false000081158900008115892023-10-252023-10-25

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 __________________
Form 8-K
__________________
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 25, 2023
 
First Bancorp
(Exact Name of Registrant as Specified in its Charter)
     
North Carolina 0-15572 56-1421916
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
     
       300 SW Broad Street,
Southern Pines, NC  28387
(Address of Principal Executive Offices)  (Zip Code)
 
(910) 246-2500
____________________
(Registrant’s telephone number, including area code)
 
Not Applicable
___________________
(Former Name or Former Address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:

Title of each class            Trading symbol            Name of each exchange on which registered:
Common Stock, No Par Value        FBNC                The Nasdaq Global Select Market
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First Bancorp
INDEX
 
 Page
  
Item 2.02 – Results of Operations and Financial Condition3 
Item 9.01 – Financial Statements and Exhibits3 
  
Signatures3 
  
4 

2

Item 2.02 - Results of Operations and Financial Condition
On October 25, 2023, First Bancorp (the “Registrant” or “Company”) issued an earnings release to announce its financial results for the three month period ended September 30, 2023. The earnings release contains forward-looking statements regarding the Company and includes cautionary language identifying important factors that could cause actual results to differ materially from those anticipated. The earnings release is furnished as Exhibit 99.1. Consequently, it is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Such materials may only be incorporated by reference into another filing under the Exchange Act or Securities Act of 1933 if such subsequent filing specifically references this Form 8-K.



Item 9.01 – Financial Statements and Exhibits
(d) Exhibits


Disclosures About Forward Looking Statements
This news 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. 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.




Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
       
      First Bancorp
       
  October 25, 2023  
By:		  
/s/ Richard H. Moore
      Richard H. Moore
      Chief Executive Officer

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News Release

For Immediate Release:For More Information, Contact:
October 25, 2023Elaine Pozarycki
984-900-2457

First Bancorp Reports Third Quarter Results

SOUTHERN PINES, N.C. - First Bancorp (the "Company") (NASDAQ - FBNC), the parent company of First Bank, announced today net income of $29.9 million, or $0.73 per diluted common share, for the three months ended September 30, 2023 compared to $29.4 million, or $0.71 per diluted common share, for the three months ended June 30, 2023 ("linked quarter") and $37.9 million, or $1.06 per diluted common share, recorded in the third quarter of 2022. For the nine months ended September 30, 2023, the Company recorded net income of $74.5 million, or $1.81 per diluted common share, compared to $108.5 million, or $3.04 per diluted common share, for the nine months ended September 30, 2022.

On January 1, 2023, the Company completed its acquisition of GrandSouth Bancorporation ("GrandSouth"). Comparisons for the financial periods presented are impacted by the GrandSouth acquisition which contributed $1.02 billion in loans and $1.05 billion in deposits. The results for the nine months ended September 30, 2023 include merger expenses totaling $13.5 million and an initial loan loss provision of $12.2 million for acquired loans.

Richard H. Moore, CEO and Chairman of the Company, stated, “Our Company has demonstrated once again that our deposit base is very stable, comparatively low cost, diversified and growing. We are a relationship-driven bank and it has paid off in this market. When you consider our deposit base, our low loan-to-deposit ratio, strong credit quality, and almost no large office building credit exposure, we are confident about our ability to stay well-positioned for the remainder of the year and into next year.”

Third Quarter 2023 Highlights

•Loans totaled $8.0 billion at September 30, 2023, with growth for the quarter of $129.4 million, an annualized growth rate of 6.5%.
•Total market deposits (exclusive of brokered deposits) grew $66.7 million for the quarter, an annualized growth rate of 2.6%.
•Noninterest-bearing demand accounts remained strong at 34% of total deposits at quarter end.
•Total loan yield increased to 5.32%, up 83 basis points from the third quarter of 2022, with accretion on purchased loans contributing 16 basis points to loan yield.
•While deposit rates increased during the quarter, total cost of funds remained low at 1.46% for the quarter ended September 30, 2023.
•The on-balance sheet liquidity ratio was 14.4% at September 30, 2023. Available off-balance sheet sources totaled $2.2 billion at quarter end, resulting in a total liquidity ratio of 30.2%.
•Credit quality continued to be strong with a nonperforming assets ("NPA") to total assets ratio of 0.32% as of September 30, 2023, down from 0.39% for the comparable period of 2022.
•Capital remained strong with a total common equity tier 1 ratio of 12.93% (estimated) and a total risk-based capital ratio of 15.26% (estimated) as of September 30, 2023.
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Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2023 was $84.7 million compared to $85.3 million recorded in the third quarter of 2022, a nominal decrease of 0.7%. Net interest income for the current quarter decreased 2.6% from the $87.0 million reported for the linked quarter. Average interest-earning assets for the third quarter of 2023 increased 13.7% from the comparable period of the prior year, with growth primarily in loans resulting from both organic growth and the GrandSouth acquisition.

Despite the higher level of earning assets, the market-driven increases in rates on liabilities, which have occurred at a more rapid pace than increased yields on assets, resulted in the reduction in net interest income and net interest margin ("NIM") as compared to the prior periods.

The Company’s tax-equivalent NIM (calculated by dividing tax-equivalent net interest income by average earning assets) declined year-over-year with the third quarter of 2023 reporting a tax-equivalent NIM of 2.97% compared to 3.40% for the third quarter of 2022. The lower NIM was due to rising market interest rates driving higher cost of funds which outpaced the increase in loan yields over the same period. While loan yields rose from 4.49% for the third quarter of 2022 to 5.32% for the current period, the total cost of funds increased from 0.12% for the third quarter of 2022 to 1.46% for the quarter ended September 30, 2023. There has been some deceleration of the pace of increase of the Company's cost of funds; however, it is anticipated there may continue to be some compression in the NIM given the percentage of fixed rate loans in the Company's loan portfolio.

For the Three Months Ended
YIELD INFORMATIONSeptember 30, 2023June 30, 2023September 30, 2022
Yield on loans5.32%5.26%4.49%
Yield on securities1.75%1.77%1.71%
Yield on other earning assets4.58%4.60%2.27%
   Yield on total interest-earning assets4.31%4.25%3.49%
Rate on interest-bearing deposits1.95%1.68%0.13%
Rate on other interest-bearing liabilities5.88%5.68%3.99%
   Rate on total interest-bearing liabilities2.20%1.96%0.21%
     Total cost of funds1.46%1.29%0.12%
        Net interest margin (1)2.95%3.05%3.38%
        Net interest margin - tax-equivalent (2)2.97%3.08%3.40%
        Average prime rate8.43%8.16%5.35%
(1) Calculated by dividing annualized net interest income by average earning assets for the period.
(2) Calculated by dividing annualized tax-equivalent net interest income by average earning assets for the period. The tax-equivalent amount reflects the tax benefit that the Company receives related to its tax-exempt loans and securities, which carry interest rates lower than similar taxable investments due to their tax-exempt status. This amount has been computed assuming a 23% tax rate and is reduced by the related nondeductible portion of interest expense.

Included in interest income for the third quarter of 2023 was total loan discount accretion of $3.2 million compared to $2.6 million for the third quarter of 2022, with the increase being primarily related to the GrandSouth acquisition. Loan discount accretion had an 11 basis points positive impact on the Company's NIM in the third quarter of 2023 compared to accretion contributing 10 basis points to NIM for the prior year quarter.

2

The following table presents the impact to net interest income of the purchase accounting adjustments for each period.
For the Three Months Ended
NET INTEREST INCOME PURCHASE ACCOUNTING ADJUSTMENTS
($ in thousands)
September 30, 2023June 30, 2023September 30, 2022
Interest income - increased by accretion of loan discount on acquired loans$2,766 3,159 1,519 
Interest income - increased by accretion of loan discount on retained portions of SBA loans437 426 1,032 
Total interest income impact3,203 3,585 2,551 
Interest expense - (increased) reduced by (discount accretion) premium amortization of deposits(709)(878)121 
Interest expense - increased by discount accretion of borrowings(215)(212)(64)
Total net interest expense impact(924)(1,090)57 
     Total impact on net interest income$2,279 2,495 2,608 


Provision for Credit Losses and Credit Quality

For the three months ended September 30, 2023 and September 30, 2022, the Company recorded $1.2 million and $5.1 million in provision for loan losses, respectively. The provision for the current quarter was driven by the loan growth experienced during the quarter, combined with updated prepayment speed estimates which are a key assumption in the CECL model. The higher interest rate environment has resulted in slower prepayment speed estimates, thus increasing the projected allowance for credit losses ("ACL") required. Loss driver assumptions were also updated with the lower loss rate estimates resulting in offsetting reductions to the ACL reserve estimate.

During the third quarter of 2023, the Company recorded a $1.2 million reversal of the provision for unfunded commitments, compared to a provision for unfunded commitments of $0.3 million for the third quarter of 2022. The current quarter's reversal related primarily to a reduction in the amount of available lines of credit and the updated loss driver assumptions reducing the loss rate estimates. The reserve for unfunded commitments totaled $11.8 million at September 30, 2023 and is included in the line item "Other Liabilities".

The combination of the above provisions for credit losses and unfunded commitments resulted in an income statement impact of $0 for the third quarter of 2023 as compared to $5.4 million for the third quarter of 2022.

Asset quality remained strong with annualized net loan charge-offs of 0.11% for the third quarter of 2023. Total NPAs amounted to $38.8 million at September 30, 2023, or 0.32% of total assets, down from $40.7 million, or 0.39% of total assets, at September 30, 2022. Nonaccrual loans declined $3.0 million from the linked quarter, with the higher number and volume of modifications to borrowers experiencing financial distress accounting for the increase in total NPAs during the current quarter.

3

The following table presents the summary of NPAs and asset quality ratios for each period.

ASSET QUALITY DATA
($ in thousands)
September 30, 2023June 30, 2023September 30, 2022
Nonperforming assets
Nonaccrual loans$26,884 29,876 28,669 
Modifications to borrowers in financial distress10,723 4,862 — 
Troubled debt restructurings - accruing (1)
— — 11,355 
Total nonperforming loans37,607 34,738 40,024 
Foreclosed real estate1,235 1,077 658 
Total nonperforming assets$38,842 35,815 40,682 
Asset Quality Ratios
Quarterly net charge-offs to average loans - annualized0.11 %0.04 %0.04 %
Nonperforming loans to total loans0.47 %0.44 %0.61 %
Nonperforming assets to total assets0.32 %0.30 %0.39 %
Allowance for credit losses to total loans1.35 %1.38 %1.33 %
(1) The Company implemented ASU 2022-02 effective January 1, 2023 eliminating TDR accounting.

Noninterest Income

Total noninterest income for the third quarter of 2023 was $15.2 million, a 10.3% decrease from the $16.9 million recorded for the third quarter of 2022 and a 6.6% increase from the linked quarter. The primary factors driving fluctuations among the periods presented were as follows:

•The increase in "Service charges on deposit accounts" between periods was primarily driven by the higher number of customer accounts resulting from the GrandSouth acquisition and organic growth.
•The year-over-year decline in "Other service charges, commissions and fees" was related to the lower interchange fees beginning during the third quarter of 2022 as a result of the Durbin Amendment limitations becoming applicable to the Company.
•SBA loan sale gains were up from the linked quarter of 2023 and the comparable quarter of 2022, while year to date results for 2023 continued to lag 2022 due primarily to slower loan originations earlier in the current year combined with lower premiums available on SBA loan sales given the current market conditions.
•Other gains for the third quarter and year to date period of 2022 included death benefits realized on bank-owned life insurance policies. There were no large or unusual transactions in 2023 giving rise to large gains or losses.

Noninterest Expenses

Noninterest expenses amounted to $62.2 million for the third quarter of 2023 compared to $61.6 million for the linked quarter and $48.7 million for the third quarter of 2022.

The 27.8% increase in total noninterest expenses from the prior year period was primarily driven by increased compensation expense of $7.4 million, or 25.8%, and other facilities-related and support costs associated with the acquisition of eight GrandSouth branch locations and related branch and support personnel. Intangible amortization increased $1.1 million (119.7%) from the third quarter of 2022 to the third quarter of 2023 as a direct result of the core deposit intangibles added with the GrandSouth acquisition. Other operating expenses increased $5.5 million (39.7%) from the third quarter of 2022 driven by: (1) increases in data processing and software expense for the additional transaction and account volumes and investments in new software systems; (2) FDIC insurance increases related to the deposits acquired from GrandSouth and the general FDIC rate increase effective January 1, 2023; and (3) higher check fraud and other non-credit losses experienced to date in 2023.

4

Balance Sheet

Total assets at September 30, 2023 amounted to $12.0 billion, down $55.0 million from the linked quarter and growing 13.9% from a year earlier. The decrease from the linked quarter was primarily related to lower cash and borrowing balances from normal balance sheet fluctuations. Increases in loans during the quarter were essentially offset by lower balances of investment securities. The growth from a year earlier was driven by the acquisition of GrandSouth, combined with organic loan and deposit growth during the period.

Quarterly average balances for key balance sheet accounts are presented below.


For the Three Months Ended
AVERAGE BALANCES
($ in thousands)
September 30, 2023December 31, 2022September 30, 2022Change
3Q23 vs 3Q22
Total assets$12,005,778 10,579,187 10,567,133 13.6 %
Investment securities, at amortized cost3,180,845 3,325,652 3,378,383 (5.8)%
Loans7,939,783 6,576,415 6,389,996 24.3 %
Earning assets11,405,306 10,161,108 10,028,388 13.7 %
Deposits10,180,046 9,275,909 9,299,278 9.5 %
Interest-bearing liabilities7,071,407 5,779,958 5,661,339 24.9 %
Shareholders’ equity1,303,249 1,003,031 1,087,763 19.8 %

Total investment securities were $2.6 billion at September 30, 2023, a decrease of $121.7 million from the linked quarter and $246.5 million from September 30, 2022. The investment securities portfolio continues to decline as cash flows from amortizing investments are utilized to fund loan growth and fluctuations in deposits. The unrealized loss on available for sale securities totaled $521.7 million at September 30, 2023, representing an increase of $81.5 million from the linked quarter and $77.6 million from year end. The Company has the intent to hold, and will not be required to sell, investments with unrealized losses until maturity or recovery of the amortized cost as market conditions change.

Total loans amounted to $8.0 billion at September 30, 2023, an increase of $129.4 million from the linked quarter and $1.5 billion, or 23.0%, from September 30, 2022. Excluding the GrandSouth acquisition, organic loan growth was $341.8 million for 2023 year to date, representing an annualized growth rate of 5.9%.

As presented below, our total loan portfolio mix has remained consistent. There were no notable concentrations in geographies or industries, including in office or hospitality categories. The Company's exposure to non-owner occupied office loans represented approximately 5.8% of the total portfolio at September 30, 2023, and the average size of these loans was $1.4 million. Non-owner occupied office loans are generally in non-metro markets and the top 10 loans in this category represent less than 2% of the total loan portfolio.

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The following table presents the balance and portfolio percentage by loan category for each period.

September 30, 2023June 30, 2023September 30, 2022
($ in thousands)AmountPercentageAmountPercentageAmountPercentage
Commercial and industrial$893,910 11 %888,391 11 %617,538 10 %
Construction, development & other land loans1,008,289 13 %1,109,769 14 %919,236 14 %
Commercial real estate - owner occupied1,252,259 16 %1,222,189 16 %1,038,877 16 %
Commercial real estate - non-owner occupied2,509,317 31 %2,423,262 31 %2,095,283 32 %
Multi-family real estate405,161 5 %392,120 5 %339,065 5 %
Residential 1-4 family real estate1,560,140 19 %1,461,068 18 %1,132,552 17 %
Home equity loans/lines of credit331,108 4 %334,566 4 %323,218 5 %
Consumer loans67,169 1 %67,077 1 %60,651 1 %
Loans, gross8,027,353 100 %7,898,442 100 %6,526,420 100 %
Unamortized net deferred loan fees(316)(813)(1,134)
Total loans$8,027,037 7,897,629 6,525,286 

Total deposits amounted to $10.2 billion at September 30, 2023, an increase of $1.0 billion, or 10.9%, from September 30, 2022, primarily driven by the GrandSouth acquisition. Organic market deposit growth (excluding the acquired deposits and brokered deposits) was $66.7 million for the third quarter of 2023 and $220.7 million since year end. Quarterly organic market growth represents an annualized growth rate of 3.0%.

The Company has a diversified and granular deposit base which has remained stable with continued growth in core deposits, primarily noninterest-bearing checking accounts and money market accounts. At quarter end, noninterest-bearing deposits accounted for 34% of total deposits, down slightly from 36% in the linked quarter. As of September 30, 2023, the estimated insured deposits totaled $6.4 billion or 63.0% of total deposits. In addition, there were collateralized deposits at that date of $804.6 million such that approximately 70.9% of our total deposits were insured or collateralized at the current quarter end.

Our deposit mix has remained consistent historically and has not significantly changed with the addition of GrandSouth as presented in the table below.

September 30, 2023June 30, 2023September 30, 2022
($ in thousands)AmountPercentageAmountPercentageAmountPercentage
Noninterest-bearing checking accounts$3,503,050 34 %3,639,930 36 %3,748,207 41 %
Interest-bearing checking accounts1,458,855 14 %1,454,489 14 %1,551,450 17 %
Money market accounts3,635,523 36 %3,411,072 34 %2,432,926 26 %
Savings accounts638,912 6 %658,473 6 %751,895 8 %
Other time deposits626,870 6 %638,751 6 %485,738 5 %
Time deposits >$250,000359,704 4 %353,473 4 %259,055 3 %
Total market deposits10,222,914 100 %10,156,188 100 %9,229,271 100 %
Brokered deposits12,489 — %12,381 — %— — %
Total deposits$10,235,403 100 %10,168,569 100 %9,229,271 100 %


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Capital

The Company remains well-capitalized by all regulatory standards, with an estimated total risk-based capital ratio at September 30, 2023 of 15.26%, up from the linked quarter ratio of 15.09% and the 14.84% ratio reported at September 30, 2022.

The Company has elected to exclude accumulated other comprehensive income ("AOCI") related primarily to available for sale securities from common equity tier 1 capital. AOCI is included in the Company’s tangible common equity to tangible assets ratio ("TCE") which was 6.49% at September 30, 2023, a decrease of 30 basis points from the linked quarter and an increase of 51 basis points from the prior year period. The decrease in TCE for the current quarter was driven by changes in AOCI, partially offset by earnings. As discussed above, the AOCI balance deteriorated relative to the increase in unrealized loss on available for sale securities as of September 30, 2023.

CAPITAL RATIOSSeptember 30, 2023 (estimated)June 30, 2023September 30, 2022
Tangible common equity to tangible assets (non-GAAP)6.49%6.79%5.98%
Common equity tier I capital ratio12.93%12.75%12.76%
Tier I leverage ratio10.72%10.47%10.21%
Tier I risk-based capital ratio13.71%13.54%13.59%
Total risk-based capital ratio15.26%15.09%14.84%


Liquidity

Liquidity is evaluated as both on-balance sheet (primarily cash and cash-equivalents, unpledged securities, and other marketable assets) and off-balance sheet (readily available lines of credit or other funding sources). The Company continues to manage liquidity sources, including unused lines of credit, at levels believed to be adequate to meet its operating needs for the foreseeable future.

The Company's on-balance sheet liquidity ratio (net liquid assets as a percent of net liabilities) at September 30, 2023 was 14.4%. In addition, the Company had approximately $2.2 billion in available lines of credit at that date resulting in a total liquidity ratio of 30.2%. The increase of $462,000 in available lines during the third quarter of 2023 was a result of additional loan collateral being transferred to the FHLB to enhance the levels of off-balance sheet liquidity availability to meet demands, as necessary.

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First Bancorp is a bank holding company headquartered in Southern Pines, North Carolina, with total assets of $12.0 billion. Its principal activity is the ownership and operation of First Bank, a state-chartered community bank that operates 118 branches in North Carolina and South Carolina. 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.

Caution about Forward-Looking Statements: This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, which statements are inherently subject to risks and uncertainties. Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results or otherwise are not statements of historical fact. Such statements are often characterized by the use of qualifying words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” or other words or phrases concerning opinions or judgments of the Company and its management about future events. Factors that could influence the accuracy of such forward-looking statements include, but are not limited to, the financial success or changing strategies of the Company’s customers, the Company’s level of success in integrating acquisitions, actions of government regulators, the level of market interest rates, and general economic conditions. For additional information about the factors that could affect the matters discussed in this paragraph, see the “Risk Factors” section of the Company’s most recent Annual Report on Form 10-K available at www.sec.gov. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements. The Company is also not responsible for changes made to this press release by wire services, internet services or other media.

8

First Bancorp and Subsidiaries
Financial Summary
CONSOLIDATED INCOME STATEMENT
($ in thousands, except per share data)
For the Three Months EndedFor the Nine Months Ended
September 30, 2023June 30, 2023September 30, 2022September 30, 2023September 30, 2022
Interest income
   Interest and fees on loans$106,514 102,963 72,239 308,857 201,518 
   Interest on investment securities14,054 14,183 14,565 42,783 43,312 
   Other interest income3,283 4,015 1,486 10,546 3,016 
      Total interest income123,851 121,161 88,290 362,186 247,846 
Interest expense
   Interest on deposits32,641 27,328 1,848 78,887 5,204 
   Interest on borrowings6,508 6,848 1,108 19,125 2,160 
      Total interest expense39,149 34,176 2,956 98,012 7,364 
        Net interest income84,702 86,985 85,334 264,174 240,482 
Provision for loan losses1,200 3,700 5,100 16,351 8,600 
(Reversal of) provision for unfunded commitments(1,200)(1,339)300 (1,487)(1,200)
     Total provision for credit losses— 2,361 5,400 14,864 7,400 
        Net interest income after provision for credit losses84,702 84,624 79,934 249,310 233,082 
Noninterest income
   Service charges on deposit accounts4,661 4,114 4,166 13,012 11,407 
   Other service charges, commissions, and fees5,450 5,650 6,312 16,677 21,200 
   Fees from presold mortgage loans325 557 376 1,288 1,951 
   Commissions from sales of financial products1,207 1,413 1,391 3,926 3,487 
   SBA consulting fees478 409 479 1,408 1,963 
   SBA loan sale gains1,101 696 479 2,052 4,581 
   Bank-owned life insurance income1,104 1,066 962 3,216 2,880 
   Other gains, net851 330 2,747 1,369 5,958 
      Total noninterest income15,177 14,235 16,912 42,948 53,427 
Noninterest expenses
   Salaries expense29,394 28,676 24,416 87,391 71,669 
   Employee benefit expense6,539 6,165 4,156 19,097 16,044 
   Occupancy and equipment related expense5,003 4,972 4,847 15,042 14,171 
   Merger and acquisition expenses— 1,334 548 13,506 4,769 
   Intangibles amortization expense1,953 2,049 889 6,147 2,859 
   Other operating expenses19,335 18,397 13,844 56,809 40,051 
      Total noninterest expenses62,224 61,593 48,700 197,992 149,563 
Income before income taxes37,655 37,266 48,146 94,266 136,946 
Income tax expense7,762 7,863 10,197 19,809 28,443 
Net income$29,893 29,403 37,949 74,457 108,503 
Earnings per common share - diluted$0.73 0.71 1.06 1.81 3.04 


9



First Bancorp and Subsidiaries
Financial Summary
CONSOLIDATED BALANCE SHEETS
($ in thousands)
At September 30, 2023At June 30, 2023At December 31, 2022At September 30, 2022
Assets
Cash and due from banks$95,257 101,215 101,133 83,050 
Interest-bearing deposits with banks178,332 259,460 169,185 186,465 
     Total cash and cash equivalents273,589 360,675 270,318 269,515 
Investment securities2,635,866 2,757,607 2,856,193 2,882,408 
Presold mortgages and SBA loans held for sale8,060 4,953 1,282 3,710 
Loans8,027,037 7,897,629 6,665,145 6,525,286 
Allowance for credit losses on loans(108,198)(109,230)(90,967)(86,587)
Net loans7,918,839 7,788,399 6,574,178 6,438,699 
Premises and equipment151,981 152,443 134,187 134,288 
Operating right-of-use lease assets17,604 18,375 18,733 19,230 
Intangible assets513,629 515,847 376,938 378,150 
Bank-owned life insurance182,764 181,659 164,592 164,793 
Other assets275,628 253,040 228,628 225,069 
     Total assets$11,977,960 12,032,998 10,625,049 10,515,862 
Liabilities
Deposits:
     Noninterest-bearing checking accounts$3,503,050 3,639,930 3,566,003 3,748,207 
     Interest-bearing deposit accounts6,732,353 6,528,639 5,661,526 5,481,064 
          Total deposits10,235,403 10,168,569 9,227,529 9,229,271 
Borrowings401,843 481,658 287,507 226,476 
Operating lease liabilities18,348 19,109 19,391 19,847 
Other liabilities64,683 66,020 59,026 55,771 
     Total liabilities10,720,277 10,735,356 9,593,453 9,531,365 
Shareholders’ equity
Common stock 962,644 960,851 725,153 724,694 
Retained earnings695,791 674,933 648,418 617,839 
Stock in rabbi trust assumed in acquisition(1,375)(1,365)(1,585)(1,585)
Rabbi trust obligation1,375 1,365 1,585 1,585 
Accumulated other comprehensive loss(400,752)(338,142)(341,975)(358,036)
     Total shareholders’ equity1,257,683 1,297,642 1,031,596 984,497 
Total liabilities and shareholders’ equity$11,977,960 12,032,998 10,625,049 10,515,862 


10

First Bancorp and Subsidiaries
Financial Summary

TREND INFORMATION

For the Three Months Ended
September 30, 2023June 30, 2023March 31, 2023December 31, 2022September 30, 2022
PERFORMANCE RATIOS (annualized)
Return on average assets (1)0.99 %0.98 %0.51 %1.44 %1.42 %
Return on average common equity (2)9.10 %8.97 %4.83 %15.20 %13.84 %
Return on average tangible common equity (3)15.05 %14.79 %8.16 %20.96 %21.25 %
COMMON SHARE DATA
Cash dividends declared - common$0.22 0.22 0.22 0.22 0.22 
Stated book value - common$30.61 31.59 31.72 28.89 27.57 
Tangible book value - common (non-GAAP)$18.11 19.03 19.08 18.34 16.98 
Common shares outstanding at end of period41,085,498 41,082,678 40,986,990 35,704,154 35,711,754 
Weighted average shares outstanding - diluted41,199,058 41,129,100 41,112,692 35,614,972 35,703,446 
CAPITAL INFORMATION (estimates for current quarter)
Tangible common equity to tangible assets6.49 %6.79 %6.60 %6.39 %5.98 %
Common equity tier I capital ratio12.93 %12.75 %12.53 %13.02 %12.76 %
Total risk-based capital ratio15.26 %15.09 %14.88 %15.09 %14.84 %
(1) Calculated by dividing annualized net income by average assets.
(2) Calculated by dividing annualized net income by average common equity.
(3) Calculated by dividing annualized net income by average tangible common equity.
For the Three Months Ended
INCOME STATEMENT
($ in thousands except per share data)
September 30, 2023June 30, 2023March 31, 2023December 31, 2022September 30, 2022
Net interest income - tax-equivalent (1)$85,442 87,684 93,186 85,094 86,026 
Taxable equivalent adjustment (1)740 699 700 722 692 
Net interest income84,702 86,985 92,486 84,372 85,334 
Provision for loan losses1,200 3,700 11,451 4,000 5,100 
(Reversal of) provision for unfunded commitments(1,200)(1,339)1,051 1,000 300 
Noninterest income15,177 14,235 13,536 14,558 16,912 
Merger and acquisition costs— 1,334 12,182 303 548 
Other noninterest expense62,224 60,259 61,993 45,354 48,152 
Income before income taxes37,655 37,266 19,345 48,273 48,146 
Income tax expense7,762 7,863 4,184 9,840 10,197 
Net income 29,893 29,403 15,161 38,433 37,949 
Earnings per common share - diluted$0.73 0.71 0.37 1.08 1.06 
(1) This amount reflects the tax benefit that the Company receives related to its tax-exempt loans and securities, which carry interest rates lower than similar taxable investments due to their tax-exempt status. This amount has been computed assuming a 23% tax rate and is reduced by the related nondeductible portion of interest expense.

11
v3.23.3
Cover Page
Oct. 25, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 25, 2023
Entity Registrant Name First Bancorp
Entity Incorporation, State or Country Code NC
Entity File Number 0-15572
Entity Tax Identification Number 56-1421916
Entity Address, Address Line One 300 SW Broad Street,
Entity Address, City or Town Southern Pines,
Entity Address, State or Province NC
Entity Address, Postal Zip Code 28387
City Area Code (910)
Local Phone Number 246-2500
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, No Par Value
Trading Symbol FBNC
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000811589
First Bancorp (NASDAQ:FBNC)
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