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The First Bancorp Third Quarter Earnings Increase 27.0%

The First Bancorp (Nasdaq: FNLC), parent company of First National Bank, today announced operating results for the three months ended September 30, 2021. Unaudited net income was $9.0 million, up $1.9 million or 27.0% from the $7.1 million reported for the three months ended September 30, 2020, representing a new quarterly earnings high mark for the Company. Earnings per common share for the period on a fully diluted basis were up $0.17 to $0.82 per share, an increase of 26.2% from the prior year. The Company also reported results for the nine months ended September 30, 2021. Net income was $26.7 million, up $6.6 million or 32.6% from the first nine months of 2020, and representing a new high mark for nine month earnings. Year-to-date earnings per share on a fully diluted basis were $2.43, up $0.59 or 32.1% from the same period in 2020.

“The First Bancorp continues to execute on its strategic initiatives as evidenced by record quarterly and year-to-date earnings", commented Tony C. McKim, the Company’s President and Chief Executive Officer. "Growth on both sides of the balance sheet has exceeded expectations to date in 2021. Loan balances net of Paycheck Protection Program (PPP) loans were up $43.7 million in the third quarter, an annualized growth rate of 11.3%, while low-cost deposit growth continued to be very strong, increasing $138.9 million during the period. Loan growth was centered in commercial real estate, construction, and residential mortgage loans. Low-cost deposit growth was focused in municipal and business accounts, and allowed for a further reduction in wholesale funding.

"Our earnings formula remains focused on growing earning assets, enhancing fee income and controlling operating expenses, while opportunistically investing in people, markets and technology. Interest income from the loan portfolio combined with lower funding costs produced a 15.4% increase in net interest income for the quarter ended September 30, 2021 compared to a year ago. Our fee-based business lines continue to produce strong results, with wealth management income in the third quarter up 24.9% from the same period a year ago, and debit card revenue up 25.2%. As expected, mortgage banking revenues were down from the extraordinary results of 2020's third quarter, off 46.2% year-over-year. Continued strong asset quality coupled with improved economic conditions allowed for a $1.3 million reduction in the provision for loan loss expense compared to the third quarter of 2020. Revenue growth along with controlled operating expenses resulted in an excellent efficiency ratio of 44.85% for the quarter, improved from 45.97% for the same period a year ago, and in line with the 44.75% achieved in the second quarter of 2021."

Mr. McKim continued, "We continue to support the Bank's customers and communities through the ongoing COVID-19 pandemic. Of the over 1,700 PPP loans granted in 2020, more than 99% of the original balances have been forgiven per program guidelines as of September 30, 2021. In the 2021 program we disbursed over $52 million in PPP loans to more than 1,200 eligible borrowers, and approximately 25% has been forgiven to date. Like most businesses we have continued to face and address COVID related challenges, all of which I believe have made us a stronger and more resilient organization. The Company's excellent results for the quarter and year-to-date are a direct result of the collaborative, customer-focused efforts of our dedicated lending, deposit gathering, asset management, and service teams."

THIRD QUARTER 2021 FINANCIAL HIGHLIGHTS

  • Net Income of $9.0 million is an increase of 27.0% from the quarter ended September 30, 2020, an increase of 2.6% from the quarter ended June 30, 2021, and is a new quarterly earnings record for the Company
  • Pre-tax, Pre-Provision Net Income (non-GAAP) increased 11.5% compared to the third quarter of 2020 and increased 2.8% from the second quarter of 2021
  • Loans increased $28.9 million in the third quarter to $1.62 billion
  • Low-cost deposits grew $138.9 million in the third quarter to $1.33 billion
  • Net Interest Margin for the quarter ended September 30, 2021 was 2.96%, up from 2.82% for the quarter ended September 30, 2020, and up from 2.86% for the quarter ended June 30, 2021
  • Quarterly shareholder dividend declared of $0.32 per share
  • Tangible Book Value increased to $18.90 per share, up from $17.32 at September 30, 2020, and $18.49 at June 30, 2021

YEAR-TO-DATE 2021 FINANCIAL HIGHLIGHTS

  • Net Income of $26.7 million is an increase of 32.6% from the nine months ended September 30, 2020 and sets a new nine month earnings record for the Company
  • Pre-tax, Pre-Provision Net Income (non-GAAP) increased 18.7% compared to the nine months ended September 30, 2020
  • Loans have increased $140.5 million, or 9.5%, since December 31, 2020
  • Low-cost deposits have increased $253.0 million, or 23.5%, since December 31, 2020
  • Non-Interest Income without Securities Gains or Losses increased 17.0% compared to the nine months ended September 30, 2020
  • Eclipsed $2.5 billion in Total Assets

FINANCIAL CONDITION

Total assets at September 30, 2021 were $2.53 billion, up $79.1 million in the third quarter and up $233.0 million from a year ago. Earning assets increased $83.5 million during the quarter comprised of an increase in loans of $28.9 million, an increase in investments of $2.5 million, and the remainder in interest earning cash balances. Year-over-year, earning assets have increased $233.1 million centered in loan growth of $180.6 million and supplemented by increases in investments of $11.1 million and interest earning cash balances of $45.7 million.

Loan growth in the third quarter was concentrated in the commercial and residential portfolios. Commercial loans increased $19.5 million during the period with all of the growth in the commercial real estate and construction sectors. Residential term loans increased $14.5 million offset by decreases in the home equity and consumer loan portfolios of $3.1 million and $1.0 million, respectively. PPP loans totaled $39.6 million as of September 30, 2021, down from $54.4 million as of June 30, 2021.

Total deposits at September 30, 2021 were $2.03 billion, up $71.9 million during the quarter, and up $270.2 million or 15.3% from September 30, 2020. Low-cost deposits increased $138.9 million in the third quarter focused in Checking and NOW accounts which combined to grow $123.4 million during the period. The increase in low-cost deposits allowed for a reduction in certificate of deposit balances, predominantly brokered, of $81.6 million during the quarter. Borrowings increased $4.6 million, all in customer repurchase agreements.

The Company’s capital position remained strong as of September 30, 2021, with an estimated total risk-based capital ratio of 14.25%, and an estimated leverage capital ratio of 8.57%. The leverage capital ratio compares favorably to 8.59% as of June 30, 2021 and 8.42% as of September 30, 2020. The total capital ratio compares to 14.55% as of prior quarter end and 15.44% a year ago, reflecting commercial loan growth over the past year.

ASSET QUALITY & PROVISION FOR LOAN LOSSES

Asset quality remains strong and stable. As of September 30, 2021, the ratio of non-performing assets to total assets was 0.25%, down from 0.30% as of June 30, 2021, and down from 0.43% at September 30, 2020. Net charge-offs for the quarter were an annualized 0.03% of total loans, down from the 0.10% of total loans experienced in 2020. Past due loans were 0.25% of total loans as of September 30, 2021, up slightly from 0.22% of total loans at June 30, 2021, and down from 0.89% as of September 30, 2020.

The provision for loan losses totaled $525,000 in the third quarter of 2021, compared with $1.8 million for the same period in 2020. The Company continues to view it prudent to consider the uncertainties brought about by COVID-19 and the potential impact to borrowers in its provision analysis. The allowance for loan losses stood at 1.08% of total loans as of September 30, 2021, slightly above the 1.07% of total loans at both June 30, 2021 and September 30, 2020. If PPP loan balances are excluded, the allowance as of September 30, 2021 would stand at 1.12% of total loans.

As of September 30, 2021, the Bank had 59 loans totaling $6.6 million and representing 0.41% of the total portfolio that were in an active modification for interest-only payments or deferred payments in conformance with inter-agency guidance issued in March 2020, the CARES Act of March 2020, or the Supplemental Appropriations Act passed in December 2020. Modified loans were down from $22.0 million or 1.38% of total loans as of June 30, 2021. Of the loans in modification as of September 30, 2021, 54 units totaling $5.4 million were in the residential portfolio, 3 units totaling $1.1 million were in the commercial portfolio, and 2 units totaling $42,000 were other retail credit. It is expected that 83% of the remaining units and 69% of the remaining modified balances will exit modification by year-end 2021.

OPERATING RESULTS

Net Income for the three months ended September 30, 2021 was $9.0 million, an increase of $1.9 million or 27.0% from the three months ended September 30, 2020. On a Pre-Tax, Pre-Provision (PTPP) (non-GAAP) basis net income for the period was $11.5 million, up $1.2 million or 11.5% from a year ago. The Company’s Return on Average Assets of 1.44% for the quarter was up from the 1.24% posted during third quarter of 2020. The third quarter 2021 PTPP Return on Average Assets was 1.83%, up from 1.79% a year ago. Return on Average Tangible Common Equity increased to 17.14% for the third quarter of 2021, up from 14.81% for the third quarter of 2020. The Company's Efficiency Ratio (non-GAAP) was 44.85% in the third quarter of 2021, improved from 45.97% in the third quarter of 2020.

Contributing factors to the Company’s operating results in the three months ended September 30, 2021 included:

  • Net interest income increased $2.3 million from the third quarter of 2020, an increase of 15.4%, and was up $1.3 million from the second quarter of 2021. The increases in net interest income are attributable to earning asset growth, an increase in PPP fees recognized, and lower funding costs.
  • Net interest margin for the third quarter of 2021 was 2.96%, up from 2.82% for the same period in 2020, and up from 2.86% in the second quarter of 2021.
  • Non-interest income before securities gains or losses was $4.5 million, a decrease of $288,000 or 6.0% from the quarter ended September 30, 2020, and a decrease of $349,000 or 7.2% from the second quarter of 2021.
    • Revenue increased $226,000 or 24.9% year-over-year, and decreased $17,000 or 1.5% from the preceding quarter at First National Wealth Management, the Bank’s trust and investment management division;
    • Debit card revenue increased $268,000 or 25.2% from the third quarter of 2020, and increased $42,000 or 3.3% from the second quarter of 2021;
    • Mortgage banking revenue decreased $884,000 or 46.2% year-over-year, and $324,000 or 23.9% from the immediately preceding quarter but remains well above pre-pandemic norms.
  • Non-interest expense for the quarter ended September 30, 2021 was $9.9 million, up $656,000 or 7.1% from the quarter ended September 30, 2020.
    • Employee salary and benefit expenses increased $392,000, or 7.8% from the third quarter of 2020;
    • Other Operating Expenses increased $260,000, or 12.1%, from the prior year quarter, most of which resulted from expenses such as marketing and travel and entertainment that rebounded to normal, pre-pandemic levels as re-opening progressed.

As mentioned above, the Bank had $39.6 million in PPP loan balances as of September 30, 2021, comprised of 12 loans totaling $656,000 originated in 2020 (PPP1) and 881 loans totaling $39.0 million originated in 2021 (PPP2). The Company received $3.8 million in associated origination fees from PPP1. Essentially all PPP1 fees have been recognized in interest income, including $81,000 this quarter. The Company has received $4.0 million in associated origination fees from PPP2, of which $955,000 was recognized in interest income in the third quarter of 2021, and $2.5 million has yet to be recognized.

DIVIDEND

On September 30, 2021 the Company's Board of Directors declared a third quarter dividend of $0.32 per share. The third quarter dividend represents a payout to shareholders of 38.55% of earnings per share for the period, and will be paid on October 22, 2021 to shareholders of record as of October 12, 2021.

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 $2.50 billion in assets. The Bank provides a complete array of commercial and retail banking services through seventeen 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

September 30, 2021

December 31, 2020

September 30, 2020

Assets

 

 

 

Cash and due from banks

$

27,126

 

 

$

26,212

 

 

$

22,742

 

 

Interest-bearing deposits in other banks

93,779

 

 

56,151

 

 

48,111

 

 

Securities available for sale

309,224

 

 

313,376

 

 

340,140

 

 

Securities to be held to maturity

375,699

 

 

365,613

 

 

331,962

 

 

Restricted equity securities, at cost

8,839

 

 

10,545

 

 

10,545

 

 

Loans held for sale

1,437

 

 

5,855

 

 

6,387

 

 

Loans

1,617,212

 

 

1,476,761

 

 

1,436,646

 

 

Less allowance for loan losses

17,507

 

 

16,253

 

 

15,371

 

 

Net loans

1,599,705

 

 

1,460,508

 

 

1,421,275

 

 

Accrued interest receivable

8,380

 

 

9,298

 

 

10,249

 

 

Premises and equipment

29,106

 

 

27,251

 

 

27,110

 

 

Other real estate owned

 

 

908

 

 

777

 

 

Goodwill

30,646

 

 

30,646

 

 

29,805

 

 

Other assets

45,650

 

 

54,873

 

 

47,523

 

 

Total assets

$

2,529,591

 

 

$

2,361,236

 

 

$

2,296,626

 

 

Liabilities

 

 

 

Demand deposits

$

354,899

 

 

$

250,219

 

 

$

248,444

 

 

NOW deposits

625,294

 

 

520,385

 

 

492,223

 

 

Money market deposits

190,420

 

 

163,819

 

 

156,948

 

 

Savings deposits

348,033

 

 

304,603

 

 

275,513

 

 

Certificates of deposit

194,373

 

 

246,875

 

 

252,461

 

 

Certificates $100,000 to $250,000

263,860

 

 

295,672

 

 

269,881

 

 

Certificates $250,000 and over

56,334

 

 

63,038

 

 

67,589

 

 

Total deposits

2,033,213

 

 

1,844,611

 

 

1,763,059

 

 

Borrowed funds

233,201

 

 

262,038

 

 

283,787

 

 

Other liabilities

24,440

 

 

30,861

 

 

30,340

 

 

Total Liabilities

2,290,854

 

 

2,137,510

 

 

2,077,186

 

 

Shareholders' equity

 

 

 

Common stock

110

 

 

110

 

 

109

 

 

Additional paid-in capital

66,471

 

 

65,285

 

 

64,943

 

 

Retained earnings

174,391

 

 

158,359

 

 

154,783

 

 

Net unrealized gain (loss) on securities available for sale

(627

)

 

5,009

 

 

5,520

 

 

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

(99

)

 

(133

)

 

(139

)

 

Net unrealized loss on cash flow hedging derivative instruments

(1,537

)

 

(4,932

)

 

(5,800

)

 

Net unrealized gain on postretirement costs

28

 

 

28

 

 

24

 

 

Total shareholders' equity

238,737

 

 

223,726

 

 

219,440

 

 

Total liabilities & shareholders' equity

$

2,529,591

 

 

$

2,361,236

 

 

$

2,296,626

 

 

Common Stock

 

 

 

Number of shares authorized

18,000,000

 

 

18,000,000

 

 

18,000,000

 

 

Number of shares issued and outstanding

10,992,950

 

 

10,950,289

 

 

10,942,959

 

 

Book value per common share

$

21.72

 

 

$

20.43

 

 

$

20.05

 

 

Tangible book value per common share

$

18.90

 

 

$

17.60

 

 

$

17.32

 

 

 

The First Bancorp

Consolidated Statements of Income (Unaudited)

 

 

For the nine months ended

September 30,

For the quarter ended

September 30,

In thousands of dollars, except per share data

2021

2020

2021

2020

Interest income

 

 

 

 

 

 

Interest and fees on loans

$

45,864

 

$

44,124

 

$

15,905

 

$

14,109

 

Interest on deposits with other banks

45

 

87

 

21

 

8

 

Interest and dividends on investments

11,173

 

13,775

 

3,662

 

4,389

 

Total interest income

57,082

 

57,986

 

19,588

 

18,506

 

Interest expense

 

 

 

 

 

 

Interest on deposits

5,796

 

11,613

 

1,650

 

2,866

 

Interest on borrowed funds

2,679

 

2,219

 

927

 

895

 

Total interest expense

8,475

 

13,832

 

2,577

 

3,761

 

Net interest income

48,607

 

44,154

 

17,011

 

14,745

 

Provision for loan losses

1,575

 

4,550

 

525

 

1,800

 

Net interest income after provision for loan losses

47,032

 

39,604

 

16,486

 

12,945

 

Non-interest income

 

 

 

 

 

 

Investment management and fiduciary income

3,352

 

2,712

 

1,135

 

909

 

Service charges on deposit accounts

1,132

 

1,257

 

413

 

375

 

Net securities gains (losses)

22

 

1,179

 

(142

)

 

Mortgage origination and servicing income

4,351

 

3,802

 

1,030

 

1,914

 

Debit card income

3,875

 

3,041

 

1,332

 

1,064

 

Other operating income

1,852

 

1,636

 

607

 

543

 

Total non-interest income

14,584

 

13,627

 

4,375

 

4,805

 

Non-interest expense

 

 

 

 

 

 

Salaries and employee benefits

15,600

 

14,719

 

5,424

 

5,032

 

Occupancy expense

2,148

 

2,117

 

735

 

709

 

Furniture and equipment expense

3,535

 

3,438

 

1,135

 

1,184

 

FDIC insurance premiums

600

 

548

 

209

 

189

 

Amortization of identified intangibles

52

 

32

 

17

 

10

 

Other operating expense

7,367

 

8,382

 

2,412

 

2,152

 

Total non-interest expense

29,302

 

29,236

 

9,932

 

9,276

 

Income before income taxes

32,314

 

23,995

 

10,929

 

8,474

 

Applicable income taxes

5,591

 

3,836

 

1,915

 

1,379

 

Net Income

$

26,723

 

$

20,159

 

$

9,014

 

$

7,095

 

Basic earnings per share

$

2.45

 

$

1.86

 

$

0.83

 

$

0.65

 

Diluted earnings per share

$

2.43

 

$

1.84

 

$

0.82

 

$

0.65

 

 

 

 

 

 

 

 

The First Bancorp

Selected Financial Data (Unaudited)

 

 

 

 

 

 

As of and for the nine months ended

September 30,

As of and for the quarter ended

September 30,

Dollars in thousands, except for per share amounts

2021

2020

2021

2020

 

 

 

 

 

Summary of Operations

 

 

 

 

Interest Income

$

57,082

 

$

57,986

 

$

19,588

 

$

18,506

 

Interest Expense

8,475

 

13,832

 

2,577

 

3,761

 

Net Interest Income

48,607

 

44,154

 

17,011

 

14,745

 

Provision for Loan Losses

1,575

 

4,550

 

525

 

1,800

 

Non-Interest Income

14,584

 

13,627

 

4,375

 

4,805

 

Non-Interest Expense

29,302

 

29,236

 

9,932

 

9,276

 

Net Income

26,723

 

20,159

 

9,014

 

7,095

 

Per Common Share Data

 

 

 

 

Basic Earnings per Share

$

2.45

 

$

1.86

 

$

0.83

 

$

0.65

 

Diluted Earnings per Share

2.43

 

1.84

 

0.82

 

0.65

 

Cash Dividends Declared

0.95

 

0.92

 

0.32

 

0.31

 

Book Value per Common Share

21.72

 

20.05

 

21.72

 

20.05

 

Tangible Book Value per Common Share

18.90

 

17.32

 

18.90

 

17.32

 

Market Value

29.14

 

21.07

 

29.14

 

21.07

 

Financial Ratios

 

 

 

 

Return on Average Equity (a)

15.28

%

12.32

%

14.92

%

12.80

%

Return on Average Tangible Common Equity (a)

17.62

%

14.27

%

17.14

%

14.81

%

Return on Average Assets (a)

1.48

%

1.22

%

1.44

%

1.24

%

Average Equity to Average Assets

9.68

%

9.89

%

9.66

%

9.65

%

Average Tangible Equity to Average Assets

8.40

%

8.54

%

8.41

%

8.34

%

Net Interest Margin Tax-Equivalent (a)

2.94

%

2.93

%

2.96

%

2.82

%

Dividend Payout Ratio

38.78

%

49.46

%

38.55

%

47.69

%

Allowance for Loan Losses/Total Loans

1.08

%

1.07

%

1.08

%

1.07

%

Non-Performing Loans to Total Loans

0.39

%

0.63

%

0.39

%

0.63

%

Non-Performing Assets to Total Assets

0.25

%

0.43

%

0.25

%

0.43

%

Efficiency Ratio

45.04

%

50.00

%

44.85

%

45.97

%

At Period End

 

 

 

 

Total Assets

$

2,529,591

 

$

2,296,626

 

$

2,529,591

 

$

2,296,626

 

Total Loans

1,617,212

 

1,436,646

 

1,617,212

 

1,436,646

 

Total Investment Securities

693,762

 

682,647

 

693,762

 

682,647

 

Total Deposits

2,033,213

 

1,763,059

 

2,033,213

 

1,763,059

 

Total Shareholders' Equity

238,737

 

219,440

 

238,737

 

219,440

 

(a) Annualized using a 365-day basis for 2021 and a 366-day basis for 2020.

 

 

 

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 2021 and 2020.

 

 

For the nine months ended

For the quarters ended

In thousands of dollars

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Net interest income as presented

$

48,607

 

$

44,154

 

$

17,011

 

$

14,745

 

Effect of tax-exempt income

1,762

 

1,741

 

574

 

586

 

Net interest income, tax equivalent

$

50,369

 

$

45,895

 

$

17,585

 

$

15,331

 

 

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 nine months ended

For the quarters ended

In thousands of dollars

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Non-interest expense, as presented

$

29,302

 

$

29,236

 

$

9,932

 

$

9,276

 

Net interest income, as presented

48,607

 

44,154

 

17,011

 

14,745

 

Effect of tax-exempt interest income

1,762

 

1,741

 

574

 

586

 

Non-interest income, as presented

14,584

 

13,627

 

4,375

 

4,805

 

Effect of non-interest tax-exempt income

124

 

124

 

41

 

41

 

Net securities (gains) losses

(22

)

(1,179

)

142

 

 

Adjusted net interest income plus non-interest income

$

65,055

 

$

58,467

 

$

22,143

 

$

20,177

 

Non-GAAP efficiency ratio

45.04

%

50.00

%

44.85

%

45.97

%

GAAP efficiency ratio

46.37

%

50.60

%

46.44

%

47.45

%

 

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 nine months ended

For the quarters ended

In thousands of dollars

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Average shareholders' equity as presented

$

233,763

 

 

$

218,603

 

 

$

239,673

 

 

$

220,465

 

 

Less intangible assets

(30,971

)

 

(29,920

)

 

(30,994

)

 

(29,934

)

 

Tangible average shareholders' equity

$

202,792

 

 

$

188,683

 

 

$

208,679

 

 

$

190,531

 

 

 

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 nine months ended

For the quarters ended

In thousands of dollars

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Net Income, as presented

$

26,723

 

$

20,159

 

$

9,014

 

$

7,095

 

Add: provision for loan losses

1,575

 

4,550

 

525

 

1,800

 

Add: income taxes

5,591

 

3,836

 

1,915

 

1,379

 

Pre-Tax, pre-provision net income

$

33,889

 

$

28,545

 

$

11,454

 

$

10,274

 

 

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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