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The First Bancorp Second Quarter Earnings Increase 13.8%

The First Bancorp (Nasdaq: FNLC), parent company of First National Bank, today announced operating results for the three months ended June 30, 2022. Unaudited net income was $10.0 million, up $1.2 million or 13.8% from the $8.8 million reported for the three months ended June 30, 2021, and represents a new quarterly earnings high mark for the Company. Earnings per common share for the period on a fully diluted basis were up $0.11 to $0.91 per share, an increase of 13.8% from the prior year. The Company also reported results for the six months ended June 30, 2022. Net income was $19.7 million, up $2.0 million or 11.3% from the first six months of 2021, with earnings per share on a fully diluted basis of $1.79, up $0.18 or 11.2% from the same period in 2021.

“The First Bancorp started 2022 very strongly, posting record earnings in each of the first two quarters", commented Tony C. McKim, the Company’s President and Chief Executive Officer. "Growth in net interest income, predominantly from earning asset growth, was a primary driver of our results year-to-date, more than offsetting the effects of decreased mortgage activity and the wind-down of the Payroll Protection Program (PPP). Earning asset growth was focused in the loan portfolio which, excluding PPP, has grown $162.7 million year-to-date, representing an annualized growth rate of 20.2%. Growth continues to be centered in the commercial real estate and construction segments, along with loans secured by one-to-four family residential real estate. Our pipeline of new loans in process remains healthy.

"As noted, net interest income has been strong and in the second quarter was the primary factor in our overall performance. Loan growth drove a 16.5% increase in interest revenue from the portfolio compared to a year ago, leading to a 18.9% increase in net interest income for the quarter ended June 30, 2022 from the quarter ended June 30, 2021. Our net interest margin was 3.13% for the second quarter of 2022, up from 2.86% a year ago. Compared to the first quarter of 2022, net interest income increased a more modest 0.4% while the margin tightened from 3.24%. Both measures were influenced by lower PPP fee recognition. Non-interest income was solid. Wealth management, debit card, and service charge revenues increased 6.7%, 2.8%, 22.3% respectively in the second quarter compared to the same period a year ago. Mortgage banking revenues continued to trend down, as expected. Strong overall revenues along with managed operating expenses resulted in an excellent efficiency ratio of 43.49% for the quarter, improved from 44.75% for the same period a year ago, and from 45.42% in the first quarter of 2022."

Mr. McKim continued, "In addition to strong earning asset growth, we continue to be particularly pleased with the Bank's overall asset quality. As of June 30, 2022 the ratios of non-performing loans to total loans and non-performing assets to total assets were each at ten-year lows, and past due loans were well-controlled. COVID-19 related loan modifications have nearly all been resolved, with just four loans remaining in modification status at the end of the second quarter, representing less than $400,000 in total balances. Each of the four are residential mortgage loans and each is scheduled to exit modification within the next two months.

"The end of the second quarter marks the half-way point in our three-year strategic plan. I am so pleased with the progress we have made on the initiatives we laid out in the planning process in late 2020. The plan, along with outstanding efforts of our engaged employee base, are really the cornerstones of our success as a community bank."

SECOND QUARTER 2022 FINANCIAL HIGHLIGHTS

  • Net Income of $10.0 million is an increase of 13.8% from the quarter ended June 30, 2021, an increase of 3.0% from the quarter ended March 31, 2022, and is a new quarterly earnings record for the Company.
  • Pre-tax, Pre-Provision ("PTPP") Net Income (non-GAAP) increased 13.2% compared to the second quarter of 2021 and increased 3.3% from the first quarter of 2022.
  • Loans increased $81.0 million in the second quarter to $1.79 billion.
  • Low-cost deposits held steady at $1.34 billion, decreasing 0.7% in the second quarter.
  • Net Interest Margin for the quarter ended June 30, 2022 was 3.13%, up from 2.86% for the quarter ended June 30, 2021, and down from 3.24% for the quarter ended March 31, 2022.
  • Quarterly shareholder dividend declared of $0.34 per share, an increase of 6.25%.
  • Tangible Book Value was $17.84 per share as of June 30, 2022, down from $18.49 at June 30, 2021, and down from $18.39 at March 31, 2022. The period-to-period changes are the result of increases in the unrealized loss position on available for sale securities.

FINANCIAL CONDITION

Total assets at June 30, 2022 were $2.63 billion, up $81.7 million in the second quarter and up $179.9 million from a year ago. Earning assets increased $76.5 million during the quarter comprised primarily of an increase in loans of $81.0 million. As compared to June 30, 2021, earning assets have increased $175.9 million centered in loan growth of $200.1 million, a decrease in the carrying value of investments of $5.1 million, and a reduction in interest earning cash balances of $19.3 million.

Loan growth in the second quarter was concentrated in the commercial and residential portfolios. Commercial loans increased $63.2 million during the period, nearly all in the commercial real estate and construction sectors. Residential term loans increased $16.0 million and residential construction loans increased $7.7 million, while the home equity and consumer loan portfolios had decreases of $1.2 million and $721,000, respectively.

Total deposits at June 30, 2022 were $2.25 billion, up $93.5 million during the quarter, and up $290.7 million or 14.8% from June 30, 2021. Core deposits were essentially unchanged during the quarter, while low-cost deposits were down $10.1 million in the second quarter as a modest decrease in NOW account balances was partially offset by increases in demand and savings balances. Certificates of deposit increased $94.5 million during the quarter while borrowings decreased $7.1 million, all in customer repurchase agreements.

The Company’s capital position remained strong as of June 30, 2022, with an estimated total risk-based capital ratio of 13.69%, and an estimated leverage capital ratio of 8.92%. The leverage capital ratio is in line with the 8.96% and 8.59% reported as of March 31, 2022 and as of June 30, 2021, respectively. Growth in risk-weighted assets lowered the total capital ratio from 14.08% as of March 31, 2022 and 14.83% as of June 30, 2021.

ASSET QUALITY & PROVISION FOR LOAN LOSSES

Asset quality remains strong and stable. As of June 30, 2022, the ratio of non-performing assets to total assets was 0.18%, down from 0.20% as of March 31, 2022, and down from 0.30% at June 30, 2021. Net charge-offs year-to-date were an annualized 0.03% of total loans, down slightly from the annualized 0.04% of total loans experienced as of June 30, 2021. Past due loans were 0.18% of total loans as of June 30, 2022, improved from 0.25% of total loans at March 31, 2022, and from 0.22% as of June 30, 2021.

The provision for loan losses totaled $450,000 in the second quarter of 2022, compared with $525,000 for the same period in 2021. The allowance for loan losses stood at 0.91% of total loans and 337% of non-performing loans as of June 30, 2022, as compared to 0.92% of total loans and 312% of non-performing loans at March 31, 2022, and 1.07% of total loans and 244% of non-performing loans as of June 30, 2021.

OPERATING RESULTS

Net Income for the three months ended June 30, 2022 was $10.0 million, an increase of $1.2 million or 13.8% from the three months ended June 30, 2021. On a PTPP (non-GAAP) basis net income for the period was $12.6 million, up $1.5 million or 13.2% from a year ago. The Company’s Return on Average Assets of 1.54% for the quarter was up from the 1.46% posted during the second quarter of 2021. The second quarter 2022 PTPP Return on Average Assets was 1.94%, up from 1.86% a year ago. Return on Average Tangible Common Equity was 19.94% for the second quarter of 2022, compared to 17.43% for the second quarter of 2021. The Company's Efficiency Ratio (non-GAAP) was 43.49% in the second quarter of 2022, down from 44.75% in the second quarter of 2021.

Contributing factors to the Company’s operating results in the three months ended June 30, 2022 included:

  • Net interest income increased $3.0 million from the second quarter of 2021, an increase of 18.9%, attributable to a rise in revenue from earning asset growth and stable overall funding expenses. Net interest income was up $78,000 from the first quarter of 2022.
  • Net interest margin for the second quarter of 2022 was 3.13%, up from 2.86% for the same period in 2021.
  • Non-interest income before securities gains or losses was $4.1 million, a decrease of $785,000 or 16.1% from the quarter ended June 30, 2021, and a decrease of $149,000 or 3.5% from the first quarter of 2022.
    • Revenue increased $77,000 or 6.7% from the second quarter of 2021, and increased $32,000 or 2.7% from the first quarter of 2022 at First National Wealth Management, the Bank’s trust and investment management division.
    • Debit card revenue increased $36,000 or 2.8% from the second quarter of 2021, and decreased $104,000 or 7.3% from the first quarter of 2022. The decrease from the first quarter of 2022 is attributable to timing of an annual incentive payment.
    • Mortgage banking revenue decreased $1.0 million or 71.9% from the second quarter of 2021, and $118,000 or 23.7% from the first quarter of 2022. These decreases result from a significant year-to-year decrease in mortgage refinance activity and a $40,000 mark against mortgage servicing rights recognized in the second quarter of 2022.
    • Service charge revenue increased $85,000 from the second quarter of 2021, and $30,000 from the first quarter of 2022.
  • Non-interest expense for the quarter ended June 30, 2022 was $10.2 million, up $676,000 or 7.1% from the quarter ended June 30, 2021.
    • Employee salary and benefit expenses increased $345,000, or 6.8% from the second quarter of 2021, and decreased $539,000, or 9.1% from the first quarter of 2022.
    • Occupancy expenses increased $89,000, or 13.5%, from the second quarter of 2021 and decreased $80,000, or 9.7%, from the first quarter of 2022.
    • Other Operating Expenses increased $158,000, or 6.6%, from the second quarter of 2021, and increased $132,000 or 5.5% from the first quarter of 2022.

Net PPP origination fees of $137,000 were recognized in interest income in the second quarter of 2022, down from $1.1 million in the first quarter of 2022 and down from $641,000 in the second quarter of 2021. As of June 30, 2022 all origination fees associated with PPP have been fully recognized.

DIVIDEND

On June 30, 2022 the Company's Board of Directors declared a second quarter dividend of $0.34 per share, an increase of $0.02 per share from the $0.32 per share paid in each of the prior four quarters. The second quarter dividend represents a payout to shareholders of 37.4% of earnings per share for the period, and will be paid on July 22, 2022 to shareholders of record as of July 11, 2022.

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 $2.60 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, 2022

December 31, 2021

June 30, 2021

Assets

 

 

 

Cash and due from banks

$

23,453

 

$

20,634

 

$

27,092

 

Interest-bearing deposits in other banks

 

22,871

 

 

66,678

 

 

42,215

 

Securities available for sale

 

301,737

 

 

320,566

 

 

306,247

 

Securities to be held to maturity

 

379,693

 

 

370,040

 

 

376,181

 

Restricted equity securities, at cost

 

4,720

 

 

5,365

 

 

8,839

 

Loans held for sale

 

689

 

 

835

 

 

1,147

 

Loans

 

1,788,355

 

 

1,647,649

 

 

1,588,264

 

Less allowance for loan losses

 

16,201

 

 

15,521

 

 

17,034

 

Net loans

 

1,772,154

 

 

1,632,128

 

 

1,571,230

 

Accrued interest receivable

 

10,262

 

 

7,544

 

 

10,985

 

Premises and equipment

 

29,010

 

 

28,949

 

 

29,503

 

Other real estate owned

 

51

 

 

 

 

224

 

Goodwill

 

30,646

 

 

30,646

 

 

30,646

 

Other assets

 

55,068

 

 

43,714

 

 

46,134

 

Total assets

$

2,630,354

 

$

2,527,099

 

$

2,450,443

 

Liabilities

 

 

 

Demand deposits

$

324,354

 

$

334,945

 

$

303,168

 

NOW deposits

 

640,497

 

 

655,061

 

 

553,592

 

Money market deposits

 

206,313

 

 

206,901

 

 

175,839

 

Savings deposits

 

376,448

 

 

360,185

 

 

332,520

 

Certificates of deposit

 

340,876

 

 

252,568

 

 

226,924

 

Certificates $100,000 to $250,000

 

282,180

 

 

258,211

 

 

310,068

 

Certificates $250,000 and over

 

81,354

 

 

55,426

 

 

59,210

 

Total deposits

 

2,252,022

 

 

2,123,297

 

 

1,961,321

 

Borrowed funds

 

126,588

 

 

136,342

 

 

228,648

 

Other liabilities

 

24,059

 

 

21,803

 

 

26,319

 

Total Liabilities

 

2,402,669

 

 

2,281,442

 

 

2,216,288

 

Shareholders' equity

 

 

 

Common stock

 

110

 

 

110

 

 

110

 

Additional paid-in capital

 

67,627

 

 

66,830

 

 

66,115

 

Retained earnings

 

192,565

 

 

180,417

 

 

168,908

 

Net unrealized gain (loss) on securities available for sale

 

(32,795

)

 

(1,718

)

 

1,190

 

Net unrealized loss on securities transferred from available for sale to held to maturity

 

(73

)

 

(87

)

 

(113

)

Net unrealized gain (loss) on cash flow hedging derivative instruments

 

146

 

 

 

 

(2,083

)

Net unrealized gain on postretirement costs

 

105

 

 

105

 

 

28

 

Total shareholders' equity

 

227,685

 

 

245,657

 

 

234,155

 

Total liabilities & shareholders' equity

$

2,630,354

 

$

2,527,099

 

$

2,450,443

 

Common Stock

 

 

 

Number of shares authorized

 

18,000,000

 

 

18,000,000

 

 

18,000,000

 

Number of shares issued and outstanding

 

11,030,236

 

 

10,998,765

 

 

10,987,680

 

Book value per common share

$

20.64

 

$

22.33

 

$

21.31

 

Tangible book value per common share

$

17.84

 

$

19.52

 

$

18.49

 

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, 2022

June 30, 2021

June 30, 2022

March 31, 2022

June 30, 2021

Interest income

 

 

 

 

 

Interest and fees on loans

$

33,899

$

29,959

$

17,286

 

$

16,613

$

14,840

Interest on deposits with other banks

 

71

 

24

 

62

 

 

9

 

12

Interest and dividends on investments

 

7,994

 

7,511

 

4,083

 

 

3,911

 

3,689

Total interest income

 

41,964

 

37,494

 

21,431

 

 

20,533

 

18,541

Interest expense

 

 

 

 

 

Interest on deposits

 

4,026

 

4,146

 

2,401

 

 

1,625

 

1,948

Interest on borrowed funds

 

620

 

1,752

 

332

 

 

288

 

870

Total interest expense

 

4,646

 

5,898

 

2,733

 

 

1,913

 

2,818

Net interest income

 

37,318

 

31,596

 

18,698

 

 

18,620

 

15,723

Provision for loan losses

 

900

 

1,050

 

450

 

 

450

 

525

Net interest income after provision for loan losses

 

36,418

 

30,546

 

18,248

 

 

18,170

 

15,198

Non-interest income

 

 

 

 

 

Investment management and fiduciary income

 

2,426

 

2,217

 

1,229

 

 

1,197

 

1,152

Service charges on deposit accounts

 

904

 

719

 

467

 

 

437

 

382

Net securities gains (losses)

 

1

 

164

 

(1

)

 

2

 

45

Mortgage origination and servicing income

 

878

 

3,321

 

380

 

 

498

 

1,354

Debit card income

 

2,756

 

2,543

 

1,326

 

 

1,430

 

1,290

Other operating income

 

1,347

 

1,245

 

679

 

 

668

 

688

Total non-interest income

 

8,312

 

10,209

 

4,080

 

 

4,232

 

4,911

Non-interest expense

 

 

 

 

 

Salaries and employee benefits

 

11,335

 

10,176

 

5,398

 

 

5,937

 

5,053

Occupancy expense

 

1,578

 

1,413

 

749

 

 

829

 

660

Furniture and equipment expense

 

2,474

 

2,400

 

1,239

 

 

1,235

 

1,185

FDIC insurance premiums

 

440

 

391

 

222

 

 

218

 

192

Amortization of identified intangibles

 

35

 

35

 

18

 

 

17

 

18

Other operating expense

 

4,960

 

4,955

 

2,546

 

 

2,414

 

2,388

Total non-interest expense

 

20,822

 

19,370

 

10,172

 

 

10,650

 

9,496

Income before income taxes

 

23,908

 

21,385

 

12,156

 

 

11,752

 

10,613

Applicable income taxes

 

4,206

 

3,676

 

2,159

 

 

2,047

 

1,826

Net Income

$

19,702

$

17,709

$

9,997

 

$

9,705

$

8,787

Basic earnings per share

$

1.80

$

1.63

$

0.91

 

$

0.89

$

0.81

Diluted earnings per share

$

1.79

$

1.61

$

0.91

 

$

0.88

$

0.80

 

 

 

 

 

 

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, 2022

June 30, 2021

June 30, 2022

March 31, 2022

June 30, 2021

 

 

 

 

 

 

Summary of Operations

 

 

 

 

 

Interest Income

$

41,964

 

$

37,494

 

$

21,431

 

$

20,533

 

$

18,541

 

Interest Expense

 

4,646

 

 

5,898

 

 

2,733

 

 

1,913

 

 

2,818

 

Net Interest Income

 

37,318

 

 

31,596

 

 

18,698

 

 

18,620

 

 

15,723

 

Provision for Loan Losses

 

900

 

 

1,050

 

 

450

 

 

450

 

 

525

 

Non-Interest Income

 

8,312

 

 

10,209

 

 

4,080

 

 

4,232

 

 

4,911

 

Non-Interest Expense

 

20,822

 

 

19,370

 

 

10,172

 

 

10,650

 

 

9,496

 

Net Income

 

19,702

 

 

17,709

 

 

9,997

 

 

9,705

 

 

8,787

 

Per Common Share Data

 

 

 

 

 

Basic Earnings per Share

$

1.80

 

$

1.63

 

$

0.91

 

$

0.89

 

$

0.81

 

Diluted Earnings per Share

 

1.79

 

 

1.61

 

 

0.91

 

 

0.88

 

 

0.80

 

Cash Dividends Declared

 

0.66

 

 

0.63

 

 

0.34

 

 

0.32

 

 

0.32

 

Book Value per Common Share

 

20.64

 

 

21.31

 

 

20.64

 

 

21.19

 

 

21.31

 

Tangible Book Value per Common Share

 

17.84

 

 

18.49

 

 

17.84

 

 

18.39

 

 

18.49

 

Market Value

 

30.13

 

 

29.45

 

 

30.13

 

 

30.08

 

 

29.45

 

Financial Ratios

 

 

 

 

 

Return on Average Equity(a)

 

16.61

%

 

15.48

%

 

17.29

%

 

15.96

%

 

15.11

%

Return on Average Tangible Common Equity(a)

 

19.07

%

 

17.88

%

 

19.94

%

 

18.25

%

 

17.43

%

Return on Average Assets(a)

 

1.55

%

 

1.50

%

 

1.54

%

 

1.56

%

 

1.46

%

Average Equity to Average Assets

 

9.35

%

 

9.69

%

 

8.91

%

 

9.80

%

 

9.69

%

Average Tangible Equity to Average Assets

 

8.14

%

 

8.39

%

 

7.73

%

 

8.57

%

 

8.40

%

Net Interest Margin Tax-Equivalent(a)

 

3.18

%

 

2.93

%

 

3.13

%

 

3.24

%

 

2.86

%

Dividend Payout Ratio

 

36.67

%

 

38.65

%

 

37.36

%

 

35.96

%

 

39.51

%

Allowance for Loan Losses/Total Loans

 

0.91

%

 

1.07

%

 

0.91

%

 

0.92

%

 

1.07

%

Non-Performing Loans to Total Loans

 

0.27

%

 

0.44

%

 

0.27

%

 

0.30

%

 

0.44

%

Non-Performing Assets to Total Assets

 

0.18

%

 

0.30

%

 

0.18

%

 

0.20

%

 

0.30

%

Efficiency Ratio

 

44.45

%

 

45.14

%

 

43.49

%

 

45.42

%

 

44.75

%

At Period End

 

 

 

 

 

Total Assets

$

2,630,354

 

$

2,450,443

 

$

2,630,354

 

$

2,548,607

 

$

2,450,443

 

Total Loans

 

1,788,355

 

 

1,588,264

 

 

1,788,355

 

 

1,707,348

 

 

1,588,264

 

Total Investment Securities

 

686,150

 

 

691,267

 

 

686,150

 

 

695,600

 

 

691,267

 

Total Deposits

 

2,252,022

 

 

1,961,321

 

 

2,252,022

 

 

2,158,539

 

 

1,961,321

 

Total Shareholders' Equity

 

227,685

 

 

234,155

 

 

227,685

 

 

233,646

 

 

234,155

 

(a) Annualized using a 365-day basis for both 2022 and 2021.

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 2022 and 2021.

 

For the six months ended

For the quarters ended

In thousands of dollars

June 30, 2022

June 30, 2021

June 30, 2022

March 31, 2022

June 30, 2021

Net interest income as presented

$

37,318

$

31,596

$

18,698

$

18,620

$

15,723

Effect of tax-exempt income

 

1,127

 

1,188

 

570

 

557

 

592

Net interest income, tax equivalent

$

38,445

$

32,784

$

19,268

$

19,177

$

16,315

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 six months ended

For the quarters ended

In thousands of dollars

June 30, 2022

June 30, 2021

June 30, 2022

March 31, 2022

June 30, 2021

Non-interest expense, as presented

$

20,822

 

$

19,370

 

$

10,172

 

$

10,650

 

$

9,496

 

Net interest income, as presented

 

37,318

 

 

31,596

 

 

18,698

 

 

18,620

 

 

15,723

 

Effect of tax-exempt interest income

 

1,127

 

 

1,188

 

 

570

 

 

557

 

 

592

 

Non-interest income, as presented

 

8,312

 

 

10,209

 

 

4,080

 

 

4,232

 

 

4,911

 

Effect of non-interest tax-exempt income

 

84

 

 

83

 

 

43

 

 

42

 

 

41

 

Net securities (gains) losses

 

(1

)

 

(164

)

 

1

 

 

(2

)

 

(45

)

Adjusted net interest income plus non-interest income

$

46,840

 

$

42,912

 

$

23,392

 

$

23,449

 

$

21,222

 

Non-GAAP efficiency ratio

 

44.45

%

 

45.14

%

 

43.49

%

 

45.42

%

 

44.75

%

GAAP efficiency ratio

 

45.63

%

 

46.33

%

 

44.66

%

 

46.60

%

 

46.02

%

 

 

 

 

 

 

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. GAAP:

 

For the six months ended

For the quarters ended

In thousands of dollars

June 30, 2022

June 30, 2021

June 30, 2022

March 31, 2022

June 30, 2021

Average shareholders' equity as presented

$

239,267

 

$

230,760

 

$

231,980

 

$

246,635

 

$

233,214

 

Less intangible assets

 

(30,910

)

 

(30,980

)

 

(30,919

)

 

(30,919

)

 

(30,995

)

Tangible average shareholders' equity

$

208,357

 

$

199,780

 

$

201,061

 

$

215,716

 

$

202,219

 

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 six months ended

For the quarters ended

In thousands of dollars

June 30, 2022

June 30, 2021

June 30, 2022

March 31, 2022

June 30, 2021

Net Income, as presented

$

19,702

$

17,709

$

9,997

$

9,705

$

8,787

Add: provision for loan losses

 

900

 

1,050

 

450

 

450

 

525

Add: income taxes

 

4,206

 

3,676

 

2,159

 

2,047

 

1,826

Pre-Tax, pre-provision net income

$

24,808

$

22,435

$

12,606

$

12,202

$

11,138

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

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