First Bank(FBNC) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Highlights Q2 2025 Financial Data First Bancorp reported strong second-quarter 2025 results with significant increases in net income and diluted EPS compared to both the linked and like quarters, achieving expanded net interest income and margin, alongside disciplined expense management and improved liquidity and capital levels Q2 2025 Financial Data | Metric | Q2-2025 | Q1-2025 | Q2-2024 | | :--- | :--- | :--- | :--- | | Total interest income | $136,741 | $132,660 | $128,822 | | Total interest expense | $40,065 | $39,777 | $47,707 | | Net interest income | $96,676 | $92,883 | $81,115 | | Provision for credit losses | $2,212 | $1,116 | $541 | | Noninterest income | $14,341 | $12,902 | $14,601 | | Noninterest expenses | $58,983 | $57,893 | $58,291 | | Income tax expense | $11,256 | $10,370 | $8,172 | | Net income | $38,566 | $36,406 | $28,712 | | Diluted EPS | $0.93 | $0.88 | $0.70 | | Return on average assets | 1.24% | 1.21% | 0.96% | | Return on average common equity | 10.11% | 10.06% | 8.38% | | NIM | 3.32% | 3.25% | 2.84% | | Tangible common equity to tangible assets | 8.83% | 8.55% | 7.90% | | Common equity tier I capital ratio | 14.62% | 14.52% | 13.99% | | Total risk-based capital ratio | 16.87% | 16.80% | 16.24% | Q2 2025 Key Highlights Key highlights for Q2 2025 include significant diluted EPS growth, expanded loan yield, contracted cost of funds, increased core deposits, strong loan growth, and improved liquidity - Diluted earnings per share (D-EPS) increased to $0.93, up from $0.88 in Q1-2025 and $0.70 in Q2-2024[2][3] - Total loan yield expanded to 5.53% (up 1 bp QoQ, 3 bps YoY), while total cost of funds contracted 3 bps to 1.48% (from 1.51% QoQ and 1.81% YoY)[2][3] - Average core deposits reached $10.7 billion, an increase of $140.4 million from the linked quarter, driven by growth in noninterest-bearing deposits and money market accounts[3] - Total loans grew by $122.6 million (6.07% annualized) for the quarter, reaching $8.2 billion at June 30, 2025[3] - On-balance sheet liquidity ratio increased to 20.0% from 19.8% in the linked quarter, with total liquidity ratio at 36.1% including off-balance sheet sources[3] CEO Statement CEO Richard H. Moore highlighted improved financial results, expanded net interest margin, disciplined expense management, enhanced liquidity, increased capital, strong credit quality, and an approved dividend increase - Second quarter net income was $38.6 million and diluted EPS was $0.93, driven by expanded net interest margin and disciplined expense management[7] - The company improved its liquidity position and increased capital levels, while maintaining strong credit quality with low charge-offs and nonperforming assets[7] - Loan growth was 6% annualized in the quarter, benefiting from favorable cost of funds and increased yields on earning assets[7] - The Board increased the quarterly dividend to $0.23 per share, effective June 30, 2025[7] Financial Performance Analysis Net Interest Income and Net Interest Margin Net interest income and net interest margin (NIM) significantly improved in Q2 2025, primarily due to effective management of deposit costs, increased loan yields, and higher securities yields - Net interest income for Q2 2025 was $96.7 million, a 4.1% increase from the linked quarter ($92.9 million) and a 19.2% increase from the like quarter ($81.1 million)[8] - NIM expanded to 3.32% in Q2 2025, up 7 basis points from 3.25% in the linked quarter and 48 basis points from 2.84% in the like quarter[9] - The yield on securities increased by 13 basis points to 2.41% due to the purchase of $127.0 million of CMOs yielding 5.16%. Loan yields also increased by 1 basis point to 5.53%[9] Yield Information (Quarterly) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Yield on loans | 5.53% | 5.52% | 5.50% | | Yield on securities | 2.41% | 2.28% | 1.72% | | Cost of interest-bearing deposits | 2.14% | 2.14% | 2.54% | | Total cost of funds | 1.48% | 1.51% | 1.81% | | Net interest margin | 3.32% | 3.25% | 2.84% | Provision for Credit Losses and Credit Quality The provision for credit losses increased in Q2 2025 due to net charge-offs, loan growth, and macroeconomic projections, while asset quality remained strong - Provision for credit losses was $2.2 million in Q2 2025, up from $1.1 million in Q1 2025 and $0.5 million in Q2 2024[13] - The Q2 2025 provision was influenced by $1.2 million in net charge-offs, reserves for $122.6 million in loan growth, and declining macro-economic projections, partially offset by a $3.5 million reduction in Hurricane Helene reserves[13] - Asset quality remained strong with annualized net loan charge-offs of 0.06% for Q2 2025. Total nonperforming assets (NPAs) were $35.8 million, or 0.28% of total assets, consistent with prior periods[15] Asset Quality Data | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Nonaccrual loans | $34,625 | $29,081 | $33,102 | | Total nonperforming assets | $35,843 | $33,850 | $34,252 | | Quarterly net charge-offs to average loans - annualized | 0.06% | 0.17% | 0.07% | | Nonperforming loans to total loans | 0.42% | 0.36% | 0.54% | | Nonperforming assets to total assets | 0.28% | 0.27% | 0.28% | | Allowance for credit losses to total loans | 1.47% | 1.49% | 1.36% | Noninterest Income Total noninterest income increased from the linked quarter, primarily driven by higher service charges and other income, but slightly decreased year-over-year - Total noninterest income was $14.3 million in Q2 2025, an 11.2% increase from $12.9 million in the linked quarter, but a 1.8% decrease from $14.6 million in the like quarter[18] - The increase from the linked quarter was mainly due to higher Other service charges, commissions and fees (up $0.7 million) and Other income, net (up $0.6 million)[18] Noninterest Expenses Noninterest expenses saw a modest increase from both the linked and like quarters, primarily due to higher operating and personnel expenses - Noninterest expenses totaled $59.0 million in Q2 2025, a $1.1 million (1.9%) increase from $57.9 million in the linked quarter[19] - The linked quarter increase was driven by a $0.7 million rise in Other operating expenses and a $0.4 million increase in total personnel expenses[19] - Compared to the like quarter, noninterest expenses increased by $0.7 million, mainly due to higher total personnel expenses and occupancy/equipment costs[20] Income Taxes Income tax expense increased in Q2 2025, with a slightly higher effective tax rate compared to prior periods - Income tax expense was $11.3 million in Q2 2025, up from $10.4 million in the linked quarter and $8.2 million in the like quarter[21] - Effective tax rates were 22.6% for Q2 2025, compared to 22.2% for both the linked and like quarters[21] Balance Sheet Overview Assets Total assets grew in Q2 2025, primarily driven by loan growth and an increase in the available-for-sale securities portfolio, which also saw decreased unrealized losses - Total assets reached $12.6 billion at June 30, 2025, an increase of $172.0 million (5.5% annualized) from the linked quarter and $547.5 million (4.5%) from a year earlier[22] - Investment securities increased to $2.7 billion, reflecting $78.5 million increase from the linked quarter, due to purchases and decreased unrealized losses on available-for-sale securities[24] - Total unrealized losses on available for sale investment securities decreased to $298.9 million at June 30, 2025, from $321.2 million at March 31, 2025 and $410.1 million at June 30, 2024[24] Key Period End Balance Sheet Components | BALANCES ($ in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | Change 2Q25 vs 1Q25 | Change 2Q25 vs 2Q24 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total assets | $12,608,265 | $12,436,245 | $12,060,805 | 1.4% | 4.5% | | Loans | $8,225,650 | $8,103,033 | $8,069,848 | 1.5% | 1.9% | | Investment securities | $2,661,236 | $2,582,781 | $2,390,811 | 3.0% | 11.3% | | Total cash and cash equivalents | $711,286 | $772,441 | $608,412 | (7.9)% | 16.9% | | Noninterest-bearing deposits | $3,542,626 | $3,476,786 | $3,339,678 | 1.9% | 6.1% | | Interest-bearing deposits | $7,287,754 | $7,267,873 | $7,148,151 | 0.3% | 2.0% | | Shareholders' equity | $1,556,180 | $1,508,176 | $1,404,342 | 3.2% | 10.8% | Loans Portfolio Total loans continued to grow, with a diversified portfolio mix and no notable concentrations in specific geographies or industries, including non-owner occupied office loans - Total loans amounted to $8.2 billion at June 30, 2025, an increase of $122.6 million (6.1% annualized) from March 31, 2025, and $155.8 million (1.9%) from June 30, 2024[25] - The loan portfolio is diversified, with no notable concentrations in North Carolina and South Carolina geographies or industries like office or hospitality[25] - Non-owner occupied office loans represented approximately 6.5% of the total portfolio, primarily in non-metro markets, with the ten largest loans in this category being less than 2% of the total loan portfolio[25] Loan Portfolio by Category | LOAN PORTFOLIO ($ in thousands) | June 30, 2025 Amount | June 30, 2025 Percentage | March 31, 2025 Amount | March 31, 2025 Percentage | June 30, 2024 Amount | June 30, 2024 Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial and industrial | $911,227 | 11% | $890,071 | 11% | $863,366 | 11% | | Construction, development & other land loans | $633,529 | 8% | $644,439 | 8% | $764,418 | 9% | | Commercial real estate - owner occupied | $1,254,596 | 15% | $1,233,732 | 15% | $1,250,267 | 16% | | Commercial real estate - non owner occupied | $2,758,629 | 34% | $2,701,746 | 34% | $2,561,803 | 32% | | Multi-family real estate | $509,419 | 6% | $512,958 | 6% | $497,187 | 6% | | Residential 1-4 family real estate | $1,731,397 | 21% | $1,709,593 | 21% | $1,729,050 | 21% | | Home equity loans/lines of credit | $355,876 | 4% | $341,240 | 4% | $326,411 | 4% | | Consumer loans | $70,137 | 1% | $68,115 | 1% | $76,638 | 1% | | Loans, gross | $8,224,810 | 100% | $8,101,894 | 100% | $8,069,140 | 100% | Deposits Portfolio Total deposits increased, maintaining a diversified and stable funding base with a significant portion of noninterest-bearing deposits, and a high percentage insured or collateralized - Total deposits were $10.8 billion at June 30, 2025, an increase of $85.7 million (3.2% annualized) from March 31, 2025, and $342.6 million (3.3%) from June 30, 2024[28] - Noninterest-bearing deposits comprised 33% of total deposits at June 30, 2025, indicating a stable funding source[29] - Approximately 66.3% of total deposits were insured or collateralized at June 30, 2025[30] Deposit Portfolio by Category | DEPOSIT PORTFOLIO ($ in thousands) | June 30, 2025 Amount | June 30, 2025 Percentage | March 31, 2025 Amount | March 31, 2025 Percentage | June 30, 2024 Amount | June 30, 2024 Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Noninterest-bearing checking accounts | $3,542,626 | 33% | $3,476,786 | 32% | $3,339,678 | 32% | | Interest-bearing checking accounts | $1,443,010 | 13% | $1,448,377 | 14% | $1,400,071 | 13% | | Money market accounts | $4,446,485 | 41% | $4,386,469 | 41% | $4,150,429 | 40% | | Savings accounts | $536,247 | 5% | $539,632 | 5% | $558,126 | 5% | | Other time deposits | $514,865 | 5% | $533,723 | 5% | $601,212 | 6% | | Time deposits >$250,000 | $337,382 | 3% | $349,990 | 3% | $389,281 | 4% | | Total customer deposits | $10,820,615 | 100% | $10,734,977 | 100% | $10,438,797 | 100% | | Brokered deposits | $9,765 | —% | $9,682 | —% | $49,032 | —% | | Total deposits | $10,830,380 | 100% | $10,744,659 | 100% | $10,487,829 | 100% | Capital and Liquidity Capital Ratios First Bancorp maintained capital levels well above regulatory requirements, with all key capital ratios showing improvement from both the linked and like quarters - The estimated total risk-based capital ratio at June 30, 2025, was 16.87%, up from 16.80% in the linked quarter and 16.24% in the like quarter[31] - The tangible common equity (TCE) to tangible assets ratio (non-GAAP) increased to 8.83% at June 30, 2025, up 28 basis points from the linked quarter and 93 basis points from June 30, 2024[32] - The increase in capital ratios was primarily driven by earnings exceeding dividends and improvements in unrealized losses on the available-for-sale securities portfolio[31][32] Capital Ratios (Estimated) | CAPITAL RATIOS | June 30, 2025 (estimated) | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Tangible common equity to tangible assets (non-GAAP) | 8.83% | 8.55% | 7.90% | | Common equity tier I capital ratio | 14.62% | 14.52% | 13.99% | | Tier I leverage ratio | 11.45% | 11.41% | 11.24% | | Tier I risk-based capital ratio | 15.42% | 15.34% | 14.79% | | Total risk-based capital ratio | 16.87% | 16.80% | 16.24% | Liquidity Position The company maintained a strong liquidity position, with both on-balance sheet and off-balance sheet sources deemed adequate to meet operational needs - The on-balance sheet liquidity ratio was 20.0% at June 30, 2025, an increase from 19.8% in the linked quarter[35] - Available off-balance sheet sources totaled approximately $2.3 billion, resulting in a total liquidity ratio of 36.1%[35] Company Information About First Bancorp First Bancorp is a bank holding company operating First Bank, a community bank with 113 branches in North and South Carolina, offering tailored banking solutions and SBA loans - First Bancorp is headquartered in Southern Pines, North Carolina, with total assets of $12.6 billion[37] - Its principal activity is the ownership and operation of First Bank, a state-chartered community bank with 113 branches in North Carolina and South Carolina[37] - First Bank provides tailored banking solutions, local expertise, technology, and SBA loans through a nationwide network[37] Forward-Looking Statements The press release contains forward-looking statements subject to risks and uncertainties, and the company disclaims any obligation to update or revise them - Statements in the press release that are not historical facts are forward-looking and subject to risks and uncertainties, including financial success of customers, integration of acquisitions, regulatory actions, interest rates, and economic conditions[39] - The company undertakes no obligation to update or revise forward-looking statements and is not responsible for changes made by media[39] Non-GAAP Measures Disclosure The company uses non-GAAP financial measures to evaluate performance, which are not substitutes for GAAP measures and are reconciled in the appendices - Certain performance measures presented are non-GAAP and used by management to evaluate performance, excluding or including amounts not normally treated as such under GAAP[40] - Non-GAAP measures should not be viewed as substitutes for GAAP measures, and reconciliations are provided in the appendices[40] Detailed Financial Statements Consolidated Income Statement The consolidated income statement shows strong growth in net interest income and net income for both the quarter and year-to-date periods, despite increased provision for credit losses and noninterest expenses Consolidated Income Statement (Q2 2025 vs. Q1 2025 vs. Q2 2024) | ($ in thousands, except per share data) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total interest income | $136,741 | $132,660 | $128,822 | | Total interest expense | $40,065 | $39,777 | $47,707 | | Net interest income | $96,676 | $92,883 | $81,115 | | Provision for credit losses | $2,212 | $1,116 | $541 | | Total noninterest income | $14,341 | $12,902 | $14,601 | | Total noninterest expenses | $58,983 | $57,893 | $58,291 | | Income before income taxes | $49,822 | $46,776 | $36,884 | | Income tax expense | $11,256 | $10,370 | $8,172 | | Net income | $38,566 | $36,406 | $28,712 | | Diluted EPS | $0.93 | $0.88 | $0.70 | Consolidated Income Statement (YTD June 30, 2025 vs. YTD June 30, 2024) | ($ in thousands, except per share data) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total interest income | $269,401 | $255,436 | | Total interest expense | $79,842 | $95,047 | | Net interest income | $189,559 | $160,389 | | Provision for credit losses | $3,328 | $1,741 | | Total noninterest income | $27,243 | $27,497 | | Total noninterest expenses | $116,876 | $117,478 | | Income before income taxes | $96,598 | $68,667 | | Income tax expense | $21,626 | $14,683 | | Net income | $74,972 | $53,984 | | Diluted EPS | $1.81 | $1.31 | Consolidated Balance Sheets The consolidated balance sheet reflects growth in total assets, loans, and deposits, alongside an increase in shareholders' equity and a reduction in accumulated other comprehensive loss Consolidated Balance Sheets ($ in thousands) | Assets | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total cash and cash equivalents | $711,286 | $772,441 | $608,412 | | Securities available for sale | $2,144,831 | $2,064,516 | $1,867,211 | | Securities held to maturity | $516,405 | $518,265 | $523,600 | | Loans | $8,225,650 | $8,103,033 | $8,069,848 | | Allowance for credit losses on loans | $(120,545) | $(120,631) | $(110,058) | | Net loans | $8,105,105 | $7,982,402 | $7,959,790 | | Total assets | $12,608,265 | $12,436,245 | $12,060,805 | | Liabilities | | | | | Total deposits | $10,830,380 | $10,744,659 | $10,487,829 | | Borrowings | $92,237 | $92,055 | $91,513 | | Total liabilities | $11,052,085 | $10,928,069 | $10,656,463 | | Shareholders' equity | | | | | Total shareholders' equity | $1,556,180 | $1,508,176 | $1,404,342 | | Accumulated other comprehensive loss | $(229,518) | $(246,628) | $(315,191) | | Total liabilities and shareholders' equity | $12,608,265 | $12,436,245 | $12,060,805 | Trend Information Performance ratios, common share data, and capital information show positive trends across key metrics over the past five quarters, with improvements in profitability, book value, and capital strength Performance Ratios (Annualized) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Return on average assets | 1.24% | 1.21% | 0.12% | 0.61% | 0.96% | | Return on average common equity | 10.11% | 10.06% | 0.96% | 5.14% | 8.38% | | Return on average tangible common equity | 15.25% | 15.54% | 1.93% | 8.30% | 13.60% | Common Share Data | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash dividends declared - common | $0.23 | $0.22 | $0.22 | $0.22 | $0.22 | | Book value per common share | $37.53 | $36.46 | $34.96 | $35.74 | $34.10 | | Tangible book value per share | $25.82 | $24.69 | $23.17 | $23.91 | $22.19 | | Common shares outstanding at end of period | 41,468,098 | 41,368,828 | 41,347,418 | 41,340,099 | 41,187,943 | Capital Information (Preliminary for Current Quarter) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Tangible common equity to tangible assets | 8.83% | 8.55% | 8.22% | 8.47% | 7.90% | | Common equity tier I capital ratio | 14.62% | 14.52% | 14.35% | 14.37% | 13.99% | | Total risk-based capital ratio | 16.87% | 16.80% | 16.63% | 16.65% | 16.24% | Average Balances and Net Interest Income Analysis - Quarters Quarterly average balance analysis shows consistent growth in interest-earning assets and net interest income, with an expanding net interest margin, driven by higher asset yields and managed liability costs Average Balances and Net Interest Income Analysis (Quarterly) | ($ in thousands) | June 30, 2025 Average Volume | June 30, 2025 Interest Earned or Paid | June 30, 2025 Average Rate | March 31, 2025 Average Volume | March 31, 2025 Interest Earned or Paid | March 31, 2025 Average Rate | June 30, 2024 Average Volume | June 30, 2024 Interest Earned or Paid | June 30, 2024 Average Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Loans | $8,187,662 | $112,931 | 5.53% | $8,107,394 | $110,533 | 5.52% | $8,070,815 | $110,472 | 5.50% | | Total interest-earning assets | $11,678,760 | $136,741 | 4.69% | $11,528,742 | $132,660 | 4.65% | $11,462,112 | $128,822 | 4.51% | | Total interest-bearing deposits | $7,212,437 | $38,405 | 2.14% | $7,219,042 | $38,119 | 2.14% | $7,081,586 | $44,744 | 2.54% | | Total interest-bearing liabilities | $7,304,636 | $40,065 | 2.20% | $7,311,002 | $39,777 | 2.21% | $7,249,562 | $47,707 | 2.65% | | Net interest income | | $96,676 | 3.32% | | $92,883 | 3.25% | | $81,115 | 2.84% | | Interest rate spread | | | 2.49% | | | 2.44% | | | 1.86% | Average Balances and Net Interest Income Analysis - Year-to-Date Year-to-date average balance analysis demonstrates sustained growth in interest-earning assets and net interest income, with a notable expansion in net interest margin and interest rate spread compared to the prior year Average Balances and Net Interest Income Analysis (Year-to-Date) | ($ in thousands) | June 30, 2025 Average Volume | June 30, 2025 Interest Earned or Paid | June 30, 2025 Average Rate | June 30, 2024 Average Volume | June 30, 2024 Interest Earned or Paid | June 30, 2024 Average Rate | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Loans | $8,147,750 | $223,464 | 5.52% | $8,087,101 | $220,270 | 5.47% | | Total interest-earning assets | $11,604,165 | $269,401 | 4.67% | $11,475,954 | $255,436 | 4.47% | | Total interest-bearing deposits | $7,215,721 | $76,524 | 2.14% | $6,923,761 | $83,879 | 2.44% | | Total interest-bearing liabilities | $7,307,802 | $79,842 | 2.20% | $7,296,748 | $95,047 | 2.62% | | Net interest income | | $189,559 | 3.29% | | $160,389 | 2.81% | | Interest rate spread | | | 2.47% | | | 1.85% | Non-GAAP Reconciliations (Appendices) APPENDIX A: Calculation of Return on TCE This appendix provides the reconciliation for the calculation of Return on Tangible Common Equity (TCE), a non-GAAP measure, showing its components and trend over the past five quarters Calculation of Return on TCE ($ in thousands) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Income | $38,566 | $36,406 | $3,551 | $18,680 | $28,712 | | Intangible asset amortization, net of taxes | $1,123 | $1,159 | $1,195 | $1,240 | $1,283 | | Tangible Net income | $39,689 | $37,565 | $4,746 | $19,920 | $29,995 | | Average common equity | $1,530,550 | $1,467,871 | $1,466,181 | $1,445,029 | $1,378,284 | | Less: Average goodwill and other intangibles, net of related taxes | $(486,393) | $(487,395) | $(488,624) | $(489,987) | $(491,318) | | Average tangible common equity | $1,044,157 | $980,476 | $977,557 | $955,042 | $886,966 | | Return on average common equity | 10.11% | 10.06% | 0.96% | 5.14% | 8.38% | | Return on average tangible common equity | 15.25% | 15.54% | 1.93% | 8.30% | 13.60% | APPENDIX B: Reconciliation of Common Equity to TCE This appendix details the reconciliation from total shareholders' common equity to tangible common equity (TCE) by subtracting goodwill and other intangibles, net of related taxes Reconciliation of Common Equity to TCE ($ in thousands) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total shareholders' common equity | $1,556,180 | $1,508,176 | $1,445,611 | $1,477,525 | $1,404,342 | | Less: Goodwill and other intangibles, net of related taxes | $(485,657) | $(486,749) | $(487,660) | $(489,139) | $(490,439) | | Tangible common equity | $1,070,523 | $1,021,427 | $957,951 | $988,386 | $913,903 | APPENDIX C: Tangible Book Value Per Share This appendix presents the calculation of tangible book value per common share, a non-GAAP measure, by dividing tangible common equity by common shares outstanding Tangible Book Value Per Share ($ in thousands except per share data) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Tangible common equity (Appendix B) | $1,070,523 | $1,021,427 | $957,951 | $988,386 | $913,903 | | Common shares outstanding | 41,468,098 | 41,368,828 | 41,347,418 | 41,340,099 | 41,187,943 | | Tangible book value per common share | $25.82 | $24.69 | $23.17 | $23.91 | $22.19 | APPENDIX D: TCE Ratio This appendix provides the calculation of the Tangible Common Equity (TCE) to Tangible Assets (TA) ratio, a non-GAAP measure, showing the company's capital strength relative to its tangible asset base TCE Ratio ($ in thousands) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Tangible common equity (Appendix B) | $1,070,523 | $1,021,427 | $957,951 | $988,386 | $913,903 | | Total assets | $12,608,265 | $12,436,245 | $12,147,694 | $12,153,430 | $12,060,805 | | Less: Goodwill and other intangibles, net of related taxes | $(485,657) | $(486,749) | $(487,660) | $(489,139) | $(490,439) | | Tangible assets ("TA") | $12,122,608 | $11,949,496 | $11,660,034 | $11,664,291 | $11,570,366 | | TCE to TA ratio | 8.83% | 8.55% | 8.22% | 8.47% | 7.90% | APPENDIX E: Adjusted D-EPS This appendix provides the reconciliation of diluted earnings per share (D-EPS) to adjusted D-EPS, a non-GAAP measure, by accounting for the after-tax impact of Hurricane Helene Adjusted D-EPS ($ in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Net income | $38,566 | $36,406 | $28,712 | | Impact of Hurricane Helene: Provision for (benefit from) credit losses | $(3,500) | $(2,000) | — | | Less, tax impact | $812 | $464 | — | | After-tax impact of Hurricane Helene | $(2,688) | $(1,536) | — | | Adjusted net income | $35,878 | $34,870 | $28,712 | | Weighted average shares outstanding - diluted | 41,441,393 | 41,406,525 | 41,262,091 | | D-EPS | $0.93 | $0.88 | $0.70 | | Adjusted D-EPS | $0.87 | $0.84 | $0.70 | APPENDIX F: Loan purchase discount accretion and its impact on the Company's NIM This appendix details the impact of loan purchase accounting discount accretion on net interest income and net interest margin (NIM), showing a decreasing but still positive contribution - Loan purchase accounting discount accretion included in interest income was $1.5 million in Q2 2025, compared to $1.8 million in the linked quarter and $2.3 million in the like quarter[62] - This accretion had positive impacts of 4 basis points, 5 basis points, and 6 basis points on the company's NIM and NIM-T/E in Q2 2025, the linked quarter, and the like quarter, respectively[62] Net Interest Income Purchase Accounting Adjustments ($ in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Interest income - increased by accretion of loan discount on acquired loans | $1,457 | $1,789 | $2,303 | | Total interest income impact | $1,457 | $1,789 | $2,303 | | Interest expense - increased by discount accretion on deposits | $(102) | $(103) | $(224) | | Interest expense - increased by discount accretion on borrowings | $(194) | $(191) | $(190) | | Total net interest expense impact | $(296) | $(294) | $(414) | | Total impact on net interest income | $1,161 | $1,495 | $1,889 |