The First Bancorp Announces Fourth Quarter and 2024 Annual Results

DAMARISCOTTA, Maine--(BUSINESS WIRE)--The First Bancorp (Nasdaq: FNLC), parent company of First National Bank, today announced operating results for the three months and year ended December 31, 2024. Fourth quarter unaudited net income was $7.3 million, an increase of 9.0% from the fourth quarter of 2023. Earnings per share on a fully diluted basis for the fourth quarter of 2024 were $0.65, up $0.05 or 8.5% from the prior year period. For the twelve months ended December 31, 2024 unaudited net income was $27.0 million, a decrease of 8.4% from the $29.5 million reported for the twelve months ended December 31, 2023. Earnings per common share on a fully diluted basis were down $0.24 to $2.43 per share, a decrease of 8.9% from the prior year. Fourth Quarter Notable Items: Total loans increased $33.7 million, an annualized growth rate of 5.9% Core deposits increased $33.0 million Net Interest Income up 7.0% from 3Q2024, and up 10.7% from 4Q2023 Net Interest Margin increased 10 basis points from 3Q2024 and 8 basis points from 4Q2023 Efficiency Ratio improved to 53.39% Quarterly shareholder dividend of $0.36 per share CEO COMMENTS "The First Bancorp concluded 2024 with annual earnings of $27.0 million," commented Tony C. McKim, the Company’s President and Chief Executive Officer. "While down from the prior year we are encouraged by the improvements in net interest income posted in the second half of the year, driven by a steadily increasing net interest margin. Pre-Tax, Pre-Provision (PTPP) (non-GAAP) Return on Average Assets for 2024 was 1.09% and PTPP Return on Average Tangible Common Equity was 15.12%. We experienced strong earning asset growth during the year with total loans increasing $211.5 million, or 9.9%, while maintaining favorable asset quality." Mr. McKim continued, "Results for the fourth quarter of 2024 continued the performance improvement noted in our third quarter report. PTPP net income in the fourth quarter was $9.8 million, up $1.3 million or 15.5% from the linked quarter, with nearly all of the increase coming in net interest income, which increased $1.2 million, or 7.0%, in the fourth quarter to $17.6 million, as compared to $16.4 million earned in the third quarter. Non-interest income increased $314,000 period-to-period primarily attributable to debit card revenue. Operating expenses for the fourth quarter increased modestly from the third quarter, up $145,000 or 1.2%. "We began the past year with a continuance of the margin contraction from 2023, and reached a low-point in the second quarter of 2024, with resulting impact on our bottom line. Through the combined effects of new asset pricing, legacy asset re-pricing, and funding cost stabilization, our net interest margin has increased in each of the past two quarters, and has led to improved net income performance. We expect this positive trend to continue with further gradual margin improvement in coming quarters. The Bank's over 280 employees continue to provide best in class service to their customers and communities. In 2024 we extended over $600 million in new loans, opened in excess of 8,200 new deposit accounts, expanded the volume and reach of our digital banking services, and saw 10% growth in assets under management at First National Wealth Management. I continue to be impressed each and every day by the commitment of our team." FINANCIAL RESULTS FOR THE QUARTER ENDED DECEMBER 31, 2024 Net Income was $7.3 million, or $0.65 per diluted share, for the three months ended December 31, 2024. Results compare to the linked quarter for which net income was $7.6 million and diluted earnings per share were $0.68, with third quarter earnings having been influenced by a reverse provision to the Allowance for Credit Losses. On a PTPP basis, earnings for the fourth quarter were $9.8 million, an increase of $1.3 million or 15.5% from the linked quarter's $8.5 million. The current quarter also compares favorably to the fourth quarter of 2023, with net income up $602,000, or 9.0%, diluted earnings per share up $0.05, or 8.5%, and PTPP net income up $1.1 million, or 12.2%. Drivers of fourth quarter 2024 results are discussed in the following sections: Net Interest Income Net interest income was $17.6 million for the three months ended December 31, 2024, an increase of $1.2 million, or 7.0%, from the third quarter of 2024, and an increase of $1.7 million, or 10.7% from the fourth quarter of 2023. Net interest margin of 2.42% for the fourth quarter was an improvement of 10 basis points from the 2.32% margin earned in the third quarter, and an 8 basis point improvement from the 2.34% margin earned in the fourth quarter of 2023. The average tax-equivalent yield on earning assets fell 3 basis in the fourth quarter of 2024 to 5.25%, while the average cost of liability funding fell 15 basis points to 3.33%. Provision For Credit Losses Total provision for credit losses was $1.16 million in the fourth quarter of 2024, compared to a reverse provision of $638,000 in the third quarter, and a provision of $683,000 in the fourth quarter of 2023. The current period total consisted of a $1.25 million provision for credit losses on loans, coupled with reverse provisions of $28,000 and $54,000 for credit losses on held to maturity securities and off-balance sheet commitments, respectively. Provision for credit losses on loans increased from prior periods due to loan growth and identification in the fourth quarter of specific reserve requirements on two credits which were moved to individually analyzed status. Non-Interest Income Total non-interest income was $4.4 million for the three months ended December 31, 2024, up $314,000 from the third quarter. The linked quarter increase was centered in Debit Card revenue which grew $207,000 and Mortgage Banking revenue which increased $89,000. As compared to the fourth quarter of 2023, total non-interest income increased $329,000 centered in Wealth Management revenue growth of $135,000, or 11.9%, an increase in Mortgage Banking revenue of $80,000, and an increase in other operating income of $75,000. Non-Interest Expense Non-interest expense totaled $12.1 million for the three months ended December 31, 2024, a modest increase of $145,000 from the third quarter, and up $958,000 from the prior year period. As compared to the linked quarter, employee salaries and benefits increased $336,000 while other operating expenses decreased $225,000. The Company's efficiency ratio for the fourth quarter of 2024 was 53.39%, improved from 56.37% in the linked quarter and 54.08% a year ago. Loans, Total Assets & Funding Total assets at December 31, 2024 were $3.15 billion, up $205.3 million from the prior year end. Earning assets increased $211.8 million year-over-year, as loan balances grew $211.5 million, and investments declined by $19.1 million. Loan portfolio growth in 2024 was led by commercial loans which increased $141.6 million, including CRE term and construction loans which increased $68.5 million, and C&I loans which increased $50.8 million. Residential mortgage loans increased $36.0 million year-over-year, and home equity loan balances increased by $19.0 million in the same time period. The loan portfolio grew $33.7 million in the fourth quarter with growth concentrated within the CRE and residential segments. Total deposits at December 31, 2024 were $2.73 billion, up $125.6 million or 4.8% from December 31, 2023, and up $22.5 million since September 30, 2024. Core deposits increased $81.0 million for the year centered in money market and NOW account balances, and increased $33.0 million in the fourth quarter. Borrowed funds increased $76.6 million year-to-year, principally in Federal Home Loan Bank term advances, and decreased $4.7 million in the quarter. Uninsured deposits were an estimated 18.6% of total deposits as of December 31, 2024, and 69% of uninsured deposits were fully collateralized. Available day-one liquidity was in excess of $790 million, sufficient to cover approximately 156% of estimated uninsured deposits. ASSET QUALITY Asset quality continues to be stable and favorable. As of December 31, 2024, the ratio of non-performing assets to total assets was 0.14%, a modest increase from ratios of 0.07% and 0.08% as of December 31, 2023 and September 30, 2024, respectively. The ratio of non-performing loans to total loans stood at 0.18%, up modestly from 0.10% a year ago and 0.11% last quarter. Net charge-offs continued to be very low ending 2024 at 0.02% of total loans, compared to 0.01% in 2023 and 0.03% in 2022. Past due loans were 0.40% of total loans as of December 31, 2024, up from 0.18% of total loans at December 31, 2023, and from 0.14% at September 30, 2024. The allowance for loan losses stood at 1.06% of total loans as of December 31, 2024, down from 1.13% of total loans at December 31, 2023, and up from 1.04% at September 30, 2024. The provision for credit losses on loans was $1.30 million in 2024, including $1.25 million in the fourth quarter, as compared to $1.33 million and $911,000, respectively in 2023. Management considers the allowance to be at an appropriate level given the strong asset quality metrics at year-end. CAPITAL The Company’s capital position remained strong as of December 31, 2024, with an estimated total risk-based capital ratio of 13.21%, and an estimated leverage capital ratio of 8.47%. These compare to 13.66% and 8.61% respectively as of December 31, 2023, the modest decreases being the result of earning asset growth. The Company's tangible book value was $19.87 per share as of December 31, 2024, an increase from $19.12 a year earlier, and down from $20.27 as of September 30, 2024. The linked quarter per share decrease is attributable to an increase in unrealized losses in the Company's available for sale investments resulting from changes in market interest rates. DIVIDEND On December 19, 2024, the Company's Board of Directors declared a fourth quarter dividend of $0.36 per share. The fourth quarter dividend represents a payout to shareholders of 54.71% of earnings per share for the period and was paid on January 16, 2025 to shareholders of record as of January 6, 2025. ABOUT THE FIRST BANCORP The First Bancorp, the parent company of First National Bank, is based in Damariscotta, Maine. Founded in 1864, First National Bank is a full-service community bank with $3.13 billion in assets. The Bank provides a complete array of commercial and retail banking services through eighteen locations in mid-coast and eastern Maine. First National Wealth Management, a division of the Bank, provides investment management and trust services to individuals, businesses, and municipalities. More information about The First Bancorp, First National Bank and First National Wealth Management may be found at www.thefirst.com. The First Bancorp Consolidated Balance Sheets (Unaudited) In thousands of dollars, except per share data December 31, 2024 December 31, 2023 Assets Cash and due from banks $ 27,636 $ 31,942 Interest-bearing deposits in other banks 22,100 3,488 Securities available for sale 274,680 282,053 Securities to be held to maturity 369,704 385,235 Restricted equity securities, at cost 7,203 3,385 Loans 2,340,940 2,129,454 Less allowance for credit losses 24,871 24,030 Net loans 2,316,069 2,105,424 Accrued interest receivable 13,976 11,894 Premises and equipment 27,855 28,684 Other real estate owned 173 — Goodwill 30,646 30,646 Other assets 61,931 63,947 Total assets $ 3,151,973 $ 2,946,698 Liabilities Demand deposits $ 292,255 $ 289,104 NOW deposits 676,107 634,543 Money market deposits 376,627 305,931 Savings deposits 265,451 299,837 Certificates of deposit 702,632 646,818 Certificates $100,000 to $250,000 225,106 251,192 Certificates $250,000 and over 187,073 172,237 Total deposits 2,725,251 2,599,662 Borrowed funds 146,278 69,652 Other liabilities 27,951 34,305 Total Liabilities 2,899,480 2,703,619 Shareholders' equity Common stock 112 111 Additional paid-in capital 71,832 70,071 Retained earnings 222,823 211,925 Net unrealized loss on securities available for sale (42,671 ) (39,575 ) Net unrealized loss on securities transferred from available for sale to held to maturity (47 ) (56 ) Net unrealized gain on cash flow hedging derivative instruments 157 300 Net unrealized gain on postretirement costs 287 303 Total shareholders' equity 252,493 243,079 Total liabilities & shareholders' equity $ 3,151,973 $ 2,946,698 Common Stock Number of shares authorized 18,000,000 18,000,000 Number of shares issued and outstanding 11,155,528 11,098,057 Book value per common share $ 22.63 $ 21.90 Tangible book value per common share $ 19.87 $ 19.12 The First Bancorp Consolidated Statements of Income (Unaudited) For the year ended For the quarter ended In thousands of dollars, except per share data December 31, 2024 December 31, 2023 December 31, 2024 September 30, 2024 December 31, 2023 Interest income Interest and fees on loans $ 129,440 $ 108,274 $ 33,899 $ 33,498 $ 29,414 Interest on deposits with other banks 550 517 360 56 217 Interest and dividends on investments 18,842 19,383 4,740 4,733 5,191 Total interest income 148,832 128,174 38,999 38,287 34,822 Interest expense Interest on deposits 79,411 61,004 20,300 20,118 18,620 Interest on borrowed funds 5,511 1,963 1,146 1,767 349 Total interest expense 84,922 62,967 21,446 21,885 18,969 Net interest income 63,910 65,207 17,553 16,402 15,853 Credit loss (reduction) expense 525 1,184 1,164 (638 ) 683 Net interest income after provision for credit losses 63,385 64,023 16,389 17,040 15,170 Non-interest income Investment management and fiduciary income 4,963 4,654 1,274 1,232 1,139 Service charges on deposit accounts 2,048 1,887 496 511 488 Mortgage origination and servicing income 794 813 282 193 202 Debit card income 5,456 5,384 1,572 1,365 1,541 Other operating income 3,094 2,699 812 821 737 Total non-interest income 16,355 15,437 4,436 4,122 4,107 Non-interest expense Salaries and employee benefits 24,230 21,942 6,462 6,126 5,522 Occupancy expense 3,373 3,319 841 823 825 Furniture and equipment expense 5,622 5,391 1,440 1,416 1,382 FDIC insurance premiums 2,391 1,962 629 636 533 Amortization of identified intangibles 26 26 6 7 6 Other operating expense 11,514 11,118 2,767 2,992 2,919 Total non-interest expense 47,156 43,758 12,145 12,000 11,187 Income before income taxes 32,584 35,702 8,680 9,162 8,091 Applicable income taxes 5,539 6,184 1,398 1,591 1,411 Net Income $ 27,045 $ 29,518 $ 7,282 $ 7,571 $ 6,680 Basic earnings per share $ 2.45 $ 2.68 $ 0.66 $ 0.69 $ 0.61 Diluted earnings per share $ 2.43 $ 2.66 $ 0.65 $ 0.68 $ 0.60 The First Bancorp Selected Financial Data (Unaudited) As of and for the year ended As of and for the quarter ended Dollars in thousands, except for per share amounts December 31, 2024 December 31, 2023 December 31, 2024 September 30, 2024 December 31, 2023 Summary of Operations Interest Income $ 148,832 $ 128,174 $ 38,999 $ 38,287 $ 34,822 Interest Expense 84,922 62,967 21,446 21,885 18,969 Net Interest Income 63,910 65,207 17,553 16,402 15,853 Credit loss (reduction) expense 525 1,184 1,164 (638 ) 683 Non-Interest Income 16,355 15,437 4,436 4,122 4,107 Non-Interest Expense 47,156 43,757 12,145 12,000 11,186 Net Income 27,045 29,519 7,282 7,571 6,680 Per Common Share Data Basic Earnings per Share $ 2.45 $ 2.68 $ 0.66 $ 0.69 $ 0.61 Diluted Earnings per Share 2.43 2.66 0.65 0.68 0.60 Cash Dividends Declared 1.43 1.39 0.36 0.36 0.35 Book Value per Common Share 22.63 21.90 22.63 23.03 21.90 Tangible Book Value per Common Share 19.87 19.12 19.87 20.27 19.12 Market Value 27.35 28.22 27.35 26.32 28.22 Financial Ratios Return on Average Equity1 10.83 % 12.59 % 11.27 % 11.86 % 11.35 % Return on Average Tangible Common Equity1 12.35 % 14.50 % 12.81 % 13.50 % 13.08 % Return on Average Assets1 0.89 % 1.03 % 0.92 % 0.98 % 0.90 % Average Equity to Average Assets 8.19 % 8.18 % 8.17 % 8.24 % 7.92 % Average Tangible Equity to Average Assets 7.18 % 7.10 % 7.19 % 7.24 % 6.87 % Net Interest Margin Tax-Equivalent1 2.29 % 2.49 % 2.42 % 2.32 % 2.34 % Dividend Payout Ratio 58.44 % 51.87 % 54.71 % 52.55 % 57.38 % Allowance for Credit Losses/Total Loans 1.06 % 1.13 % 1.06 % 1.04 % 1.13 % Non-Performing Loans to Total Loans 0.18 % 0.10 % 0.18 % 0.11 % 0.10 % Non-Performing Assets to Total Assets 0.14 % 0.07 % 0.14 % 0.08 % 0.07 % Efficiency Ratio 56.66 % 52.43 % 53.39 % 56.37 % 54.08 % At Period End Total Assets $ 3,151,973 $ 2,946,698 $ 3,151,973 $ 3,142,563 $ 2,946,698 Total Loans 2,340,940 2,129,454 2,340,940 2,307,253 2,129,454 Total Investment Securities 651,587 670,673 651,587 669,076 670,673 Total Deposits 2,725,251 2,599,662 2,725,251 2,702,718 2,599,662 Total Shareholders' Equity 252,493 243,079 252,493 256,783 243,079 1Annualized using a 366-day basis for 2024 and a 365-day basis for 2023 Use of Non-GAAP Financial Measures Certain information in this release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management uses these “non-GAAP” measures in its analysis of the Company's performance (including for purposes of determining the compensation of certain executive officers and other Company employees) and believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and with other financial institutions, as well as demonstrating the effects of significant gains and charges in the current period, in light of the disclosure practices employed by many other publicly-traded financial institutions. The Company believes that a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. Management believes that investors may use these non-GAAP financial measures to analyze financial performance without the impact of unusual items that may obscure trends in the Company's underlying performance. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. In several places net interest income is calculated on a fully tax-equivalent basis. Specifically included in interest income was tax-exempt interest income from certain investment securities and loans. An amount equal to the tax benefit derived from this tax-exempt income has been added back to the interest income total which, as adjusted, increased net interest income accordingly. Management believes the disclosure of tax-equivalent net interest income information improves the clarity of financial analysis, and is particularly useful to investors in understanding and evaluating the changes and trends in the Company's results of operations. Other financial institutions commonly present net interest income on a tax-equivalent basis. This adjustment is considered helpful in the comparison of one financial institution's net interest income to that of another institution, as each will have a different proportion of tax-exempt interest from its earning assets. Moreover, net interest income is a component of a second financial measure commonly used by financial institutions, net interest margin, which is the ratio of net interest income to average earning assets. For purposes of this measure as well, other financial institutions generally use tax-equivalent net interest income to provide a better basis of comparison from institution to institution. The Company follows these practices. The following table provides a reconciliation of tax-equivalent financial information to the Company's consolidated financial statements, which have been prepared in accordance with GAAP. A 21.0% tax rate was used in both 2024 and 2023. For the years ended For the quarters ended In thousands of dollars December 31, 2024 December 31, 2023 December 31, 2024 September 30, 2024 December 31, 2023 Net interest income as presented $ 63,910 $ 65,207 $ 17,553 $ 16,402 $ 15,853 Effect of tax-exempt income 2,780 2,644 708 717 679 Net interest income, tax equivalent $ 66,690 $ 67,851 $ 18,261 $ 17,119 $ 16,532 The Company presents its efficiency ratio using non-GAAP information which is most commonly used by financial institutions. The GAAP-based efficiency ratio is non-interest expenses divided by net interest income plus non-interest income from the Consolidated Statements of Income. The non-GAAP efficiency ratio excludes securities losses and other-than-temporary impairment charges from non-interest expenses, excludes securities gains from non-interest income, and adds the tax-equivalent adjustment to net interest income. The following table provides a reconciliation between the GAAP and non-GAAP efficiency ratio: For the years ended For the quarters ended In thousands of dollars December 31, 2024 December 31, 2023 December 31, 2024 September 30, 2024 December 31, 2023 Non-interest expense, as presented $ 47,156 $ 43,758 $ 12,145 $ 12,000 $ 11,187 Net interest income, as presented 63,910 65,207 17,553 16,402 15,853 Effect of tax-exempt interest income 2,780 2,644 708 717 679 Non-interest income, as presented 16,355 15,437 4,436 4,122 4,107 Effect of non-interest tax-exempt income 185 176 49 45 45 Adjusted net interest income plus non-interest income $ 83,230 $ 83,464 $ 22,746 $ 21,286 $ 20,684 Non-GAAP efficiency ratio 56.66 % 52.43 % 53.39 % 56.37 % 54.08 % GAAP efficiency ratio 58.75 % 54.26 % 55.23 % 58.47 % 56.05 % The Company presents certain information based upon average tangible common equity instead of total average shareholders' equity. The difference between these two measures is the Company's intangible assets, specifically goodwill from prior acquisitions. Management, banking regulators and many stock analysts use the tangible common equity ratio and the tangible book value per common share in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions. The following table provides a reconciliation of average tangible common equity to the Company's consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles: For the years ended For the quarters ended In thousands of dollars December 31, 2024 December 31, 2023 December 31, 2024 September 30, 2024 December 31, 2023 Average shareholders' equity as presented $ 249,786 $ 234,480 $ 257,034 $ 253,911 $ 233,405 Less intangible assets (30,817 ) (30,843 ) (30,827 ) (30,827 ) (30,853 ) Tangible average shareholders' equity $ 218,969 $ 203,637 $ 226,207 $ 223,084 $ 202,552 To provide period-to-period comparison of operating results prior to consideration of credit loss provision and income taxes, the non-GAAP measure of Pre-Tax, Pre-Provision Net Income is presented. The following table provides a reconciliation to Net Income: For the years ended For the quarters ended In thousands of dollars December 31, 2024 December 31, 2023 December 31, 2024 September 30, 2024 December 31, 2023 Net Income, as presented $ 27,045 $ 29,518 $ 7,282 $ 7,571 $ 6,680 Add: credit loss (reduction) expense 525 1,184 1,164 (638 ) 683 Add: income taxes 5,539 6,184 1,398 1,591 1,411 Pre-Tax, pre-provision net income $ 33,109 $ 36,886 $ 9,844 $ 8,524 $ 8,774 Forward-Looking and Cautionary Statements Except for the historical information and discussions contained herein, statements contained in this release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results and events to differ materially, as discussed in the Company's filings with the Securities and Exchange Commission. Category: Earnings Source: The First Bancorp

The First Bancorp Announces Fourth Quarter and 2024 Annual Results

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