First Bank(US:FBNC)2025-11-07 21:07Financial Performance - Net income for Q3 2025 was $20.4 million, or $0.49 diluted EPS, compared to $18.7 million, or $0.45 diluted EPS in Q3 2024, reflecting a 9.1% increase in net income year-over-year [124]. - Adjusted net income for Q3 2025, excluding a $27.9 million securities loss, was $41.8 million, or $1.01 per diluted share [124]. - Noninterest income for the nine months ended September 30, 2025, totaled $14.4 million, a decrease of $26.7 million from the prior year, primarily due to a $27.9 million securities loss [130]. - Total noninterest income for the three months ended September 30, 2025, was negative $12.9 million, primarily due to a $27.9 million loss on securities [165]. - Total noninterest income for the nine months ended September 30, 2025, was $42.3 million, slightly up from $42.2 million in 2024, despite a $2.3 million decrease in SBA loan sale gains [166]. Interest Income and Margin - Net interest income for Q3 2025 was $102.5 million, a 23.4% increase from $83.0 million in Q3 2024, driven by higher yields on interest-earning assets and lower cost of funds [128]. - The net interest margin (NIM) increased to 3.46% in Q3 2025, up 58 basis points from 2.88% in Q3 2024 [128]. - Net interest income for the nine months ended September 30, 2025, was $292.0 million, an increase of $48.6 million, or 20.0%, from the same period in 2024 [144]. - The net interest margin (NIM) increased by 51 basis points to 3.34% for the nine months ended September 30, 2025, compared to 2.83% for the same period in 2024 [153]. - The tax-equivalent net interest income for Q3 2025 was $102.8 million, compared to $83.8 million in Q3 2024 [143]. Loan and Deposit Growth - Total loans amounted to $8.4 billion at September 30, 2025, reflecting a 4.0% increase from December 31, 2024 [134]. - Average loan volumes for Q3 2025 were $8.3 billion, an increase of $277.9 million compared to Q3 2024 [145]. - Total deposits were $10.9 billion at September 30, 2025, an increase of 3.33% from December 31, 2024 [134]. - Total deposits reached $10.9 billion at September 30, 2025, an increase of $350.6 million, or 3.3%, from December 31, 2024 [179]. Credit Quality and Losses - The provision for credit losses for Q3 2025 was $3.4 million, influenced by loan growth and net charge-offs of $3.0 million [128]. - The allowance for credit losses was $120.9 million at September 30, 2025, down from $122.6 million at December 31, 2024, with the allowance as a percentage of loans at 1.44% [186]. - Nonperforming assets increased to $39.0 million at September 30, 2025, from $36.7 million at December 31, 2024, primarily due to a $5.5 million increase in nonaccrual loans [182]. - The provision for credit losses was $6.8 million for the nine months ended September 30, 2025, down from $15.9 million in the same period of 2024 [159]. Securities and Investments - The company recorded a securities loss of $27.9 million during a transaction in the third quarter of 2025, involving the sale of $194.3 million of securities [176]. - The unrealized loss on AFS securities totaled $251.8 million at September 30, 2025, attributed to interest rate factors rather than credit quality concerns [178]. - Total investment securities were $2.7 billion at September 30, 2025, an increase of $117.3 million from December 31, 2024 [176]. Capital and Liquidity - The Company’s Tier 1 capital ratio was 15.14% at September 30, 2025, slightly down from 15.17% at the end of 2024 [200]. - The tangible common equity (TCE) ratio improved to 9.12% at September 30, 2025, compared to 8.22% at December 31, 2024 [201]. - The overall on-balance sheet liquidity ratio was 18.2% at September 30, 2025, compared to 17.6% at December 31, 2024 [192]. - The total liquidity ratio, including $2.5 billion in available lines of credit, was 35.3% as of September 30, 2025 [192]. Interest Rate Risk Management - The company aims to maximize net interest income while managing interest rate risk to minimize adverse impacts from rate changes [208]. - Interest rate risk is monitored using earnings simulation modeling and economic value simulation, which provide a comprehensive view of the company's interest rate risk exposure [209]. - The company proactively manages the rates earned on assets and the rates paid on liabilities to mitigate interest rate risk [213]. - Assumptions in the net interest income sensitivity analyses are inherently uncertain, and actual results may differ from simulated results [214].