The First Bancorp Reports Third Quarter Financial Results
The First Bancorp (Nasdaq: FNLC), the parent company of First National Bank, has announced its financial results for the third quarter of 2024. The company reported an unaudited net income of $7.6 million for the quarter, equating to diluted earnings per share of $0.68. Additionally, for the nine months ending September 30, 2024, the company’s net income totaled $19.8 million, with a year-to-date diluted earnings per share of $1.78.
Third Quarter Highlights
- Net Income Growth: 22.7% increase compared to Q2 2024
- Earnings Per Share: Increased by 22.6% to $0.68 per diluted share
- Net Interest Income: Highest level in six quarters, with an 8.8% increase
- Net Interest Margin: Improved by 11 basis points from Q2 2024
- Total Assets: Increased to $3.14 billion, reflecting a quarterly growth of $57.6 million
- Loan Growth: Expanded at an annualized rate of 10.6%, reaching $2.31 billion
- Asset Quality: Non-Performing Assets to Total Assets ratio of 0.08%
- Dividend: Quarterly shareholder dividend maintained at $0.36 per share
CEO Commentary
Tony C. McKim, President and Chief Executive Officer of The First Bancorp, expressed satisfaction with the company’s third-quarter performance:
“I am pleased to report our results for the third quarter. We saw significant improvements, including a 22.7% rise in net income from the previous quarter and a 22.6% increase in diluted earnings per share.”
McKim emphasized the positive impact of an 11-basis-point expansion in net interest margin, attributing the increase to higher asset yields and stable funding costs. This development, alongside steady growth in earning assets, contributed to an $8.8% rise in net interest income quarter-over-quarter.
“Although the Federal Reserve’s recent decision to reduce short-term interest rates by 0.50% in September had minimal effect on this quarter’s performance, we anticipate continued margin improvements in the coming quarters as funding cost pressures ease,” McKim added.
McKim also highlighted the company’s commitment to sustainable balance sheet growth while maintaining strong asset quality, capital strength, and liquidity. “With over $129 million in new loans granted during the quarter, we remain dedicated to supporting our customers and communities as we celebrate our 160th anniversary.”
Financial Performance Analysis
Net Interest Income & Margin Expansion
For the third quarter of 2024, net interest income reached $16.4 million, representing an increase of $1.3 million (8.8%) from the previous This marks the highest level recorded since Q1 2023. The company also reported a net interest margin of 2.32%, an improvement from 2.21% in the second quarter. The average tax-equivalent yield on earning assets rose by six basis points to 5.28%, while the cost of total liabilities remained steady at 3.48%.
Credit Loss Provisions
A reversal of $580,000 was recorded in the provision for credit losses on loans in Q3, contrasting with the $539,000 provision expense in Q2. This adjustment reflects post-pandemic improvements in asset quality and a refinement of peer group analyses used in the company’s risk models. Net charge-offs for the quarter totaled $113,000, bringing year-to-date net charge-offs to $89,000, equating to an annualized 0.005% of total loans.
The company also recognized a provision for credit losses on held-to-maturity securities amounting to $76,000 while recording a reverse provision of $134,000 for off-balance-sheet exposures.
Non-Interest Income Performance
Total non-interest income forstood at $4.1 million, consistent with the previous quarter. Debit card income saw a 2.4% increase, while revenue from Wealth Management and service charges on deposit accounts experienced minor declines.
Non-Interest Expenses
Operating expenses for Q3 reached $12.0 million, an increase of $750,000 (6.7%) from the prior This rise was primarily driven by higher employee salaries and benefits, stemming from a decrease in loan-related salary deferrals, seasonal hiring trends, and adjustments to incentive compensation. The company’s efficiency ratio for the quarter stood at 56.37%, virtually unchanged from 56.35% in Q2.
Balance Sheet and Loan Growth
As of September 30, 2024, The First Bancorp reported total assets of $3.14 billion, marking a quarterly increase of $57.6 million and an annual increase of $198.4 million.
Loan balances showed robust growth, increasing by $59.6 million during the quarter. Key loan portfolio trends included:
- Commercial Loans: Increased by $37.9 million
- Multifamily Loans: Grew by $4.8 million
- Residential Term Loans & Home Equity Loans: Increased by $12.1 million and $4.8 million, respectively
- Commercial Real Estate Loans: Declined slightly by $1.6 million
Deposits & Liquidity Position
Total deposits reached $2.70 billion, reflecting a quarterly increase of $124.6 million and an annual increase of $102.8 million (4.0%). Growth was driven primarily by non-maturity deposits, which rose by $111.1 million, while time deposits increased by $13.6 million.
This increase in deposit levels enabled the company to reduce borrowings by $79.6 million, including the full redemption of a $25 million advance under the Bank Term Funding Program. Uninsured deposits accounted for an estimated 17% of total deposits, with 73% of these uninsured funds being fully collateralized. As of September 30, 2024, the company maintained a liquidity position of $703 million, sufficient to cover 149% of estimated uninsured deposits.
Asset Quality & Capital Strength
Asset quality remains a cornerstone of The First Bancorp’s financial stability. As of September 30, 2024:
- Non-Performing Assets to Total Assets Ratio: 0.08%, down slightly from 0.09% in Q2 2024
- Non-Performing Loans to Total Loans Ratio: 0.11%, consistent with prior quarters
- Past Due Loans: 0.14% of total loans, reflecting a slight decline from Q2
- Allowance for Credit Losses: 1.04% of total loans, slightly reduced from 1.10% in Q2 2024
The loan portfolio remains well-diversified, with commercial real estate exposures kept below regulatory guidance limits and minimal exposure to higher-risk office space sectors.
Capital Position & Shareholder Value
The company continues to maintain a strong capital position:
- Leverage Capital Ratio: 8.53%, slightly down from 8.58% in Q2 2024
- Total Risk-Based Capital Ratio: 13.11%, compared to 13.24% in Q2 2024
- Tangible Book Value Per Share: Increased to $20.27 from $19.20 in Q2 2024
- Tangible Common Equity Ratio: 7.26%, up from 7.00% in Q2 2024
Dividend Announcement
On September 26, 2024, The First Bancorp’s Board of Directors declared a quarterly dividend of $0.36 per share. This dividend was paid on October 18, 2024, to shareholders of record as of October 8, 2024.
