FIRST BANCORP 
By TROY, N.C., Jan. 31, 2012 /PRNewswire/ -- First Bancorp (NASDAQ - FBNC), the parent company of First Bank, announced today net income available to common shareholders of $0.2 million, or $0.01 per diluted common share, for the three months ended December 31, 2011 compared to a net loss available to common shareholders of $3.3 million, or ($0.19) per diluted common share, for the same period in 2010. For the year ended December 31, 2011, net income available to common shareholders amounted to $7.5 million, or $0.44 per diluted common share, compared to $5.9 million, or $0.35 per diluted common share, for the year ended December 31, 2010.
In each of the fourth quarters of 2011 and 2010, the Company experienced significant write-downs and losses associated with loans and foreclosed properties that were assumed in two failed bank acquisitions. The amounts of the write-downs and losses were less in 2011 than in 2010, but continued to significantly impact the Company's earnings. The Company obtains annual updates of appraisal values for a significant amount of its collateral dependent problem loans and foreclosed properties in the fourth quarter of the calendar year. The vast majority of these losses related to the Company's June 2009 failed bank acquisition of Cooperative Bank.
The following significant factors also affect the comparability of the full year 2011 and 2010 results:
-- In the first quarter of 2011, the Company realized a $10.2 million
bargain purchase gain related to the acquisition of The Bank of
Asheville in Asheville, North Carolina. This gain resulted from the
difference between the purchase price and the acquisition-date fair
values of the acquired assets and liabilities. The after-tax impact of
this gain was $6.2 million, or $0.37 per diluted common share.
-- In the third quarter of 2011, the Company recorded $2.3 million of
accelerated accretion of the discount remaining on the preferred stock
that was redeemed during the quarter. This stock was originally issued
to the U.S. Treasury in January 2009 as part of the program known as
TARP. When this preferred stock was redeemed, the remaining discount
that was recorded upon the issuance of the stock, which had been on a
five year accretion schedule, was immediately accreted as a reduction to
net income available to common shareholders. Total discount accretion
of the preferred stock in 2011 was $2.9 million, or $0.17 per diluted
common share. As of December 31, 2011, there are no remaining preferred
stock discounts on the Company's balance sheet.
Note Regarding Components of Earnings
In addition to the gain related to The Bank of Asheville acquisition, the Company's results of operation are significantly affected by the on-going accounting for the two FDIC-assisted failed bank acquisitions that the Company has completed. In the discussion below, 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.
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% due to the corresponding adjustments made to the indemnification asset.
Net Interest Income and Net Interest Margin
Net interest income for the fourth quarter of 2011 amounted to $31.9 million, a decrease of $1.7 million, or 4.9%, from the $33.6 million recorded in the fourth quarter of 2010. Net interest income for the year ended December 31, 2011 amounted to $132.2 million, an increase of $4.8 million, or 3.8%, from the $127.4 million recorded in the comparable period of 2010.
The variances in net interest income for both periods were primarily caused by fluctuations in the amounts of discount accretion on loans purchased in failed bank acquisitions recognized during the respective periods. Loan discount accretion amounted to $1.7 million in the fourth quarter of 2011 compared to $3.2 million in the fourth quarter of 2010, a decline of $1.5 million. Loan discount accretion amounted to $11.6 million for full year 2011 compared to $7.6 million in 2010, an increase of $4.0 million. As previously discussed, the impact of the changes in discount accretion on pretax income is only 20% of the gross amount of the change. See page 5 of the Financial Summary for a table that presents the impact of the purchase accounting adjustments, including discount accretion on purchased loans.
The Company's net interest margin (tax-equivalent net interest income divided by average earning assets) for the fourth quarter of 2011 was 4.55% compared to 4.79% for the fourth quarter of 2010. The lower margin was primarily due to the aforementioned decrease in loan discount accretion. For the full year 2011, the Company's net interest margin was 4.72% compared to 4.39% for 2010. The higher margin was due to higher amounts of loan discount accretion, as well as an improvement in funding costs.
Provision for Loan Losses and Asset Quality
The Company's provisions for loan losses remain at elevated levels, primarily due to continued high unemployment rates and ongoing declines in property values in its market area that negatively impact collateral dependent real estate loans. The Company's provision for loan losses for non-covered loans amounted to $6.9 million in the fourth quarter of 2011 compared to $9.6 million in the fourth quarter of 2010. For the year ended December 31, 2011, the provision for loan losses for non-covered loans was $28.5 million compared to $33.6 million for the comparable period of 2010. The lower provisions in 2011 are primarily due to stabilization in overall loan quality and lower levels of non-covered nonperforming loans.
The Company's provision for loan losses for covered loans amounted to $3.0 million and $12.8 million for the three and twelve months ended December 31, 2011, respectively, compared to $20.9 million recorded for both the three and twelve months ended December 31, 2010. The lower provisions in 2011 were due to declines in covered nonperforming loans resulting from the resolution of these loans through a combination of charge-offs and foreclosures. All of the provisions for loan losses on covered loans in 2010 and most of the provisions in 2011 relate to loans assumed in the Company's June 2009 acquisition of Cooperative Bank. As previously discussed, the provision for loan losses related to covered loans is offset by an 80% increase to the FDIC indemnification asset, which increases noninterest income.
Total non-covered nonperforming assets have remained fairly stable over the past five quarter ends, ranging from $116 million to $122 million, or approximately 4.3% of total non-covered assets. Covered nonperforming assets have generally declined over that same period, amounting to $141 million at December 31, 2011 compared to $168 million at December 31, 2010.
Noninterest Income
Total noninterest income was $3.4 million in the fourth quarter of 2011 compared to $14.9 million for the fourth quarter of 2010. For the years ended December 31, 2011 and 2010, the Company recorded noninterest income of $26.2 million and $29.1 million, respectively. The decline in noninterest income for both periods in 2011 is due to lower amounts of indemnification asset income recorded. As previously discussed, when the Company anticipates receiving additional amounts from the FDIC because of new losses identified in its covered loan and foreclosed property portfolios, the Company records indemnification asset income for 80% of the expected loss. In 2011, fewer new losses were identified compared to 2010, and thus less indemnification asset income was recorded.
Within noninterest income, service charges on deposits declined for the year ended December 31, 2011, amounting to $12.0 million in 2011 compared to $12.3 million in 2010. This decline was primarily attributable to lower overdraft fees, which began declining in the second half of 2010 partially as a result of new regulations that took effect in the third quarter of 2010 that limit the Company's ability to charge overdraft fees. Service charges on deposit accounts recorded in the fourth quarter of 2011 amount to $3.0 million, or approximately $0.3 million higher than they were in the fourth quarter of 2010. Revenue that was lost in 2010 was substantially replaced by new fees on deposit accounts that took effect April 1, 2011.
Other service charges, commissions and fees amounted to $2.0 million in the fourth quarter of 2011 compared to $1.6 million in the fourth quarter of 2010. For the twelve months ended December 31, 2011, this line item totaled $8.1 million compared to $6.5 million in the comparable period of 2010. The increases in 2011 are primarily attributable to increased debit card usage by the Company's customers. The Company earns a small fee each time its customers make a debit card transaction.
The Company continues to experience losses and write-downs on its foreclosed properties due to declining property values in its market area. For the fourth quarter of 2011, these losses amounted to $11.8 million for covered properties compared to $22.7 million in the fourth quarter of 2010. For the year ended December 31 2011, losses on covered properties amounted to $24.5 million compared to $34.5 million for the same period in 2010.
Losses on non-covered foreclosed properties amounted to $0.8 million for the fourth quarter of 2011 compared to $0.9 million in 2010. For the twelve months ended December 31, 2011, losses on non-covered foreclosed properties amounted to $3.4 million compared to $1.0 million for the comparable period of 2010.
As previously discussed, indemnification asset income is recorded to reflect additional amounts expected to be received from the FDIC due to covered loan and foreclosed property losses arising during the period. For the fourth quarter of 2011, indemnification asset income totaled $10.0 million compared to $32.3 million the fourth quarter of 2010. For the year ended December 31, 2011, indemnification asset income amounted to $20.5 million compared to $41.8 million for the same period of 2010.
As previously discussed, in the first quarter of 2011, the Company recorded a $10.2 million bargain purchase gain related to the acquisition of The Bank of Asheville.
Noninterest Expenses
Noninterest expenses amounted to $24.2 million in the fourth quarter of 2011, a 9.9% increase over the $22.0 million recorded in the same period of 2010. Noninterest expenses for the twelve months ended December 31, 2011 amounted to $96.1 million, a 10.5% increase from the $87.0 million recorded in 2010.
Personnel expense increased in 2011 due to employees joining the Company in The Bank of Asheville acquisition, as well as higher employee medical expense due to higher claims. Also, the Company has progressively built its infrastructure to manage increased compliance burdens, collection activities and overall growth of the Company that has generally resulted in higher expenses across all categories.
Two of the largest overhead expenses for the Company are collection expenses and FDIC insurance expense. Collection expenses on non-covered assets amounted to $0.9 million and $3.5 million for the three and twelve months ended December 31, 2011, respectively, compared to $0.7 million and $2.1 million for the comparable periods in 2010. Collection expenses on covered assets (net of FDIC reimbursement) were approximately the same in 2011 as they were in 2010, amounting to approximately $1.0 million for the fourth quarters of 2011 and 2010 and $2.9 million for the full years of 2011 and 2010.
FDIC insurance expense amounted to $0.7 million and $3.1 million for the three and twelve months ended December 31, 2011, respectively, compared to $1.1 million and $4.4 million for the comparable periods in 2010. The decreases in FDIC insurance expense in 2011 were due to a change in the FDIC's assessment methodology effective April 1, 2011 that was favorable for the Company.
There were no individually significant unusual items of expense in the fourth quarter of 2011. For the full year 2011, the Company experienced a fraud loss that amounted to $1.0 million and merger expenses that amounted to $0.6 million.
Balance Sheet and Capital
Total assets at December 31, 2011 amounted to $3.3 billion, a 0.4% increase from a year earlier. Total loans at December 31, 2011 amounted to $2.4 billion, a 1.0% decrease from a year earlier, and total deposits amounted to $2.8 billion at December 31, 2011, a 3.9% increase from a year earlier.
Since the onset of the recession, the Company has generally experienced declines in loans and deposits. Normal loan paydowns and loan foreclosures have exceeded new loan growth, which has provided the liquidity to lessen reliance on high cost deposits. However, for the past two quarters this trend has reversed and the Company has experienced sequential growth in its non-covered loan portfolio, which increased $18 million in the third quarter of 2011 and $10 million in the fourth quarter of 2011. The Company is actively pursuing lending opportunities in order to improve its asset yields, as well as to potentially decrease the dividend rate on its preferred stock, as discussed in the following paragraph.
In September 2011, the Company issued $63.5 million in preferred stock to the U.S. Treasury as part of the Company's participation in the Small Business Lending Fund ("SBLF"). The goal of the SBLF is to incentivize healthy banks to make loans to small businesses. Depending on our success in making small business loans, the dividend rate on the preferred stock could range from 5% to as low as 1% for several years. For the first quarter of 2012, the Company expects to pay a dividend rate of 4.8%.
The Company remains well-capitalized by all regulatory standards, with a Total Risk-Based Capital Ratio of 16.72% compared to the 10.00% minimum to be considered well-capitalized. The Company's tangible common equity to tangible assets ratio was 6.58% at December 31, 2011, an increase of six basis points from a year earlier. The Company's equity was negatively impacted in the fourth quarter of 2011 by a $4.8 million increase in accumulated other comprehensive loss that was caused by an increase in the Company's pension liability. The increase in the pension liability was due to the impact of lower interest rates on the actuarial calculations involved in determining the liability.
Comments of the President and Other Business Matters
Jerry L. Ocheltree, President and CEO of First Bancorp, commented on today's report, "Considering the economic challenges faced by our market areas in 2011, I am pleased to report net income for the year of approximately $7.5 million. Also, in the last half of 2011, we experienced almost $30 million of growth in our legacy loan portfolio. We are hopeful that this growth continues. First Bancorp remains very strong financially, and we are doing everything we can to improve the economy by lending to qualified borrowers. In addition, we continue to provide free checking account options and free debit cards to our customers, which I know are appreciated."
Mr. Ocheltree noted the following other corporate developments:
-- On December 5, 2011, the Wilmington, North Carolina Hanover Center
branch re-opened after extensive renovations.
-- On March 5, 2012, the Kill Devil Hills, North Carolina branch located at
2007 S. Croatan Highway will re-open after extensive renovations. The
temporary location at 5000 S. Croatan Highway will close on that same
date.
-- The Company has received regulatory approvals to open a branch in Salem,
Virginia and to relocate its branch in Fort Chiswell, Virginia. Both
are expected to occur in the spring of 2012.
-- On October 24, 2011, the Company reported that it had reached an
agreement to purchase eleven coastal branches from Waccamaw Bank,
headquartered in Whiteville, North Carolina. The application for
regulatory approval for this transaction has been submitted and is
pending.
-- On December 13, 2011, the Company announced a quarterly cash dividend of
$0.08 cents per share payable on January 25, 2012 to shareholders of
record on December 31, 2011. This is the same dividend rate as the
Company declared in the fourth quarter of 2010.
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 now operates 97 branches, with 82 branches operating in North Carolina, 9 branches in South Carolina (Cheraw, Dillon, Florence, Latta, Jefferson, and Little River), and 6 branches in Virginia (Abingdon, Christiansburg, 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 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.
First Bancorp and Subsidiaries
==============================
Financial Summary - page 1
==========================
Three Months Ended
------------------ Percent
December 31,
------------
($ in thousands except
per share data -
unaudited) 2011 2010 Change
---------------------- ---- ---- ------
INCOME STATEMENT
Interest income
---------------
Interest and fees on
loans $35,181 38,568
Interest on investment
securities 1,865 1,733
Other interest income 136 123
--- ---
Total interest income 37,182 40,424 (8.0%)
------ ------
Interest expense
----------------
Interest on deposits 4,667 6,454
Other, primarily
borrowings 595 400
--- ---
Total interest expense 5,262 6,854 (23.2%)
----- -----
Net interest income 31,920 33,570 (4.9%)
------ ------
Provision for loan
losses - non-covered
loans 6,907 9,629 (28.3%)
Provision for loan
losses - covered loans 2,971 20,916 (85.8%)
----- ------
Total provision for loan
losses 9,878 30,545 (67.7%)
----- ------
Net interest income
after provision for
loan losses 22,042 3,025 628.7%
------ -----
Noninterest income
------------------
Service charges on
deposit accounts 2,996 2,727
Other service charges,
commissions, and fees 2,042 1,627
Fees from presold
mortgages 500 597
Commissions from
financial product sales 365 389
Foreclosed property
losses and write-downs
- covered (11,799) (22,697)
Foreclosed property
losses and write-downs
- non-covered (812) (876)
Indemnification asset
income, net 10,026 32,344
Securities gains - 1
Other gains (losses) 105 806
--- ---
Total noninterest income 3,423 14,918 (77.1%)
----- ------
Noninterest expenses
--------------------
Personnel expense 12,811 11,557
Occupancy and equipment
expense 2,695 2,472
Intangibles amortization 226 220
Merger expenses 30 -
Other operating expenses 8,430 7,759
----- -----
Total noninterest
expenses 24,192 22,008 9.9%
------ ------
Income (loss) before
income taxes 1,273 (4,065) n/m
Income taxes (benefit) 289 (1,820) n/m
--- ------
Net income (loss) 984 (2,245) n/m
Preferred stock
dividends (794) (812)
Accretion of preferred
stock discount - (215)
--- ----
Net income (loss)
available to common
shareholders $190 (3,272) n/m
==== ======
Earnings (loss) per
common share - basic $0.01 (0.19) n/m
Earnings (loss) per
common share - diluted 0.01 (0.19) n/m
ADDITIONAL INCOME STATEMENT
INFORMATION
---------------------------
Net interest income, as
reported $31,920 33,570
Tax-equivalent
adjustment (1) 394 361
--- ---
Net interest income,
tax-equivalent $32,314 33,931 (4.8%)
======= ======
(1) This amount reflects the tax benefit that the Company
receives related to its tax-exempt loans and securities,
which carry interest rates lower than similar taxable
investments due to their tax-exempt status. This amount
has been computed assuming a 39% tax rate and is reduced by
the related nondeductible portion of interest expense.
First Bancorp and Subsidiaries
==============================
Financial Summary - page 2
==========================
Twelve Months Ended
December 31, Percent
------------
($ in thousands except per share
data -unaudited) 2011 2010 Change
-------------------------------- ---- ---- ------
INCOME STATEMENT
Interest income
---------------
Interest and fees on loans $147,652 151,292
Interest on investment
securities 7,680 7,383
Other interest income 436 586
--- ---
Total interest income 155,768 159,261 (2.2%)
------- -------
Interest expense
----------------
Interest on deposits 21,351 29,930
Other, primarily borrowings 2,214 1,977
----- -----
Total interest expense 23,565 31,907 (26.1%)
------ ------
Net interest income 132,203 127,354 3.8%
------- -------
Provision for loan losses - non-
covered 28,525 33,646 (15.2%)
Provision for loan losses -
covered 12,776 20,916 (38.9%)
------ ------
Total provision for loan losses 41,301 54,562 (24.3%)
------ ------
Net interest income after
provision for loan losses 90,902 72,792 24.9%
------ ------
Noninterest income
------------------
Service charges on deposit
accounts 11,981 12,335
Other service charges,
commissions, and fees 8,067 6,507
Fees from presold mortgages 1,609 1,813
Commissions from financial
product sales 1,512 1,476
Gain from acquisition 10,196 -
Foreclosed property losses and
write-downs - covered (24,492) (34,527)
Foreclosed property losses and
write-downs - non-covered (3,355) (984)
Indemnification asset income,
net 20,481 41,808
Securities gains 74 26
Other gains (losses) 143 652
--- ---
Total noninterest income 26,216 29,106 (9.9%)
------ ------
Noninterest expenses
--------------------
Personnel expense 51,438 45,290
Occupancy and equipment expense 10,900 11,126
Intangibles amortization 902 874
Merger expenses 636 -
Other operating expenses 32,230 29,666
------ ------
Total noninterest expenses 96,106 86,956 10.5%
------ ------
Income before income taxes 21,012 14,942 40.6%
Income taxes 7,370 4,960 48.6%
----- -----
Net income $13,642 9,982 36.7%
Preferred stock dividends (3,234) (3,250)
Accretion of preferred stock
discount (2,932) (857)
------ ----
Net income available to common
shareholders $7,476 5,875 27.3%
====== =====
Earnings per share - basic $0.44 0.35 25.7%
Earnings per share - diluted 0.44 0.35 25.7%
ADDITIONAL INCOME STATEMENT INFORMATION
---------------------------------------
Net interest income, as reported $132,203 127,354
Tax-equivalent adjustment (1) 1,556 1,316
----- -----
Net interest income, tax-
equivalent $133,759 128,670 4.0%
======== =======
(1) See footnote 1 on page 1 of Financial Summary for
discussion of tax-equivalent adjustments.
First Bancorp and Subsidiaries
==============================
Financial Summary - page 3
==========================
Twelve Months
Three Months Ended Ended
------------------ --------------
December 31, December 31,
------------ ------------
PERFORMANCE
RATIOS
(annualized) 2011 2010 2011 2010
---- ---- ---- ----
Return on
average
assets
(1) 0.02% (0.40%) 0.23% 0.18%
Return on
average
common
equity
(2) 0.26% (4.48%) 2.59% 2.05%
Net
interest
margin -
tax-
equivalent
(3) 4.55% 4.79% 4.72% 4.39%
Net
charge-
offs to
average
loans -
non-
covered 1.09% 3.10% 1.52% 1.55%
COMMON SHARE DATA
Cash
dividends
declared
- common $0.08 0.08 $0.32 0.32
Stated
book
value -
common 16.66 16.64 16.66 16.64
Tangible
book
value -
common 12.53 12.45 12.53 12.45
Common
shares
outstanding
at end
of
period 16,909,820 16,801,426 16,909,820 16,801,426
Weighted
average
shares
outstanding
- basic 16,893,140 16,795,482 16,856,072 16,764,879
Weighted
average
shares
outstanding
-
diluted 16,920,210 16,823,089 16,883,244 16,793,650
CAPITAL RATIOS
Tangible
equity
to
tangible
assets 8.55% 8.54% 8.55% 8.54%
Tangible
common
equity
to
tangible
assets 6.58% 6.52% 6.58% 6.52%
Tier I
leverage
ratio 10.21% 10.28% 10.21% 10.28%
Tier I
risk-
based
capital
ratio 15.46% 15.31% 15.46% 15.31%
Total
risk-
based
capital
ratio 16.72% 16.57% 16.72% 16.57%
AVERAGE BALANCES ($
in thousands)
Total
assets $3,292,494 3,225,655 $3,315,045 3,326,977
Loans 2,432,568 2,484,684 2,461,995 2,554,401
Earning
assets 2,816,689 2,811,988 2,834,938 2,927,815
Deposits 2,730,422 2,722,162 2,758,022 2,807,161
Interest-
bearing
liabilities 2,577,329 2,543,070 2,606,450 2,655,195
Shareholders'
equity 354,206 354,715 353,588 350,908
(1) Calculated by dividing annualized net income
available to common shareholders by average assets.
(2) Calculated by dividing annualized net income
available to common shareholders by average common
equity.
(3) See footnote 1 on page 1 of Financial Summary
for discussion of tax-equivalent adjustments.
TREND INFORMATION
($ in
thousands
except
per
share
data) For the Three Months Ended
--------------------------
December September December
31, 30, June 30, March 31, 31,
INCOME
STATEMENT --------- ---------- -------- --------- ---------
2011 2011 2011 2011 2010
---- ---- ---- ---- ----
Net
interest
income
- tax-
equivalent
(1) $32,314 33,878 34,868 32,699 33,931
Taxable
equivalent
adjustment
(1) 394 389 388 385 361
Net
interest
income 31,920 33,489 34,480 32,314 33,570
Provision
for
loan
losses
- non-
covered 6,907 6,441 7,607 7,570 9,629
Provision
for
loan
losses
-
covered 2,971 2,705 3,327 3,773 20,916
Noninterest
income 3,423 3,486 5,114 14,193 14,918
Noninterest
expense 24,192 23,958 22,913 25,043 22,008
Income
(loss)
before
income
taxes 1,273 3,871 5,747 10,121 (4,065)
Income
tax
expense
(benefit) 289 1,314 2,021 3,746 (1,820)
Net
income
(loss) 984 2,557 3,726 6,375 (2,245)
Preferred
stock
dividends 794 815 812 813 813
Accretion
of
preferred
stock
discount - 2,474 229 229 214
Net
income
(loss)
available
to
common
shareholders 190 (732) 2,685 5,333 (3,272)
Earnings
(loss)
per
common
share
-
basic 0.01 (0.04) 0.16 0.32 (0.19)
Earnings
(loss)
per
common
share
-
diluted 0.01 (0.04) 0.16 0.32 (0.19)
(1) See footnote 1 on page 1 of Financial Summary for
discussion of tax-equivalent adjustments.
First Bancorp and Subsidiaries
==============================
Financial Summary - page 4
==========================
CONSOLIDATED BALANCE SHEETS
At Dec. At Sept. At Dec.
($ in thousands) 31, 30, 31, One Year
-------- --------- -------- --------
2011 2011 2010 Change
---- ---- ---- ------
Assets
Cash and due from
banks $80,341 75,772 56,821 41.4%
Interest bearing
deposits with
banks 135,826 167,712 155,181 (12.5%)
------- ------- -------
Total cash and cash
equivalents 216,167 243,484 212,002 2.0%
------- ------- -------
Investment
securities 240,614 217,403 235,200 2.3%
Presold mortgages 6,090 3,823 3,962 53.7%
Loans - non-covered 2,069,152 2,058,724 2,083,004 (0.7%)
Loans - covered by
FDIC loss share
agreements 361,234 373,824 371,128 (2.7%)
------- ------- -------
Total loans 2,430,386 2,432,548 2,454,132 (1.0%)
--------- --------- ---------
Allowance for loan
losses - non-
covered (35,610) (34,397) (38,275) (7.0%)
Allowance for loan
losses - covered (5,808) (3,257) (11,155) (47.9%)
------ ------ -------
Total allowance for
loan losses (41,418) (37,654) (49,430) (16.2%)
------- ------- -------
Net loans 2,388,968 2,394,894 2,404,702 (0.7%)
--------- --------- ---------
Premises and
equipment 69,975 69,862 67,741 3.3%
FDIC loss share
receivable 121,677 120,950 123,719 (1.7%)
Intangible assets 69,732 69,958 70,358 (0.9%)
Other real estate
owned - non-
covered 37,023 32,673 21,081 75.6%
Other real estate
owned - covered 85,272 104,785 94,891 (10.1%)
Other assets 54,956 44,866 45,276 21.4%
------ ------ ------
Total assets $3,290,474 3,302,698 3,278,932 0.4%
========== ========= =========
Liabilities
Deposits:
Non-interest
bearing demand $335,833 334,109 292,759 14.7%
NOW accounts 423,452 376,999 292,623 44.7%
Money market
accounts 509,801 502,235 498,312 2.3%
Savings accounts 146,481 146,977 153,325 (4.5%)
Brokered deposits 157,408 157,177 143,554 9.7%
Internet time
deposits 29,902 40,120 46,801 (36.1%)
Other time deposits
> $100,000 575,408 567,347 602,371 (4.5%)
Other time deposits 576,752 604,440 622,768 (7.4%)
------- ------- -------
Total deposits 2,755,037 2,729,404 2,652,513 3.9%
Repurchase
agreements 17,105 60,498 54,460 (68.6%)
Borrowings 133,925 135,759 196,870 (32.0%)
Other liabilities 39,257 25,224 30,486 28.8%
------ ------ ------
Total liabilities 2,945,324 2,950,885 2,934,329 0.4%
--------- --------- ---------
Shareholders' equity
Preferred stock 63,500 63,500 65,000 (2.3%)
Discount on
preferred stock - - (2,932) (100.0%)
Common stock 104,841 105,518 104,207 0.6%
Retained earnings 185,491 186,654 183,413 1.1%
Accumulated other
comprehensive
income (loss) (8,682) (3,859) (5,085) (70.7%)
------ ------ ------
Total shareholders'
equity 345,150 351,813 344,603 0.2%
------- ------- -------
Total liabilities
and shareholders'
equity $3,290,474 3,302,698 3,278,932 0.4%
========== ========= =========
First Bancorp and Subsidiaries
==============================
Financial Summary - page 5
==========================
For the Three Months Ended
--------------------------
December September March December
31, 30, June 30, 31, 31,
YIELD
INFORMATION --------- ---------- -------- ------ ---------
2011 2011 2011 2011 2010
---- ---- ---- ---- ----
Yield
on
loans 5.74% 6.04% 6.24% 5.97% 6.16%
Yield
on
securities
-
tax-
equivalent
(1) 3.95% 4.14% 3.90% 3.87% 4.00%
Yield
on
other
earning
assets 0.34% 0.29% 0.32% 0.29% 0.41%
Yield
on
all
interest
earning
assets 5.29% 5.60% 5.77% 5.54% 5.75%
Rate
on
interest
bearing
deposits 0.77% 0.85% 0.91% 0.99% 1.06%
Rate
on
other
interest
bearing
liabilities 1.27% 1.22% 1.25% 1.24% 1.30%
Rate
on
all
interest
bearing
liabilities 0.81% 0.88% 0.93% 1.00% 1.07%
Total
cost
of
funds 0.72% 0.78% 0.82% 0.89% 0.96%
Net
interest
margin
-
tax-
equivalent
(2) 4.55% 4.79% 4.92% 4.62% 4.79%
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
ACCOUNTING December September June March December
ADJUSTMENTS 31, 30, 30, 31, 31,
--------- ---------- ----- ------ ---------
2011 2011 2011 2011 2010
---- ---- ---- ---- ----
Positive (negative) impact on net interest income
Interest
income -
reduced
by
premium
amortization
on loans $(116) (116) (116) (105) (49)
Interest
income -
increased
by
accretion
of loan
discount
(1) 1,730 3,339 4,014 2,515 3,233
Interest
expense
-
reduced
by
premium
amortization
of
deposits 58 96 130 53 -
Interest
expense
-
reduced
by
premium
amortization
of
borrowings 35 37 37 37 37
--- --- --- --- ---
Impact on
net
interest
income $1,707 3,356 4,065 2,500 3,221
====== ===== ===== ===== =====
(1) Indemnification asset income is reduced by 80% of the
amount of the accretion of loan discount, and therefore
the net effect is that pretax income is positively
impacted by 20% of the amounts in this line item.
==========================================================
First Bancorp and Subsidiaries
==============================
Financial Summary - page 6
==========================
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
ASSET
QUALITY
DATA
($ in
thousands) -------- --------- -------- --------- --------
2011 2011 2011 2011 2010
---- ---- ---- ---- ----
Non-covered
nonperforming
assets
--------------
Nonaccrual
loans $73,566 75,013 71,570 69,250 62,326
Restructured
loans 11,720 11,257 16,893 19,843 33,677
Accruing
loans
> 90
days
past
due - - - - -
--- --- --- --- ---
Total
non-
covered
nonperforming
loans 85,286 86,270 88,463 89,093 96,003
Other
real
estate 37,023 32,673 31,849 26,961 21,081
------ ------ ------ ------ ------
Total
non-
covered
nonperforming
assets $122,309 118,943 120,312 116,054 117,084
======== ======= ======= ======= =======
Covered
nonperforming
assets (1)
--------------
Nonaccrual
loans
(2) $41,472 36,536 37,057 56,862 58,466
Restructured
loans 14,218 16,912 24,325 16,238 14,359
Accruing
loans
> 90
days
past
due - - - - -
--- --- --- --- ---
Total
covered
nonperforming
loans 55,690 53,448 61,382 73,100 72,825
Other
real
estate 85,272 104,785 102,883 95,868 94,891
------ ------- ------- ------ ------
Total
covered
nonperforming
assets $140,962 158,233 164,265 168,968 167,716
======== ======= ======= ======= =======
Total
nonperforming
assets $263,271 277,176 284,577 285,022 284,800
======== ======= ======= ======= =======
Asset Quality
Ratios - All
Assets
-------------
Net
charge-
offs
to
average
loans
-
annualized 1.00% 1.87% 2.22% 2.92% 4.17%
Nonperforming
loans
to
total
loans 5.80% 5.74% 6.14% 6.52% 6.88%
Nonperforming
assets
to
total
assets 8.00% 8.39% 8.54% 8.38% 8.69%
Allowance
for
loan
losses
to
total
loans 1.70% 1.55% 1.64% 1.72% 2.01%
Asset Quality
Ratios - Based
on Non-
covered Assets
only
---------------
Net
charge-
offs
to
average
non-
covered
loans
-
annualized 1.09% 1.26% 1.74% 1.97% 3.10%
Non-
covered
nonperforming
loans
to
non-
covered
loans 4.12% 4.19% 4.33% 4.35% 4.61%
Non-
covered
nonperforming
assets
to
total
non-
covered
assets 4.30% 4.21% 4.25% 4.05% 4.16%
Allowance
for
loan
losses
to
non-
covered
loans 1.72% 1.67% 1.69% 1.75% 1.84%
(1) Covered nonperforming assets consist of assets
that are included in loss-share agreements with the
FDIC.
(2) At December 31, 2011, the contractual balance of
the nonaccrual loans covered by the FDIC loss share
agreements was $69.0 million.
SOURCE First Bancorp
