News Release
| For Immediate Release: | For More Information, |
| February 8, 2010 | Contact: Jerry L. Ocheltree |
| 910-576-6171 |
First Bancorp Reports
Fourth Quarter and Annual Earnings
TROY, N.C. – First Bancorp (NASDAQ - FBNC), the parent company of First Bank, announced today fourth quarter net income available to common shareholders of $4.3 million compared to $5.0 million reported in the fourth quarter of 2008. Earnings per diluted common share were $0.25 in the fourth quarter of 2009 compared to $0.30 in the fourth quarter of 2008. For the year ended December 31, 2009, the Company reported net income available to common shareholders of $56.3 million compared to $22.0 million reported for 2008. Earnings per diluted common share were $3.37 for the year ended December 31, 2009 compared to $1.37 for 2008.
Several significant factors affect the comparability of the 2009 and 2008 results, including the following:
| · | In the second quarter of 2009, the Company realized a $67.9 million gain related to the acquisition of Cooperative Bank in Wilmington, North Carolina. This gain resulted from the difference between the purchase price and the acquisition-date fair value of the acquired assets and liabilities. The after-tax impact of this gain was $41.1 million, or $2.46 per diluted common share. |
| · | The Company recorded acquisition related expenses related to Cooperative Bank totaling $1,343,000, consisting primarily of professional fees. The after-tax impact of these expenses was $813,000 (or $0.05 per diluted common share). |
| · | The Company recorded approximately $1.0 million in preferred stock dividends in each quarter of 2009 related to the January 12, 2009 issuance of preferred stock to the U.S. Treasury. For the year ended December 31, 2009, total preferred stock dividends of $4.0 million reduced the Company’s net income available to common shareholders. |
| · | FDIC insurance expense amounted to $5.5 million in 2009 compared to $1.2 million in 2008. The after-tax impact of the increase in this expense was $2.6 million (or $0.16 per diluted common share). |
Update on Cooperative Bank Acquisition
On June 19, 2009, First Bank acquired substantially all of the assets and liabilities of Cooperative Bank, which had been closed earlier that day by regulatory authorities. Cooperative Bank operated through twenty-one branches in North Carolina and three branches in South Carolina. In connection with the acquisition, First Bank assumed assets with a book value of $958 million, including $829 million in loans and $706 million in deposits.
1
The loans and foreclosed real estate purchased are covered by a loss share agreement between the FDIC and First Bank which affords First Bank significant loss protection. Under the loss share agreement, the FDIC covers 80% of loan and foreclosed real estate losses up to $303 million and 95% of losses that exceed that amount.
First Bank received a $123 million discount on the assets acquired and paid no deposit premium, which, after applying initial estimates of purchase accounting fair market value adjustments to the acquired assets and assumed deposits, resulted in an original gain of $53.8 million.
During the third and fourth quarters of 2009, the Company obtained third-party appraisals for the majority of Cooperative’s collateral dependent problem loans. Overall, the appraised values were higher than the Company’s original estimates made as of the acquisition date. In addition, subsequent to June 19, the Company received payoffs related to certain loans for which losses had been anticipated. Accordingly, as required by relevant accounting rules, the Company retrospectively adjusted the fair value of the loans acquired for these factors, which resulted in the acquisition gain that was recorded in the second quarter of 2009 increasing by $8.3 million for information determined in the third quarter of 2009 and by an additional $5.8 million for information determined in the fourth quarter of 2009. Thus, the originally stated second quarter of 2009 gain of $53.8 million has been increased to $67.9 million, all on a retroactive basis. The Company continues to obtain more information regarding the fair value of the assets acquired. Fair values are subject to refinement for up to one year after the closing date of the acquisition as information relative to closing date fair values becomes available, and thus the gain could be adjusted again (up or down) in the future during the one year period.
On October 9, 2009, First Bank successfully converted Cooperative’s loan and deposit records to First Bank’s computer system. Also on that day, five branches were consolidated in market areas in which First Bank branches were in close proximity with former Cooperative Bank branches. On December 11, 2009, two additional branches were consolidated with existing First Bank branches.
Balance Sheet and Capital
Total assets at December 31, 2009, including the impact of Cooperative, amounted to $3.5 billion, 28.9% higher than a year earlier. Total loans at December 31, 2009 amounted to $2.7 billion, a 20.0% increase from a year earlier, and total deposits amounted to $2.9 billion at December 31, 2009, a 41.4% increase from a year earlier.
Excluding the effects of the Cooperative acquisition, the Company experienced a general decline in loans and an increase in deposits during 2009. Excluding the impact of Cooperative, loans declined approximately 4% in 2009. The Company continues to originate and renew a significant amount of loans each month, but normal paydowns of loans have exceeded new loan growth. Excluding the impact of Cooperative, the Company experienced deposit growth of approximately 7% in 2009. Additionally, the Company has steadily lessened its reliance on brokered deposits and internet deposits since the Cooperative acquisition. Brokered deposits comprised just 2.6% of total deposits at December 31, 2009, with internet deposits comprising an additional 4.4%.
The combination of lower loans and higher deposits has significantly enhanced the Company’s liquidity during 2009 and lessened its reliance on borrowings. At December 31, 2009, the Company’s cash balances exceeded $350 million, a 56% increase from a year earlier, while borrowings declined by approximately $190 million during the year.
The Company remains well-capitalized by all regulatory standards with a Tier I Leverage Ratio of 9.30%, a Tier I Risk-Based Capital Ratio of 13.90% and a Total Risk-Based Capital Ratio of 15.15%. The Company’s tangible common equity to tangible assets ratio was 5.94% at December 31, 2009. The Company continues to
2
have $65 million in outstanding preferred stock that was issued to the US Treasury in January 2009. The Company has no immediate plans to redeem this stock in light of the challenging economic conditions.
Net Interest Income and Net Interest Margin
Net interest income for the fourth quarter of 2009 amounted to $31.0 million, a 37.9% increase over the fourth quarter of 2008. Net interest income for the year ended December 31, 2009 amounted to $86.9 million, a 13.3% increase from 2008.
The increases in net interest income were primarily due to 1) the higher average balances of loans and deposits previously discussed, and 2) a higher net interest margin.
The Company’s net interest margin (tax-equivalent net interest income divided by average earnings assets) in the fourth quarter of 2009 was 3.92%, a five basis point increase from the 3.87% margin realized in the third quarter of 2009, and a 22 basis point increase from the 3.70% margin realized in the fourth quarter of 2008. The Company’s net interest margin for 2009 was 3.81% compared to 3.74% for 2008. During 2009, there were no changes in the interest rates set by the Federal Reserve, and the Company was able to reprice at lower rates maturing time deposits that had been originated in periods of higher interest rates.
Provision for Loan Losses and Asset Quality
The current economic environment has resulted in an increase in the Company’s loan losses and nonperforming assets, which has led to significantly higher provisions for loan losses. The Company’s provision for loan losses amounted to $6.6 million in the fourth quarter of 2009 compared to $3.4 million in the fourth quarter of 2008. The provision for loan losses for the year ended December 31, 2009 was $20.2 million compared to $10.0 million recorded in 2008.
The increases in the provisions for loan losses are solely attributable to the Company’s “non-covered” loan portfolio, which excludes loans assumed from Cooperative that are subject to the loss share agreement with the FDIC. The Company does not expect to record any significant loan loss provisions in the foreseeable future related to the loan portfolio acquired from Cooperative because these loans were written down to estimated fair market value in connection with the recording of the acquisition.
The Company’s non-covered nonperforming assets at December 31, 2009 amounted to $92 million at December 31, 2009 compared to $66 million at September 30, 2009 and $35 million at December 31, 2008. At December 31, 2009, the ratio of non-covered nonperforming assets to total non-covered assets was 3.10% compared to 2.21% at September 30, 2009, and 1.29% at December 31, 2008.
Within non-covered nonperforming assets, troubled debt restructurings increased from $7 million at September 30, 2009 to $21 million at December 31, 2009. This increase was a result of the Company working with borrowers experiencing financial difficulties by modifying certain loan terms and was also impacted by the Company’s analysis of the Federal Reserve’s October 2009 guidance related to real estate loan workouts, which provided clarification of situations involving borrowers that should be reported as troubled debt restructurings. At December 31, 2009, all of the Company’s troubled debt restructurings were performing in accordance with their restructured terms, with none of them being past due.
The Company’s ratio of annualized net charge-offs to average non-covered loans was 0.69% for the fourth quarter of 2009 compared to 0.38% in the fourth quarter of 2008. For the year ended December 31, 2009, the Company’s ratio of net charge-offs to average non-covered loans was 0.56% compared to 0.24% for 2008.
3
The Company’s nonperforming assets that are covered by FDIC loss share agreements have increased from $91 million at June 30, 2009 to $165 million at December 31, 2009. The Company continues to submit claims to the FDIC on a regular basis and has received total cash reimbursements from the FDIC of approximately $40 million pursuant to the loss-share agreements since the Cooperative acquisition.
Noninterest Income
Total noninterest income was $6.3 million in the fourth quarter of 2009, a 26.1% increase from the $5.0 million recorded in the fourth quarter of 2008, with the increase being attributable to a larger customer base as a result of the Cooperative acquisition and an increase in fees received from presold mortgages. Mortgage refinance activity has increased due to a favorable interest environment.
Noninterest income for the year ended December 31, 2009 amounted to $89.5 million compared to $21.1 million for 2008. The primary reason for the increase was the $67.9 million gain realized from the Cooperative acquisition that occurred in June 2009, as discussed above.
Noninterest Expenses
Noninterest expenses amounted to $22.5 million in the fourth quarter of 2009, a 39.7% increase over the $16.1 million recorded in the same period of 2008. Noninterest expenses for the year ended December 31, 2009 amounted to $78.6 million, a 25.4% increase from the $62.7 million recorded in 2008.
Incremental operating expenses associated with the Cooperative acquisition were the primary reason for the increases in 2009. Additionally, FDIC insurance expense amounted to $1.0 million and $5.5 million for the three and twelve months ended December 31, 2009, compared to $0.3 million and $1.2 million for the comparable periods of 2008, respectively. Included in the $5.5 million in FDIC insurance expense for the year ended December 31, 2009 is $1.6 million related to a special assessment that was levied by the FDIC on all banks in the second quarter of 2009.
In the fourth quarter of 2009, the Company recorded acquisition related expenses related to Cooperative Bank of $261,000 consisting primarily of professional fees. The Company recorded $1.3 million in acquisition related expenses for the year ended December 31, 2009.
The Company’s effective tax rate was approximately 36%-38% for all periods presented.
Comments of the President and Other Business Matters
Jerry L. Ocheltree, President and CEO of First Bancorp, commented on today’s report, “In light of the current economic environment, I am pleased with the solid results we are reporting today. We continue to remain a profitable and sound institution that is well-positioned for the future. During the second half of 2009, we successfully integrated the Cooperative acquisition, and I would like to thank all of our employees for their hard work in continuing to take care of their customers during the transition.”
Mr. Ocheltree noted the following other corporate developments:
| · | On September 14, 2009, the Company reported that it had been recognized for the second year in a row by investment banking firm Sandler O’Neill & Partners, L.P., as one of the top performing small-cap banks in the nation. New York-based Sandler O’Neill is one of the best-known and most highly regarded investment firms specializing in the commercial banking industry. Please contact the Company if you would like a copy of this press release. |
4
| · | First Bank has elected to continue to participate in the FDIC’s Transaction Account Guarantee Program. Under the program, through June 30, 2010, all non-interest bearing transaction accounts are fully guaranteed by the FDIC for the entire amount in the account. Coverage under this program is in addition to and separate from the coverage available under the FDIC’s general deposit insurance rules. |
| · | The Company has received regulatory approval to open a full-service bank branch in Christiansburg, Virginia. Construction of a branch facility has begun and the Company anticipates the opening the branch in the spring of 2010. This will be the Company’s sixth branch in southwestern Virginia. |
| · | On December 11, 2009, First Bank moved into a newly constructed branch office in Leland, North Carolina that was in close proximity to two existing First Bank branches. The two existing branches were closed. |
| · | On December 11, 2009, First Bank closed its bank branch located at Market Commons in Myrtle Beach, South Carolina. Customer accounts were transferred to First Bank’s branch located in Little River, South Carolina. |
| · | On November 18, 2009, the Company announced a quarterly cash dividend of $0.08 cents per share payable on January 25, 2010 to shareholders of record on December 31, 2009. This is the same dividend rate as the Company declared in each of the first three quarters of 2009 and is a decrease from the $0.19 rate paid in the comparable quarter in 2008. The dividend rate was reduced in order to conserve capital in light of current economic conditions. |
| · | There was no stock repurchase activity during 2009. |
First Bancorp is a bank holding company headquartered in Troy, North Carolina with total assets of approximately $3.5 billion. Its principal activity is the ownership and operation of First Bank, a state-chartered community bank that now operates 91 branches, with 77 branches operating in the central piedmont and coastal regions of North Carolina, 9 branches in South Carolina (Cheraw, Dillon, Florence, Latta, Jefferson, and Little River), and 5 branches in Virginia (Abingdon, Dublin, Fort Chiswell, Radford, and Wytheville), where First Bank does business as First Bank of Virginia. First Bank also has a loan production office in 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 statements that could be deemed 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 report on Form 10-K.
5
First Bancorp and Subsidiaries Financial Summary |
Three Months Ended December 31, | Percent | |||||||||||
| ($ in thousands except per share data - unaudited) | 2009 | 2008 | Change | |||||||||
| INCOME STATEMENT | ||||||||||||
| Interest income | ||||||||||||
| Interest and fees on loans | $ | 40,411 | 34,569 | |||||||||
| Interest on investment securities | 1,751 | 1,983 | ||||||||||
| Other interest income | 252 | 81 | ||||||||||
| Total interest income | 42,414 | 36,633 | 15.8 | % | ||||||||
| Interest expense | ||||||||||||
| Interest on deposits | 10,700 | 12,307 | ||||||||||
| Other, primarily borrowings | 681 | 1,817 | ||||||||||
| Total interest expense | 11,381 | 14,124 | (19.4 | %) | ||||||||
| Net interest income | 31,033 | 22,509 | 37.9 | % | ||||||||
| Provision for loan losses | 6,575 | 3,437 | 91.3 | % | ||||||||
Net interest income after provision for loan losses | 24,458 | 19,072 | 28.2 | % | ||||||||
| Noninterest income | ||||||||||||
| Service charges on deposit accounts | 3,819 | 3,387 | ||||||||||
| Other service charges, commissions, and fees | 1,306 | 1,030 | ||||||||||
| Fees from presold mortgages | 658 | 212 | ||||||||||
| Commissions from financial product sales | 360 | 378 | ||||||||||
| Data processing fees | 36 | 27 | ||||||||||
| Securities gains | 9 | - | ||||||||||
| Other gains (losses) | 67 | (73 | ) | |||||||||
| Total noninterest income | 6,255 | 4,961 | 26.1 | % | ||||||||
| Noninterest expenses | ||||||||||||
| Personnel expense | 11,760 | 8,856 | ||||||||||
| Occupancy and equipment expense | 3,143 | 2,132 | ||||||||||
| Intangibles amortization | 216 | 107 | ||||||||||
| Acquisition expenses | 261 | - | ||||||||||
| Other operating expenses | 7,078 | 4,981 | ||||||||||
| Total noninterest expenses | 22,458 | 16,076 | 39.7 | % | ||||||||
| Income before income taxes | 8,255 | 7,957 | 3.7 | % | ||||||||
| Income taxes | 2,987 | 2,956 | 1.0 | % | ||||||||
| Net income | $ | 5,268 | 5,001 | 5.3 | % | |||||||
| Preferred stock dividends and accretion | (1,014 | ) | - | |||||||||
| Net income available to common shareholders | $ | 4,254 | 5,001 | (14.9 | %) | |||||||
| Earnings per common share – basic | $ | 0.25 | 0.30 | (16.7 | %) | |||||||
| Earnings per common share – diluted | 0.25 | 0.30 | (16.7 | %) | ||||||||
| ADDITIONAL INCOME STATEMENT INFORMATION | ||||||||||||
| Net interest income, as reported | $ | 31,033 | 22,509 | |||||||||
| Tax-equivalent adjustment (1) | 247 | 166 | ||||||||||
| Net interest income, tax-equivalent | $ | 31,280 | 22,675 | 37.9 | % | |||||||
| (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. |
6
First Bancorp and Subsidiaries Financial Summary - Page 2 |
Twelve Months Ended December 31, | Percent | |||||||||||
| ($ in thousands except per share data - unaudited) | 2009 | 2008 | Change | |||||||||
| INCOME STATEMENT | ||||||||||||
| Interest income | ||||||||||||
| Interest and fees on loans | $ | 148,007 | 138,878 | |||||||||
| Interest on investment securities | 7,439 | 7,973 | ||||||||||
| Other interest income | 545 | 1,011 | ||||||||||
| Total interest income | 155,991 | 147,862 | 5.5 | % | ||||||||
| Interest expense | ||||||||||||
| Interest on deposits | 45,518 | 53,241 | ||||||||||
| Other, primarily borrowings | 3,377 | 8,062 | ||||||||||
| Total interest expense | 48,895 | 61,303 | (20.2 | %) | ||||||||
| Net interest income | 107,096 | 86,559 | 23.7 | % | ||||||||
| Provision for loan losses | 20,186 | 9,880 | 104.3 | % | ||||||||
Net interest income after provision for loan losses | 86,910 | 76,679 | 13.3 | % | ||||||||
| Noninterest income | ||||||||||||
| Service charges on deposit accounts | 13,854 | 13,535 | ||||||||||
| Other service charges, commissions, and fees | 4,848 | 4,842 | ||||||||||
| Fees from presold mortgages | 1,505 | 869 | ||||||||||
| Commissions from financial product sales | 1,524 | 1,552 | ||||||||||
| Data processing fees | 139 | 167 | ||||||||||
| Gain from acquisition | 67,894 | - | ||||||||||
| Securities gains (losses) | (104 | ) | (14 | ) | ||||||||
| Other gains (losses) | (142 | ) | 156 | |||||||||
| Total noninterest income | 89,518 | 21,107 | 324.1 | % | ||||||||
| Noninterest expenses | ||||||||||||
| Personnel expense | 41,588 | 35,446 | ||||||||||
| Occupancy and equipment expense | 10,405 | 8,280 | ||||||||||
| Intangibles amortization | 630 | 416 | ||||||||||
| Acquisition expenses | 1,343 | - | ||||||||||
| Other operating expenses | 24,585 | 18,519 | ||||||||||
| Total noninterest expenses | 78,551 | 62,661 | 25.4 | % | ||||||||
| Income before income taxes | 97,877 | 35,125 | 178.7 | % | ||||||||
| Income taxes | 37,618 | 13,120 | 186.7 | % | ||||||||
| Net income | $ | 60,259 | 22,005 | 173.8 | % | |||||||
| Preferred stock dividends and accretion | (3,972 | ) | - | |||||||||
| Net income available to common shareholders | $ | 56,287 | 22,005 | 155.8 | % | |||||||
| Earnings per common share - basic | $ | 3.38 | 1.38 | 144.9 | % | |||||||
| Earnings per common share - diluted | 3.37 | 1.37 | 146.0 | % | ||||||||
ADDITIONAL INCOME STATEMENT INFORMATION | ||||||||||||
| Net interest income, as reported | $ | 107,096 | 86,559 | |||||||||
| Tax-equivalent adjustment (1) | 818 | 658 | ||||||||||
| Net interest income, tax-equivalent | $ | 107,914 | 87,217 | 23.7 | % | |||||||
__________________________________________________________________________________________________________
(1) See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments
7
First Bancorp and Subsidiaries Financial Summary - page 3 |
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
PERFORMANCE RATIOS (annualized) | 2009 | 2008 | 2009 | 2008 | ||||||||||||
| Return on average assets (1) | 0.48 | % | 0.76 | % | 1.82 | % | 0.89 | % | ||||||||
| Return on average common equity (2) | 6.15 | % | 8.85 | % | 22.55 | % | 10.44 | % | ||||||||
| Net interest margin - tax equivalent (3) | 3.92 | % | 3.70 | % | 3.81 | % | 3.74 | % | ||||||||
| Efficiency ratio - tax equivalent (3) (4) | 59.83 | % | 58.17 | % | 39.79 | % | 57.85 | % | ||||||||
| Net charge-offs to average non-covered loans | 0.69 | % | 0.38 | % | 0.56 | % | 0.24 | % | ||||||||
| COMMON SHARE DATA | ||||||||||||||||
| Cash dividends declared - common | $ | 0.08 | 0.19 | $ | 0.32 | 0.76 | ||||||||||
| Stated book value - common | 16.62 | 13.27 | 16.62 | 13.27 | ||||||||||||
| Tangible book value - common | 12.37 | 9.18 | 12.37 | 9.18 | ||||||||||||
| Common shares outstanding at end of period | 16,693,157 | 16,573,826 | 16,693,157 | 16,573,826 | ||||||||||||
| Weighted average shares outstanding - basic | 16,685,350 | 16,555,051 | 16,648,822 | 15,980,533 | ||||||||||||
| Weighted average shares outstanding - diluted | 16,723,524 | 16,584,871 | 16,686,880 | 16,027,144 | ||||||||||||
| CAPITAL RATIOS | ||||||||||||||||
| Tangible equity to tangible assets | 7.81 | % | 5.67 | % | 7.81 | % | 5.67 | % | ||||||||
| Tangible common equity to tangible assets | 5.94 | % | 5.67 | % | 5.94 | % | 5.67 | % | ||||||||
| Tier I leverage ratio | 9.30 | % | 8.10 | % | 9.30 | % | 8.10 | % | ||||||||
| Tier I risk-based capital ratio | 13.90 | % | 9.40 | % | 13.90 | % | 9.40 | % | ||||||||
| Total risk-based capital ratio | 15.15 | % | 10.65 | % | 15.15 | % | 10.65 | % | ||||||||
AVERAGE BALANCES ($ in thousands) | ||||||||||||||||
| Total assets | $ | 3,520,632 | 2,602,205 | $ | 3,097,137 | 2,484,296 | ||||||||||
| Loans | 2,685,090 | 2,212,119 | 2,475,045 | 2,117,028 | ||||||||||||
| Earning assets | 3,162,966 | 2,440,535 | 2,833,167 | 2,329,025 | ||||||||||||
| Deposits | 2,913,738 | 2,031,877 | 2,549,709 | 1,985,332 | ||||||||||||
| Interest-bearing liabilities | 2,859,989 | 2,126,035 | 2,497,304 | 2,019,256 | ||||||||||||
| Shareholders’ equity | 339,321 | 224,703 | 313,173 | 210,810 | ||||||||||||
(1) Calculated by dividing annualized net income available to common shareholders by average assets.
(2) Calculated by dividing annualized net income available to common shareholders by average common equity.
(3) See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments.
(4) Calculated by dividing noninterest expense by the sum of tax-equivalent net interest income plus noninterest income.
TREND INFORMATION
| ($ in thousands except per share data) | For the Three Months Ended | |||||||||||||||||||
INCOME STATEMENT | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 | December 31, 2008 | |||||||||||||||
| Net interest income - tax equivalent (1) | $ | 31,280 | 30,731 | 23,630 | 22,273 | 22,675 | ||||||||||||||
| Taxable equivalent adjustment (1) | 247 | 221 | 187 | 163 | 166 | |||||||||||||||
| Net interest income | 31,033 | 30,510 | 23,443 | 22,110 | 22,509 | |||||||||||||||
| Provision for loan losses | 6,575 | 5,200 | 3,926 | 4,485 | 3,437 | |||||||||||||||
| Noninterest income | 6,255 | 5,741 | 72,776 | 4,746 | 4,961 | |||||||||||||||
| Noninterest expense | 22,458 | 20,953 | 19,203 | 15,937 | 16,076 | |||||||||||||||
| Income before income taxes | 8,255 | 10,098 | 73,090 | 6,434 | 7,957 | |||||||||||||||
| Income taxes | 2,987 | 3,716 | 28,562 | 2,353 | 2,956 | |||||||||||||||
| Net income | 5,268 | 6,382 | 44,528 | 4,081 | 5,001 | |||||||||||||||
| Preferred stock dividends and accretion | 1,014 | 995 | 1,022 | 941 | − | |||||||||||||||
| Net income available to common shareholders | 4,254 | 5,387 | 43,506 | 3,140 | 5,001 | |||||||||||||||
| Earnings per common share – basic | 0.25 | 0.32 | 2.62 | 0.19 | 0.30 | |||||||||||||||
| Earnings per common share – diluted | 0.25 | 0.32 | 2.61 | 0.19 | 0.30 | |||||||||||||||
(1) See footnote 1 on page 1 of Financial Summary for discussion of tax-equivalent adjustments.
8
First Bancorp and Subsidiaries Financial Summary - page 4 |
CONSOLIDATED BALANCE SHEETS ($ in thousands) | At Dec. 31, 2009 | At Sept. 30, 2009 | At Dec. 31, 2008 | One Year Change | ||||||||||||
| Assets | ||||||||||||||||
| Cash and due from banks | $ | 60,071 | 43,667 | 88,015 | -31.7 | % | ||||||||||
| Interest bearing deposits with banks | 290,801 | 240,425 | 136,765 | 112.6 | % | |||||||||||
| Total cash and cash equivalents | 350,872 | 284,092 | 224,780 | 56.1 | % | |||||||||||
| Investment securities | 214,168 | 196,607 | 187,183 | 14.4 | % | |||||||||||
| Presold mortgages | 3,967 | 8,420 | 423 | |||||||||||||
| Loans – non-covered | 2,132,843 | 2,147,615 | 2,211,315 | -3.5 | % | |||||||||||
| Loans – covered by FDIC loss share agreement | 520,022 | 578,485 | − | n/m | ||||||||||||
| Total loans | 2,652,865 | 2,726,100 | 2,211,315 | 20.0 | % | |||||||||||
| Allowance for loan losses | (37,343 | ) | (34,444 | ) | (29,256 | ) | 27.6 | % | ||||||||
| Net loans | 2,615,522 | 2,691,656 | 2,182,059 | 19.9 | % | |||||||||||
| Premises and equipment | 54,159 | 52,868 | 52,259 | 3.6 | % | |||||||||||
| FDIC loss share receivable | 143,221 | 187,029 | − | n/m | ||||||||||||
| Intangible assets | 70,948 | 71,165 | 67,780 | 4.7 | % | |||||||||||
| Other assets | 92,499 | 33,657 | 36,083 | 156.4 | % | |||||||||||
| Total assets | $ | 3,545,356 | 3,525,494 | 2,750,567 | 28.9 | % | ||||||||||
| Liabilities | ||||||||||||||||
| Deposits: | ||||||||||||||||
| Non-interest bearing demand | $ | 272,422 | 268,097 | 229,478 | 18.7 | % | ||||||||||
| NOW accounts | 362,366 | 264,267 | 198,775 | 82.3 | % | |||||||||||
| Money market accounts | 496,940 | 477,092 | 340,739 | 45.8 | % | |||||||||||
| Savings accounts | 149,338 | 142,391 | 125,240 | 19.2 | % | |||||||||||
| Brokered time deposits | 76,332 | 122,634 | 78,569 | -2.8 | % | |||||||||||
| Internet time deposits | 128,024 | 158,680 | 5,206 | n/m | ||||||||||||
| Other time deposits > $100,000 | 704,128 | 706,343 | 520,198 | 35.4 | % | |||||||||||
| Other time deposits | 743,558 | 782,136 | 576,586 | 29.0 | % | |||||||||||
| Total deposits | 2,933,108 | 2,921,640 | 2,074,791 | 41.4 | % | |||||||||||
| Repurchase agreements | 64,058 | 58,209 | 61,140 | 4.8 | % | |||||||||||
| Borrowings | 176,811 | 176,927 | 367,275 | -51.9 | % | |||||||||||
| Other liabilities | 28,996 | 32,336 | 27,493 | 5.5 | % | |||||||||||
| Total liabilities | 3,202,973 | 3,189,112 | 2,530,699 | 26.6 | % | |||||||||||
| Shareholders’ equity | ||||||||||||||||
| Preferred stock | 65,000 | 65,000 | − | n/m | ||||||||||||
| Discount on preferred stock | (3,789 | ) | (3,990 | ) | − | n/m | ||||||||||
| Common stock | 98,099 | 97,745 | 96,072 | 2.1 | % | |||||||||||
| Common stock warrants | 4,592 | 4,592 | − | n/m | ||||||||||||
| Retained earnings | 182,908 | 179,988 | 131,952 | 38.6 | % | |||||||||||
| Accumulated other comprehensive income | (4,427 | ) | (6,953 | ) | (8,156 | ) | 45.7 | % | ||||||||
| Total shareholders’ equity | 342,383 | 336,382 | 219,868 | 55.7 | % | |||||||||||
| Total liabilities and shareholders’ equity | $ | 3,545,356 | 3,525,494 | 2,750,567 | 28.9 | % | ||||||||||
9
First Bancorp and Subsidiaries Financial Summary - page 5 |
| For the Three Months Ended | ||||||||||||||||||||
YIELD INFORMATION | December 31, 2009 | September 30, 2009 | June 30, 2009 | March 31, 2009 | December 31, 2008 | |||||||||||||||
| Yield on loans | 5.97 | % | 6.01 | % | 6.00 | % | 5.99 | % | 6.22 | % | ||||||||||
| Yield on securities - tax equivalent (1) | 3.97 | % | 4.23 | % | 4.46 | % | 4.80 | % | 4.63 | % | ||||||||||
| Yield on other earning assets | 0.36 | % | 0.34 | % | 0.26 | % | 0.22 | % | 0.74 | % | ||||||||||
| Yield on all interest earning assets | 5.35 | % | 5.45 | % | 5.65 | % | 5.74 | % | 6.00 | % | ||||||||||
Rate on interest bearing deposits | 1.61 | % | 1.82 | % | 2.24 | % | 2.47 | % | 2.72 | % | ||||||||||
| Rate on other interest bearing liabilities | 1.17 | % | 1.36 | % | 2.40 | % | 1.97 | % | 2.22 | % | ||||||||||
| Rate on all interest bearing liabilities | 1.58 | % | 1.78 | % | 2.25 | % | 2.42 | % | 2.64 | % | ||||||||||
Interest rate spread - tax equivalent (1) | 3.77 | % | 3.72 | % | 3.40 | % | 3.32 | % | 3.36 | % | ||||||||||
| Net interest margin - tax equivalent (2) | 3.92 | % | 3.87 | % | 3.74 | % | 3.68 | % | 3.70 | % | ||||||||||
Average prime rate | 3.25 | % | 3.25 | % | 3.25 | % | 3.25 | % | 4.06 | % | ||||||||||
| ___________________________________________________________________________________________________________________________ |
(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.
ASSET QUALITY DATA ($ in thousands) | Dec. 31, 2009 | Sept. 30, 2009 | June 30, 2009 | March 31, 2009 | Dec. 31, 2008 | |||||||||||||||
| Nonaccrual loans – non-covered | $ | 62,206 | 51,015 | 43,210 | 35,296 | 26,600 | ||||||||||||||
| Nonaccrual loans – covered by FDIC loss share (1) | 117,916 | 122,308 | 78,413 | - | - | |||||||||||||||
| Restructured loans – non-covered | 21,283 | 6,963 | 3,995 | 3,995 | 3,995 | |||||||||||||||
| Accruing loans > 90 days past due | - | - | - | - | - | |||||||||||||||
| Total nonperforming loans | 201,405 | 180,286 | 125,618 | 39,291 | 30,595 | |||||||||||||||
| Other real estate – non-covered | 8,793 | 7,549 | 6,032 | 5,428 | 4,832 | |||||||||||||||
| Other real estate – covered by FDIC loss share | 47,430 | 10,439 | 12,415 | - | - | |||||||||||||||
| Total nonperforming assets | $ | 257,628 | 198,274 | 144,065 | 44,719 | 35,427 | ||||||||||||||
| Total nonperforming assets – non-covered | $ | 92,282 | 65,527 | 53,237 | 44,719 | 35,427 | ||||||||||||||
| Asset Quality Ratios – All Assets | ||||||||||||||||||||
| Net charge-offs to average loans - annualized | 0.54 | % | 0.57 | % | 0.47 | % | 0.34 | % | 0.38 | % | ||||||||||
| Nonperforming loans to total loans | 7.59 | % | 6.68 | % | 4.58 | % | 1.80 | % | 1.38 | % | ||||||||||
| Nonperforming assets to total assets | 7.27 | % | 5.63 | % | 4.09 | % | 1.66 | % | 1.29 | % | ||||||||||
| Allowance for loan losses to total loans | 1.41 | % | 1.28 | % | 1.21 | % | 1.46 | % | 1.32 | % | ||||||||||
| Allowance for loan losses to nonperforming loans | 18.54 | % | 19.11 | % | 26.42 | % | 81.22 | % | 95.62 | % | ||||||||||
| Asset Quality Ratios – Based on Non-covered Assets only | ||||||||||||||||||||
| Net charge-offs to average non-covered loans - annualized | 0.69 | % | 0.72 | % | 0.49 | % | 0.34 | % | 0.38 | % | ||||||||||
| Non-covered nonperforming loans to non-covered loans | 3.91 | % | 2.70 | % | 2.17 | % | 1.80 | % | 1.38 | % | ||||||||||
| Non-covered nonperforming assets to total non-covered assets | 3.10 | % | 2.21 | % | 1.81 | % | 1.66 | % | 1.29 | % | ||||||||||
| Allowance for loan losses to non-covered loans | 1.75 | % | 1.60 | % | 1.53 | % | 1.46 | % | 1.32 | % | ||||||||||
| Allowance for loan losses to non-covered nonperforming loans | 44.73 | % | 59.41 | % | 70.30 | % | 81.22 | % | 95.62 | % | ||||||||||
(1) At December 31, 2009, the contractual balance of the nonaccrual loans covered by the FDIC loss share agreement was $192.1 million.
10