FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the quarterly period ended March 31, 2025 Commission File Number 0-15572 FIRST BANCORP (Exact Name of Registrant as Specified in its Charter) | North Carolina | | | 56-1421916 | | --- | --- | --- | --- | | (State or Other Jurisdiction of Incorporation or Organization) | | | (I.R.S. Employer Identification Number) | | 300 SW Broad St., | ...

Investors might want to bet on First Bancorp (FBNC) , as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.Si ...

Financial Performance - First Bancorp's net income for Q1 2025 was $364 million, a $328 million increase compared to $36 million in Q4 2024[22] - Adjusted net income increased to $349 million in Q1 2025, up from $317 million in Q4 2024[22] - The return on average assets significantly improved to 121% in Q1 2025, compared to 012% in Q4 2024[22] - Net interest margin (tax equivalent) increased by 19 basis points to 327% in Q1 2025[22] Balance Sheet and Capital - Total deposits reached $107 billion, representing a $214 million increase for the quarter, or an annualized growth rate of 8%[48] - The company maintains strong capital levels, with growth in every capital measure from Q4 2024 to Q1 2025[44, 46] - As of March 31, 2025, brokered deposits remained minimal at $10 million[48] Asset Quality - The allowance for credit losses to total loans was 149% as of March 31, 2025[57] - The company benefits from a granular deposit franchise, with the top twenty depositors representing approximately 7% of total deposits[52] - Uninsured and uncollateralized deposits represent approximately 33% of total deposits[52] Strategic Positioning - First Bancorp is the 4th largest bank headquartered in North Carolina and the largest community bank[9] - The company operates 113 branches in North Carolina and South Carolina[9] - The company is focused on high-growth markets in the Carolinas, which are experiencing significant population influx and economic growth[69, 81]

First Bancorp (FBNC) came out with quarterly earnings of $0.84 per share, beating the Zacks Consensus Estimate of $0.78 per share. This compares to earnings of $0.61 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 7.69%. A quarter ago, it was expected that this bank holding company for First Bank would post earnings of $0.72 per share when it actually produced earnings of $0.76, delivering a surprise of 5.56%.Over the last fou ...

News Release For Immediate Release: For More Information, Contact: April 23, 2025 Hillary Kestler 704-644-4137 First Bancorp Reports First Quarter Results SOUTHERN PINES, N.C. - First Bancorp (the "Company") (NASDAQ - FBNC), the parent company of First Bank, reported unaudited first quarter earnings today. The Company announced net income of $36.4 million, or $0.88 diluted earnings per share ("D-EPS"), for the three months ended March 31, 2025 compared to $3.6 million, or $0.08 D-EPS, for the three months e ...

Core Viewpoint - First BanCorp's valuation is under threat due to tariffs affecting the bond market and Puerto Rico's tourism sector, leading to an increase in estimated provision expenses for loan losses and a subsequent reduction in earnings [1] Group 1 - The impact of tariffs on First BanCorp's valuation is significant, particularly concerning the bond market [1] - Puerto Rico's tourism industry is also affected, which has implications for First BanCorp's financial health [1] - The analyst has adjusted the provision expense estimate for loan losses upward, indicating a more cautious outlook for the company's earnings [1]

Acquisitions and Growth - The company acquired GrandSouth Bancorp in January 2023, which had total assets of $1.2 billion, loans of $1.0 billion, and deposits of $1.1 billion, enhancing its presence in high-growth markets in South Carolina [19]. - The company has made several acquisitions in recent years, including Select Bancorp, Inc. for $1.8 billion in October 2021 and Magnolia Financial, Inc. for $15.1 million in September 2020 [20]. - The company’s total assets increased significantly due to recent acquisitions, contributing to its strategic growth initiatives [19]. Lending Practices - As of December 31, 2024, the company reported a diversified loan portfolio, including commercial business loans and real estate loans, with a focus on small to medium-sized businesses [21]. - The company's legal lending limit to any one borrower is approximately $213.6 million, with a structured approval process for loans exceeding individual lending authority [26]. - The company has a conservative lending policy and regularly reviews its loan portfolio to identify areas of concern and manage risk effectively [24][27]. - The company emphasizes maintaining a comprehensive lending policy that meets the credit needs of the communities it serves, including low- and moderate-income customers [24]. - The company maintains a diversified loan portfolio, providing a broad range of commercial and retail lending services, including commercial business loans and real estate construction loans [21]. - As of December 31, 2024, the largest categories of commercial real estate (CRE) loans were retail at approximately 14%, office (non-owner-occupied at 6% and owner-occupied at 3%), commercial at approximately 7%, and warehouse at approximately 6% [30]. - The total lending exposure in Wake County, North Carolina was 9.7% in 2024, down from 10.1% in 2023, while New Hanover County increased to 8.9% from 8.1% [32]. Risk Management - The company’s internal loan review department conducts ongoing assessments of the loan portfolio to ensure adherence to policies and manage risk effectively [28]. - The company has engaged an independent consulting firm to perform assessments of new loan originations and existing credits, enhancing its risk management practices [29]. - The company’s total loan participations purchased as of December 31, 2024, were nominal, indicating a conservative approach to loan participation [22]. Investment Policies - The bank's investment policy aims to maximize income from funds not needed for loan demand, with investments subject to concentration and maturity limits [34]. - The bank's investment portfolio must consist of "investment-grade" securities, with a limit of 15% for high-quality corporate bonds [35]. - The company’s investment policy aims to maximize income from funds not needed for loan demand, investing in U.S. government bonds and GSEs [33]. Workforce and Human Capital - As of December 31, 2024, the bank had 1,345 full-time and 51 part-time associates, with a workforce consisting of approximately 73% females and 18% minorities [50]. - The bank's 401(k) plan matched 100% of each employee's elective deferral amount, up to the first 4% of their contribution, with a 2% non-elective employer contribution based on eligible compensation [55]. - The bank's human capital management strategy emphasizes attracting and retaining top talent, with a focus on diversity and inclusion [51]. Regulatory Environment - The bank is subject to heightened supervision and regulation due to total assets exceeding $10.0 billion, impacting its business operations [60]. - The Bank's dividends are subject to regulatory limitations, ensuring that they do not deplete the capital base below minimum regulatory requirements [80]. - Under Basel III, the Bank's ability to pay dividends is limited unless its common equity conservation buffer exceeds the minimum required capital ratio by at least 2.5% of risk-weighted assets [81]. - The Company is required to maintain a minimum CET1 capital ratio of at least 6.5% and a total capital ratio of at least 10.0% [96]. - The capital conservation buffer requires a minimum CET1 to risk-weighted assets ratio of at least 7.0% [96]. - The Bank is subject to various federal and state consumer protection laws, with increased examination and enforcement leading to potential penalties for non-compliance [72]. - The Company is subject to regulatory capital requirements under Basel III, which became fully phased-in as of January 1, 2019 [92]. Cybersecurity and Compliance - The SEC adopted new cybersecurity disclosure rules in July 2023, requiring public companies to disclose cybersecurity risk management practices and material incidents within four days [99]. - The Company employs a layered defensive approach to cybersecurity, utilizing various tools to monitor and block suspicious activities [100]. - The Company must notify federal regulators within 36 hours of identifying a significant computer-security incident that could disrupt operations [98]. - The BSA requires financial institutions to establish a risk-based system to prevent money laundering and financing of terrorism, with significant compliance obligations [101]. - The AML aims to modernize anti-money laundering laws, requiring financial institutions to develop standards for evaluating technology and internal processes for compliance [102]. - The company faces potential regulatory sanctions, including financial penalties, if it fails to observe cybersecurity regulatory guidance [97]. Market Competition - Competition for deposits is primarily based on the types of deposits offered and rates paid, with pressure to increase deposit rates to retain and attract customers [48]. - The company expects competition in the industry to remain high, with pressure to increase deposit rates to retain and attract new deposits [48][49]. Community Reinvestment - The Bank's community reinvestment record is evaluated by federal regulators, impacting mergers and acquisitions [73]. - In October 2023, the Federal Reserve, FDIC, and OCC issued a final rule to amend CRA regulations, expected to increase thresholds for large banks to receive "Outstanding" ratings starting January 1, 2026 [105].

Core Viewpoint - First Bancorp (FBNC) has been upgraded to a Zacks Rank 2 (Buy), indicating an upward trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of a company's shares, leading to stock price movements based on their buying or selling activities [4]. Company Performance Indicators - For the fiscal year ending December 2025, First Bancorp is expected to earn $3.09 per share, reflecting an 11.6% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for First Bancorp has increased by 0.3%, indicating a positive trend in earnings expectations [8]. Zacks Rating System Overview - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have generated an average annual return of +25% since 1988 [7]. - The upgrade of First Bancorp to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Group 1: Earnings Performance - First Bancorp reported quarterly earnings of $0.76 per share, exceeding the Zacks Consensus Estimate of $0.72 per share, and up from $0.72 per share a year ago, representing an earnings surprise of 5.56% [1] - The company posted revenues of $102.48 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.48%, and an increase from year-ago revenues of $97.03 million [2] Group 2: Market Performance and Outlook - First Bancorp shares have increased by approximately 0.4% since the beginning of the year, while the S&P 500 has gained 3.2% [3] - The current consensus EPS estimate for the upcoming quarter is $0.74 on revenues of $104 million, and for the current fiscal year, it is $3.08 on revenues of $433 million [7] Group 3: Industry Context - The Zacks Industry Rank for Banks - Southeast is currently in the top 12% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Financial Performance - Net income for Q4 2024 was $3.6 million, or $0.08 diluted EPS, down from $18.7 million ($0.45 EPS) in Q3 2024 and $29.7 million ($0.72 EPS) in Q4 2023[2] - Adjusted net income for Q4 2024 was $31.7 million, or $0.76 adjusted diluted EPS, compared to $29.0 million ($0.70 EPS) in Q3 2024 and $29.7 million ($0.72 EPS) in Q4 2023[3] - The company reported a net income of $3.6 million for the fourth quarter of 2024, down from $29.7 million in the same quarter of 2023[42] - Net income for Q4 2024 was $3,551 thousand, a decrease from $29,674 thousand in Q4 2023, while adjusted net income rose to $31,690 thousand[64] Income and Expenses - Noninterest expenses declined by $1.6 million to $58.3 million in Q4 2024, driven by a $1.3 million decrease in personnel expenses[6] - Noninterest expenses for the fourth quarter of 2024 were $58.3 million, slightly down from $56.4 million in the same quarter of 2023[42] - Noninterest income for Q4 2024 was negative $23.2 million, primarily due to a $36.8 million loss on securities, while excluding this loss, it showed a 0.5% increase from the previous quarter[18] Loans and Deposits - Loan growth accelerated to $8.1 billion, reflecting a $81.1 million increase, or 4.03%, for the quarter[6] - Total loans reached $8.1 billion, an increase of $81.1 million, or 4.0%, from the previous quarter, but a decrease of $55.4 million, or 0.7%, year-over-year[26] - Average deposits increased by $99.4 million to $10.6 billion in Q4 2024, with noninterest-bearing deposits growing by $51.6 million[6] - Total deposits were $10.5 billion, reflecting an increase of $25.6 million, or 1.0%, from the previous quarter, and an increase of $498.9 million, or 5.0%, year-over-year[28] Capital and Ratios - Total risk-based capital ratio was estimated at 16.61% as of December 31, 2024, well above regulatory minimums[6] - The estimated total risk-based capital ratio was 16.61%, down from 16.65% in the previous quarter, but up from 15.54% year-over-year[31] - The tangible common equity to tangible assets ratio was 8.22%, a decrease of 25 basis points from the linked quarter, but an increase of 66 basis points year-over-year[32] - Return on average common equity was 5.48%, up from 1.29% in the previous quarter[46] Asset Management - Total assets amounted to $12.1 billion, a slight decrease of $5.7 million, or 0.19%, from the linked quarter, but an increase of $32.8 million, or 0.27%, year-over-year[23] - Total assets as of December 31, 2024, were $12.1 billion, with net loans amounting to $7.97 billion[37][44] - Total interest-earning assets increased to $11,508,581 thousand with net interest income of $332,273 thousand, reflecting a net yield of 2.89% for the twelve months ended December 31, 2024[56] Credit Losses - The provision for credit losses was $507,000 for the fourth quarter of 2024, significantly lower than $2.95 million in the same quarter of 2023[42] - Provision for credit losses was $507,000 for the quarter, significantly lower than $14,200,000 in the prior quarter[50] - The company reported a provision for credit losses of $13,000 thousand in Q4 2024, reflecting ongoing risk management strategies[64] Liquidity - The company continues to manage liquidity sources adequately to meet its operating needs for the foreseeable future[34] - The on-balance sheet liquidity ratio at December 31, 2024, was 17.6%, with a total liquidity ratio of 34.9% including $2.4 billion in available lines of credit[35] - Noninterest-bearing deposits comprised 32% of total deposits, indicating a stable funding source[29]