The First Bancorp Reports Results for 2023

Rhea-AI Summary

The First Bancorp (Nasdaq: FNLC) reported a decrease in net income by 24.3% for the year 2023, with total assets reaching $2.95 billion, and total loans and deposits increasing by 11.2% and 9.3% respectively. The company's asset quality remained excellent, with a Non-Performing Assets to Total Assets ratio of 0.07%. However, net income decreased due to higher funding costs, resulting in a 24.3% decrease from 2022. The company's CEO expressed optimism despite the challenges faced in 2023, highlighting the support provided to businesses and communities, and the strong financial position of the company.

Insights

Financial Analyst

The comprehensive financial results of The First Bancorp reveal a notable dichotomy between growth in earning assets and deposits and a decline in net income, primarily due to an increase in funding costs. This growth in assets and deposits, at rates of 11.2% and 9.3% respectively, indicates a robust accumulation of capital and customer trust, which is essential for the bank's lending capabilities and financial stability. However, the 24.3% decrease in net income, alongside a 14.4% reduction in net interest income before loan loss provision, suggests that the bank's profitability is under pressure from the rising interest rate environment.

An efficiency ratio of 52.43% is indicative of a relatively cost-effective operation, particularly when compared favorably to peers. This metric, which measures non-interest expenses as a percentage of revenue, is crucial for investors assessing the bank's operational efficiency. Although the bank's net interest margin has contracted from 3.15% to 2.49%, reflecting the impact of higher funding costs, the management's focus on controlling operating expenses has likely mitigated further declines in profitability.

Furthermore, the bank's strong capital ratios, with an estimated total risk-based capital ratio of 13.66% and leverage capital ratio of 8.61%, provide assurance of financial resilience. The tangible book value per share increase to $19.12 also reflects positively on the bank's intrinsic value, potentially influencing investor sentiment.

Market Research Analyst

From a market perspective, The First Bancorp's performance can be seen as a reflection of broader industry trends, where banks are grappling with the consequences of aggressive interest rate hikes. The reported increase in the bank's loan portfolio, particularly in commercial real estate and construction loans, aligns with a demand for commercial lending, which is a positive sign for local economic development. However, the decline in mortgage banking revenue by 42.9% is a direct result of the cooling housing market due to higher interest rates.

The bank's strategic focus on digital banking capabilities and community engagement, as evidenced by the 11,000 hours of volunteer time, may enhance its competitive edge and customer loyalty, which is increasingly important in the digital age. This could have long-term benefits for customer retention and acquisition, thereby supporting future revenue streams.

Investors may also take note of the bank's dividend payout, which, at 57.38% of earnings per share, demonstrates a commitment to shareholder returns despite the earnings decline. This could be a factor in maintaining investor confidence during a period of earnings volatility.

Risk Management Analyst

The First Bancorp's asset quality metrics, such as the non-performing assets to total assets ratio at a mere 0.07%, signal a low level of credit risk within its portfolio, which is commendable given the current economic headwinds. The slight increase in past due loans to 0.18% of total loans, however, warrants monitoring as it could be an early indicator of potential asset quality deterioration.

The bank's proactive adjustment to the Current Expected Credit Losses (CECL) accounting standard and the increase in the allowance for loan losses to 1.13% of total loans reflect prudent risk management practices. These measures are particularly relevant in an environment where economic uncertainty could lead to an uptick in loan defaults. Such financial prudence is likely to reassure stakeholders concerned about the bank's ability to withstand potential credit shocks.

Lastly, the bank's liquidity position, with the capacity to cover over 150% of uninsured deposits, provides a substantial buffer against sudden withdrawal risks. This robust liquidity profile is a critical factor in ensuring operational continuity and maintaining depositor confidence, especially in light of recent concerns around the failures of several large regional banks.

2023 Results Driven by Strong Earning Asset Growth, Strong Deposit Growth, and Excellent Credit Quality

2023 FINANCIAL HIGHLIGHTS

• Total assets increased $207.5 million, ending the year at $2.95 billion.
• Total loans grew to $2.13 billion, an increase of $214.8 million or 11.2%, year-over-year.
• Total deposits grew to $2.60 billion, an increase of $220.8 million or 9.3% year-over-year.
• Asset Quality continued to be excellent demonstrated by a Non-Performing Assets to Total Assets ratio of 0.07%.
• Strong Liquidity with day-one capacity to cover more than 150% of uninsured deposits.
• Tangible Book Value per share of $19.12 up $1.19 per share from a year ago.
• Net income decreased $9.5 million or 24.3% from 2022, attributable primarily to a $10.4 million decrease in Net Interest Income resulting from higher funding costs.
• Efficiency Ratio (non-GAAP) remained favorable to peer at 52.43% for 2023.

DAMARISCOTTA, Maine--(BUSINESS WIRE)-- The First Bancorp (Nasdaq: FNLC), parent company of First National Bank, today announced operating results for the year ended December 31, 2023. Unaudited net income was $29.5 million, a decrease of 24.3% from the $39.0 million reported for the year ended December 31, 2022. Earnings per common share on a fully diluted basis were down $0.87 to $2.66 per share, a decrease of 24.6% from the prior year. The Company also announced operating results for the three months ended December 31, 2023. Unaudited net income was $6.7 million, a decrease of 27.4% from the final three months of 2022. Earnings per share on a fully diluted basis for the fourth quarter of 2023 were $0.60, down $0.23 or 27.7% from the fourth quarter of 2022.

CEO COMMENTS

“The First Bancorp ended 2023 with annual earnings of $29.5 million," commented Tony C. McKim, the Company’s President and Chief Executive Officer. "While down from a record year in 2022, we were pleased to overcome significant headwinds to earn a Pre-Tax, Pre-Provision (PTPP) (non-GAAP) Return on Average Assets of 1.29% and a PTPP Return on Average Tangible Common Equity of 18.11%. Primary drivers of our 2023 earnings performance were a 14.4% year-over-year decrease in net interest income before loan loss provision, and controlled operating expenses. The change in net interest income was the result of significantly increased funding costs, partially offset by loan growth. Our net interest margin was 2.49% for the year, compared to 3.15% in 2022. Operating costs were tightly controlled, with a small decrease in total expenses from the prior year."

Mr. McKim continued, "Results for the fourth quarter of 2023 were on trend with the year as a whole. The Company recorded net income of $6.7 million as compared to net income of $7.5 million in the third quarter of 2023. PTPP net income in the fourth quarter of 2023 was $8.8 million, level with the third quarter. Net interest income before loan loss provision in the fourth quarter of $15.9 million was in line with the $16.0 million earned in the third quarter. Non-interest income increased $260,000 period-to-period attributable to debit card revenue. Operating expenses for the fourth quarter of 2023 increased modestly from the third quarter, up $180,000 or 1.6%."

"The year just concluded presented a number of challenges for the banking industry and The First Bancorp. The cycle of interest rate increases begun by the Federal Reserve in 2022 and sustained in 2023, coupled with concerns around the failures of several large regional banks this past spring, combined to materially increase the Bank's cost of funds which directly impacted our bottom line. Despite this challenging environment, we continued to support businesses and communities across our footprint by extending over $575 million in new loans, adding to and enhancing our digital banking capabilities, and providing best in class service to our growing customer base. Our employees are engaged in their work and in supporting their communities as demonstrated by the 11,000 hours of volunteer time given by our staff in 2023. "Our Best Days Are Ahead" is a brand phrase we've lived by for a number of years, and I believe it today as much as ever."

FINANCIAL CONDITION

Total assets at December 31, 2023 were $2.95 billion, up $207.5 million from the prior year end. Earning assets increased $203.4 million year-over-year, as loan balances grew $214.8 million, and investments declined by $11.6 million. Loan portfolio growth in 2023 was led by commercial real estate and construction loans which increased $82.9 million, including $27.7 million in the fourth quarter. Residential mortgage and construction loans increased $59.9 million year-over-year, other commercial loans increased $37.4 million and home equity line of credit balances increased by $11.0 million.

Total deposits at December 31, 2023 were $2.60 billion, up $220.8 million or 9.3% from December 31, 2022, and level with balances at September 30, 2023. Core deposits increased $18.2 million centered in money market account balances. Borrowed funds decreased $33.8 million year-to-year. Uninsured deposits were an estimated 15.7% of total deposits, and 83% of uninsured deposits were fully collateralized. Available day-one liquidity was in excess of $625 million at year-end, sufficient to cover approximately 153% of estimated uninsured deposits.

The Company’s capital position remained strong as of December 31, 2023, with an estimated total risk-based capital ratio of 13.66%, and an estimated leverage capital ratio of 8.61%. These measures compare to 13.58% and 9.01% respectively as of December 31, 2022. The Company's tangible book value was $19.12 per share as of December 31, 2023, an increase from $17.93 a year earlier, and up from $17.66 as of September 30, 2023.

ASSET QUALITY & PROVISION FOR LOAN LOSSES

Asset quality continues to be strong and stable. As of December 31, 2023, the ratio of non-performing assets to total assets was 0.07%, consistent with a ratio of 0.06% at December 31, 2022 and down from 0.09% as of September 30, 2023. The ratio of non-performing loans to total loans stood at 0.10%, consistent with 0.09% a year ago and down from 0.12% last quarter. Net charge-offs continued to be very low ending 2023 at 0.01% of total loans, down from 0.03% in 2022 and 0.02% in 2021. Past due loans were 0.18% of total loans as of December 31, 2023, a modest increase from 0.08% of total loans at December 31, 2022, and from 0.10% at September 30, 2023.

The allowance for loan losses stood at 1.13% of total loans as of December 31, 2023, up from 0.87% of total loans at December 31, 2022, and 1.12% at September 30, 2023. The Company adopted ASC 326, the CECL standard, effective January 1, 2023 incurring a $6.3 million retained earnings adjustment in the first quarter. The provision for credit losses on loans was $1.3 million in 2023, including $911,000 in the fourth quarter, as compared to $1.8 million and $450,000, respectively in 2022. Management considers the allowance to be at an appropriate level given the strong asset quality metrics at year-end.

OPERATING RESULTS

Net income for the year ended December 31, 2023 was $29.5 million, down $9.5 million or 24.3% from the year ended December 31, 2022. On a fully diluted earnings per share basis, 2023 earnings were $2.66, down $0.87 or 24.6% from the prior year. The Company’s Return on Average Assets for the year ended December 31, 2023 was 1.03%, down from 1.49% for the year ended December 31, 2022. On a PTPP (non-GAAP) basis, 2023 Return on Average Assets was 1.29%, compared to 1.87% the prior year. Return on Average Tangible Common Equity was 14.50% for the year ended December 31, 2023, down from 19.15% for the year ended December 31, 2022. On a PTPP basis (non-GAAP), Return on Average Tangible Common Equity for 2023 was 18.11%, compared to 24.13% in 2022. The Company's Efficiency Ratio (non-GAAP) was 52.43% for the year ended December 31, 2023, compared to 45.96% in 2022. (GAAP Efficiency Ratio was 54.26% for the year ended December 31, 2023, compared to 47.19% in 2022.)

Contributing factors to the Company’s 2023 annual and fourth quarter results included:

• A narrowed balance sheet spread led to a $10.6 million decrease in tax-equivalent net interest income year-over-year, a decrease of 13.6%. In the fourth quarter of 2023, tax equivalent net interest income was down $3.6 million or 17.7% from the same period in 2022, and little changed from the third quarter of 2023, down $107,000 or 0.6%.
• Net interest margin was 2.34% for the quarter ended December 31, 2023 and 2.49% for the year then ended, as compared to 3.09% and 3.15% respectively for the same periods in 2022, and 2.40% in the third quarter of 2023. In 2023, the tax equivalent yield on earning assets increased 98 basis points to an average of 4.80%, while the cost of interest bearing liabilities increased 190 basis points to an average of 2.73%. In the fourth quarter of 2023, the tax equivalent yield on earning assets increased 13 basis points from the third quarter to an average of 5.02%, while the cost of interest bearing liabilities increased 21 basis points to an average of 3.17%.
• Non-interest income was $15.4 million for the year ended December 31, 2023, down $1.4 million or 8.5% from 2022. The year-to-year decrease in non-interest income is primarily attributable to mortgage banking activity and debit card revenue. Mortgage banking revenue dropped 42.9% from 2022, as higher interest rates slowed origination activity, negatively impacting both gain on sale income and mortgage servicing rights valuation. Debit card revenue decreased 15.2% year-over-year, attributable to one-time incentive payments received in 2022. Annual revenues at First National Wealth Management, the Bank’s trust and investment management division, were stable, up 1.2% from 2022. Service charge revenues and other income also had modest increases for the year.
• Non-interest expense for 2023 was $43.8 million, a decrease of $147,000 or 0.3% from 2022. Employee salary and benefit expense decreased $1.4 million or 5.9% from the prior year, due primarily to reduced incentive compensation accruals. A base rate increase imposed by the FDIC led to a $894,000 increase in deposit insurance premiums from the prior year. Occupancy expense and furniture & equipment expense each had modest dollar increases from 2022.

DIVIDEND

On December 21, 2023, the Company's Board of Directors declared a fourth quarter dividend of $0.35 per share. The fourth quarter dividend represents a payout to shareholders of 57.38% of earnings per share for the period and was paid on January 19, 2024 to shareholders of record as of January 8, 2024.

ABOUT THE FIRST BANCORP

The First Bancorp, the parent company of First National Bank, is based in Damariscotta, Maine. Founded in 1864, First National Bank is a full-service community bank with $2.92 billion in assets. The Bank provides a complete array of commercial and retail banking services through eighteen locations in mid-coast and eastern Maine. First National Wealth Management, a division of the Bank, provides investment management and trust services to individuals, businesses, and municipalities. More information about The First Bancorp, First National Bank and First National Wealth Management may be found at www.thefirst.com.

The First Bancorp
Consolidated Balance Sheets (Unaudited)
In thousands of dollars, except per share data	December 31, 2023			December 31, 2022
Assets
Cash and due from banks	$	31,942		$	22,728
Interest-bearing deposits in other banks		3,488			3,693
Securities available for sale		282,053			284,509
Securities to be held to maturity1		385,235			393,896
Restricted equity securities, at cost		3,385			3,883
Loans held for sale		—			275
Loans		2,129,454			1,914,674
Less allowance for credit losses		24,030			16,723
Net loans		2,105,424			1,897,951
Accrued interest receivable		11,894			9,829
Premises and equipment		28,684			28,277
Goodwill		30,646			30,646
Other assets		63,947			63,491
Total assets	$	2,946,698		$	2,739,178
Liabilities
Demand deposits	$	289,104		$	318,626
NOW deposits		634,543			630,416
Money market deposits		305,931			192,632
Savings deposits		299,837			369,532
Certificates of deposit		646,818			489,793
Certificates $100,000 to $250,000		251,192			259,614
Certificates $250,000 and over		172,237			118,264
Total deposits		2,599,662			2,378,877
Borrowed funds		69,652			103,483
Other liabilities		34,305			27,895
Total Liabilities		2,703,619			2,510,255
Shareholders' equity
Common stock		111			110
Additional paid-in capital		70,071			68,435
Retained earnings		211,925			204,343
Net unrealized loss on securities available for sale		(39,575	)		(44,718	)
Net unrealized loss on securities transferred from available for sale to held to maturity		(56	)		(64	)
Net unrealized gain on cash flow hedging derivative instruments		300			544
Net unrealized gain on postretirement costs		303			273
Total shareholders' equity		243,079			228,923
Total liabilities & shareholders' equity	$	2,946,698		$	2,739,178
Common Stock
Number of shares authorized		18,000,000			18,000,000
Number of shares issued and outstanding		11,098,057			11,045,186
Book value per common share	$	21.90		$	20.73
Tangible book value per common share	$	19.12		$	17.93

¹December 31, 2023 net of allowance for credit losses

The First Bancorp
Consolidated Statements of Income (Unaudited)
	For the year ended				For the quarter ended
In thousands of dollars, except per share data	December 31, 2023		December 31, 2022		December 31, 2023		September 30, 2023			December 31, 2022
Interest income
Interest and fees on loans	$	108,274	$	75,805	$	29,414	$	28,329		$	22,342
Interest on deposits with other banks		517		315		217		211			152
Interest and dividends on investments		19,383		16,915		5,191		4,714			4,586
Total interest income		128,174		93,035		34,822		33,254			27,080
Interest expense
Interest on deposits		61,004		15,359		18,620		16,992			7,169
Interest on borrowed funds		1,963		1,510		349		308			427
Total interest expense		62,967		16,869		18,969		17,300			7,596
Net interest income		65,207		76,166		15,853		15,954			19,484
Provision (reduction) for credit losses		1,184		1,750		911		(200	)		450
Net interest income after provision for credit losses		64,023		74,416		15,170		16,154			19,034
Non-interest income
Investment management and fiduciary income		4,654		4,600		1,139		1,160			1,087
Service charges on deposit accounts		1,887		1,825		488		465			467
Net securities gains		—		7		—		—			—
Mortgage origination and servicing income		813		1,424		202		224			190
Debit card income		5,384		6,348		1,541		1,367			1,464
Other operating income		2,699		2,670		737		675			639
Total non-interest income		15,437		16,874		4,107		3,891			3,847
Non-interest expense
Salaries and employee benefits		21,942		23,316		5,522		5,523			6,224
Occupancy expense		3,319		3,052		825		784			754
Furniture and equipment expense		5,391		5,058		1,382		1,403			1,318
FDIC insurance premiums		1,962		1,068		533		551			330
Amortization of identified intangibles		26		69		6		7			17
Other operating expense		11,117		11,341		2,918		2,738			3,068
Total non-interest expense		43,757		43,904		11,186		11,006			11,711
Income before income taxes		35,703		47,386		8,091		9,039			11,170
Applicable income taxes		6,184		8,396		1,411		1,565			1,973
Net Income	$	29,519	$	38,990	$	6,680	$	7,474		$	9,197
Basic earnings per share	$	2.68	$	3.56	$	0.61	$	0.68		$	0.84
Diluted earnings per share	$	2.66	$	3.53	$	0.60	$	0.67		$	0.83

The First Bancorp
Selected Financial Data (Unaudited)
	As of and for the year ended						As of and for the quarter ended
Dollars in thousands, except for per share amounts	December 31, 2023			December 31, 2022			December 31, 2023			September 30, 2023			December 31, 2022
Summary of Operations
Interest Income	$	128,174		$	93,035		$	34,822		$	33,254		$	27,080
Interest Expense		62,967			16,869			18,969			17,300			7,596
Net Interest Income		65,207			76,166			15,853			15,954			19,484
Provision (reduction) for Credit Losses		1,184			1,750			683			(200	)		450
Non-Interest Income		15,437			16,874			4,107			3,891			3,847
Non-Interest Expense		43,757			43,904			11,186			11,006			11,711
Net Income		29,519			38,990			6,680			7,474			9,197
Per Common Share Data
Basic Earnings per Share	$	2.68		$	3.56		$	0.61		$	0.68		$	0.84
Diluted Earnings per Share		2.66			3.53			0.60			0.67			0.83
Cash Dividends Declared		1.39			1.34			0.35			0.35			0.34
Book Value per Common Share		21.90			20.73			21.90			20.44			20.73
Tangible Book Value per Common Share		19.12			17.93			19.12			17.66			17.93
Market Value		28.22			29.94			28.22			23.50			29.94
Financial Ratios
Return on Average Equity1		12.59	%		16.63	%		11.35	%		12.67	%		16.15	%
Return on Average Tangible Common Equity1		14.50	%		19.15	%		13.08	%		14.59	%		18.71	%
Return on Average Assets1		1.03	%		1.49	%		0.90	%		1.02	%		1.34	%
Average Equity to Average Assets		8.18	%		8.94	%		7.92	%		8.07	%		8.32	%
Average Tangible Equity to Average Assets		7.10	%		7.76	%		6.87	%		7.01	%		7.18	%
Net Interest Margin Tax-Equivalent1		2.49	%		3.15	%		2.34	%		2.40	%		3.09	%
Dividend Payout Ratio		51.87	%		37.64	%		57.38	%		51.47	%		40.48	%
Allowance for Credit Losses/Total Loans		1.13	%		0.87	%		1.13	%		1.12	%		0.87	%
Non-Performing Loans to Total Loans		0.10	%		0.09	%		0.10	%		0.12	%		0.09	%
Non-Performing Assets to Total Assets		0.07	%		0.06	%		0.07	%		0.09	%		0.06	%
Efficiency Ratio		52.43	%		45.96	%		54.08	%		53.49	%		48.83	%
At Period End
Total Assets	$	2,946,698		$	2,739,178		$	2,946,698		$	2,944,139		$	2,739,178
Total Loans		2,129,454			1,914,674			2,129,454			2,079,860			1,914,674
Total Investment Securities		670,673			682,288			670,673			676,206			682,288
Total Deposits		2,599,662			2,378,877			2,599,662			2,599,937			2,378,877
Total Shareholders' Equity		243,079			228,923			243,079			226,665			228,923
1Annualized using a 365-day basis for 2023 and 2022

Use of Non-GAAP Financial Measures

Certain information in this release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management uses these “non-GAAP” measures in its analysis of the Company's performance (including for purposes of determining the compensation of certain executive officers and other Company employees) and believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and with other financial institutions, as well as demonstrating the effects of significant gains and charges in the current period, in light of the disclosure practices employed by many other publicly-traded financial institutions. The Company believes that a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. Management believes that investors may use these non-GAAP financial measures to analyze financial performance without the impact of unusual items that may obscure trends in the Company's underlying performance. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

In several places net interest income is calculated on a fully tax-equivalent basis. Specifically included in interest income was tax-exempt interest income from certain investment securities and loans. An amount equal to the tax benefit derived from this tax-exempt income has been added back to the interest income total which, as adjusted, increased net interest income accordingly. Management believes the disclosure of tax-equivalent net interest income information improves the clarity of financial analysis, and is particularly useful to investors in understanding and evaluating the changes and trends in the Company's results of operations. Other financial institutions commonly present net interest income on a tax-equivalent basis. This adjustment is considered helpful in the comparison of one financial institution's net interest income to that of another institution, as each will have a different proportion of tax-exempt interest from its earning assets. Moreover, net interest income is a component of a second financial measure commonly used by financial institutions, net interest margin, which is the ratio of net interest income to average earning assets. For purposes of this measure as well, other financial institutions generally use tax-equivalent net interest income to provide a better basis of comparison from institution to institution. The Company follows these practices.

The following table provides a reconciliation of tax-equivalent financial information to the Company's consolidated financial statements, which have been prepared in accordance with GAAP. A 21.0% tax rate was used in both 2023 and 2022.

	For the years ended				For the quarters ended
In thousands of dollars	December 31, 2023		December 31, 2022		December 31, 2023		September 30, 2023		December 31, 2022
Net interest income as presented	$	65,207	$	76,166	$	15,853	$	15,954	$	19,484
Effect of tax-exempt income		2,644		2,326		679		685		607
Net interest income, tax equivalent	$	67,851	$	78,492	$	16,532	$	16,639	$	20,091

The Company presents its efficiency ratio using non-GAAP information which is most commonly used by financial institutions. The GAAP-based efficiency ratio is non-interest expenses divided by net interest income plus non-interest income from the Consolidated Statements of Income. The non-GAAP efficiency ratio excludes securities losses and other-than-temporary impairment charges from non-interest expenses, excludes securities gains from non-interest income, and adds the tax-equivalent adjustment to net interest income. The following table provides a reconciliation between the GAAP and non-GAAP efficiency ratio:

	For the years ended						For the quarters ended
In thousands of dollars	December 31, 2023			December 31, 2022			December 31, 2023			September 30, 2023			December 31, 2022
Non-interest expense, as presented	$	43,757		$	43,904		$	11,186		$	11,006		$	11,711
Net interest income, as presented		65,207			76,166			15,853			15,954			19,484
Effect of tax-exempt interest income		2,644			2,326			679			685			607
Non-interest income, as presented		15,437			16,874			4,107			3,891			3,847
Effect of non-interest tax-exempt income		176			170			45			44			43
Net securities gain		—			(7	)		—			—			—
Adjusted net interest income plus non-interest income	$	83,464		$	95,529		$	20,684		$	20,574		$	23,981
Non-GAAP efficiency ratio		52.43	%		45.96	%		54.08	%		53.49	%		48.83	%
GAAP efficiency ratio		54.26	%		47.19	%		56.04	%		55.46	%		50.20	%

The Company presents certain information based upon average tangible common equity instead of total average shareholders' equity. The difference between these two measures is the Company's intangible assets, specifically goodwill from prior acquisitions. Management, banking regulators and many stock analysts use the tangible common equity ratio and the tangible book value per common share in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions. The following table provides a reconciliation of average tangible common equity to the Company's consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles:

	For the years ended						For the quarters ended
In thousands of dollars	December 31, 2023			December 31, 2022			December 31, 2023			September 30, 2023			December 31, 2022
Average shareholders' equity as presented	$	234,480		$	234,521		$	233,405		$	234,024		$	225,940
Less intangible assets		(30,843	)		(30,892	)		(30,853	)		(30,853	)		(30,884	)
Tangible average shareholders' equity	$	203,637		$	203,629		$	202,552		$	203,171		$	195,056

To provide period-to-period comparison of operating results prior to consideration of credit loss provision and income taxes, the non-GAAP measure of Pre-Tax, Pre-Provision Net Income is presented. The following table provides a reconciliation to Net Income:

	For the years ended				For the quarters ended
In thousands of dollars	December 31, 2023		December 31, 2022		December 31, 2023		September 30, 2023			December 31, 2022
Net Income, as presented	$	29,519	$	38,990	$	6,680	$	7,474		$	9,197
Add: provision (reduction) for credit losses		1,184		1,750		683		(200	)		450
Add: income taxes		6,184		8,396		1,411		1,565			1,973
Pre-Tax, pre-provision net income	$	36,887	$	49,136	$	8,774	$	8,839		$	11,620

Forward-Looking and Cautionary Statements

Except for the historical information and discussions contained herein, statements contained in this release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results and events to differ materially, as discussed in the Company's filings with the Securities and Exchange Commission.

Category: Earnings

View source version on businesswire.com: https://www.businesswire.com/news/home/20240124493638/en/

The First Bancorp

Richard M. Elder, EVP, Chief Financial Officer

207-563-3195

rick.elder@thefirst.com

Source: The First Bancorp

FAQ

What is the ticker symbol of The First Bancorp?

The ticker symbol of The First Bancorp is FNLC.

What were the total assets of The First Bancorp at the end of 2023?

The total assets of The First Bancorp at the end of 2023 were $2.95 billion.

What was the percentage increase in total loans for The First Bancorp in 2023?

The total loans for The First Bancorp increased by 11.2% in 2023.

What was the net income for The First Bancorp in 2023?

The net income for The First Bancorp in 2023 was $29.5 million, a decrease of 24.3% from 2022.

What was the Non-Performing Assets to Total Assets ratio for The First Bancorp in 2023?

The Non-Performing Assets to Total Assets ratio for The First Bancorp in 2023 was 0.07%.