934
|
|
(80.4%)
|
|
Bank-owned life
insurance
|
56,175
|
|
55,793
|
|
55,421
|
|
44,685
|
|
25.7%
|
|
Other
assets
|
45,134
|
|
35,739
|
|
33,910
|
|
54,404
|
|
(17.0%)
|
|
Total assets
|
$ 3,211,519
|
|
3,219,588
|
|
3,218,383
|
|
3,266,499
|
|
(1.7%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing
checking accounts
|
$ 614,619
|
|
591,283
|
|
560,230
|
|
525,332
|
|
17.0%
|
|
Interest bearing checking
accounts
|
553,918
|
|
578,784
|
|
583,903
|
|
551,577
|
|
0.4%
|
|
Money market
accounts
|
576,360
|
|
568,752
|
|
548,255
|
|
554,731
|
|
3.9%
|
|
Savings accounts
|
184,786
|
|
183,036
|
|
180,317
|
|
175,084
|
|
5.5%
|
|
Brokered deposits
|
58,534
|
|
62,801
|
|
88,375
|
|
135,300
|
|
(56.7%)
|
|
Internet time
deposits
|
−
|
|
249
|
|
747
|
|
2,216
|
|
(100.0%)
|
|
Other time deposits >
$100,000
|
342,024
|
|
373,599
|
|
384,127
|
|
421,255
|
|
(18.8%)
|
|
Other time
deposits
|
322,886
|
|
335,110
|
|
349,952
|
|
389,084
|
|
(17.0%)
|
|
Total deposits
|
2,653,127
|
|
2,693,614
|
|
2,695,906
|
|
2,754,579
|
|
(3.7%)
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
176,394
|
|
116,394
|
|
116,394
|
|
116,394
|
|
51.5%
|
|
Other
liabilities
|
16,609
|
|
16,336
|
|
18,384
|
|
14,433
|
|
15.1%
|
|
Total liabilities
|
2,846,130
|
|
2,826,344
|
|
2,830,684
|
|
2,885,406
|
|
(1.4%)
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock
|
38,787
|
|
70,787
|
|
70,787
|
|
70,787
|
|
(45.2%)
|
|
Common
stock
|
133,061
|
|
132,752
|
|
132,532
|
|
132,417
|
|
0.5%
|
|
Retained
earnings
|
194,600
|
|
190,150
|
|
184,958
|
|
175,871
|
|
10.6%
|
|
Accumulated other
comprehensive income (loss)
|
(1,059)
|
|
(445)
|
|
(578)
|
|
2,018
|
|
n/m
|
|
Total shareholders'
equity
|
365,389
|
|
393,244
|
|
387,699
|
|
381,093
|
|
(4.1%)
|
|
Total liabilities and
shareholders' equity
|
$ 3,211,519
|
|
3,219,588
|
|
3,218,383
|
|
3,266,499
|
|
(1.7%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n/m = not
meaningful
|
|
First Bancorp and
Subsidiaries
|
|
Financial Summary
- Page 5
|
|
|
|
For the Three Months
Ended
|
|
YIELD
INFORMATION
|
June 30,
2015
|
March 31,
2015
|
December 31,
2014
|
September 30,
2014
|
June 30,
2014
|
|
|
|
|
|
|
|
Yield on
loans
|
4.86%
|
4.99%
|
5.13%
|
5.23%
|
5.65%
|
|
Yield on securities –
tax-equivalent (1)
|
2.80%
|
2.67%
|
2.95%
|
3.25%
|
3.00%
|
|
Yield on other
earning assets
|
0.50%
|
0.43%
|
0.38%
|
0.30%
|
0.33%
|
|
Yield on
all interest earning assets
|
4.38%
|
4.44%
|
4.51%
|
4.58%
|
4.95%
|
|
|
|
|
|
|
|
Rate on interest
bearing deposits
|
0.26%
|
0.28%
|
0.30%
|
0.32%
|
0.33%
|
|
Rate on other
interest bearing liabilities
|
1.04%
|
1.03%
|
1.03%
|
1.03%
|
1.02%
|
|
Rate on
all interest bearing liabilities
|
0.30%
|
0.32%
|
0.34%
|
0.35%
|
0.37%
|
|
Total cost of
funds
|
0.24%
|
0.26%
|
0.27%
|
0.28%
|
0.30%
|
|
|
|
|
|
|
|
Net
interest margin – tax-equivalent (2)
|
4.15%
|
4.19%
|
4.25%
|
4.30%
|
4.65%
|
|
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)
|
June 30,
2015
|
|
March 31,
2015
|
|
December 31,
2014
|
|
September 30,
2014
|
|
June 30,
2014
|
|
|
|
|
|
|
|
|
|
|
|
Interest income –
reduced by premium
amortization on loans
|
$
−
|
|
−
|
|
−
|
|
−
|
|
(49)
|
|
Interest income –
increased by accretion of
loan discount (1)
|
1,135
|
|
1,557
|
|
2,173
|
|
2,577
|
|
4,851
|
|
Interest expense –
reduced by premium
amortization of deposits
|
−
|
|
−
|
|
−
|
|
−
|
|
4
|
|
Impact
on net interest income
|
$ 1,135
|
|
1,557
|
|
2,173
|
|
2,577
|
|
4,806
|
|
|
|
|
|
|
|
(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)
|
June 30,
2015
|
|
March 31,
2015
|
|
Dec. 31,
2014
|
|
Sept. 30,
2014
|
|
June 30,
2014
|
|
|
|
|
|
|
|
|
|
|
|
Non-covered
nonperforming assets
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
$ 44,123
|
|
47,416
|
|
50,066
|
|
53,620
|
|
47,533
|
|
Troubled debt
restructurings - accruing
|
32,059
|
|
33,997
|
|
35,493
|
|
31,501
|
|
27,250
|
|
Accruing loans > 90
days past due
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total non-covered
nonperforming loans
|
76,182
|
|
81,413
|
|
85,559
|
|
85,121
|
|
74,783
|
|
Foreclosed real
estate
|
9,954
|
|
8,978
|
|
9,771
|
|
11,705
|
|
9,346
|
|
Total non-covered
nonperforming assets
|
$ 86,136
|
|
90,391
|
|
95,330
|
|
96,826
|
|
84,129
|
|
|
|
|
|
|
|
|
|
|
|
Covered
nonperforming assets (1)
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
$ 7,378
|
|
8,596
|
|
10,508
|
|
10,478
|
|
20,938
|
|
Troubled debt
restructurings - accruing
|
3,910
|
|
3,874
|
|
5,823
|
|
6,273
|
|
8,193
|
|
Accruing loans > 90
days past due
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total covered nonperforming
loans
|
11,288
|
|
12,470
|
|
16,331
|
|
16,751
|
|
29,131
|
|
Foreclosed real
estate
|
1,945
|
|
2,055
|
|
2,350
|
|
3,237
|
|
9,934
|
|
Total covered
nonperforming assets
|
$ 13,233
|
|
14,525
|
|
18,681
|
|
19,988
|
|
39,065
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming
assets
|
$ 99,369
|
|
104,916
|
|
114,011
|
|
116,814
|
|
123,194
|
|
Asset Quality
Ratios – All Assets
|
|
|
|
|
|
|
|
|
|
|
Net quarterly
charge-offs to average loans - annualized
|
0.80%
|
|
0.76%
|
|
0.82%
|
|
0.51%
|
|
0.99%
|
|
Nonperforming loans
to total loans
|
3.63%
|
|
3.92%
|
|
4.25%
|
|
4.20%
|
|
4.27%
|
|
Nonperforming assets
to total assets
|
3.09%
|
|
3.26%
|
|
3.54%
|
|
3.66%
|
|
3.77%
|
|
Allowance for loan
losses to total loans
|
1.33%
|
|
1.50%
|
|
1.70%
|
|
1.82%
|
|
1.88%
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios – Based on Non-covered Assets only
|
|
|
|
|
|
|
|
|
|
|
Net quarterly
charge-offs to average non-covered loans
- annualized
|
0.81%
|
|
0.84%
|
|
0.78%
|
|
0.60%
|
|
0.69%
|
|
Non-covered
nonperforming loans to non-covered
loans
|
3.31%
|
|
3.58%
|
|
3.77%
|
|
3.71%
|
|
3.31%
|
|
Non-covered
nonperforming assets to total non-covered
assets
|
2.78%
|
|
2.92%
|
|
3.09%
|
|
3.17%
|
|
2.73%
|
|
Allowance for loan
losses to non-covered loans
|
1.31%
|
|
1.48%
|
|
1.69%
|
|
1.81%
|
|
1.86%
|
|
|
|
|
|
|
|
|
|
|
|
___________________________________________________________________________________________________________________
(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)
|
June 30,
2015
|
|
March 31,
2015
|
|
Dec. 31,
2014
|
|
Sept. 30,
2014
|
|
June 30,
2014
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income,
as reported
|
$ 29,605
|
|
29,703
|
|
30,923
|
|
31,343
|
|
33,808
|
|
Tax-equivalent
adjustment
|
402
|
|
390
|
|
376
|
|
378
|
|
375
|
|
Net interest income,
tax-equivalent (A)
|
$ 30,007
|
|
30,093
|
|
31,299
|
|
31,721
|
|
34,183
|
|
Average earning
assets (B)
|
$ 2,901,770
|
|
2,910,732
|
|
2,920,295
|
|
2,924,705
|
|
2,946,586
|
|
Tax-equivalent net
interest
margin, annualized – as reported –
(A)/(B)
|
4.15%
|
|
4.19%
|
|
4.25%
|
|
4.30%
|
|
4.65%
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income,
tax-equivalent
|
$ 30,007
|
|
30,093
|
|
31,299
|
|
31,721
|
|
34,183
|
|
Loan discount
accretion
|
1,135
|
|
1,557
|
|
2,173
|
|
2,577
|
|
4,851
|
|
Net interest income,
tax-equivalent, excluding
loan discount accretion (A)
|
$ 28,872
|
|
28,536
|
|
29,126
|
|
29,144
|
|
29,332
|
|
Average earnings
assets (B)
|
$ 2,901,770
|
|
2,910,732
|
|
2,920,295
|
|
2,924,705
|
|
2,946,586
|
|
Tax-equivalent net
interest margin, excluding
impact of loan discount accretion,
annualized – (A) / (B)
|
3.99%
|
|
3.98%
|
|
3.96%
|
|
3.95%
|
|
3.99%
|
|
|
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
June 30, 2015, the Company had a remaining loan discount balance of
$17.6 million compared to $25.8 million at June 30, 2014. 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-second-quarter-results-300119244.html
SOURCE First Bancorp