EX-99.1 2 a24q2earningsex991.htm EX-99.1 Document

Exhibit 99.1
The First Bancorp Announces Second Quarter Results
2024 Q2 Results Driven by Loan Growth, Stable Net Interest Margin, and Strong Asset Quality
DAMARISCOTTA, ME--(BUSINESS WIRE)--The First Bancorp (Nasdaq: FNLC), ("the Company", "we", "us", "our"), parent company of First National Bank, today reported unaudited net income of $6.2 million with diluted earnings per share of $0.55 for the quarter ended June 30, 2024. The Company also reported results for the six months ended June 30, 2024. Net income year-to-date in 2024 was $12.2 million, with diluted earnings per share of $1.10.

Second Quarter Notable Items:
•Total assets reached $3.08 billion, an increase of $106.8 million in Q2
•Pre-tax, pre-provision earnings increased by $1.2 million or 18.1% from Q1
•Loan balances grew at an annualized rate of 13.6% to $2.25 billion
•Non-Performing Assets to Total Assets of 0.09%, unchanged from Q1
•Efficiency Ratio improved by 4.8 percentage points from Q1
•Quarterly shareholder dividend increased by $0.01 to $0.36 per share

CEO COMMENTS
"I am pleased to report our operating results for the second quarter," commented Tony C. McKim, the Company's President and Chief Executive Officer. "Net income increased 2.5% from the first quarter of 2024, and diluted earnings per share increased 2.4%. On a pre-tax, pre-provision ("PTPP") basis, second quarter earnings increased $1.2 million, or 18.1%, from the first quarter of 2024 ("linked quarter").
"We continue to responsibly grow our balance sheet while enjoying strong asset quality, capital, and liquidity positions. Asset growth has been focused in the loan portfolio and comes from what has been a long-term formula for success - building relationships and lending to creditworthy borrowers under well-structured terms. Our net interest margin for the quarter was stable, and
1






when combined with earning asset growth, produced a modest rise in linked quarter net interest income."
Mr. McKim concluded, "Rather than retreating from certain activities due to a challenging operating environment, we have continued our commitment to serving customers and supporting communities throughout our footprint. We originated over $200 million in new loan volume in the second quarter resulting in loan portfolio expansion of $73.9 million. As the Bank observes its 160th anniversary in 2024, our team remains totally focused upon serving their customers and communities."

FINANCIAL RESULTS FOR THE QUARTER ENDED JUNE 30, 2024
Net income was $6.2 million, or $0.55 per diluted share, for the three months ended June 30, 2024. On a PTPP basis, earnings for the quarter were $8.0 million. Results for the quarter compare favorably to the linked quarter for which net income was $6.0 million, diluted earnings per share were $0.54, and PTPP earnings were $6.8 million. The drivers of second quarter results are discussed in the following sections:
Net Interest Income
Net interest income was $15.1 million for the three months ended June 30, 2024, an increase of $195,000 or 1.3% from the first quarter of 2024. The increase resulted primarily from an expansion in earning assets during the quarter. Net interest margin stabilized at 2.21% for the second quarter of 2024, down slightly from 2.22% in the first quarter. The average tax equivalent yield on earning assets increased 13 basis points in the second quarter to 5.22%, while the cost of total liabilities also increased 13 basis points to an average of 3.48% for the quarter.
Provision for Credit Losses
A provision for credit losses on loans of $539,000 was recorded in the second quarter of 2024, compared with a provision expense of $99,000 in the first quarter. Loan growth and the modeling effects of slightly less favorable economic projections, partially offset by strong asset quality, drove the period-to-period increase. For the three months ended June 30, 2024 net charge-offs were $53,000 as compared to net recoveries of $79,000 for the three months ended March 31, 2024.
Non-Interest Income
Total non-interest income was $4.2 million for the three months ended June 30, 2024, an increase of $517,000, or 14.2% from the three months ended March 31, 2024. The Bank recorded quarterly revenue gains in all business lines, including a 12.4% increase in Debit Card income, a
2






6.8% increase in Wealth Management revenue, and an increase of 29.4% in Other Operating Income led by loan-related fees.
Non-Interest Expense
Total non-interest expense for three months ended June 30, 2024 was $11.3 million, a decrease of $511,000, or 4.3%, from the three months ended March 31, 2024. The period-to-period change was concentrated within employee salaries and benefits, resulting largely from early year salary and benefit dynamics and an increase in loan-related salary deferrals. The Company's efficiency ratio for the second quarter was 56.35%, significantly improved from the linked quarter ratio of 61.15%.
Loans, Total Assets & Funding
Total assets at June 30, 2024, were $3.08 billion, up $106.8 million in the second quarter and up $210.1 million from a year ago. Earning assets increased $102.7 million during the quarter comprised primarily of an increase in loans of $73.9 million. Earning assets have increased by $201.2 million since June 30, 2023 centered in loan growth of $186.7 million.
Loan growth in the second quarter was led by commercial credit. Commercial real estate balances increased $33.3 million, commercial and industrial balances increased $8.7 million, and multifamily loan balances increased $4.4 million. Growth was also present in the municipal, residential term, and home equity segments of the portfolio, up $7.4 million, $7.9 million, and $6.4 million, respectively, in the quarter.
Total deposits at June 30, 2024 were $2.58 billion, up $29.1 million during the period, and up $78.2 million, or 3.1%, from June 30, 2023. Time deposits led the quarterly change, increasing $46.3 million while low-cost deposits were collectively down $12.5 million. Borrowings increased $75.8 million during the period to $230.6 million. Uninsured deposits as of June 30, 2024, were estimated at 16% of total deposits, and 75% of uninsured deposits were fully collateralized. Available day-one liquidity was $594 million, sufficient to cover 143% of estimated uninsured deposits.
ASSET QUALITY
Asset quality continues to be very strong. As of June 30, 2024, the ratio of non-performing assets to total assets was 0.09%, unchanged from March 31, 2024, and up modestly from 0.06% as of June 30, 2023. The ratio of non-performing loans to total loans was 0.11% as of June 30, 2024, in range with the 0.12% and 0.08% reported as of March 31, 2024 and June 30, 2023, respectively.
3






Past due loans remain low at 0.15% of total loans as of June 30, 2024, a decrease from 0.18% of total loans as of March 31, 2024 and a slight increase from 0.14% of total loans as of June 30, 2023.
The Allowance for Credit Losses (ACL) on Loans stood at 1.10% of total loans as of June 30, 2024, as compared to an ACL of 1.11% and 1.14% of total loans as of March 31, 2024, and June 30, 2023, respectively. The loan portfolio is well-diversified with Commercial Real Estate exposures comfortably below regulatory guidance limits, and with very limited exposure in sectors frequently mentioned as potential problems, such as office space.
CAPITAL
The Company’s regulatory capital position remained strong as of June 30, 2024. The Leverage Capital ratio was an estimated 8.58% as of June 30, 2024, as compared to the 8.67% and 8.68% reported as of March 31, 2024, and as of June 30, 2023, respectively, with period-to-period changes attributable primarily to earning asset growth. The estimated Total Risk-Based Capital ratio was 13.24% as of June 30, 2024, as compared to the 13.54% and 13.66% reported as of March 31, 2024, and as of June 30, 2023, respectively. The Company's tangible book value per share was $19.20 as of June 30, 2024, up from $19.03 as March 31, 2024 and up from $18.15 as of June 30, 2023. Earning asset growth during the quarter, coupled with a moderately larger unrealized loss position on available-for-sale securities, produced a Tangible Common Equity ratio of 7.00% as of June 30, 2024, as compared to 7.19% as of March 31, 2024 and 7.07% as of June 30, 2023.
DIVIDEND
On June 27, 2024, the Company's Board of Directors declared a second quarter dividend of $0.36 per share. The dividend was paid on July 19, 2024, to shareholders of record as of July 9, 2024.
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 $3.06 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.
4






The First Bancorp
Consolidated Balance Sheets (Unaudited)
In thousands of dollars, except per share dataJune 30, 2024December 31, 2023June 30, 2023
Assets
Cash and due from banks$27,816 $31,942 $25,077 
Interest-bearing deposits in other banks33,133 3,488 3,978 
Securities available-for-sale273,501 282,053 278,355 
Securities held-to-maturity377,522 385,235 389,987 
Restricted equity securities, at cost7,110 3,385 5,227 
Loans2,247,670 2,129,454 2,060,953 
Less allowance for credit losses24,693 24,030 23,465 
Net loans2,222,977 2,105,424 2,037,488 
Accrued interest receivable17,760 11,894 13,598 
Premises and equipment27,929 28,684 27,808 
Other real estate owned208 — 64 
Goodwill30,646 30,646 30,646 
Other assets66,342 63,947 62,587 
Total assets$3,084,944 $2,946,698 $2,874,815 
Liabilities
Demand deposits$270,858 $289,104 $296,950 
NOW deposits609,878 634,543 615,370 
Money market deposits317,133 305,931 208,262 
Savings deposits268,472 299,837 329,651 
Certificates of deposit728,410 646,818 667,552 
Certificates $100,000 to $250,000219,732 251,192 252,720 
Certificates $250,000 and over163,597 172,237 129,357 
Total deposits2,578,080 2,599,662 2,499,862 
Borrowed funds230,620 69,652 114,481 
Other liabilities31,576 34,305 28,469 
Total Liabilities2,840,276 2,703,619 2,642,812 
Shareholders' equity
Common stock111 111 111 
Additional paid-in capital70,942 70,071 69,240 
Retained earnings215,999 211,925 205,539 
Net unrealized loss on securities available-for-sale(43,369)(39,575)(43,781)
Net unrealized loss on securities transferred from available-for-sale to held-to-maturity(51)(56)(59)
Net unrealized gain on cash flow hedging derivative instruments733 300 680 
Net unrealized gain on postretirement costs303 303 273 
Total shareholders' equity244,668 243,079 232,003 
Total liabilities & shareholders' equity$3,084,944 $2,946,698 $2,874,815 
Common Stock
Number of shares authorized18,000,000 18,000,000 18,000,000 
Number of shares issued and outstanding11,139,639 11,098,057 11,081,800 
Book value per common share$21.96 $21.90 $20.94 
Tangible book value per common share$19.20 $19.12 $18.15 

5






The First Bancorp
Consolidated Statements of Income (Unaudited)
In thousands of dollars, except per share dataFor the six months endedFor the quarter ended
June 30, 2024June 30, 2023June 30, 2024March 31, 2024June 30, 2023
Interest income
Interest and fees on loans$62,043 $50,531 $31,839 $30,204 $26,406 
Interest on deposits with other banks134 89 56 78 49 
Interest and dividends on investments9,369 9,478 4,663 4,706 4,729 
     Total interest income71,546 60,098 36,558 34,988 31,184 
Interest expense
Interest on deposits38,993 25,392 19,816 19,177 14,475 
Interest on borrowed funds2,598 1,306 1,667 931 784 
     Total interest expense41,591 26,698 21,483 20,108 15,259 
Net interest income29,955 33,400 15,075 14,880 15,925 
Provision (reduction) for credit losses(1)701 512 (513)151 
Net interest income after provision for credit losses29,956 32,699 14,563 15,393 15,774 
Non-interest income
Investment management and fiduciary income2,457 2,355 1,269 1,188 1,209 
Service charges on deposit accounts1,041 934 542 499 497 
Mortgage origination and servicing income319 387 189 130 195 
Debit card income2,519 2,476 1,333 1,186 1,291 
Other operating income1,461 1,287 824 637 678 
     Total non-interest income7,797 7,439 4,157 3,640 3,870 
Non-interest expense
Salaries and employee benefits11,642 10,897 5,585 6,057 5,177 
Occupancy expense1,709 1,710 843 866 842 
Furniture and equipment expense2,766 2,606 1,377 1,389 1,303 
FDIC insurance premiums1,126 878 562 564 534 
Amortization of identified intangibles13 13 6 7 6 
Other operating expense5,755 5,461 2,877 2,878 2,853 
     Total non-interest expense23,011 21,565 11,250 11,761 10,715 
Income before income taxes14,742 18,573 7,470 7,272 8,929 
Applicable income taxes2,550 3,208 1,299 1,251 1,535 
Net Income$12,192 $15,365 $6,171 $6,021 $7,394 
Basic earnings per share$1.104 $1.397 $0.559 $0.546 $0.673 
Diluted earnings per share$1.095 $1.387 $0.554 $0.541 $0.668 



6






The First Bancorp
Selected Financial Data (Unaudited)
   
Dollars in thousands, except for per share amountsAs of and for the six months endedAs of and for the quarter ended
June 30, 2024June 30, 2023June 30, 2024March 31, 2024June 30, 2023
Summary of Operations
Interest Income$71,546 $60,098 $36,558 $34,988 $31,184 
Interest Expense41,591 26,698 21,483 20,108 15,259 
Net Interest Income29,955 33,400 15,075 14,880 15,925 
Provision (reduction) for Credit Losses(1)701 512 (513)151 
Non-Interest Income7,797 7,439 4,157 3,640 3,870 
Non-Interest Expense23,011 21,565 11,250 11,761 10,715 
Net Income12,192 15,365 6,171 6,021 7,394 
Per Common Share Data
Basic Earnings per Share$1.104 $1.397 $0.559 $0.546 $0.673 
Diluted Earnings per Share1.095 1.387 0.554 0.541 0.668 
Cash Dividends Declared0.710 0.690 0.360 0.350 0.350 
Book Value per Common Share21.96 20.94 21.96 21.80 20.94 
Tangible Book Value per Common Share19.20 18.15 19.20 19.03 18.15 
Market Value24.85 24.34 24.85 24.64 24.34 
Financial Ratios
Return on Average Equity1
10.04 %13.17 %10.16 %9.92 %12.73 %
Return on Average Tangible Common Equity1
11.49 %15.16 %11.63 %11.36 %14.67 %
Return on Average Assets1
0.82 %1.10 %0.82 %0.82 %1.04 %
Average Equity to Average Assets8.18 %8.37 %8.10 %8.26 %8.20 %
Average Tangible Equity to Average Assets7.15 %7.28 %7.08 %7.22 %7.11 %
Net Interest Margin Tax-Equivalent1
2.21 %2.62 %2.21 %2.22 %2.46 %
Dividend Payout Ratio64.31 %49.29 %64.40 %63.64 %52.24 %
Allowance for Credit Losses/Total Loans1.10 %1.14 %1.10 %1.11 %1.14 %
Non-Performing Loans to Total Loans0.11 %0.08 %0.11 %0.12 %0.08 %
Non-Performing Assets to Total Assets0.09 %0.06 %0.09 %0.09 %0.06 %
Efficiency Ratio58.70 %51.10 %56.35 %61.15 %52.27 %
At Period End
Total Assets$3,084,944 $2,874,815 $3,084,944 $2,978,170 $2,874,815 
Total Loans2,247,670 2,060,953 2,247,670 2,173,746 2,060,953 
Total Investment Securities658,133 673,569 658,133 659,837 673,569 
Total Deposits2,578,080 2,499,862 2,578,080 2,548,988 2,499,862 
Total Shareholders' Equity244,668 232,003 244,668 242,624 232,003 
1Annualized using a 366-day basis for 2024 and a 365-day basis for 2023.


7






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 six months endedFor the quarters ended
In thousands of dollarsJune 30, 2024June 30, 2023June 30, 2024March 31, 2024June 30, 2023
Net interest income as presented$29,955 $33,400 $15,075 $14,880 $15,925 
Effect of tax-exempt income1,355 1,280 686 $669 661 
Net interest income, tax equivalent$31,310 $34,680 $15,761 $15,549 $16,586 
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 provision for credit losses on securities from non-interest expenses, excludes securities gains from non-interest income, and adds the tax-
8






equivalent adjustment to net interest income. The following table provides a reconciliation between the GAAP and non-GAAP efficiency ratio:
 For the six months endedFor the quarters ended
In thousands of dollarsJune 30, 2024June 30, 2023June 30, 2024March 31, 2024June 30, 2023
Non-interest expense, as presented$23,011 $21,565 $11,250 $11,761 $10,715 
Net interest income, as presented29,955 33,400 15,075 14,880 15,925 
Effect of tax-exempt interest income1,355 1,280 686 669 661 
Non-interest income, as presented7,797 7,439 4,157 3,640 3,870 
Effect of non-interest tax-exempt income91 86 45 45 43 
Adjusted net interest income plus non-interest income$39,198 $42,205 $19,963 $19,234 $20,499 
Non-GAAP efficiency ratio58.70 %51.10 %56.35 %61.15 %52.27 %
GAAP efficiency ratio60.95 %52.80 %58.50 %63.50 %54.13 %
The Company presents certain information based upon tangible common equity instead of total 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. GAAP:
 For the six months endedFor the quarters ended
In thousands of dollarsJune 30, 2024June 30, 2023June 30, 2024March 31, 2024June 30, 2023
Average shareholders' equity as presented$244,202 $235,242 $244,321 $244,083 $232,991 
Less intangible assets(30,824)(30,850)(30,827)(30,827)(30,853)
Tangible average shareholders' equity$213,378 $204,392 $213,494 $213,256 $202,138 
To provide period-to-period comparison of operating results prior to consideration of credit loss provision and income taxes, the non-GAAP measure of PTPP Net Income is presented. The following table provides a reconciliation to Net Income:
For the six months endedFor the quarters ended
In thousands of dollarsJune 30, 2024June 30, 2023June 30, 2024March 31, 2024June 30, 2023
Net Income, as presented$12,192 $15,365 $6,171 $6,021 $7,394 
Add: provision (reduction) for credit losses(1)701 512 (513)151 
Add: income taxes2,550 3,208 1,299 1,251 1,535 
Pre-Tax, pre-provision net income$14,741 $19,274 $7,982 $6,759 $9,080 
9






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
Richard M. Elder, EVP, Chief Financial Officer
207-563-3195
rick.elder@thefirst.com

10