FIRST BANCORP Net Income Jumps 31% on Strong Net Interest Income

Ticker: FBNC · Form: 10-Q · Filed: Nov 7, 2025 · CIK: 811589

Sentiment: mixed

Topics: Regional Banking, Net Interest Income, Credit Quality, Investment Securities, Earnings Growth, Asset Management, Financial Performance

TL;DR

**FBNC's net income soared, but watch those securities losses – a mixed bag for the bulls.**

AI Summary

FIRST BANCORP /NC/ (FBNC) reported a significant increase in net income for the nine months ended September 30, 2025, reaching $95.335 million, up 31.2% from $72.664 million in the prior year. This was driven by a robust 19.9% increase in net interest income to $292.048 million, compared to $243.432 million in 2024. Interest and fees on loans rose to $342.286 million from $331.346 million, and taxable interest income from investment securities increased to $49.952 million from $34.798 million. However, the company recorded substantial securities losses, net, of $27.905 million for the nine-month period, a sharp contrast to a $1.161 million loss in 2024. The provision for credit losses decreased significantly to $6.770 million from $15.941 million, contributing positively to net income. Total assets grew to $12.750 billion as of September 30, 2025, from $12.148 billion at December 31, 2024, primarily due to an increase in net loans to $8.298 billion from $7.972 billion. Total deposits also increased to $10.881 billion from $10.531 billion. Diluted EPS improved to $2.30 from $1.76 year-over-year.

Why It Matters

This strong performance, particularly the 31.2% surge in net income and 19.9% rise in net interest income, signals robust operational health for FBNC, which is crucial for investors seeking growth in the regional banking sector. The significant reduction in provision for credit losses suggests improved asset quality or a more optimistic economic outlook, potentially freeing up capital for other uses. However, the substantial $27.905 million securities losses could indicate challenges in managing interest rate risk or a strategic portfolio adjustment, which warrants investor scrutiny. For customers, a healthy bank means continued access to credit and stable services, while employees benefit from a thriving company. In a competitive market, FBNC's ability to grow net interest income and manage credit risk effectively positions it favorably against peers.

Risk Assessment

Risk Level: medium — The company reported significant 'Securities losses, net' of $27.905 million for the nine months ended September 30, 2025, compared to only $1.161 million in the prior year, indicating potential volatility in its investment portfolio. While the provision for credit losses decreased to $6.770 million from $15.941 million, suggesting improved loan quality, the substantial unrealized losses on securities available for sale, totaling $(257,756) million, and held to maturity, totaling $(71,708) million, as of September 30, 2025, present a notable market risk.

Analyst Insight

Investors should closely monitor FBNC's future disclosures regarding its investment portfolio strategy and interest rate risk management, given the substantial securities losses. While the strong net interest income and reduced credit loss provision are positive, a deeper dive into the composition and duration of their securities holdings is warranted to assess potential future impacts on earnings and capital. Consider this a 'hold' with a watchful eye on market risk.

Financial Highlights

debt To Equity
0.06
revenue
$413.601M
operating Margin
N/A
total Assets
$12.750B
total Debt
$92.421M
net Income
$95.335M
eps
$2.30
gross Margin
N/A
cash Position
$597.975M
revenue Growth
+6.9%

Revenue Breakdown

SegmentRevenueGrowth
Interest and fees on loans$342.286M+3.3%
Taxable interest income from investment securities$49.952M+43.6%
Net interest income$292.048M+19.9%

Key Numbers

Key Players & Entities

FAQ

What were FIRST BANCORP's net income and net interest income for the nine months ended September 30, 2025?

FIRST BANCORP reported net income of $95.335 million for the nine months ended September 30, 2025, a 31.2% increase from $72.664 million in the prior year. Net interest income for the same period was $292.048 million, up 19.9% from $243.432 million in 2024.

How did FIRST BANCORP's provision for credit losses change in the first nine months of 2025?

FIRST BANCORP's provision for credit losses significantly decreased to $6.770 million for the nine months ended September 30, 2025, down from $15.941 million in the same period of 2024. This represents a 57.5% reduction.

What was the impact of securities losses on FIRST BANCORP's income statement?

FIRST BANCORP recorded substantial 'Securities losses, net' of $27.905 million for the nine months ended September 30, 2025. This is a significant increase compared to a net loss of $1.161 million in the corresponding period of 2024.

What were FIRST BANCORP's total assets and total deposits as of September 30, 2025?

As of September 30, 2025, FIRST BANCORP's total assets stood at $12.750 billion, an increase from $12.148 billion at December 31, 2024. Total deposits also grew to $10.881 billion from $10.531 billion over the same period.

How did FIRST BANCORP's diluted earnings per share (EPS) perform?

FIRST BANCORP's diluted earnings per common share increased to $2.30 for the nine months ended September 30, 2025, up from $1.76 in the same period of 2024.

What are the key risks identified in FIRST BANCORP's 10-Q filing?

The 10-Q filing highlights 'Securities losses, net' of $27.905 million and significant unrealized losses on securities available for sale of $(257,756) million and held to maturity of $(71,708) million as of September 30, 2025. These figures indicate market risk related to the company's investment portfolio.

What accounting standards did FIRST BANCORP adopt in 2025?

FIRST BANCORP did not adopt any new accounting standards during the first nine months of 2025. However, it noted ASU 2023-09, ASU 2024-03, and ASU 2025-07 are pending adoption, with no significant impact expected on its consolidated financial statements.

What was the change in FIRST BANCORP's cash and cash equivalents?

FIRST BANCORP's cash and cash equivalents increased by $90.468 million for the nine months ended September 30, 2025, reaching $597.975 million at the end of the period, compared to $507.507 million at the beginning of the period.

How much did FIRST BANCORP pay in cash dividends for common stock?

FIRST BANCORP paid cash dividends of $27.747 million for common stock during the nine months ended September 30, 2025. This represents a dividend of $0.68 per common share for the period.

What is the status of SBA Complete, Inc., a former subsidiary of FIRST BANCORP?

SBA Complete, Inc., which previously specialized in SBA loan consulting services, became inactive during the second quarter of 2024. Certain activities previously handled by SBA Complete have transitioned to First Bank, the wholly owned subsidiary of FIRST BANCORP.

Risk Factors

Industry Context

The banking industry is currently navigating a complex environment characterized by fluctuating interest rates, evolving regulatory landscapes, and increasing competition from both traditional institutions and fintech companies. Banks are focused on managing net interest margins, controlling operational costs, and adapting to changing customer preferences for digital services. Credit quality remains a key focus, with ongoing vigilance required due to potential economic uncertainties.

Regulatory Implications

First Bancorp, as a financial institution, is subject to stringent regulatory oversight from bodies like the Federal Reserve and the FDIC. Compliance with capital adequacy requirements, consumer protection laws, and anti-money laundering regulations is paramount. Any missteps can lead to significant penalties and reputational damage, impacting operational flexibility and profitability.

What Investors Should Do

  1. Monitor the impact of unrealized securities losses on future earnings and capital ratios.
  2. Analyze the sustainability of the reduced provision for credit losses.
  3. Evaluate the growth drivers for net interest income.
  4. Assess the impact of goodwill on future performance.

Glossary

Net interest income
The difference between the interest income generated by a bank and the interest it pays out to depositors and lenders. (A core measure of a bank's profitability from its lending and borrowing activities. An increase here is a positive sign for FBNC.)
Provision for credit losses
An expense set aside by a financial institution to cover potential losses from loans that may not be repaid. (A decrease in this provision suggests improved credit quality or a more optimistic outlook on loan repayments for FBNC.)
Securities available for sale
Investments in debt or equity securities that a company intends to sell in the near term to realize gains or manage liquidity. (Unrealized losses in this category ($217.756M) indicate a decline in market value, impacting comprehensive income but not necessarily current earnings.)
Securities held to maturity
Investments in debt securities that a company has the intent and ability to hold until their maturity date. (Unrealized losses ($71.708M) in this category are not recognized in the income statement but reflect a decline in the underlying value of these long-term holdings.)
Accumulated other comprehensive income (loss)
A component of shareholders' equity that includes unrealized gains and losses on certain investments, foreign currency translations, and pension adjustments. (The significant negative balance ($-193.395M) primarily reflects the unrealized losses on the securities portfolio.)
Goodwill
An intangible asset that arises when a company acquires another company for a price greater than the fair value of its net identifiable assets. (FBNC has substantial goodwill ($478.750M), which is subject to impairment testing and could lead to significant write-downs if its value diminishes.)
Diluted EPS
Earnings per share calculated by dividing net income by the total number of outstanding shares, including all dilutive potential common shares (like stock options and convertible securities). (An increase in Diluted EPS from $1.76 to $2.30 indicates improved profitability on a per-share basis for FBNC.)
Net loans
The total amount of loans a bank has issued, minus the allowance for credit losses. (An increase in net loans to $8.298B from $7.972B shows growth in the bank's core lending business.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, First Bancorp has demonstrated robust growth in net income, up 31.2% to $95.335 million, largely driven by a 19.9% increase in net interest income. This was supported by higher interest income from both loans and investment securities. However, the company has also seen a dramatic increase in net securities losses, from $1.161 million to $27.905 million, and a significant reduction in the provision for credit losses, which positively impacted net income. Total assets and deposits have grown, indicating expansion, but the balance sheet also reflects substantial unrealized losses within the securities portfolio.

Filing Stats: 4,573 words · 18 min read · ~15 pages · Grade level 19.3 · Accepted 2025-11-07 16:07:41

Key Financial Figures

Filing Documents

Financial Information

Part I. Financial Information

- Financial Statements (unaudited)

Item 1 - Financial Statements (unaudited) Consolidated Balance Sheets 4 Consolidated Statements of Income 5 Consolidated Statements of Comprehensive Income (Loss) 6 Consolidated Statements of Shareholders' Equity 7 Consolidated Statements of Cash Flows 9

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 11

– Management's Discussion and Analysis of Consolidated Results of Operations and Financial Condition

Item 2 – Management's Discussion and Analysis of Consolidated Results of Operations and Financial Condition 34

– Quantitative and Qualitative Disclosures About Market Risk

Item 3 – Quantitative and Qualitative Disclosures About Market Risk 52

– Controls and Procedures

Item 4 – Controls and Procedures 54

Other Information

Part II. Other Information

– Legal Proceedings

Item 1 – Legal Proceedings 54

– Risk Factors

Item 1A – Risk Factors 54

- Other Information

Item 5 - Other Information 54

– Exhibits

Item 6 – Exhibits 55

Signatures

Signatures 56 Page 2 Index

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS Part I of this report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, which statements are inherently subject to risks and uncertainties. Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results or otherwise are not statements of historical fact. Further, forward-looking statements are intended to speak only as of the date made. Such statements are often characterized by the use of qualifying words (and their derivatives) such as "expect," "believe," "estimate," "plan," "project," or other statements concerning our opinions or judgment about future events. Our actual results may differ materially from those anticipated in any forward-looking statements, as they will depend on many factors about which we are unsure, including many factors which are beyond our control. Factors that could influence the accuracy of such forward-looking statements include, but are not limited to, the financial success or changing strategies of our customers, our level of success in integrating acquisitions, actions of government regulators, the level of market interest rates, geopolitical influences and general economic conditions. For additional information about factors that could affect the matters discussed in this paragraph, see the "Risk Factors" section of our 2024 Annual Report on Form 10-K ("2024 Annual Report") and Item 1A of Part II of this report. Page 3 Index

Financial Information

Part I. Financial Information

- Financial Statements

Item 1 - Financial Statements First Bancorp Consolidated Balance Sheets ($ in thousands - unaudited) September 30, 2025 December 31, 2024 Assets Cash and due from banks, noninterest-bearing $ 138,369 $ 78,596 Due from banks, interest-bearing 459,606 428,911 Total cash and cash equivalents 597,975 507,507 Securities available for sale (amortized cost of $ 2,417,434 and $ 2,411,117 , respectively) 2,165,668 2,043,062 Securities held to maturity (fair values of $ 443,055 and $ 428,571 , respectively) 514,733 519,998 Presold mortgages in process of settlement 4,032 5,942 Loans 8,419,224 8,094,676 Allowance for credit losses on loans ( 120,948 ) ( 122,572 ) Net loans 8,298,276 7,972,104 Premises and equipment, net 141,441 143,459 Accrued interest receivable 35,986 36,329 Goodwill 478,750 478,750 Other intangible assets, net 18,526 22,904 Bank-owned life insurance 191,911 188,460 Other assets 302,965 229,179 Total assets $ 12,750,263 $ 12,147,694 Liabilities Deposits Noninterest-bearing deposits $ 3,580,560 $ 3,367,624 Interest-bearing deposits 7,300,610 7,162,901 Total deposits 10,881,170 10,530,525 Borrowings 92,421 91,876 Accrued interest payable 4,436 4,604 Other liabilities 168,913 75,078 Total liabilities 11,146,940 10,702,083 Commitments and contingencies Shareholders' Equity Preferred stock, no par value per share. Authorized: 5,000,000 shares Issued & outstanding: none and none , respectively — — Common stock, no par value per share. Authorized: 60,000,000 shares Issued & outstanding: 41,465,437 shares and 41,347,418 shares, respectively 973,235 971,313 Retained earnings 823,483 756,327 Stock in rabbi trust assumed in acquisition ( 877 ) ( 1,148 ) Rabbi trust obligation 877 1,148 Accumulated other comprehensive income (loss) ( 193,395 ) ( 282,029 ) Total shareholders' equity 1,603,323 1,445,611 Total liabilities and shareholders' equity $ 12,750,263 $ 12,147,694 See accompanying notes to unaudited consolida

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (unaudited) Note 1. Organization and Basis of Presentation The consolidated financial statements include the accounts of First Bancorp (the "Company") and its wholly owned subsidiary First Bank (the "Bank"). The Bank has two wholly owned subsidiaries that are fully consolidated, Magnolia Financial, Inc. ("Magnolia Financial"), and First Troy SPE, LLC. All significant intercompany accounts and transactions have been eliminated. The Bank formerly operated a third subsidiary, SBA Complete, Inc. ("SBA Complete"), which specialized in providing consulting services for financial institutions across the country related to Small Business Administration ("SBA") loan origination and servicing. During the second quarter of 2024, SBA Complete became inactive with certain activities transitioning to the Bank. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and notes necessary for complete financial statements in accordance with GAAP. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position of the Company as of September 30, 2025, the consolidated results of income, comprehensive income and shareholders' equity for the nine months ended September 30, 2025 and 2024, and the consolidated cash flows for the nine months ended September 30, 2025 and 2024. Any such adjustments were of a normal, recurring nature. These interim financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes in the 2024 Annual Report for the year ended December 31, 2024. Operating results for int

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