SOUTHERN PINES, N.C.,
Oct. 27, 2016 /PRNewswire/
-- First Bancorp (NASDAQ: FBNC), the parent company of First
Bank, announced today net income available to common shareholders
of $4.6 million, or $0.23 per diluted common share, for the three
months ended September 30, 2016
compared to the $6.9 million, or
$0.34 per diluted common share,
recorded in the third quarter of 2015.
For the nine months ended September 30,
2016, the Company recorded net income available to common
shareholders of $19.0 million, or
$0.93
per diluted common share, compared to the $19.7 million, or $0.97 per diluted common share, for the nine
months ended September 30,
2015. The decreases for the periods in 2016 are primarily due
to the Company's termination of its loss share agreements with the
FDIC, the impact of which was partially offset by a gain recorded
in a branch exchange transaction, as follows:
- Effective July 1, 2016, the
Company terminated all loss share agreements with the FDIC. The
loss share agreements related to two failed bank acquisitions from
2009 and 2011. As a result of the termination of the agreements,
the Company recorded indemnification asset expense of $5.7 million during the three months ended
September 30, 2016, which primarily
relates to the write-off of the remaining indemnification asset
associated with the agreements. The Company expects there to be a
positive impact on future earnings as a result of the elimination
of FDIC indemnification asset expense that
we had recorded in most of our recent financial
quarters.
- On July 15, 2016, the Company
completed a branch exchange with First Community Bank,
headquartered in Bluefield,
Virginia. The Company exchanged its seven branches in
Virginia for six of First
Community Bank's branches, with four locations in Winston-Salem and one each in Mooresville and Huntersville. In the exchange, the Company
acquired approximately $152 million
in loans and $111 million in
deposits, while transferring approximately $151 million in loans and $134 million in deposits to First Community Bank.
The Company recorded a gain on this transaction of $1.4 million.
Net Interest Income and Net Interest Margin
Net interest income amounted to $30.4
million for both the third quarter of 2016 and 2015.
Net interest income for the first nine months of 2016 amounted to
$92.1 million, a 2.7% increase from
the $89.7 million recorded in the
comparable period of 2015. The higher net interest income was
primarily due to growth in the Company's loans outstanding.
The Company's net interest margin (tax-equivalent net interest
income divided by average earning assets) in the third quarter of
2016 was 3.93% compared to 4.14% for the third quarter of
2015. For the nine month period ended September 30, 2016, the Company's net interest
margin was 4.07% compared to 4.16% for the same period in
2015. The lower margins in 2016 were primarily due to lower
loan yields, which have been impacted by the continued low interest
rate environment. Lower loan discount accretion on purchased
loans also contributed to the lower 2016 margins. Loan
discount accretion amounted to $0.8
million in the third quarter of 2016, compared to
$1.2 million in the third quarter of
2015. For the first nine months of 2016, loan discount
accretion amounted to $3.6 million
compared to $3.9 million for the
first nine months of 2015.
Excluding the effects of discount accretion, the Company's net
interest margin was 3.82% for the third quarter of 2016 compared to
3.98% for the third quarter of 2015, with the loan yield for the
third quarter of 2016 being 4.39% compared to 4.63% for the third quarter of
2015.
See the Financial Summary for a table that presents the impact
of loan discount accretion on 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.
Provision for Loan Losses and Asset Quality
The Company recorded no provision for loan losses in the third
quarter of 2016 compared to a negative provision of $1.4 million in the third quarter of 2015.
For the nine months ended September 30,
2016, the Company recorded a negative provision for loan
losses of $23,000 compared to a
negative provision of $0.7 million in
the same period of 2015.
For periods prior to the third quarter of 2016, the Company's
provision for loan losses was disclosed in separate line items
between covered loans and non-covered loans, as shown in the
attached tables. Generally the Company had recorded
provisions for loan losses on non-covered loans as a result of net
charge-offs and loan growth, while significant recoveries in the
Company's covered loan portfolios resulted in negative provisions
for loan losses. Upon the termination of the FDIC loss share
agreements effective July 1, 2016,
all loans are classified as non-covered.
The Company's provision for loan loss levels have been impacted
by continued improvement in asset quality. Nonperforming assets
amounted to $70.2 million at
September 30, 2016, a decrease of
23.4% from the $91.7 million one year
earlier. The Company's nonperforming assets to total assets
ratio was 1.98% at September 30, 2016
compared to 2.80% at September 30,
2015. Annualized net charge-offs as a percentage of average
loans for the three and nine months ended September 30, 2016 were 0.06% and 0.15%,
respectively, compared to 0.10% and 0.55%, respectively, for the
comparable periods of 2015.
Noninterest Income
Total noninterest income was $5.2
million and $3.5 million for
the three months ended September 30,
2016 and September 30, 2015,
respectively. For the nine months ended September 30, 2016, noninterest income amounted
to $16.1 million compared to
$13.0 million for the nine months
ended September 30, 2015.
Core noninterest income for the third quarter of 2016 was
$9.8 million, an increase of 34.2%
from the $7.3 million reported for
the third quarter of 2015. For the first nine months of 2016,
core noninterest income amounted to $25.3
million, a 15.5% increase from the $21.9 million recorded in the comparable period
of 2015. 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, v) SBA consulting fees, vi) SBA loan sale
gains and vii) bank-owned life insurance income.
The increases in core noninterest income are primarily the
result of the following initiatives by the Company to increase
noninterest income:
- On January 1, 2016, the Company
acquired Bankingport, Inc., an insurance agency located in
Sanford, North Carolina, which is
primarily responsible for the increases in commissions from
financial product sales in the accompanying tables.
- On May 5, 2016, the Company
completed the acquisition of a firm that specializes in providing
consulting services for financial institutions across the country
related to Small Business Administration ("SBA") loan origination
and servicing. The Company recorded $1.9
million in SBA consulting fees from the date of the
acquisition through September 30,
2016.
- In the third quarter of 2016, the Company launched a national
SBA lending division. This division
offers SBA loans to small business owners throughout the United States. During the third quarter of
2016, this division originated $11.3
million of SBA loans and earned $694,000 from gains on the sales of the
guaranteed portions of these loans.
As discussed previously, in the third quarter of 2016, the
Company recorded an expense of $5.7
million associated with the termination of its FDIC loss
share agreements, which is reflected in the line item "FDIC
indemnification asset expense, net" in the accompanying
schedules. Accordingly, all future losses and recoveries
associated with the failed bank assets will be borne solely by the
Company.
In the third quarter of 2016, the Company also recorded a net
gain of $1.4 million as a result of
the branch exchange, which is included in the line item "Other
gains (losses)" in the accompanying schedules.
Noninterest Expenses and Tax
Expense
Noninterest expenses amounted to $27.7
million in the third quarter of 2016 compared to
$24.6 million recorded in the third
quarter of 2015. Noninterest expenses for the nine months
ended September 30, 2016 amounted to
$78.6 million compared to
$72.6 million recorded in the first
nine months of 2015.
Salaries expense increased to $13.4
million in the third quarter of 2016 from the $12.4 million recorded in the third quarter of
2015. Salaries expense for the nine months ended September 30, 2016 amounted to $37.5 million compared to $35.5 million in 2015. The primary reason
for increases in salaries expense is due to growth initiatives
discussed previously.
Merger and acquisition expenses amounted to $0.6 million and $1.3
million, respectively, for the quarter and nine months ended
September 30, 2016, compared to none
in the comparable periods in 2015.
The Company's effective
tax rate increased from approximately 34% in the second quarter of
2016 to approximately 40% in the third quarter of 2016 due to tax
matters associated with the branch exchange.
Balance Sheet and Capital
Total assets at September 30, 2016
amounted to $3.5 billion, an 8.1%
increase from a year earlier. Total loans at September 30, 2016 amounted to $2.7 billion, a 6.8% increase from a year
earlier, and total deposits amounted to $2.9
billion at September 30, 2016,
a 7.5% increase from a year earlier.
The $170 million increase in the
Company's loans at September 30, 2016
compared to a year earlier is primarily related to ongoing internal
initiatives to drive loan growth, including the Company's expansion
into higher growth markets.
Total deposits increased $203.1
million at September 30, 2016
compared to September 30, 2015, which
was driven by a $194 million
increase, or 9.6%, in checking, money market and savings
accounts. Retail time deposits declined by $91 million, or 14.1%, over this same period,
while deposits obtained from brokers increased $101 million, or 216%.
The Company remains well-capitalized by all regulatory
standards, with a Total Risk-Based Capital Ratio at September 30, 2016 of 13.49% compared to the 10.00% minimum to be
considered well-capitalized. The Company's tangible common
equity to tangible assets ratio was 8.03% at September
30, 2016, a decrease of 24
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, "Significant
achievements that should benefit the future growth and
profitability of our company were accomplished this quarter.
The completion of the branch exchange increased our presence in
larger North Carolina markets and
complements the branches we expect to assume in the pending
Carolina Bank Holdings merger. Although the termination of
the FDIC loss share resulted in a charge against earnings this
quarter, we anticipate a positive impact on future
earnings."
Mr. Moore also stated, "I am also pleased with the initiatives
we undertook to increase our revenue sources, including our
acquisitions of an insurance agency and a SBA consulting firm, as
well as the launch of our own SBA lending division."
In addition to the business developments previously discussed,
the following were noted during the third quarter of 2016:
- On August 17, 2016, First Bank
opened its first full service branch in Charlotte, North Carolina. The branch is
located in the Rotunda Building in Southpark. First Bank had opened
a loan production office in Charlotte in December
2013.
- The Company continues to expect the merger agreement announced
on June 21, 2016 between the Company
and Carolina Bank Holdings, Inc. to be completed during the fourth
quarter of 2016 or first quarter of 2017.
- On September 15, 2016, the
Company announced a quarterly cash dividend of $0.08 cents per share payable on October 25, 2016 to shareholders of record on
September 30, 2016. This is the same
dividend rate as the Company declared in the third quarter of
2015.
Note Regarding Components of Earnings
For the periods presented, the Company's results of operations
were significantly affected by the accounting for two FDIC-assisted
failed bank acquisitions. In the discussion above and in the
accompanying tables, the term "covered" is used to describe assets
that were included in FDIC loss share agreements, while the term
"non-covered" refers to the Company's legacy assets, which are not
included in any type of loss share arrangement. As discussed
previously, all loss share agreements were terminated in the third
quarter of 2016 and thus the entire loan portfolio is now
classified as non-covered. Certain prior period disclosures
will continue to present the breakout of the loan portfolio between
covered and non-covered.
Certain covered loans continued to have an unaccreted discount
associated with them at the time of transfer to non-covered
status. Such loans that experience favorable changes in
credit quality compared to what was expected at the acquisition
date, including loans that pay off, will continue to result in
positive adjustments to interest income being recorded over the
life of the respective loan – also referred to as loan discount
accretion.
For periods prior to July 1, 2016,
because favorable changes in covered assets resulted in lower
expected FDIC claims, and unfavorable changes in covered assets
resulted in higher expected FDIC claims, the FDIC indemnification
asset was adjusted to reflect those expectations. The net
increase or decrease in the indemnification asset was reflected
within noninterest income, with the net impact being that pretax
income was generally only impacted by 20% of the income or expense
associated with provisions for loan losses on covered loans,
discount accretion, and losses from covered foreclosed
properties.
* * *
First Bancorp is a bank holding company headquartered in
Southern Pines, North Carolina,
with total assets of approximately $3.5
billion. Its principal activity is the ownership and
operation of First Bank, a state-chartered community bank that
operates 88 branches in North
Carolina and South
Carolina. First Bank also has loan production offices
in the North Carolina cities of
Greensboro, Greenville, and Raleigh. 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 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.
ADDITIONAL INFORMATION ABOUT THE PROPOSED TRANSACTION WITH
CAROLINA BANK AND WHERE TO FIND IT
This communication includes statements made in respect of the
proposed transaction involving First Bancorp and Carolina Bank
Holdings, Inc. ("Carolina
Bank"). This material is not a solicitation of
any vote or approval of Carolina
Bank's shareholders and is not a substitute for the proxy
statement/prospectus or any other documents which First Bancorp and
Carolina Bank may send to their
respective shareholders in connection with the proposed
merger. This communication does not constitute an offer
to sell or the solicitation of an offer to buy any
securities.
In connection with the proposed transaction, First Bancorp has
filed with the SEC a Registration Statement on Form S-4 that
includes a preliminary proxy statement of Carolina Bank and a preliminary prospectus of
First Bancorp, as well as other relevant documents concerning the
proposed transaction. Investors and security holders are
also urged to carefully review and consider each of First Bancorp's
and Carolina Bank's public filings
with the SEC, including but not limited to their Annual Reports on
Form 10-K, their proxy statements, their Current Reports on Form
8-K and their Quarterly Reports on Form 10-Q. Both Carolina Bank and First Bancorp will
mail the final definitive joint proxy statement/prospectus to the
shareholders of Carolina Bank.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS, INVESTORS
AND SHAREHOLDERS OF CAROLINA BANK ARE URGED TO CAREFULLY READ THE
ENTIRE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS
REGARDING THE PROPOSED MERGER WHEN IT BECOMES AVAILABLE AND ANY
OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders may obtain a free copy of the proxy
statement/prospectus (when available) and other filings containing
information about First Bancorp and Carolina Bank at the SEC's website at
www.sec.gov. Investors and security holders may also obtain free
copies of the documents filed with the Securities and Exchange
Commission by First Bancorp on its website at
http://www.localfirstbank.com and by Carolina Bank on its website at
http://www.carolinabank.com.
First Bancorp, Carolina Bank and
certain of their respective directors and executive officers, under
the SEC's rules, may be deemed to be participants in the
solicitation of proxies of Carolina
Bank's shareholders in connection with the proposed
transaction. Information about the directors and executive officers
of First Bancorp and their ownership of First Bancorp common stock
is set forth in the proxy statement for First Bancorp's 2016 Annual
Meeting of Shareholders, as filed with the SEC on Schedule 14A on
April 4, 2016. Information about the
directors and executive officers of Carolina Bank and their ownership of
Carolina Bank's common stock is set
forth in the proxy statement for Carolina Bank Holdings, Inc.'s
2016 Annual Meeting of Shareholders, as filed with the SEC on a
Schedule 14A on April 5, 2016.
Additional information regarding the interests of those
participants and other persons who may be deemed participants in
the transaction may be obtained by reading the joint proxy
statement/prospectus regarding the proposed transaction when it
becomes available. Free copies of this document may be obtained as
described in the preceding paragraph.
First Bancorp and
Subsidiaries
Financial Summary
– Page 1
|
|
|
Three Months
Ended
September
30,
|
Percent
|
($ in thousands
except per share data – unaudited)
|
2016
|
|
2015
|
Change
|
|
|
|
|
|
INCOME
STATEMENT
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
|
|
Interest
and fees on loans
|
$
29,919
|
|
29,863
|
|
Interest
on investment securities
|
2,123
|
|
2,125
|
|
Other
interest income
|
213
|
|
142
|
|
Total interest
income
|
32,255
|
|
32,130
|
0.4%
|
Interest
expense
|
|
|
|
|
Interest
on deposits
|
1,254
|
|
1,257
|
|
Interest
on borrowings
|
647
|
|
487
|
|
Total interest
expense
|
1,901
|
|
1,744
|
9.0%
|
Net
interest income
|
30,354
|
|
30,386
|
(0.1)%
|
Provision for loan
losses – non-covered loans
|
−
|
|
267
|
|
Provision (reversal)
for loan losses – covered loans
|
−
|
|
(1,681)
|
|
Total provision
(reversal) for loan losses
|
−
|
|
(1,414)
|
n/m
|
Net interest income
after provision for loan losses
|
30,354
|
|
31,800
|
(4.5)%
|
Noninterest
income
|
|
|
|
|
Service
charges on deposit accounts
|
2,710
|
|
2,951
|
|
Other
service charges, commissions, and fees
|
2,996
|
|
2,778
|
|
Fees
from presold mortgages
|
710
|
|
481
|
|
Commissions from financial product sales
|
969
|
|
691
|
|
SBA
consulting fees
|
1,178
|
|
−
|
|
SBA loan
sale gains
|
694
|
|
−
|
|
Bank-owned life insurance income
|
514
|
|
382
|
|
Foreclosed property losses
|
(266)
|
|
(939)
|
|
FDIC
indemnification asset expense, net
|
(5,711)
|
|
(2,865)
|
|
Securities losses
|
−
|
|
(1)
|
|
Other
gains
|
1,363
|
|
28
|
|
Total noninterest
income
|
5,157
|
|
3,506
|
47.1%
|
Noninterest
expenses
|
|
|
|
|
Salaries
expense
|
13,430
|
|
12,378
|
|
Employee
benefit expense
|
2,608
|
|
2,221
|
|
Occupancy and equipment expense
|
2,909
|
|
2,723
|
|
Merger
and acquisition expenses
|
600
|
|
−
|
|
Intangibles amortization
|
387
|
|
181
|
|
Other
operating expenses
|
7,784
|
|
7,111
|
|
Total noninterest
expenses
|
27,718
|
|
24,614
|
12.6%
|
Income before income
taxes
|
7,793
|
|
10,692
|
(27.1)%
|
Income
taxes
|
3,115
|
|
3,687
|
(15.5)%
|
Net income
|
4,678
|
|
7,005
|
(33.2)%
|
|
|
|
|
|
Preferred stock
dividends
|
(58)
|
|
(137)
|
|
|
|
|
|
|
Net income available
to common shareholders
|
$
4,620
|
|
6,868
|
(32.7)%
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share – basic
|
$
0.23
|
|
0.35
|
(34.3)%
|
Earnings per common
share – diluted
|
0.23
|
|
0.34
|
(32.4)%
|
|
|
|
|
|
ADDITIONAL INCOME
STATEMENT INFORMATION
|
|
|
|
|
Net
interest income, as reported
|
$
30,354
|
|
30,386
|
|
Tax-equivalent adjustment (1)
|
534
|
|
419
|
|
Net
interest income, tax-equivalent
|
$
30,888
|
|
30,805
|
0.3%
|
|
|
|
|
(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 2
|
|
|
Nine Months
Ended
September
30,
|
Percent
|
($ in thousands
except per share data – unaudited)
|
2016
|
|
2015
|
Change
|
|
|
|
|
|
INCOME
STATEMENT
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
|
|
Interest
and fees on loans
|
$
90,301
|
|
88,257
|
|
Interest
on investment securities
|
6,784
|
|
6,068
|
|
Other
interest income
|
612
|
|
523
|
|
Total interest
income
|
97,697
|
|
94,848
|
3.0%
|
Interest
expense
|
|
|
|
|
Interest
on deposits
|
3,860
|
|
4,055
|
|
Other,
primarily borrowings
|
1,750
|
|
1,099
|
|
Total interest
expense
|
5,610
|
|
5,154
|
8.8%
|
Net
interest income
|
92,087
|
|
89,694
|
2.7%
|
Provision for loan
losses – non-covered loans
|
2,109
|
|
1,372
|
|
Provision (reversal)
for loan losses – covered loans
|
(2,132)
|
|
(2,109)
|
|
Total provision
(reversal) for loan losses
|
(23)
|
|
(737)
|
n/m
|
Net interest income
after provision for loan losses
|
92,110
|
|
90,431
|
1.9%
|
Noninterest
income
|
|
|
|
|
Service
charges on deposit accounts
|
7,960
|
|
8,724
|
|
Other
service charges, commissions, and fees
|
8,869
|
|
8,091
|
|
Fees
from presold mortgages
|
1,491
|
|
2,020
|
|
Commissions from financial product sales
|
2,844
|
|
1,917
|
|
SBA
consulting fees
|
1,898
|
|
−
|
|
SBA loan
sale gains
|
694
|
|
−
|
|
Bank-owned life insurance income
|
1,526
|
|
1,136
|
|
Foreclosed property losses
|
(189)
|
|
(1,522)
|
|
FDIC
indemnification asset expense, net
|
(10,255)
|
|
(7,085)
|
|
Securities gains (losses)
|
3
|
|
(1)
|
|
Other
gains (losses)
|
1,237
|
|
(241)
|
|
Total noninterest
income
|
16,078
|
|
13,039
|
23.3%
|
Noninterest
expenses
|
|
|
|
|
Salaries
expense
|
37,465
|
|
35,456
|
|
Employee
benefit expense
|
7,892
|
|
6,702
|
|
Occupancy and equipment expense
|
8,484
|
|
8,309
|
|
Merger
and acquisition expenses
|
1,286
|
|
−
|
|
Intangibles amortization
|
834
|
|
541
|
|
Other
operating expenses
|
22,677
|
|
21,620
|
|
Total noninterest
expenses
|
78,638
|
|
72,628
|
8.3%
|
Income before income
taxes
|
29.550
|
|
30,842
|
(4.2)%
|
Income
taxes
|
10,396
|
|
10,605
|
(2.0)%
|
Net income
|
19,154
|
|
20,237
|
(5.4)%
|
|
|
|
|
|
Preferred stock
dividends
|
(175)
|
|
(566)
|
|
|
|
|
|
|
Net income available
to common shareholders
|
$
18,979
|
|
19,671
|
(3.5)%
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share – basic
|
$
0.95
|
|
1.00
|
(5.0)%
|
Earnings per common
share – diluted
|
0.93
|
|
0.97
|
(4.1)%
|
|
|
|
|
|
ADDITIONAL INCOME
STATEMENT INFORMATION
|
|
|
|
|
Net
interest income, as reported
|
$
92,087
|
|
89,694
|
|
Tax-equivalent adjustment (1)
|
1,510
|
|
1,211
|
|
Net
interest income, tax-equivalent
|
$
93,597
|
|
90,905
|
3.0%
|
|
|
|
|
(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
September
30,
|
|
Nine Months
Ended
September
30,
|
PERFORMANCE
RATIOS (annualized)
|
2016
|
2015
|
|
2016
|
2015
|
Return on average
assets (1)
|
0.53%
|
0.84%
|
|
0.75%
|
0.82%
|
Return on average
common equity (2)
|
5.13%
|
8.23%
|
|
7.23%
|
8.06%
|
Net interest margin –
tax-equivalent (3)
|
3.93%
|
4.14%
|
|
4.07%
|
4.16%
|
Net charge-offs to
average loans
|
0.06%
|
0.10%
|
|
0.15%
|
0.55%
|
|
|
|
|
|
|
COMMON SHARE
DATA
|
|
|
|
|
|
Cash dividends
declared – common
|
$
0.08
|
0.08
|
|
$
0.24
|
0.24
|
Stated book value –
common
|
17.78
|
16.80
|
|
17.78
|
16.80
|
Tangible book value –
common
|
13.80
|
13.40
|
|
13.80
|
13.40
|
Common shares
outstanding at end of period
|
20,119,411
|
19,785,314
|
|
20,119,411
|
19,785,314
|
Weighted average
shares outstanding – basic
|
20,007,518
|
19,781,789
|
|
19,904,226
|
19,760,807
|
Weighted average
shares outstanding – diluted
|
20,785,689
|
20,512,959
|
|
20,697,125
|
20,491,973
|
|
|
|
|
|
|
CAPITAL
RATIOS
|
|
|
|
|
|
Tangible equity to
tangible assets
|
8.24%
|
9.48%
|
|
8.24%
|
9.48%
|
Tangible common
equity to tangible assets
|
8.03%
|
8.27%
|
|
8.03%
|
8.27%
|
Common equity tier I
capital ratio
|
10.67%
|
11.33%
|
|
10.67%
|
11.33%
|
Tier I leverage
ratio
|
10.22%
|
11.31%
|
|
10.22%
|
11.31%
|
Tier I risk-based
capital ratio
|
12.57%
|
14.76%
|
|
12.57%
|
14.76%
|
Total risk-based
capital ratio
|
13.49%
|
16.01%
|
|
13.49%
|
16.01%
|
|
|
|
|
|
|
AVERAGE
BALANCES ($ in thousands)
|
|
|
|
|
|
Total
assets
|
$
3,443,737
|
3,244,515
|
|
$
3,383,253
|
3,212,785
|
Loans
|
2,635,707
|
2,453,580
|
|
2,576,605
|
2,411,462
|
Earning
assets
|
3,127,219
|
2,951,638
|
|
3,073,651
|
2,921,380
|
Deposits
|
2,823,255
|
2,680,671
|
|
2,801,517
|
2,672,431
|
Interest-bearing
liabilities
|
2,319,008
|
2,223,025
|
|
2,306,226
|
2,204,691
|
Shareholders'
equity
|
365,753
|
369,499
|
|
357,941
|
385,457
|
|
|
|
|
|
|
(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
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
December 31,
2015
|
September 30,
2015
|
|
|
|
|
|
|
Net interest income –
tax-equivalent (1)
|
$
30,888
|
32,055
|
30,654
|
30,476
|
30,805
|
Taxable equivalent
adjustment (1)
|
534
|
517
|
459
|
423
|
419
|
Net interest
income
|
30,354
|
31,538
|
30,195
|
30,053
|
30,386
|
Provision for loan
losses – non-covered
|
−
|
489
|
1,621
|
636
|
267
|
Provision (reversal)
for loan losses - covered
|
−
|
(770)
|
(1,363)
|
(679)
|
(1,681)
|
Noninterest
income
|
5,157
|
5,919
|
5,002
|
5,725
|
3,506
|
Noninterest
expense
|
27,718
|
26,147
|
24,773
|
25,503
|
24,614
|
Income before income
taxes
|
7,793
|
11,591
|
10,166
|
10,318
|
10,692
|
Income tax
expense
|
3,115
|
3,952
|
3,329
|
3,521
|
3,687
|
Net income
|
4,678
|
7,639
|
6,837
|
6,797
|
7,005
|
Preferred stock
dividends
|
(58)
|
(59)
|
(58)
|
(37)
|
(137)
|
Net income available
to common shareholders
|
4,620
|
7,580
|
6,779
|
6,760
|
6,868
|
|
|
|
|
|
|
Earnings per common
share – basic
|
0.23
|
0.38
|
0.34
|
0.34
|
0.35
|
Earnings per common
share – diluted
|
0.23
|
0.37
|
0.33
|
0.33
|
0.34
|
|
|
(1) 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 Sept.
30,
2016
|
|
At June 30,
2016
|
|
At Dec.
31,
2015
|
|
At Sept.
30,
2015
|
|
One
Year
Change
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
$
64,145
|
|
58,956
|
|
53,285
|
|
52,788
|
|
21.5%
|
|
Interest bearing
deposits with banks
|
217,188
|
|
189,547
|
|
213,983
|
|
166,001
|
|
30.8%
|
|
Total cash and cash
equivalents
|
281,333
|
|
248,503
|
|
267,268
|
|
218,789
|
|
28.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
securities
|
334,964
|
|
361,835
|
|
320,224
|
|
338,813
|
|
(1.1%)
|
|
Presold
mortgages
|
4,094
|
|
4,104
|
|
4,323
|
|
3,150
|
|
30.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans –
non-covered
|
2,651,459
|
|
2,519,747
|
|
2,416,285
|
|
2,375,094
|
|
|
|
Loans – covered
(1)
|
-
|
|
78,387
|
|
102,641
|
|
106,609
|
|
|
|
Total loans
|
2,651,459
|
|
2,598,134
|
|
2,518,926
|
|
2,481,703
|
|
6.8%
|
|
Allowance for loan
losses
|
(24,575)
|
|
(26,023)
|
|
(28,583)
|
|
(30,055)
|
|
(18.2%)
|
|
Net loans
|
2,626,884
|
|
2,572,111
|
|
2,490,343
|
|
2,451,648
|
|
7.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Premises and
equipment
|
76,731
|
|
76,991
|
|
74,559
|
|
74,839
|
|
2.5%
|
|
FDIC indemnification
asset
|
─
|
|
5,157
|
|
8,439
|
|
7,649
|
|
n/m
|
|
Intangible
assets
|
79,995
|
|
77,153
|
|
67,171
|
|
67,351
|
|
18.8%
|
|
Foreclosed real
estate
|
10,103
|
|
10,606
|
|
9,994
|
|
10,873
|
|
(7.1%)
|
|
Bank-owned life
insurance
|
73,613
|
|
73,098
|
|
72,086
|
|
56,557
|
|
30.2%
|
|
Other
assets
|
49,530
|
|
36,988
|
|
47,658
|
|
43,172
|
|
14.7%
|
|
Total assets
|
$
3,537,247
|
|
3,466,546
|
|
3,362,065
|
|
3,272,841
|
|
8.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing
checking accounts
|
$
749,256
|
|
709,887
|
|
659,038
|
|
635,287
|
|
17.9%
|
|
Interest bearing checking
accounts
|
593,065
|
|
636,316
|
|
626,878
|
|
609,908
|
|
(2.8%)
|
|
Money market
accounts
|
658,166
|
|
638,125
|
|
636,692
|
|
581,644
|
|
13.2%
|
|
Savings accounts
|
207,494
|
|
197,445
|
|
186,616
|
|
187,607
|
|
10.6%
|
|
Brokered deposits
|
147,406
|
|
95,242
|
|
76,412
|
|
46,692
|
|
215.7%
|
|
Other time deposits >
$100,000
|
306,041
|
|
319,267
|
|
329,819
|
|
338,214
|
|
(9.5%)
|
|
Other time
deposits
|
249,412
|
|
275,738
|
|
295,830
|
|
308,401
|
|
(19.1%)
|
|
Total deposits
|
2,910,840
|
|
2,872,020
|
|
2,811,285
|
|
2,707,753
|
|
7.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
236,394
|
|
206,394
|
|
186,394
|
|
176,394
|
|
34.0%
|
|
Other
liabilities
|
25,065
|
|
26,518
|
|
22,196
|
|
17,520
|
|
43.1%
|
|
Total liabilities
|
3,172,299
|
|
3,104,932
|
|
3,019,875
|
|
2,901,667
|
|
9.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock
|
7,287
|
|
7,287
|
|
7,287
|
|
38,787
|
|
(81.2%)
|
|
Common
stock
|
139,979
|
|
139,832
|
|
133,393
|
|
133,211
|
|
5.1%
|
|
Retained
earnings
|
219,233
|
|
216,223
|
|
205,060
|
|
199,886
|
|
9.7%
|
|
Accumulated other
comprehensive loss
|
(1,551)
|
|
(1,728)
|
|
(3,550)
|
|
(710)
|
|
118.5%
|
|
Total shareholders'
equity
|
364,948
|
|
361,614
|
|
342,190
|
|
371,174
|
|
(1.7%)
|
|
Total liabilities and
shareholders' equity
|
$
3,537,247
|
|
3,466,546
|
|
3,362,065
|
|
3,272,841
|
|
8.1%
|
|
|
(1) All FDIC
loss share agreements were terminated effective July 1, 2016 and,
accordingly, assets previously covered under those agreements
become non-
covered on that
date.
|
n/m = not
meaningful
|
|
|
First Bancorp and
Subsidiaries
Financial Summary
- Page 5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
YIELD
INFORMATION
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
December 31,
2015
|
|
September 30,
2015
|
|
|
|
|
|
|
|
|
|
|
Yield on
loans
|
4.52%
|
|
4.83%
|
|
4.70%
|
|
4.69%
|
|
4.83%
|
Yield on securities –
tax-equivalent (1)
|
3.05%
|
|
3.06%
|
|
3.26%
|
|
2.99%
|
|
2.75%
|
Yield on other
earning assets
|
0.58%
|
|
0.61%
|
|
0.54%
|
|
0.36%
|
|
0.43%
|
Yield on
all interest earning assets
|
4.17%
|
|
4.45%
|
|
4.32%
|
|
4.29%
|
|
4.38%
|
|
|
|
|
|
|
|
|
|
|
Rate on interest
bearing deposits
|
0.24%
|
|
0.25%
|
|
0.25%
|
|
0.24%
|
|
0.24%
|
Rate on other
interest bearing liabilities
|
1.13%
|
|
1.20%
|
|
1.18%
|
|
1.05%
|
|
1.09%
|
Rate on
all interest bearing liabilities
|
0.33%
|
|
0.32%
|
|
0.33%
|
|
0.31%
|
|
0.31%
|
Total cost of
funds
|
0.25%
|
|
0.25%
|
|
0.25%
|
|
0.24%
|
|
0.24%
|
|
|
|
|
|
|
|
|
|
|
Net
interest margin – tax-equivalent (2)
|
3.93%
|
|
4.21%
|
|
4.07%
|
|
4.05%
|
|
4.14%
|
Average
prime rate
|
3.50%
|
|
3.50%
|
|
3.50%
|
|
3.29%
|
|
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)
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
December 31,
2015
|
|
September 30,
2015
|
|
|
|
|
|
|
|
|
|
|
Interest income –
increased by accretion of
loan discount
|
$
822
|
|
1,676
|
|
1,055
|
|
854
|
|
1,205
|
Impact on net interest
income
|
$
822
|
|
1,676
|
|
1,055
|
|
854
|
|
1,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY
DATA ($ in thousands)
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
December 31,
2015
|
|
September 30,
2015
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
assets
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
$
32,796
|
|
37,975
|
|
41,411
|
|
47,810
|
|
47,720
|
Troubled debt
restructurings - accruing
|
27,273
|
|
29,271
|
|
30,514
|
|
31,489
|
|
33,075
|
Accruing loans > 90
days past due
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Total nonperforming
loans
|
60,069
|
|
67,246
|
|
71,925
|
|
79,299
|
|
80,795
|
Foreclosed real
estate
|
10,103
|
|
10,606
|
|
10,336
|
|
9,994
|
|
10,873
|
Total nonperforming
assets
|
$
70,172
|
|
77,852
|
|
82,261
|
|
89,293
|
|
91,668
|
Total covered
nonperforming assets
included above (1)
|
$
-
|
|
8,024
|
|
10,698
|
|
12,100
|
|
$
10,767
|
Asset Quality
Ratios
|
|
|
|
|
|
|
|
|
|
Net quarterly
charge-offs to average loans -
annualized
|
0.06%
|
|
0.05%
|
|
0.35%
|
|
0.23%
|
|
0.10%
|
Nonperforming loans
to total loans
|
2.27%
|
|
2.59%
|
|
2.83%
|
|
3.15%
|
|
3.26%
|
Nonperforming assets
to total assets
|
1.98%
|
|
2.25%
|
|
2.43%
|
|
2.66%
|
|
2.80%
|
Allowance for loan
losses to total loans
|
0.93%
|
|
1.00%
|
|
1.05%
|
|
1.13%
|
|
1.21%
|
|
(1) All FDIC
loss share agreements were terminated effective July 1, 2016 and,
accordingly, assets previously covered under those agreements
become non-
covered on that
date
|
First Bancorp and
Subsidiaries
Financial Summary
- Page 6
|
|
|
For the Three Months
Ended
|
NET INTEREST
MARGIN, EXCLUDING
LOAN DISCOUNT ACCRETION –
RECONCILIATION
($ in
thousands)
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
December 31,
2015
|
|
September 30,
2015
|
|
|
|
|
|
|
|
|
|
|
Net interest income,
as reported
|
$
30,354
|
|
31,538
|
|
30,195
|
|
30,053
|
|
30,386
|
Tax-equivalent
adjustment
|
534
|
|
517
|
|
459
|
|
423
|
|
419
|
Net interest income,
tax-equivalent (A)
|
$
30,888
|
|
32,055
|
|
30,654
|
|
30,476
|
|
30,805
|
Average earning
assets (B)
|
$
3,127,219
|
|
3,064,959
|
|
3,028,775
|
|
2,982,356
|
|
2,951,638
|
Tax-equivalent net
interest
margin, annualized – as reported –
(A)/(B)
|
3.93%
|
|
4.21%
|
|
4.07%
|
|
4.05%
|
|
4.14%
|
|
|
|
|
|
|
|
|
|
|
Net interest income,
tax-equivalent
|
$
30,888
|
|
32,055
|
|
30,654
|
|
30,476
|
|
30,805
|
Loan discount
accretion
|
822
|
|
1,676
|
|
1,055
|
|
854
|
|
1,205
|
Net interest income,
tax-equivalent, excluding
loan discount accretion (A)
|
$
30,066
|
|
30,379
|
|
29,599
|
|
29,622
|
|
29,600
|
Average earnings
assets (B)
|
$
3,127,219
|
|
3,064,959
|
|
3,028,775
|
|
2,982,356
|
|
2,951,638
|
Tax-equivalent net
interest margin, excluding
impact of loan discount accretion,
annualized – (A) / (B)
|
3.82%
|
|
3.99%
|
|
3.93%
|
|
3.94%
|
|
3.98%
|
|
|
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
loans 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
September 30, 2016, the Company had a remaining loan discount
balance of $13.2 million compared to $16.2 million at September 30,
2015. 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-third-quarter-results-300353089.html
SOURCE First Bancorp