# EDGAR Filing Document

**Accession Number:** 0000811589
**File Stem:** 0000811589-23-000005
**Filing Date:** 2023-1
**Character Count:** 37154
**Document Hash:** dcb43244eba27b420a569fe774149f21
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000811589-23-000005.hdr.sgml**: 20230125

**ACCESSION NUMBER**: 0000811589-23-000005

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20230124

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230125

**DATE AS OF CHANGE**: 20230124

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** FIRST BANCORP /NC/
- **CENTRAL INDEX KEY:** 0000811589
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **IRS NUMBER:** 561421916
- **STATE OF INCORPORATION:** NC
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-15572
- **FILM NUMBER:** 23549238

**BUSINESS ADDRESS:**
- **STREET 1:** 300 SW BROAD STREET
- **CITY:** SOUTHERN PINES
- **STATE:** NC
- **ZIP:** 28387
- **BUSINESS PHONE:** 910-246-2500

**MAIL ADDRESS:**
- **STREET 1:** 300 SW BROAD STREET
- **CITY:** SOUTHERN PINES
- **STATE:** NC
- **ZIP:** 28387

?xml version="1.0" ? fbnc-20230124

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________

**Form 8-K** 

__________________

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

---

| | |
|:---|:---|
| Date of Report (Date of earliest event reported): | **January 24, 2023** |

---

**First Bancorp** 

(Exact Name of Registrant as Specified in its Charter)

---

| | | |
|:---|:---|:---|
| North Carolina | 0-15572 | 56-1421916 |
| (State or Other Jurisdiction | (Commission | (I.R.S. Employer |
| of Incorporation) | File Number) | Identification Number) |

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; 300 SW Broad Street, | &nbsp;&nbsp;&nbsp;&nbsp; 300 SW Broad Street, | |
| Southern Pines, | NC | 28387 |
| (Address of Principal Executive Offices) | (Address of Principal Executive Offices) | (Zip Code) |

---

(910) 246-2500

____________________

(Registrant's telephone number, including area code)

Not Applicable

___________________

(Former Name or Former Address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

<u>Title of each class</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Trading symbol</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Name of each exchange on which registered:</u>

Common Stock, No Par Value&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FBNC&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nasdaq Global Select Market

------

First Bancorp

**INDEX**

---

| | |
|:---|:---|
| | **Page** |
| Item 2.02 – Results of Operations and Financial Condition | 3 |
| Item 9.01 – Financial Statements and Exhibits | 3 |
| Signatures | 3 |
| <u>[Exhibit 99.1 News Release](exhibit991newsreleasedated.htm)[dated January 24](exhibit991newsreleasedated.htm)[,](exhibit991newsreleasedated.htm)[2023](exhibit991newsreleasedated.htm)</u> | 4 |

---

------

**Item 2.02 - Results of Operations and Financial Condition**

On January 24, 2023, First Bancorp (the "Company") issued an earnings release to announce its financial results for the three month and twelve month periods ended December 31, 2022. The earnings release contains forward-looking statements regarding the Company and includes cautionary language identifying important factors that could cause actual results to differ materially from those anticipated. The earnings release is furnished as Exhibit 99.1. Consequently, it is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Such materials may only be incorporated by reference into another filing under the Exchange Act or Securities Act of 1933 if such subsequent filing specifically references this Form 8-K.

**Item 9.01 – Financial Statements and Exhibits**

(d) Exhibits

<u>[Exhibit 99.1 – News Release issued on January 24, 2023](exhibit991newsreleasedated.htm)</u>

**Disclosures About Forward Looking Statements**

This news release 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. Such statements are often characterized by the use of qualifying words (and their derivatives) such as "expect," "believe," "estimate," "plan," "project," "anticipate," or other statements concerning opinions or judgments of the Company and its management about future events. Factors that could influence the accuracy of such forward-looking statements include, but are not limited to, the financial success or changing strategies of the Company's customers, the Company's level of success in integrating acquisitions, actions of government regulators, the level of market interest rates, and general economic conditions. For additional information about the factors that could affect the matters discussed in this paragraph, see the "Risk Factors" section of the Company's most recent annual report on Form 10-K. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements. The Company is also not responsible for changes made to the press release by wire services, internet services or other media.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| | | First Bancorp |
| January 24, 2023 | <br>By: | <br>/s/ Richard H. Moore |
|  |  | Richard H. Moore |
|  |  | Chief Executive Officer |

---

## Exhibit 99.1

**News Release**

---

| | |
|:---|:---|
| For Immediate Release: | For More Information, Contact: |
| January 24, 2023 | Elaine Pozarycki |
| | 984-900-2457 |

---

First Bancorp Reports Fourth Quarter and Annual Results

SOUTHERN PINES, N.C. - First Bancorp (the "Company") (NASDAQ - FBNC), the parent company of First Bank, announced today net income of $38.4 million, or $1.08 per diluted common share, for the three months ended December 31, 2022, compared to $37.9 million, or $1.06 per diluted common share for the three months ended September 30, 2022 ("linked quarter") and $10.5 million, or $0.30 per diluted common share, recorded in the fourth quarter of 2021. For the twelve months ended December 31, 2022, the Company recorded net income of $146.9 million, or $4.12 per diluted common share, compared to $95.6 million, or $3.19 per diluted common share for the twelve months ended December 31, 2021.

On June 21, 2022, the Company announced that it had reached an agreement to acquire GrandSouth Bancorporation ("GrandSouth"), headquartered in Greenville, South Carolina, in an all-stock transaction. The transaction closed on January 1, 2023, adding eight branches throughout South Carolina and approximately $1.2 billion in total assets, $1.0 billion in loans, and $1.0 billion in deposits to the Company's balance sheet as of the acquisition date.

Richard H. Moore, CEO and Chairman of the Company, stated, "First Bancorp had another strong year of continued growth as we earned nearly $147 million in net income, grew loans close to 10%, and improved our credit quality metrics over the course of the year. I am proud of our employees for their commitment to the communities we serve and for their continued focus on our customers, shareholders, and each other during our acquisition of GrandSouth and our October 2021 acquisition of Select Bancorp ("Select"). We welcomed our new GrandSouth customers officially as of January 1, 2023 and look forward to system conversion in March 2023."

<u>2022 Financial Highlights</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Annualized return on average assets ("ROA") of 1.44% and annualized return on average common equity ("ROE") of 15.20% was reported for the quarter ended December 31, 2022. For the year ended December 31, 2022, ROA was reported at 1.39% and ROE was 13.40%, both increasing from the prior year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total loans outstanding increased $139.9 million (8.5% annualized) during the fourth quarter of 2022, while year-over-year growth was $583.4 million, or 9.6%. Total loans were in excess of $6.6 billion at December 31, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Credit quality continues to be strong with the nonperforming assets ("NPA") to total assets ratio at 0.36% as of December 31, 2022, down three basis points from the linked quarter, and as compared to 0.50% at December 31, 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Yield on total interest-earning assets increased 15 basis points to 3.64% as compared to the third quarter of 2022 and as compared to 3.20% for the fourth quarter of 2021. For the year ended December 31, 2022, interest-earning assets yielded 3.41%, up from 3.25% for the prior year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Capital remains strong with a total common equity Tier 1 ratio of 12.68%, up from 12.53% for the prior year, and an estimated total risk-based capital ratio of 14.73% as of December 31, 2022 as compared to 14.67% for the prior year.

------

The following discussions and comparisons to the prior year financial periods presented are impacted by the Company's acquisition of Select completed in the fourth quarter of 2021 which contributed $1.3 billion in loans and $1.6 billion in deposits as of the acquisition date.

<u>Net Interest Income and Net Interest Margin</u>

Net interest income for the fourth quarter of 2022 was $84.4 million, a 14.3% increase from the $73.8 million recorded in the fourth quarter of 2021 and a decrease of $1.0 million or 1.1%, from the linked quarter. The increase in net interest income from the prior year period was due in large part to higher earning assets year-over-year and the higher net interest margin ("NIM") throughout 2022 as compared to 2021. Average interest-earning assets for the fourth quarter of 2022 increased 7.7% from the comparable period of the prior year, with strong loan growth as the primary driver for the increase.

The Company's tax-equivalent NIM (calculated by dividing tax-equivalent net interest income by average earning assets) for the twelve months ended December 31, 2022 was 3.28%, compared to 3.16% for the prior year. The NIM increase was driven by the rising market interest rates as the Federal Reserve's monetary policies resulted in a 425 basis point rise in short-term rates between March and December 2022.

The decrease in net interest income in the fourth quarter of 2022 as compared to the third quarter of 2022 was related primarily to an increase in total interest expense of $5.8 million. While the Company's total cost of funds ("COF") remained low at 0.36% for the quarter ended December 31, 2022, COF increased 24 basis points from the linked quarter contributing to the higher interest expense. During the fourth quarter of 2022, the Company experienced some pressure to reprice deposits, primarily money market accounts, and utilized more wholesale funding sources, both of which contributed to the increase in cost of funds.

<u>Allowance for Credit Losses, Provisions for Credit Losses, and Asset Quality</u>

For the three months ended December 31, 2022, the Company recorded $4.0 million in provision for loan losses. This is compared to $5.1 million provision for loan losses for the linked quarter and a provision of $11.0 million for the fourth quarter of 2021. Fluctuations each period are based on the acquisition of Select in the fourth quarter of 2021, loan growth during each period, changes in the levels of nonperforming loans, economic forecasts impacting loss drivers, and other assumptions and inputs to the Company's CECL model.

Also during the fourth quarter of 2022, the Company recorded $1.0 million in provision for unfunded commitments, compared to a $0.3 million provision for unfunded commitments for the linked quarter and a provision of $2.4 million for the fourth quarter of 2021. Changes each period are related to fluctuations in the level of available credit lines and updated loss drivers. The reserve for unfunded commitments totaled $13.3 million at December 31, 2022 and is included in the line item "Other Liabilities".

Asset quality remained strong with annualized net loan recoveries of (0.02)% for the fourth quarter of 2022 and net charge-offs of 0.01% for the year ended December 31, 2022. Total NPAs amounted to $38.3 million at December 31, 2022, or 0.36% of total assets, down from $40.7 million, 0.39% of total assets, at the end of the linked quarter, and $52.6 million, or 0.50% of total assets, at December 31, 2021.

<u>Noninterest Income</u>

Total noninterest income for the fourth quarter of 2022 was $14.6 million, a 3.3% decrease from the $15.1 million recorded for the fourth quarter of 2021 and a 13.9% decrease from the linked quarter. The primary factors driving fluctuations among the periods presented were as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Declines in "Other service charges, commission and fees" each period were related to lower interchange fees effective in July 2022 as a result of the Company becoming subject to the Durbin Amendment limitations. Lower fees were partially offset by higher volumes of activity in each period.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fees from presold mortgages amounted to $0.2 million for the fourth quarter of 2022, a decrease of 59.8% from the linked quarter, and a decrease of 92.7% from the $2.1 million recorded in the fourth quarter of 2021. Mortgage loan refinancing and origination volumes declined significantly over these periods due to increases in mortgage interest rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• SBA-related revenues, including consulting fees and gain on sales, were down year-over-year as a result of lower PPP-related revenue in 2022 and timing and volume of loan originations available to be sold each period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other gains amounted to $1.4 million for the fourth quarter of 2022 and $7.3 million for the twelve months ended December 31, 2022, primarily related to death benefits realized on bank-owned life insurance policies.

<u>Noninterest Expenses</u>

Noninterest expenses amounted to $45.7 million for the fourth quarter of 2022, compared to $48.7 million for the linked quarter and $62.8 million for the fourth quarter of 2021. The 27.3% decrease in noninterest expenses from the prior year period was driven by lower merger and acquisition expenses as compared to the fourth quarter of 2021. All other expenses remained essentially the same for the year-over-year quarter comparison other than an increase of employee benefit expenses driven by the fluctuations in the timing and volume of claims paid under the Company's self-insured health insurance plan. The increase in noninterest expenses, exclusive of merger expenses, of 13.3% year-over-year for the twelve months ended December 31, 2022 was driven by higher operating expenses, including additional locations and personnel, resulting from the Select acquisition which occurred in the fourth quarter of 2021.

<u>Balance Sheet and Capital</u>

Total assets at December 31, 2022 were $10.6 billion, an increase of 1.1% from the prior year end with growth in loans offset by reductions in other assets throughout the year.

Total investment securities decreased $288.0 million from December 31, 2021 to total $2.9 billion at December 31, 2022, as the Company is strategically redeploying the cash flows from investments to fund loan growth. Also contributing to the decline year-over-year was the higher level of unrealized losses on available for sale securities which amounted to $444.1 million at December 31, 2022, down $22.7 million from the linked quarter.

Total loans amounted to $6.7 billion at December 31, 2022, an increase of $583.4 million, or 9.6%, from December 31, 2021, due to organic loan growth throughout 2022. Organic net loan growth for the fourth quarter of 2022 amounted to $139.9 million, an annualized growth rate of 8.6%.

Total deposits amounted to $9.2 billion at December 31, 2022, an increase of $102.9 million, or 1.1%, from December 31, 2021. While deposits increased for the year to date period, the fourth quarter of 2022 realized a decline in total deposits of $1.7 million as market rates for deposits became more competitive and customer behaviors shifted from activity experienced during the pandemic.

------

The Company remains well-capitalized by all regulatory standards, with an estimated Total Risk-Based Capital Ratio at December 31, 2022 of 14.73% compared to 14.67% reported at December 31, 2021. The Company's tangible common equity ("TCE") to tangible assets ratio was 6.39% at December 31, 2022, an increase from 5.98% for the linked quarter and a decrease of 199 basis points from a year earlier. Fluctuations in the TCE ratio were driven by the changes in the unrealized loss on available for sale securities included in equity.

\* \* \*

First Bancorp is a bank holding company headquartered in Southern Pines, North Carolina, with total assets of approximately $11.8 billion. Its principal activity is the ownership and operation of First Bank, a state-chartered community bank that operates 118 branches in North Carolina and South Carolina. First Bank also provides SBA loans to customers through its nationwide network of lenders - for more information on First Bank's SBA lending capabilities, please visit www.firstbanksba.com. First Bancorp's common stock is traded on The NASDAQ Global Select Market under the symbol "FBNC."

Please visit our website at www.LocalFirstBank.com.

<u>Caution about Forward-Looking Statements</u>: This press release 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. Such statements are often characterized by the use of qualifying words (and their derivatives) such as "expect," "believe," "estimate," "plan," "project," "anticipate," or other words or phrases concerning opinions or judgments of the Company and its management about future events. Factors that could influence the accuracy of such forward-looking statements include, but are not limited to, the financial success or changing strategies of the Company's customers, the Company's level of success in integrating acquisitions, actions of government regulators, the level of market interest rates, and general economic conditions. For additional information about the factors that could affect the matters discussed in this paragraph, see the "Risk Factors" section of the Company's most recent annual report on Form 10-K available at www.sec.gov. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements. The Company is also not responsible for changes made to this press release by wire services, internet services or other media.

------

**First Bancorp and Subsidiaries<br>Financial Summary**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **CONSOLIDATED INCOME STATEMENT** | **CONSOLIDATED INCOME STATEMENT** | **CONSOLIDATED INCOME STATEMENT** | **CONSOLIDATED INCOME STATEMENT** | **CONSOLIDATED INCOME STATEMENT** | **CONSOLIDATED INCOME STATEMENT** |
|  | Three Months Ended | Three Months Ended | Three Months Ended | Twelve Months Ended | Twelve Months Ended |
| ($ in thousands except per share data - unaudited) | December 31, 2022 | September 30, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 |
| <u>Interest income</u> |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest and fees on loans | $76509 | 72239 | 64688 | $278027 | 219013 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest on investment securities | 14611 | 14565 | 10910 | 57923 | 34478 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other interest income | 1991 | 1486 | 618 | 5007 | 2427 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total interest income | 93111 | 88290 | 76216 | 340957 | 255918 |
| <u>Interest expense</u> |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest on deposits | 6145 | 1848 | 1868 | 11349 | 7881 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest on borrowings | 2594 | 1108 | 503 | 4754 | 1642 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total interest expense | 8739 | 2956 | 2371 | 16103 | 9523 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income | 84372 | 85334 | 73845 | 324854 | 246395 |
| Provision for loan losses | 4000 | 5100 | 11011 | 12600 | 9611 |
| Provision for (reversal of) unfunded commitments | 1000 | 300 | 2432 | (200) | 5420 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total provision for credit losses | 5000 | 5400 | 13443 | 12400 | 15031 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income after provision for credit losses | 79372 | 79934 | 60402 | 312454 | 231364 |
| <u>Noninterest income</u> |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Service charges on deposit accounts | 4116 | 4166 | 3551 | 15523 | 12317 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other service charges, commissions, and fees | 5094 | 6312 | 7034 | 26294 | 25516 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fees from presold mortgage loans | 151 | 376 | 2061 | 2102 | 10975 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commissions from sales of insurance & financial products | 1708 | 1391 | 1093 | 5195 | 6947 |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA consulting fees | 645 | 479 | 1152 | 2608 | 7231 |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA loan sale gains | 495 | 479 | 348 | 5076 | 7329 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bank-owned life insurance income | 967 | 962 | 940 | 3847 | 2885 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities losses, net |  |  | (1237) |  | (1237) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other gains, net | 1382 | 2747 | 115 | 7340 | 1648 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total noninterest income | 14558 | 16912 | 15057 | 67985 | 73611 |
| <u>Noninterest expenses</u> |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Salaries expense | 24652 | 24416 | 24846 | 96321 | 86815 |
| &nbsp;&nbsp;&nbsp;&nbsp;Employee benefit expense | 5353 | 4156 | 3329 | 21397 | 16434 |
| &nbsp;&nbsp;&nbsp;&nbsp;Occupancy and equipment related expense | 4433 | 4847 | 4607 | 18604 | 16020 |
| &nbsp;&nbsp;&nbsp;&nbsp;Merger and acquisition expenses | 303 | 548 | 16180 | 5072 | 16845 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangibles amortization expense | 825 | 889 | 1094 | 3684 | 3531 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreclosed property net (gains) losses |  |  | 17 | (372) | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other operating expenses | 10091 | 13844 | 12716 | 50514 | 44987 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total noninterest expenses | 45657 | 48700 | 62789 | 195220 | 184656 |
| Income before income taxes | 48273 | 48146 | 12670 | 185219 | 120319 |
| Income tax expense | 9840 | 10197 | 2148 | 38283 | 24675 |
| Net income | $38433 | 37949 | 10522 | $146936 | 95644 |
| Earnings per common share - diluted | $1.08 | 1.06 | 0.30 | $4.12 | 3.19 |
| <u>ADDITIONAL INCOME STATEMENT INFORMATION</u> |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest income, as reported | $84372 | 85334 | 73845 | $324854 | 246395 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax-equivalent adjustment (1) | 722 | 692 | 707 | 2780 | 2243 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest income, tax-equivalent | $85094 | 86026 | 74552 | 327634 | 248638 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1)This amount reflects the tax benefit that the Company receives related to its tax-exempt loans and securities, which carry interest rates lower than similar taxable investments due to their tax-exempt status. This amount has been computed assuming a 23% tax rate and is reduced by the related nondeductible portion of interest expense.

------

**First Bancorp and Subsidiaries<br>Financial Summary**

---

| | | | |
|:---|:---|:---|:---|
| **CONSOLIDATED BALANCE SHEETS** <br>($ in thousands) | **CONSOLIDATED BALANCE SHEETS** <br>($ in thousands) | **CONSOLIDATED BALANCE SHEETS** <br>($ in thousands) | **CONSOLIDATED BALANCE SHEETS** <br>($ in thousands) |
|  | At December 31, 2022<br>(unaudited) | At September 30, 2022<br>(unaudited) | At December 31, 2021<br>(audited) |
| **Assets** |  |  |  |
| Cash and due from banks | $101133 | 83050 | 128228 |
| Interest-bearing deposits with banks | 169185 | 186465 | 332934 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total cash and cash equivalents | 270318 | 269515 | 461162 |
| Investment securities | 2856193 | 2882408 | 3144239 |
| Presold mortgages in process of settlement | 1282 | 3233 | 19257 |
| SBA and other loans held for sale |  | 477 | 61003 |
| Loans | 6665145 | 6525286 | 6081715 |
| Allowance for credit losses on loans | (90967) | (86587) | (78789) |
| Net loans | 6574178 | 6438699 | 6002926 |
| Premises and equipment | 134187 | 134288 | 136092 |
| Operating right-of-use lease assets | 18733 | 19230 | 20719 |
| Intangible assets | 376938 | 378150 | 382090 |
| Foreclosed properties | 658 | 658 | 3071 |
| Bank-owned life insurance | 164592 | 164793 | 165786 |
| Other assets | 227970 | 224411 | 112556 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total assets | $10625049 | 10515862 | 10508901 |
| **Liabilities** |  |  |  |
| Deposits: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Noninterest-bearing deposit accounts | $3566003 | 3748207 | 3348622 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest-bearing deposit accounts | 5661526 | 5481064 | 5776007 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deposits | 9227529 | 9229271 | 9124629 |
| Borrowings | 287507 | 226476 | 67386 |
| Operating lease liabilities | 19391 | 19847 | 21192 |
| Other liabilities | 59026 | 55771 | 65119 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total liabilities | 9593453 | 9531365 | 9278326 |
| **Shareholders' equity** |  |  |  |
| Common stock | 725153 | 724694 | 722671 |
| Retained earnings | 648418 | 617839 | 532874 |
| Accumulated other comprehensive loss | (341975) | (358036) | (24970) |
| &nbsp;&nbsp;&nbsp;&nbsp; Total shareholders' equity | 1031596 | 984497 | 1230575 |
| Total liabilities and shareholders' equity | $10625049 | 10515862 | 10508901 |

---

------

**First Bancorp and Subsidiaries<br>Financial Summary**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | Three Months Ended | Three Months Ended | Three Months Ended | Twelve Months Ended | Twelve Months Ended |
| **PERFORMANCE RATIOS** (annualized) | December 31, 2022 | September 30, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 |
| Return on average assets (1) | 1.44% | 1.42% | 0.41% | 1.39% | 1.13% |
| Return on average common equity (2) | 15.20% | 13.84% | 3.55% | 13.40% | 9.86% |
| Return on average tangible common equity (3) | 20.96% | 21.25% | 4.64% | 20.48% | 13.79% |
| **COMMON SHARE DATA** |  |  |  |  |  |
| Cash dividends declared - common | $0.22 | 0.22 | 0.20 | 0.88 | 0.80 |
| Stated book value - common | 28.89 | 27.57 | 34.54 | 28.89 | 34.54 |
| Tangible book value - common (non-GAAP) | 18.34 | 16.98 | 23.81 | 18.34 | 23.81 |
| Common shares outstanding at end of period | 35704154 | 35711754 | 35629177 | 35704154 | 35629117 |
| Weighted average shares outstanding - diluted | 35614972 | 35703446 | 34567927 | 35674730 | 30027785 |
| **CAPITAL RATIOS** |  |  |  |  |  |
| Tangible common equity to tangible assets (non-GAAP) | 6.39% | 5.98% | 8.38% | 6.39% | 8.38% |
| Common equity tier I capital ratio (4) | 12.68% | 12.76% | 12.53% | 12.68% | 12.53% |
| Tier I leverage ratio (4) | 10.51% | 10.21% | 9.39% | 10.51% | 9.39% |
| Tier I risk-based capital ratio (4) | 13.48% | 13.59% | 13.42% | 13.48% | 13.42% |
| Total risk-based capital ratio (4) | 14.73% | 14.84% | 14.67% | 14.73% | 14.67% |
| **AVERAGE BALANCES** ($ in thousands) |  |  |  |  |  |
| Total assets | $10579187 | 10567133 | 10191402 | 10556230 | 8459645 |
| Loans | 6576415 | 6389996 | 5879373 | 6293280 | 5018391 |
| Earning assets | 10161108 | 10028388 | 9438263 | 9989185 | 7871319 |
| Deposits | 9275909 | 9299277 | 8878141 | 9283505 | 7401910 |
| Interest-bearing liabilities | 5779958 | 5661339 | 5641358 | 5758001 | 4736343 |
| Shareholders' equity | 1003031 | 1087763 | 1177374 | 1096913 | 969775 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Calculated by dividing annualized net income by average assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Calculated by dividing annualized net income by average common equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Calculated by dividing annualized net income by average tangible common equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Capital ratios as of December 31, 2022 are estimated.

**_____________________________________________________________________________________________**

**TREND INFORMATION**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ($ in thousands except per share data) | For the Three Months Ended | For the Three Months Ended | For the Three Months Ended | For the Three Months Ended | For the Three Months Ended |
| **INCOME STATEMENT** | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | December 31, 2021 |
| Net interest income - tax-equivalent (1) | $85094 | 86026 | 78939 | 77575 | 74552 |
| Taxable equivalent adjustment (1) | 722 | 692 | 669 | 697 | 707 |
| Net interest income | 84372 | 85334 | 78270 | 76878 | 73845 |
| Provision for loan losses | 4000 | 5100 |  | 3500 | 11011 |
| Provision for (reversal of) unfunded commitments | 1000 | 300 |  | (1500) | 2432 |
| Noninterest income | 14558 | 16912 | 17264 | 19251 | 15057 |
| Noninterest expense | 45657 | 48700 | 49398 | 51465 | 62789 |
| Income before income taxes | 48273 | 48146 | 46136 | 42664 | 12670 |
| Income tax expense | 9840 | 10197 | 9551 | 8695 | 2148 |
| Net income | 38433 | 37949 | 36585 | 33969 | 10522 |
| Earnings per common share - diluted | 1.08 | 1.06 | 1.03 | 0.95 | 0.30 |
| Cash dividends declared per share | 0.22 | 0.22 | 0.22 | 0.22 | 0.20 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) This amount reflects the tax benefit that the Company receives related to its tax-exempt loans and securities, which carry interest rates lower than similar taxable investments due to their tax-exempt status. This amount has been computed assuming a 23% tax rate and is reduced by the related nondeductible portion of interest expense.

------

**First Bancorp and Subsidiaries<br>Financial Summary**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | For the Three Months Ended | For the Three Months Ended | For the Three Months Ended | For the Three Months Ended | For the Three Months Ended |
| **YIELD INFORMATION** | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | December 31, 2021 |
| Yield on loans | 4.62% | 4.49% | 4.24% | 4.30% | 4.37% |
| Yield on securities | 1.74% | 1.71% | 1.69% | 1.76% | 1.45% |
| Yield on other earning assets | 3.05% | 2.27% | 0.97% | 0.55% | 0.42% |
| &nbsp;&nbsp;&nbsp;&nbsp;Yield on all interest-earning assets | 3.64% | 3.49% | 3.24% | 3.27% | 3.20% |
| Rate on interest bearing deposits | 0.44% | 0.13% | 0.11% | 0.12% | 0.13% |
| Rate on other interest-bearing liabilities | 4.58% | 3.99% | 3.52% | 2.77% | 2.88% |
| &nbsp;&nbsp;&nbsp;&nbsp;Rate on all interest-bearing liabilities | 0.60% | 0.21% | 0.15% | 0.15% | 0.17% |
| &nbsp;&nbsp;&nbsp;&nbsp; Total cost of funds | 0.36% | 0.12% | 0.09% | 0.10% | 0.11% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest margin (1) | 3.29% | 3.38% | 3.16% | 3.18% | 3.10% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest margin - tax-equivalent (2) | 3.32% | 3.40% | 3.18% | 3.21% | 3.13% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Average prime rate | 6.82% | 5.35% | 3.94% | 3.29% | 3.25% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Calculated by dividing annualized net interest income by average earning assets for the period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Calculated by dividing annualized tax-equivalent net interest income by average earning assets for the period.

______________________________________________________________________________________________________

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | For the Three Months Ended | For the Three Months Ended | For the Three Months Ended | For the Three Months Ended | For the Three Months Ended |
| **NET INTEREST INCOME PURCHASE ACCOUNTING ADJUSTMENTS** <br>($ in thousands - unaudited) | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | December 31, 2021 |
| Interest income - increased by accretion of loan discount on acquired loans | $886 | 1519 | 1545 | 1671 | 1912 |
| Interest income - increased by accretion of loan discount on retained portions of SBA loans | 427 | 1032 | 730 | 667 | 703 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest income impact | 1313 | 2551 | 2275 | 2338 | 2615 |
| Interest expense - reduced by premium amortization of deposits | 70 | 121 | 168 | 234 | 261 |
| Interest expense - increased by discount accretion of borrowings | (64) | (64) | (53) | (73) | (116) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net interest expense impact | 6 | 57 | 115 | 161 | 145 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total impact on net interest income | $1319 | 2608 | 2390 | 2499 | 2760 |

---

______________________________________________________________________________________________________

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | As of / for the Three Months Ended | As of / for the Three Months Ended | As of / for the Three Months Ended | As of / for the Three Months Ended | As of / for the Three Months Ended |
| **PAYCHECK PROTECTION PROGRAM (PPP) LOANS**<br>($ in thousands - unaudited) | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | December 31, 2021 |
| PPP loans outstanding | $35 | 38 | 3000 | 15623 | 38979 |
| PPP fee amortization |  | 284 | 1008 | 1324 | 1676 |

---

------

**First Bancorp and Subsidiaries<br>Financial Summary**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**ASSET QUALITY DATA** ($ in thousands) | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | December 31, 2021 |
| **<u>Nonperforming assets</u>** |  |  |  |  |  |
| Nonaccrual loans | $28514 | 28669 | 28715 | 33460 | 34696 |
| Troubled debt restructurings - accruing | 9121 | 11355 | 11771 | 12727 | 13866 |
| Accruing loans > 90 days past due |  |  |  |  | 1004 |
| Total nonperforming loans | 37635 | 40024 | 40486 | 46187 | 49566 |
| Foreclosed real estate | 658 | 658 | 658 | 2750 | 3071 |
| Total nonperforming assets | $38293 | 40682 | 41144 | 48937 | 52637 |
| **<u>Asset Quality Ratios</u>** |  |  |  |  |  |
| Quarterly net (recoveries) charge-offs to average loans - annualized | (0.02)% | 0.04% | (0.01)% | 0.01% | 0.05% |
| Nonperforming loans to total loans | 0.56% | 0.61% | 0.65% | 0.76% | 0.82% |
| Nonperforming assets to total assets | 0.36% | 0.39% | 0.39% | 0.46% | 0.50% |
| Allowance for credit losses to total loans | 1.36% | 1.33% | 1.32% | 1.35% | 1.30% |

---

<br>