TROY, N.C., April 25, 2013 /PRNewswire/ -- First Bancorp (NASDAQ: FBNC), the parent company of First Bank, announced today net income available to common shareholders of $2.9 million, or $0.14 per diluted common share, for the three months ended March 31, 2013, compared to a net loss available to common shareholders of $5.9 million, or ($0.35) per diluted common share, recorded in the first quarter of 2012. The higher earnings were primarily a result of a lower provision for loan losses.
Net Interest Income and Net Interest Margin
Net interest income for the first quarter of 2013 amounted to $31.9 million in the first quarter of 2013 compared to $32.1 million in the first quarter of 2012.
The Company's net interest margin (tax-equivalent net interest income divided by average earning assets) in the first quarter of 2013 was 4.69% compared to 4.59% for the first quarter of 2012. The higher margin was primarily a result of a higher amount of discount accretion on loans purchased in failed bank acquisitions, as well as lower overall funding costs. The 4.69% net interest margin realized in the first quarter of 2013 was a 32 basis point decrease from the 5.01% margin realized in the fourth quarter of 2012. The decrease in margin was due primarily to a lower amount of loan discount accretion recognized during the first quarter of 2013 in comparison to the fourth quarter of 2012. As shown in the accompanying tables, loan discount accretion amounted to $3.7 million in the first quarter of 2013, $6.0 million in the fourth quarter of 2012 and $2.6 million in the first quarter of 2012.
Excluding the discount accretion on purchased loans, the Company's net interest margin was 4.16% for the first quarter of 2013, compared to 4.17% for the fourth quarter of 2012 and 4.22% in the first quarter of 2012. The decline in 2013 has been due to asset yields that have declined by more than the average cost of deposits. See the Financial Summary for a table that presents the impact of the loan discount accretion, as well as other purchase accounting adjustments affecting net interest income. Also see the Financial Summary for a reconciliation of the Company's net interest margin to the net interest margin excluding the loan discount accretion, and the note thereto that explains why this ratio is presented and caution regarding the use of this non-GAAP performance measure.
The Company's cost of funds has steadily declined from 0.67% in the first quarter of 2012 to 0.45% in the first quarter of 2013.
Provision for Loan Losses and Asset Quality
The Company recorded total provisions for loan losses of $11.1 million in the first quarter of 2013 compared to $21.6 million for the first quarter of 2012. As discussed below, the decrease in 2013 was primarily the result of an elevated provision for loan losses on non-covered loans recorded in the first quarter of 2012 – see explanation of the terms "covered" and "non-covered" in the section below entitled "Note Regarding Components of Earnings."
The provision for loan losses on non-covered loans amounted to $5.8 million in the first quarter of 2013 compared to $18.6 million in the first quarter of 2012. The decrease was primarily due to a high provision for loan losses recorded in the first quarter of 2012 that resulted from an internal review that applied more conservative assumptions to estimate the probable losses associated with some of the Company's nonperforming loan relationships, which the Company believed could lead to a more timely resolution of the related credits. Many of these same loans were sold to a third party investor in January 2013, as discussed below.
The provision for loan losses on covered loans amounted to $5.4 million in the first quarter of 2013 compared to $3.0 million in the first quarter of 2012. The increase was primarily the result of several large credits that deteriorated during the first quarter of 2013 and were placed on nonaccrual status.
Total non-covered nonperforming assets amounted to $83.4 million at March 31, 2013 (2.79% of total non-covered assets), which compares to $106.1 million at December 31, 2012 and $117.1 million at March 31, 2012. The decrease in 2013 compared to both periods in 2012 was due primarily to a combination of loan sales and foreclosed property write-downs that occurred in the fourth quarter of 2012 and the first quarter of 2013, as discussed in the following paragraph.
In the fourth quarter of 2012, the Company identified approximately $68 million of non-covered higher-risk loans that it targeted for sale to a third-party investor. Based on an offer to purchase these loans that was received in December, the Company wrote the loans down by approximately $38 million in the fourth quarter of 2012 to their estimated liquidation value of approximately $30 million and reclassified them as "loans held for sale." The sale of these loans was completed on January 23, 2013. Of the $68 million in loans targeted for sale, approximately $38.2 million had been classified as nonaccrual loans, and $10.5 million had been classified as accruing troubled-debt-restructurings. Additionally, in the fourth quarter of 2012, the Company recorded write-downs totaling $10.6 million on substantially all of its non-covered foreclosed properties in connection with efforts to accelerate the sale of these assets.
Non-covered nonaccrual loans increased from $33.0 million at December 31, 2012 to $38.9 million at March 31, 2013 due primarily to four larger credits that deteriorated during the first quarter of 2013. Non-covered foreclosed real estate decreased from $26.3 million at December 31, 2012 to $20.1 million at March 31, 2013 as a result of strong sales activity during the quarter, which was consistent with the Company's intent discussed above to accelerate the disposition of foreclosed properties.
Total covered nonperforming assets have steadily declined in the past year, amounting to $92.0 million at March 31, 2013 compared to $135.1 million at March 31, 2012. Within this category, foreclosed real estate declined from $79.5 million at March 31, 2012 to $30.2 million at March 31, 2013. The Company is experiencing increased property sales activity, particularly along the North Carolina coast, which is where most of the Company's covered foreclosed properties are located. Covered nonaccrual loans increased from $33.5 million at December 31, 2012 to $51.2 million at March 31, 2013, due primarily to several large loans that deteriorated during the quarter.
Noninterest Income
Total noninterest income for the three months ended March 31, 2013 was $7.1 million compared to $5.3 million for the comparable period of 2012.
Core noninterest income for the first quarter of 2013 was $6.5 million, an increase of 10.6% over the $5.8 million reported for the first quarter of 2012. Core noninterest income includes i) service charges on deposit accounts, ii) other service charges, commissions, and fees, iii) fees from presold mortgages, iv) commissions from financial product sales, and v) bank-owned life insurance income. The largest component of the increase in core noninterest income was in the amount of fees from presold mortgages recorded by the Company. The increase in these fees was due to high mortgage loan refinancing activity, as well as increased volume resulting from additional mortgage loan personnel that the Company has added in recent quarters.
Noncore components of noninterest income resulted in net gains of $0.6 million in the first quarter of 2013 compared to net losses of $0.5 million in the first quarter of 2012. The largest variance related to non-covered foreclosed property gains/losses, which amounted to a gain of $0.8 million in the first quarter of 2013 compared to a loss of $0.7 million in 2012. Also in 2013, the Company recorded "other losses" of $0.4 million related to the sale of a parcel of property that the Company had previously held for a future branch.
Noninterest Expenses
Noninterest expenses amounted to $23.2 million in the first quarter of 2013, a 4.7% decrease from the $24.4 million recorded in the first quarter of 2012. The decrease primarily relates to a decline in pension expense as a result of freezing the Company's two defined benefit pension plans on December 31, 2012. Pension expense was $1.0 million in the first quarter of 2012 compared to income of $0.1 million in the first quarter of 2013, which related to investment income from the pension plan's assets.
Balance Sheet and Capital
Total assets at March 31, 2013 amounted to $3.3 billion, a 1.7% decrease from a year earlier. Total loans at March 31, 2013 amounted to $2.4 billion, a 1.7% decrease from a year earlier, and total deposits amounted to $2.9 billion at March 31, 2013, a 0.9% increase from a year earlier.
The decrease in loans over the past year was a result of the loan sale previously discussed, as well as the progressive decline in the amount of covered loans. Partially offsetting the decrease was internal loan growth, as well as loans added in a branch acquisition discussed in the following paragraph. As it relates to deposits, the Company has experienced good growth in transaction oriented deposits, while time deposits have declined.
As previously reported, during the first quarter of 2013, the Company completed the acquisition of two branches from Four Oaks Bank & Trust Company, which resulted in the addition of $16 million in loans and $57 million in deposits. Excluding the acquired growth, the Company's non-covered loans increased by $22 million, representing annualized growth of 4.3%.
The Company remains well-capitalized by all regulatory standards, with a Total Risk-Based Capital Ratio at March 31, 2013 of 16.82% compared to the 10.00% minimum to be considered well-capitalized. The Company's tangible common equity to tangible assets ratio was 6.76% at March 31, 2013, an increase of 47 basis points from a year earlier, which is primarily due to the Company's capital raise that occurred in the fourth quarter of 2012.
Comments of the President and Other Business Matters
Richard H. Moore, President and CEO of First Bancorp, commented on today's report, "Our core bank remains strong. We are seeing growth in loans and deposits, our net interest margin remains strong, and our noninterest income and expense categories are experiencing favorable trends. The difficult economic environment continues to have a negative impact on certain borrowers and values of real estate, which creates losses that we reserve for. We are optimistic that conditions are improving."
The following is a list of business development and other miscellaneous matters affecting the Company:
- On March 25, 2013, the Company reported that it had completed the acquisition of approximately $16 million in loans and $57 million in deposits from two branches of Four Oaks Bank & Trust Company located in Rockingham and Southern Pines, North Carolina. The accounts of the Southern Pines branch have been transferred to a nearby branch of First Bank, while the Rockingham branch remains open as a branch of First Bank.
- On March 15, 2013, the Company announced a quarterly cash dividend of $0.08 cents per share payable on April 25, 2013 to shareholders of record on March 31, 2013. This is the same dividend rate as the Company declared in the first quarter of 2012.
Note Regarding Components of Earnings
The Company's results of operation are significantly affected by the on-going accounting for two FDIC-assisted failed bank acquisitions. In the discussion above, the term "covered" is used to describe assets included as part of FDIC loss share agreements, which generally result in the FDIC reimbursing the Company for 80% of losses incurred on those assets. The term "non-covered" refers to the Company's legacy assets, which are not included in any type of loss share arrangement.
For covered loans that deteriorate in terms of repayment expectations, the Company records immediate allowances through the provision for loan losses. For covered loans that experience favorable changes in credit quality compared to what was expected at the acquisition date, including loans that payoff, the Company records positive adjustments to interest income over the life of the respective loan – also referred to as loan discount accretion. For foreclosed properties that are sold at gains or losses or that are written down to lower values, the Company records the gains/losses within noninterest income.
The adjustments discussed above are recorded within the income statement line items noted without consideration of the FDIC loss share agreements. Because favorable changes in covered assets result in lower expected FDIC claims, and unfavorable changes in covered assets result in higher expected FDIC claims, the FDIC indemnification asset is adjusted to reflect those expectations. The net increase or decrease in the indemnification asset is reflected within noninterest income.
The adjustments noted above can result in volatility within individual income statement line items. Because of the FDIC loss share agreements and the associated indemnification asset, pretax income resulting from amounts recorded as provisions for loan losses on covered loans, discount accretion, and losses from covered foreclosed properties is generally only impacted by 20% of these amounts due to the corresponding adjustments made to the indemnification asset.
First Bancorp is a bank holding company headquartered in Troy, North Carolina with total assets of approximately $3.3 billion. Its principal activity is the ownership and operation of First Bank, a state-chartered community bank that operates 98 branches, with 82 branches operating in North Carolina, 9 branches in South Carolina (Cheraw, Dillon, Florence, Latta, Jefferson, and Little River), and 7 branches in Virginia (Abingdon, Christiansburg, Dublin, Fort Chiswell, Radford, Salem and Wytheville), where First Bank does business as First Bank of Virginia. First Bank also has loan production offices in Greenville, North Carolina and Blacksburg, Virginia. First Bancorp's common stock is traded on the NASDAQ Global Select Market under the symbol "FBNC."
Please visit our website at www.FirstBancorp.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. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements. The Company is also not responsible for changes made to the press release by wire services, internet services or other media.
| First Bancorp and Subsidiaries |
|||||
| Three Months Ended March 31, |
Percent |
||||
| ($ in thousands except per share data – unaudited) |
2013 |
2012 |
Change |
||
| INCOME STATEMENT |
|||||
| Interest income |
|||||
| Interest and fees on loans |
$ 33,551 |
35,042 |
|||
| Interest on investment securities |
1,384 |
1,751 |
|||
| Other interest income |
154 |
139 |
|||
| Total interest income |
35,089 |
36,932 |
(5.0%) |
||
| Interest expense |
|||||
| Interest on deposits |
2,912 |
4,293 |
|||
| Other, primarily borrowings |
256 |
548 |
|||
| Total interest expense |
3,168 |
4,841 |
(34.6%) |
||
| Net interest income |
31,921 |
32,091 |
(0.5%) |
||
| Provision for loan losses – non-covered loans |
5,771 |
18,557 |
(68.9%) |
||
| Provision for loan losses – covered loans |
5,378 |
2,998 |
79.4% |
||
| Total provision for loan losses |
11,149 |
21,555 |
(48.3%) |
||
| Net interest income after provision for loan losses |
20,772 |
10,536 |
97.2% |
||
| Noninterest income |
|||||
| Service charges on deposit accounts |
2,935 |
2,847 |
|||
| Other service charges, commissions, and fees |
2,175 |
2,192 |
|||
| Fees from presold mortgages |
747 |
411 |
|||
| Commissions from financial product sales |
399 |
383 |
|||
| Bank-owned life insurance income |
208 |
11 |
|||
| Foreclosed property gains (losses) – non-covered |
758 |
(688) |
|||
| Foreclosed property losses and write-downs – covered |
(4,616) |
(4,547) |
|||
| Indemnification asset income (expense), net |
4,897 |
4,105 |
|||
| Securities gains |
− |
452 |
|||
| Other gains (losses) |
(395) |
183 |
|||
| Total noninterest income |
7,108 |
5,349 |
32.9% |
||
| Noninterest expenses |
|||||
| Personnel expense |
13,304 |
14,088 |
|||
| Occupancy and equipment expense |
2,762 |
2,851 |
|||
| Intangibles amortization |
199 |
223 |
|||
| Other operating expenses |
6,959 |
7,213 |
|||
| Total noninterest expenses |
23,224 |
24,375 |
(4.7%) |
||
| Income (loss) before income taxes |
4,656 |
(8,490) |
n/m |
||
| Income taxes (benefit) |
1,556 |
(3,308) |
n/m |
||
| Net income (loss) |
3,100 |
(5,182) |
n/m |
||
| Preferred stock dividends |
(245) |
(760) |
|||
| Net income (loss) available to common shareholders |
$ 2,855 |
(5,942) |
n/m |
||
| Earnings (loss) per common share – basic |
$ 0.15 |
(0.35) |
n/m |
||
| Earnings (loss) per common share – diluted |
0.14 |
(0.35) |
n/m |
||
| ADDITIONAL INCOME STATEMENT INFORMATION |
|||||
| Net interest income, as reported |
$ 31,921 |
32,091 |
|||
| Tax-equivalent adjustment (1) |
372 |
387 |
|||
| Net interest income, tax-equivalent |
$ 32,293 |
32,478 |
(0.6%) |
||
| (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 39% tax rate and is reduced by the related nondeductible portion of interest expense. |
|
| n/m = not meaningful |
||
| First Bancorp and Subsidiaries |
|||
| Three Months Ended March 31, |
|||
| PERFORMANCE RATIOS (annualized) |
2013 |
2012 |
|
| Return on average assets (1) |
0.36% |
(0.72%) |
|
| Return on average common equity (2) |
4.01% |
(8.39%) |
|
| Net interest margin – tax-equivalent (3) |
4.69% |
4.59% |
|
| Net charge-offs to average loans – non-covered |
0.51% |
1.49% |
|
| COMMON SHARE DATA |
|||
| Cash dividends declared – common |
$ 0.08 |
0.08 |
|
| Stated book value – common |
14.56 |
16.23 |
|
| Tangible book value – common |
11.04 |
12.13 |
|
| Common shares outstanding at end of period |
19,669,302 |
16,937,641 |
|
| Weighted average shares outstanding – basic |
19,669,302 |
16,924,616 |
|
| Weighted average shares outstanding – diluted |
20,409,760 |
16,924,650 |
|
| CAPITAL RATIOS |
|||
| Tangible equity to tangible assets |
8.96% |
8.23% |
|
| Tangible common equity to tangible assets |
6.76% |
6.29% |
|
| Tier I leverage ratio |
10.55% |
9.97% |
|
| Tier I risk-based capital ratio |
15.56% |
15.07% |
|
| Total risk-based capital ratio |
16.82% |
16.34% |
|
| AVERAGE BALANCES ($ in thousands) |
|||
| Total assets |
$ 3,228,463 |
3,302,072 |
|
| Loans |
2,382,861 |
2,430,893 |
|
| Earning assets |
2,790,745 |
2,846,972 |
|
| Deposits |
2,803,245 |
2,779,511 |
|
| Interest-bearing liabilities |
2,439,895 |
2,569,271 |
|
| Shareholders' equity |
359,362 |
348,194 |
|
| (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 |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
| Net interest income – tax-equivalent (1) |
$ 32,293 |
36,062 |
34,849 |
33,338 |
32,478 |
| Taxable equivalent adjustment (1) |
372 |
377 |
376 |
387 |
387 |
| Net interest income |
31,921 |
35,685 |
34,473 |
32,951 |
32,091 |
| Provision for loan losses – non-covered |
5,771 |
40,272 |
5,970 |
5,194 |
18,557 |
| Provision for loan losses – covered |
5,378 |
4,305 |
1,103 |
1,273 |
2,998 |
| Noninterest income |
7,108 |
(8,533) |
2,803 |
1,770 |
5,349 |
| Noninterest expense |
23,224 |
25,795 |
23,657 |
23,448 |
24,375 |
| Income (loss) before income taxes |
4,656 |
(43,220) |
6,546 |
4,806 |
(8,490) |
| Income tax expense (benefit) |
1,556 |
(17,283) |
2,123 |
1,516 |
(3,308) |
| Net income (loss) |
3,100 |
(25,937) |
4,423 |
3,290 |
(5,182) |
| Preferred stock dividends |
(245) |
(532) |
(688) |
(829) |
(760) |
| Net income (loss) available to common shareholders |
2,855 |
(26,469) |
3,735 |
2,461 |
(5,942) |
| Earnings (loss) per common share – basic |
0.15 |
(1.53) |
0.22 |
0.15 |
(0.35) |
| Earnings (loss) per common share – diluted |
0.14 |
(1.53) |
0.22 |
0.15 |
(0.35) |
| See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments. |
|||||
| First Bancorp and Subsidiaries |
|||||||
|
CONSOLIDATED BALANCE SHEETS ($ in thousands) |
At Mar. 31, 2013 |
At Dec. 31, 2012 |
At Mar. 31, 2012 |
One Year Change |
|||
| Assets |
|||||||
| Cash and due from banks |
$ 73,205 |
96,588 |
58,001 |
26.2% |
|||
| Interest bearing deposits with banks |
243,139 |
144,919 |
235,340 |
3.3% |
|||
| Total cash and cash equivalents |
316,344 |
241,507 |
293,341 |
7.8% |
|||
| Investment securities |
225,863 |
223,416 |
216,248 |
4.4% |
|||
| Presold mortgages |
4,584 |
8,490 |
7,003 |
(34.5%) |
|||
| Loans – non-covered |
2,132,683 |
2,094,143 |
2,094,524 |
1.8% |
|||
| Loans – covered by FDIC loss share agreements |
263,468 |
282,314 |
342,100 |
(23.0%) |
|||
| Total loans |
2,396,151 |
2,376,457 |
2,436,624 |
(1.7%) |
|||
| Allowance for loan losses – non-covered |
(44,761) |
(41,643) |
(46,455) |
(3.6%) |
|||
| Allowance for loan losses – covered |
(5,028) |
(4,759) |
(6,372) |
(21.1%) |
|||
| Total allowance for loan losses |
(49,789) |
(46,402) |
(52,827) |
(5.8%) |
|||
| Net loans |
2,346,362 |
2,330,055 |
2,383,797 |
(1.6%) |
|||
| Loans held for sale |
− |
30,393 |
− |
− |
|||
| Premises and equipment |
77,823 |
74,371 |
72,343 |
7.6% |
|||
| FDIC indemnification asset |
100,594 |
102,559 |
113,405 |
(11.3%) |
|||
| Intangible assets |
69,330 |
68,943 |
69,510 |
(0.3%) |
|||
| Foreclosed real estate – non-covered |
20,115 |
26,285 |
36,838 |
(45.4%) |
|||
| Foreclosed real estate – covered |
30,156 |
47,290 |
79,535 |
(62.1%) |
|||
| Bank-owned life insurance |
27,193 |
27,857 |
1,405 |
n/m |
|||
| Other assets |
62,581 |
63,744 |
63,581 |
(1.6%) |
|||
| Total assets |
$ 3,280,945 |
3,244,910 |
3,337,006 |
(1.7%) |
|||
| Liabilities |
|||||||
| Deposits: |
|||||||
| Non-interest bearing checking accounts |
$ 429,202 |
413,195 |
371,293 |
15.6% |
|||
| Interest bearing checking accounts |
539,270 |
519,573 |
468,691 |
15.1% |
|||
| Money market accounts |
568,092 |
551,209 |
522,350 |
8.8% |
|||
| Savings accounts |
166,510 |
158,578 |
157,619 |
5.6% |
|||
| Brokered deposits |
118,117 |
130,836 |
158,117 |
(25.3%) |
|||
| Internet time deposits |
7,689 |
10,060 |
27,955 |
(72.5%) |
|||
| Other time deposits > $100,000 |
532,747 |
530,015 |
561,162 |
(5.1%) |
|||
| Other time deposits |
495,940 |
507,894 |
563,872 |
(12.0%) |
|||
| Total deposits |
2,857,567 |
2,821,360 |
2,831,059 |
0.9% |
|||
| Borrowings |
46,394 |
46,394 |
133,894 |
(65.4%) |
|||
| Other liabilities |
19,752 |
21,039 |
33,622 |
(41.3%) |
|||
| Total liabilities |
2,923,713 |
2,888,793 |
2,998,575 |
(2.5%) |
|||
| Shareholders' equity |
|||||||
| Preferred stock |
70,787 |
70,787 |
63,500 |
11.5% |
|||
| Common stock |
131,896 |
131,877 |
105,068 |
25.5% |
|||
| Retained earnings |
154,911 |
153,629 |
178,195 |
(13.1%) |
|||
| Accumulated other comprehensive income (loss) |
(362) |
(176) |
(8,332) |
95.7% |
|||
| Total shareholders' equity |
357,232 |
356,117 |
338,431 |
5.6% |
|||
| Total liabilities and shareholders' equity |
$ 3,280,945 |
3,244,910 |
3,337,006 |
(1.7%) |
|||
|
First Bancorp and Subsidiaries |
|||||
| For the Three Months Ended |
|||||
|
YIELD INFORMATION |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
| Yield on loans |
5.71% |
6.15% |
6.06% |
5.88% |
5.80% |
| Yield on securities – tax-equivalent (1) |
3.23% |
3.41% |
3.45% |
3.69% |
3.84% |
| Yield on other earning assets |
0.33% |
0.34% |
0.31% |
0.35% |
0.29% |
| Yield on all interest earning assets |
5.15% |
5.53% |
5.44% |
5.31% |
5.27% |
| Rate on interest bearing deposits |
0.49% |
0.56% |
0.61% |
0.66% |
0.71% |
| Rate on other interest bearing liabilities |
2.24% |
1.40% |
1.60% |
1.54% |
1.61% |
| Rate on all interest bearing liabilities |
0.53% |
0.59% |
0.66% |
0.70% |
0.76% |
| Total cost of funds |
0.45% |
0.51% |
0.57% |
0.62% |
0.67% |
| Net interest margin – tax-equivalent (2) |
4.69% |
5.01% |
4.86% |
4.68% |
4.59% |
| Average prime rate |
3.25% |
3.25% |
3.25% |
3.25% |
3.25% |
| (1) |
See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments. |
| (2) |
Calculated by dividing annualized tax-equivalent net interest income by average earning assets for the period. See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments. |
| For the Three Months Ended |
|||||||||
| NET INTEREST INCOME PURCHASE ($ in thousands) |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
||||
| Interest income – reduced by premium |
$ (116) |
(116) |
(116) |
(116) |
(116) |
||||
| Interest income – increased by accretion of |
3,658 |
6,011 |
4,587 |
3,290 |
2,578 |
||||
| Interest expense – reduced by premium |
9 |
13 |
17 |
22 |
33 |
||||
| Interest expense – reduced by premium |
− |
− |
− |
− |
30 |
||||
| Impact on net interest income |
$ 3,551 |
5,908 |
4,488 |
3,196 |
2,525 |
||||
| (1) |
Indemnification asset income is reduced by 80% of the amount of the accretion of loan discount, and therefore the net effect is that pretax income is positively impacted by 20% of the amounts in this line item. |
| First Bancorp and Subsidiaries |
|||||||||||||||||
|
ASSET QUALITY DATA ($ in thousands) |
March 31, |
Dec. 31, |
Sept. 30, |
June 30, |
March 31, |
||||||||||||
| Non-covered nonperforming assets |
|||||||||||||||||
| Nonaccrual loans |
$ 38,917 |
33,034 |
69,413 |
73,918 |
69,665 |
||||||||||||
| Troubled debt restructurings - accruing |
24,378 |
24,848 |
38,522 |
20,684 |
10,619 |
||||||||||||
| Accruing loans > 90 days past due |
- |
- |
- |
- |
- |
||||||||||||
| Total non-covered nonperforming loans |
63,295 |
57,882 |
107,935 |
94,602 |
80,284 |
||||||||||||
| Nonperforming loans held for sale |
− |
21,938 |
- |
- |
- |
||||||||||||
| Foreclosed real estate |
20,115 |
26,285 |
38,065 |
37,895 |
36,838 |
||||||||||||
| Total non-covered nonperforming assets |
$ 83,410 |
106,105 |
146,000 |
132,497 |
117,122 |
||||||||||||
| Covered nonperforming assets (1) |
|||||||||||||||||
| Nonaccrual loans |
$ 51,221 |
33,491 |
37,619 |
39,075 |
42,369 |
||||||||||||
| Troubled debt restructurings - accruing |
10,582 |
15,465 |
17,945 |
19,054 |
13,158 |
||||||||||||
| Accruing loans > 90 days past due |
- |
- |
- |
- |
- |
||||||||||||
| Total covered nonperforming loans |
61,803 |
48,956 |
55,564 |
58,129 |
55,527 |
||||||||||||
| Foreclosed real estate |
30,156 |
47,290 |
58,367 |
70,850 |
79,535 |
||||||||||||
| Total covered nonperforming assets |
$ 91,959 |
96,246 |
113,931 |
128,979 |
135,062 |
||||||||||||
| Total nonperforming assets |
$ 175,369 |
202,351 |
259,931 |
261,476 |
252,184 |
||||||||||||
|
Asset Quality Ratios – All Assets |
|||||||||||||||||
| Net charge-offs to average loans - annualized |
1.32% |
7.76% |
1.80% |
0.96% |
1.68% |
||||||||||||
| Nonperforming loans to total loans |
5.22% |
4.50% |
6.70% |
6.27% |
5.57% |
||||||||||||
| Nonperforming assets to total assets |
5.35% |
6.24% |
7.82% |
7.86% |
7.56% |
||||||||||||
| Allowance for loan losses to total loans |
2.08% |
1.95% |
2.03% |
2.19% |
2.17% |
||||||||||||
| Asset Quality Ratios – Based on Non-covered Assets only |
|||||||||||||||||
| Net charge-offs to average non-covered loans - |
0.51% |
8.09% |
1.57% |
0.79% |
1.49% |
||||||||||||
| Non-covered nonperforming loans to non-covered |
2.97% |
2.76% |
5.05% |
4.47% |
3.83% |
||||||||||||
| Non-covered nonperforming assets to total non-covered |
2.79% |
3.64% |
4.93% |
4.51% |
4.02% |
||||||||||||
| Allowance for loan losses to non-covered loans |
2.10% |
1.99% |
2.11% |
2.25% |
2.22% |
||||||||||||
| (1) Covered nonperforming assets consist of assets that are included in loss-share agreements with the FDIC.
|
|||||||||||||||||
| First Bancorp and Subsidiaries |
|||||||||
| For the Three Months Ended |
|||||||||
| NET INTEREST MARGIN, EXCLUDING ($ in thousands) |
March 31, |
Dec. 31, |
Sept. 30, |
June 30, |
March 31, |
||||
| Net interest income, as reported |
$ 31,921 |
35,685 |
34,473 |
32,951 |
32,091 |
||||
| Tax-equivalent adjustment |
372 |
377 |
376 |
387 |
387 |
||||
| Net interest income, tax-equivalent (A) |
$ 32,293 |
36,062 |
34,849 |
33,338 |
32,478 |
||||
|
Average earning assets (B) |
$ 2,790,745 |
2,864,243 |
2,855,083 |
2,863,866 |
2,846,972 |
||||
| Tax-equivalent net interest |
4.69% |
5.01% |
4.86% |
4.68% |
4.59% |
||||
| Net interest income, tax-equivalent |
$ 32,293 |
36,062 |
34,849 |
33,338 |
32,478 |
||||
| Loan discount accretion |
3,658 |
6,011 |
4,587 |
3,290 |
2,578 |
||||
| Net interest income, tax-equivalent, excluding |
$ 28,635 |
30,051 |
30,262 |
30,048 |
29,900 |
||||
|
Average earnings assets (B) |
$ 2,790,745 |
2,864,243 |
2,855,083 |
2,863,866 |
2,846,972 |
||||
| Tax-equivalent net interest margin, excluding |
4.16% |
4.17% |
4.22% |
4.22% |
4.22% |
||||
| Note: The measure "tax-equivalent net interest margin, excluding impact of loan discount accretion" is a non-GAAP performance measure. Management of the Company believes that it is useful to calculate and present the Company's net interest margin without the impact of loan discount accretion for the reasons explained in the remainder of this paragraph. Loan discount accretion is a non-cash interest income adjustment related to the Company's acquisition of two failed banks and represents the portion of the fair value discount that was initially recorded on the acquired loans that is being recognized into income over the lives of the loans. At March 31, 2013, the Company had a remaining loan discount balance of $63.7 million compared to $101.9 million at March 31, 2012. 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. |
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SOURCE First Bancorp
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