The First Bancorp Announces Second Quarter Results

The First Bancorp Announces Second Quarter Results July 23, 2025 Strong Year-Over-Year Net Income Growth, Net Interest Margin Expansion, and Continued Favorable Asset Quality Highlight Second Quarter Performance The First Bancorp (Nasdaq: FNLC), ("the Company", "we", "us", "our"), parent company of First National Bank, today reported unaudited results for the quarter ended June 30, 2025. Net income for the period was $8.1 million with fully diluted earnings per share of $0.72. The Company also reported unaudited results for six months ended June 30, 2025, with net income for the period of $15.1 million and fully diluted earnings per share of $1.35. Second Quarter Notable Items: Net Income of $8.1 million is the strongest earnings quarter since Q4 2022 and represents:growth of 30.7% from Q2 2024; diluted EPS growth of 30.0%growth of 13.9% from Q1 2025; diluted EPS growth of 13.7%Total assets reached $3.20 billion, an increase of $12.1 million in Q2Efficiency Ratio improved to 52.39%Net Interest Margin of 2.52% is highest since Q1 2023 and is:an increase of 31 basis points from Q2 2024an increase of 4 basis points from Q1 2025Ratio of Non-Performing Assets to Total Assets of 0.19%Tangible Book Value per share rose to $20.94, up 9.1% from Q2 2024Quarterly shareholder dividend increased to $0.37 per share CEO COMMENTS "I am pleased to report continued improvement in operating results for the second quarter of 2025, demonstrated by our highest level of quarterly earnings since the fourth quarter of 2022," commented Tony C. McKim, the Company's President and Chief Executive Officer. "Net income of $8.1 million for the quarter is an increase of 30.7% from the second quarter of 2024, and year-to-date through six months, earnings have increased 24.2% from a year ago. "The primary driver of the Company's improved performance is higher levels of net interest income spurred by earning asset growth and margin expansion. Our net interest margin improved to 2.52% in the second quarter of 2025, a lift of 31 basis points from the 2.21% margin from the same period a year ago, while earning assets have increased $115.5 million. "Balance sheet expansion was slower in the second quarter and was centered in the loan portfolio," continued Mr. McKim. "New loan production during the quarter totaled $132 million as we continue to be selective in the credits and pricing structures being added to the Bank's balance sheet. Local funding balances were essentially flat in the second quarter, as is typical for the time of year. Asset quality remains favorable, while capital and liquidity positions continue to be solid. Our entire team has been focused on restoring the Company's traditionally strong operating performance, and it is gratifying to witness those efforts coming to fruition." OPERATING RESULTS Q2 2025 v. Q2 2024 (prior year quarter) Net income was $8.1 million for the three months ended June 30, 2025, an increase of $1.9 million or 30.7% from the second quarter of 2024. Net interest income was $18.4 million for the three months ended June 30, 2025, an increase of $3.3 million or 22.1% from the second quarter of 2024. Net interest margin improved to 2.52% for the second quarter of 2025, up from 2.21% in the prior year quarter. The 31 basis point lift in margin was the result of a 12 basis point increase in the tax equivalent yield on earning assets coupled with a 20 basis point decrease in the cost of total liabilities. Earning assets averaged a yield of 5.34% for the three months ended June 30, 2025, while total liabilities carried an average cost of 3.28%. A provision for credit losses of $486,000 was recorded in the second quarter of 2025, compared with a provision of $512,000 in the second quarter of 2024. The current period expense consisted primarily of a $348,000 provision to the allowance for credit losses on loans and a $137,000 increase to the reserve for unfunded commitments, the former driven largely by a slight deterioration in economic forecasts, and the latter centered in a larger pipeline of committed loans as compared to the prior quarter. Total non-interest income was $4.1 million for the three months ended June 30, 2025, consistent with the second quarter of 2024. Total non-interest expense for the three months ended June 30, 2025, was $12.2 million, an increase of $949,000, or 8.4%, from the second quarter of 2024. The period-to-period change is mostly attributable to employee salaries and benefits, resulting from salary costs, lower deferred salaries, and normalization of incentive compensation accruals. The Company's efficiency ratio for the second quarter of 2025 was 52.39%, improved from 56.35% in the prior year quarter. OPERATING RESULTS Q2 2025 v. Q1 2025 (linked quarter) Net income was $8.1 million for the three months ended June 30, 2025, an increase of $1.0 million or 13.9% from the first quarter of 2025. Net interest income of $18.4 million for the three months ended June 30, 2025, was an increase of $610,000 or 3.4% from the linked quarter. The net interest margin of 2.52% in the second quarter of 2025 was an improvement of 4 basis points. Margin improvement was driven by a 6 basis point increase in the tax equivalent yield on earning assets to 5.34%. The total cost of interest bearing liabilities increased slightly to 3.28% for the second quarter. Total non-interest income of $4.1 million for the three months ended June 30, 2025, was up $127,000 from the linked quarter. The change is centered in a $116,000 increase in Debit Card income, along with modest gains in mortgage banking and wealth management revenue. Total non-interest expense for the three months ended June 30, 2025 was $12.2 million, a decrease of $645,000, or 5.0%, from the linked quarter. The change is mostly attributable to employee salaries and benefits which were elevated in the first quarter by one-time retirement payouts and seasonal payroll tax effects. LOANS, TOTAL ASSETS & FUNDING Total assets at June 30, 2025, were $3.20 billion, up $12.1 million in the second quarter and up $114.6 million from a year ago. Earning assets increased $11.0 million during the quarter comprised primarily of an increase in loans of $10.9 million. Earning assets have increased by $115.5 million since June 30, 2024, centered in loan growth of $146.3 million. Loan balances grew at an annualized rate of 1.85% in the second quarter, the net effect of new loan production, scheduled amortization, and payoffs during the period. Municipal loans grew $7.8 million, multifamily loan balances increased $5.9 million, and commercial and industrial balances increased $1.7 million; commercial real estate balances fell by $11.4 million. The residential mortgage and home equity loan segments also contributed to loan portfolio growth, up $1.1 million and $2.8 million, respectively in the second quarter. Total deposits at June 30, 2025 were $2.71 billion, down $6.0 million during the period, and up $127.3 million, or 4.9%, from June 30, 2024. Non-maturity deposits followed normal seasonal patterns and were down $15.3 million in the second quarter, while time deposits increased $9.3 million; borrowed funds increased $10.7 million, principally in customer repurchase agreements. Uninsured deposits as of June 30, 2025, were estimated at 17.7% of total deposits, and 73% of uninsured deposits were fully collateralized. Available day-one liquidity was $718 million, sufficient to cover 150% of estimated uninsured deposits. ASSET QUALITY Asset quality remains favorable. As of June 30, 2025, the ratio of non-performing assets to total assets was 0.19%, unchanged from March 31, 2025 and up modestly from 0.09% of total assets reported as of June 30, 2024. Similarly, the ratio of non-performing loans to total loans was 0.25% as of June 30, 2025, unchanged from March 31, 2025 and up modestly from 0.11% reported as of June 30, 2024. Past due loans remain low at 0.23% of total loans as of June 30, 2025, down from 0.33% of total loans as of March 31, 2025 and up from 0.15% of total loans as of June 30, 2024. The Allowance for Credit Losses ("ACL") on loans stood at 1.04% of total loans as of June 30, 2025, as compared to an ACL of 1.05% and 1.10% of total loans as of March 31, 2025, and June 30, 2024, respectively. Net loan charge-offs in the second quarter totaled $633,000 resulting in an annualized year-to-date net charge-off rate of 0.07% of total loans. CAPITAL The Company’s regulatory capital position remained strong as of June 30, 2025. The Leverage Capital ratio was an estimated 8.47% as of June 30, 2025, as compared to the 8.40% and 8.58% reported as of March 31, 2025, and as of June 30, 2024, respectively, with period-to-period changes attributable primarily to earning asset growth. The estimated Total Risk-Based Capital ratio was 13.33% as of June 30, 2025, as compared to the 13.12% and 13.24% reported as of March 31, 2025, and as of June 30, 2024, respectively. The Company's tangible book value per share was $20.94 as of June 30, 2025, up from $20.44 as of March 31, 2025 and up from $19.20 as of June 30, 2024. An improved unrealized loss position on available-for-sale securities contributed to the Tangible Common Equity ratio increasing to 7.41% as of June 30, 2025, up from 7.25% as of March 31, 2025 and 7.00% as of June 30, 2024. DIVIDEND On June 26, 2025, the Company's Board of Directors declared a second quarter dividend of $0.37 per share. The second quarter dividend included an increase of one cent per share from the level paid in each of the preceding four quarters. The dividend was paid on July 18, 2025, to shareholders of record as of July 8, 2025. 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 $3.17 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 June 30, 2025 December 31, 2024 June 30, 2024 Assets Cash and due from banks $ 27,360 $ 27,636 $ 27,816 Interest-bearing deposits in other banks 3,253 22,100 33,133 Securities available-for-sale 278,248 274,680 273,501 Securities held-to-maturity 367,873 369,704 377,522 Restricted equity securities, at cost 7,734 7,203 7,110 Loans 2,394,007 2,340,940 2,247,670 Less allowance for credit losses 24,829 24,871 24,693 Net loans 2,369,178 2,316,069 2,222,977 Accrued interest receivable 19,386 13,976 17,760 Premises and equipment 28,198 27,855 27,929 Other real estate owned — 173 208 Goodwill 30,646 30,646 30,646 Other assets 67,634 66,968 66,342 Total assets $ 3,199,510 $ 3,157,010 $ 3,084,944 Liabilities Demand deposits $ 291,150 $ 292,255 $ 270,858 NOW deposits 590,536 676,107 609,878 Money market deposits 388,214 376,627 317,133 Savings deposits 256,584 265,451 268,472 Certificates of deposit 774,521 702,632 728,410 Certificates $100,000 to $250,000 231,926 225,106 219,732 Certificates $250,000 and over 172,406 187,073 163,597 Total deposits 2,705,337 2,725,251 2,578,080 Borrowed funds 196,170 146,278 230,620 Other liabilities 32,509 32,988 31,576 Total Liabilities 2,934,016 2,904,517 2,840,276 Shareholders' equity Common stock 112 112 111 Additional paid-in capital 72,795 71,832 70,942 Retained earnings 229,511 222,823 215,999 Net unrealized loss on securities available-for-sale (37,235 ) (42,671 ) (43,369 ) Net unrealized loss on securities transferred from available-for-sale to held-to-maturity (60 ) (47 ) (51 ) Net unrealized gain on cash flow hedging derivative instruments 84 157 733 Net unrealized gain on postretirement costs 287 287 303 Total shareholders' equity 265,494 252,493 244,668 Total liabilities & shareholders' equity $ 3,199,510 $ 3,157,010 $ 3,084,944 Common Stock Number of shares authorized 18,000,000 18,000,000 18,000,000 Number of shares issued and outstanding 11,205,861 11,155,528 11,139,639 Book value per common share $ 23.69 $ 22.63 $ 21.96 Tangible book value per common share $ 20.94 $ 19.87 $ 19.20 The First Bancorp Consolidated Statements of Income (Unaudited) In thousands of dollars, except per share data For the six months ended For the quarter ended June 30, 2025 June 30, 2024 June 30, 2025 March 31, 2025 June 30, 2024 Interest income Interest and fees on loans $ 68,938 $ 62,043 $ 35,014 $ 33,924 $ 31,839 Interest on deposits with other banks 107 134 51 56 56 Interest and dividends on investments 9,489 9,369 4,760 4,729 4,663 Total interest income 78,534 71,546 39,825 38,709 36,558 Interest expense Interest on deposits 38,994 38,993 19,725 19,269 19,816 Interest on borrowed funds 3,332 2,598 1,691 1,641 1,667 Total interest expense 42,326 41,591 21,416 20,910 21,483 Net interest income 36,208 29,955 18,409 17,799 15,075 Credit loss expense (reduction) 878 (1 ) 486 392 512 Net interest income after provision for credit losses 35,330 29,956 17,923 17,407 14,563 Non-interest income Investment management and fiduciary income 2,653 2,457 1,336 1,317 1,269 Service charges on deposit accounts 1,070 1,041 539 531 542 Mortgage origination and servicing income 416 319 221 195 189 Debit card income 2,456 2,519 1,286 1,170 1,333 Other operating income 1,536 1,461 747 789 824 Total non-interest income 8,131 7,797 4,129 4,002 4,157 Non-interest expense Salaries and employee benefits 13,126 11,642 6,276 6,850 5,585 Occupancy expense 1,753 1,709 876 877 843 Furniture and equipment expense 2,900 2,766 1,438 1,462 1,377 FDIC insurance premiums 1,395 1,126 701 694 562 Amortization of identified intangibles 13 13 6 7 6 Other operating expense 5,856 5,755 2,902 2,954 2,877 Total non-interest expense 25,043 23,011 12,199 12,844 11,250 Income before income taxes 18,418 14,742 9,853 8,565 7,470 Applicable income taxes 3,278 2,550 1,790 1,488 1,299 Net Income $ 15,140 $ 12,192 $ 8,063 $ 7,077 $ 6,171 Basic earnings per share $ 1.37 $ 1.10 $ 0.73 $ 0.64 $ 0.56 Diluted earnings per share $ 1.35 $ 1.10 $ 0.72 $ 0.63 $ 0.55 The First Bancorp Selected Financial Data (Unaudited) Dollars in thousands, except for per share amounts As of and for the six months ended As of and for the quarter ended June 30, 2025 June 30, 2024 June 30, 2025 March 31, 2025 June 30, 2024 Summary of Operations Interest Income $ 78,534 $ 71,546 $ 39,825 $ 38,709 $ 36,558 Interest Expense 42,326 41,591 21,416 20,910 21,483 Net Interest Income 36,208 29,955 18,409 17,799 15,075 Credit loss expense (reduction) 878 (1 ) 486 392 512 Non-Interest Income 8,131 7,797 4,129 4,002 4,157 Non-Interest Expense 25,043 23,011 12,199 12,844 11,250 Net Income 15,140 12,192 8,063 7,077 6,171 Per Common Share Data Basic Earnings per Share $ 1.367 $ 1.104 $ 0.727 $ 0.639 $ 0.559 Diluted Earnings per Share 1.353 1.095 0.720 0.633 0.554 Cash Dividends Declared 0.730 0.710 0.370 0.360 0.360 Book Value per Common Share 23.69 21.96 23.69 23.19 21.96 Tangible Book Value per Common Share 20.94 19.20 20.94 20.44 19.20 Market Value 25.41 24.85 25.41 24.72 24.85 Financial Ratios Return on Average Equity1 11.73 % 10.04 % 12.31 % 11.13 % 10.16 % Return on Average Tangible Common Equity1 13.31 % 11.49 % 13.95 % 12.64 % 11.63 % Return on Average Assets1 0.96 % 0.82 % 1.01 % 0.91 % 0.82 % Average Equity to Average Assets 8.19 % 8.18 % 8.23 % 8.15 % 8.10 % Average Tangible Equity to Average Assets 7.22 % 7.15 % 7.27 % 7.17 % 7.08 % Net Interest Margin Tax-Equivalent1 2.50 % 2.21 % 2.52 % 2.48 % 2.21 % Dividend Payout Ratio 53.40 % 64.31 % 50.89 % 56.34 % 64.40 % Allowance for Credit Losses/Total Loans 1.04 % 1.10 % 1.04 % 1.05 % 1.10 % Non-Performing Loans to Total Loans 0.25 % 0.11 % 0.25 % 0.25 % 0.11 % Non-Performing Assets to Total Assets 0.19 % 0.09 % 0.19 % 0.19 % 0.09 % Efficiency Ratio 54.63 % 58.70 % 52.39 % 56.93 % 56.35 % At Period End Total Assets $ 3,199,510 $ 3,084,944 $ 3,199,510 $ 3,187,372 $ 3,084,944 Total Loans 2,394,007 2,247,670 2,394,007 2,383,150 2,247,670 Total Investment Securities 653,855 658,133 653,855 656,844 658,133 Total Deposits 2,705,337 2,578,080 2,705,337 2,711,335 2,578,080 Total Shareholders' Equity 265,494 244,668 265,494 259,681 244,668 1Annualized using a 365-day basis for 2025 and a 366-day basis for 2024. 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 2025 and 2024. For the six months ended For the quarters ended In thousands of dollars June 30, 2025 June 30, 2024 June 30, 2025 March 31, 2025 June 30, 2024 Net interest income as presented $ 36,208 $ 29,955 $ 18,409 $ 17,799 $ 15,075 Effect of tax-exempt income 1,409 1,355 698 $ 711 686 Net interest income, tax equivalent $ 37,617 $ 31,310 $ 19,107 $ 18,510 $ 15,761 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 provision for credit losses on securities 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 six months ended For the quarters ended In thousands of dollars June 30, 2025 June 30, 2024 June 30, 2025 March 31, 2025 June 30, 2024 Non-interest expense, as presented $ 25,043 $ 23,011 $ 12,199 $ 12,844 $ 11,250 Net interest income, as presented 36,208 29,955 18,409 17,799 15,075 Effect of tax-exempt interest income 1,409 1,355 698 711 686 Non-interest income, as presented 8,131 7,797 4,129 4,002 4,157 Effect of non-interest tax-exempt income 96 91 48 48 45 Adjusted net interest income plus non-interest income $ 45,844 $ 39,198 $ 23,284 $ 22,560 $ 19,963 Non-GAAP efficiency ratio 54.63 % 58.70 % 52.39 % 56.93 % 56.35 % GAAP efficiency ratio 56.48 % 60.95 % 54.13 % 58.91 % 58.50 % The Company presents certain information based upon tangible common equity instead of total 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. GAAP: For the six months ended For the quarters ended In thousands of dollars June 30, 2025 June 30, 2024 June 30, 2025 March 31, 2025 June 30, 2024 Average shareholders' equity as presented $ 260,248 $ 244,202 $ 262,663 $ 257,807 $ 244,321 Less intangible assets (30,798 ) (30,824 ) (30,801 ) (30,801 ) (30,827 ) Tangible average shareholders' equity $ 229,450 $ 213,378 $ 231,862 $ 227,006 $ 213,494 To provide period-to-period comparison of operating results prior to consideration of credit loss provision and income taxes, the non-GAAP measure of PTPP Net Income is presented. The following table provides a reconciliation to Net Income: For the six months ended For the quarters ended In thousands of dollars June 30, 2025 June 30, 2024 June 30, 2025 March 31, 2025 June 30, 2024 Net Income, as presented $ 15,140 $ 12,192 $ 8,063 $ 7,077 $ 6,171 Add: credit loss expense (reduction) 878 (1 ) 486 392 512 Add: income taxes 3,278 2,550 1,790 1,488 1,299 Pre-Tax, pre-provision net income $ 19,296 $ 14,741 $ 10,339 $ 8,957 $ 7,982 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 Source: The First Bancorp The First Bancorp Richard M. Elder, EVP, Chief Financial Officer 207-563-3195 [email protected] Source: The First Bancorp