The First Bancorp Reports Fourth Quarter and 2025 Annual Results

Strong Fourth Quarter Results Driven by Net Interest Margin Expansion and Non-Interest Revenue Growth

DAMARISCOTTA, Maine--(BUSINESS WIRE)--The First Bancorp (Nasdaq: FNLC), parent company of First National Bank, today announced operating results for the three months and year ended December 31, 2025. Fourth quarter unaudited net income was $10.2 million, an increase of 39.7% from the fourth quarter of 2024. Earnings per share on a fully diluted basis for the fourth quarter of 2025 were $0.91, up $0.25 or 38.9% from the prior year period. For the twelve months ended December 31, 2025 unaudited net income was $34.4 million, an increase of 27.2% from the $27.0 million reported for the twelve months ended December 31, 2024. Earnings per common share on a fully diluted basis were up $0.64 to $3.07 per share, an increase of 26.4% from the prior year.

Fourth Quarter Notable Items:

• Net Interest Margin expanded 13 basis points from 3Q2025 and has increased 41 basis points from 4Q2024
• Non-Interest Income grew 5.8% from 3Q2025 and grew 6.7% from 4Q2024
• Core deposits increased $21.5 million from 3Q2025
• Net Interest Income grew 5.2% from 3Q2025, and grew 20.3% from 4Q2024
• Efficiency Ratio improved to 49.33% for the period
• Tangible book value increased to $22.49 per share, up 3.5% from 3Q2025 and up 13.2% from 4Q2024
• Quarterly shareholder dividend of $0.37 per share

CEO COMMENTS

“The First Bancorp concluded 2025 with robust annual earnings of $34.4 million," commented Tony C. McKim, the Company’s President and Chief Executive Officer. "Our performance was driven by a 21.1% increase in annual net interest income, and bolstered by a 6.0% rise in non-interest revenue. Return on Average Assets for 2025 was 1.08%, with a Return on Average Tangible Common Equity of 14.50%. We continued to expand the loan portfolio with total loans increasing $53.2 million, or 2.3% for the year, while maintaining generally favorable asset quality. Local deposit generation has been a focus of business development efforts leading to year-over-year core deposit growth of $77.0 million, fully funding our loan growth and allowing for a reduction in more expensive wholesale funding balances."

Mr. McKim continued, "Results for the fourth quarter of 2025 were strong as evidenced by an annualized Return on Average Assets of 1.26%, and an annualized Return on Average Tangible Common Equity of 16.12%. Net Income of $10.2 million for the period was an increase of 12.0% from the preceding quarter, and was an increase of 39.7% from the fourth quarter of 2024. Earnings growth continues to be driven by improved net interest income, which increased $1.1 million, or 5.2%, in the fourth quarter to $21.1 million. Non-interest income increased $259,000 period-to-period primarily attributable to debit card revenue. Operating expenses for the fourth quarter increased modestly from the third quarter, up $377,000 or 3.0%.

"We are pleased to close out 2025 with a strong earnings quarter and look forward to continued earnings momentum in the new year. The Federal Reserve's aggressive interest rate hiking cycle post-pandemic significantly narrowed our net interest margin in 2023 and 2024, leading to a decline in profitability. With an eye towards the long-term, we have patiently and methodically employed on- and off-balance sheet strategies to recover lost margin and re-build profitability. Through the combined effects of disciplined new asset pricing, legacy asset re-pricing, and funding cost mitigation, our net interest margin has increased in each of the past six quarters. Margin expansion, coupled with non-interest income growth and expense management, has served to restore our earnings performance. The dedication and commitment of our entire team to work through a challenging period for earnings has been admirable."

FINANCIAL RESULTS FOR THE QUARTER ENDED DECEMBER 31, 2025

Net Income was $10.2 million, or $0.91 per diluted share, for the three months ended December 31, 2025. Results compare favorably to the fourth quarter of 2024, with net income up $2.9 million, or 39.7%, and diluted earnings per share up $0.25, or 38.9%. The current quarter also compares favorably to the third quarter of 2025 ("linked quarter") in which net income was $9.1 million and diluted earnings per share were $0.81. Drivers of fourth quarter 2025 results are discussed in the following sections:

Net Interest Income

Net interest income was $21.1 million for the three months ended December 31, 2025, an increase of $1.1 million, or 5.2%, from the third quarter of 2025, and an increase of $3.6 million, or 20.3% from the fourth quarter of 2024. Net interest margin of 2.83% for the fourth quarter was an improvement of 13 basis points from the 2.70% margin earned in the third quarter, and a 41 basis point improvement from the 2.42% margin earned in the fourth quarter of 2024.

Provision For Credit Losses

Total provision for credit losses was $272,000 in the fourth quarter of 2025, compared to provision of $700,000 in the linked quarter. The current period consisted of a $615,000 provision for credit losses on loans, coupled with reverse provisions of $40,000 and $303,000 for credit losses on held to maturity securities and off-balance sheet commitments, respectively.

Non-Interest Income

Total non-interest income was $4.7 million for the three months ended December 31, 2025, up $259,000 from the third quarter. The linked quarter increase was centered in debit card revenue which grew $193,000 and Wealth Management revenue which increased $92,000. As compared to the fourth quarter of 2024, total non-interest income increased $298,000, centered in Wealth Management revenue growth of $159,000, or 12.5%, and an increase in other operating income, principally loan-based derivative fees, of $123,000.

Non-Interest Expense

Non-interest expense totaled $13.1 million for the three months ended December 31, 2025, an increase of $377,000 from the third quarter. As compared to the linked quarter, employee salaries and benefits increased $524,000 while other operating expenses decreased $86,000. The Company's efficiency ratio improved to 49.33% for the fourth quarter of 2025 as compared to 50.40% in the linked quarter and 53.39% a year ago.

Loans, Total Assets & Funding

Total assets at December 31, 2025 were $3.17 billion, up $9.3 million from the prior year end. Earning assets increased $15.7 million year-over-year, as loan balances grew $53.2 million, and investments declined by $22.9 million. Loan portfolio growth in 2025 was led by commercial loans which increased $17.5 million. Within commercial loans, CRE term loan balances increased $25.0 million, C&I loans increased $11.1 million and multifamily loans increased $50.2 million; construction loan balances fell by $64.7 million. Residential mortgage loans increased $28.4 million year-over-year, and home equity loan balances increased by $19.2 million. Overall loan balances fell $4.4 million in the fourth quarter following the payoff of several short-term municipal loans.

Total deposits at December 31, 2025 were $2.66 billion, down $60.5 million or 2.2% from December 31, 2024, and decreased $72.8 million in the fourth quarter. Deposit balance reductions were centered in planned replacement of higher-cost, wholesale time deposits with locally sourced non-maturity deposits and a modest increase in borrowings. Core non-maturity deposits increased $77.0 million for the year centered in money market and NOW account balances, including an increase of $21.5 million in the fourth quarter. Borrowed funds increased $41.5 million year-over-year, principally in Federal Home Loan Bank term advances, and increased $34.9 million in the quarter. Uninsured deposits were an estimated 19.4% of total deposits as of December 31, 2025, and 74% of uninsured deposits were fully collateralized. Available day-one liquidity was in excess of $700 million, sufficient to cover approximately 542% of estimated uninsured, uncollateralized deposits.

ASSET QUALITY

Asset quality remains generally favorable. As of December 31, 2025, the ratio of non-performing assets to total assets was 0.41%, as compared to ratios of 0.14% and 0.30% as of December 31, 2024 and September 30, 2025, respectively. The ratio of non-performing loans to total loans stood at 0.54%, as compared to 0.18% a year ago and 0.40% last quarter. Net charge-offs continued to be low, ending 2025 at 0.07% of total loans, compared to 0.02% in 2024. Past due loans were 0.90% of total loans as of December 31, 2025, compared to 0.40% of total loans at December 31, 2024, and 0.69% at September 30, 2025.

The allowance for credit losses on loans stood at 1.06% of total loans as of December 31, 2025, level with the 1.06% of total loans at December 31, 2024, and up slightly from 1.05% at September 30, 2025. The provision for credit losses on loans was $2.05 million in 2025, including $615,000 in the fourth quarter, as compared to $1.30 million and $1.25 million, respectively in 2024. The fourth quarter provision for credit losses on loans stems mostly from reserves established or increased for individually analyzed credits. Management considers the allowance to be at an appropriate level.

CAPITAL

The Company’s capital position was strong as of December 31, 2025, with an estimated total risk-based capital ratio of 13.99%, and an estimated leverage capital ratio of 8.84%. Each compares favorably to 13.22% and 8.47% respectively as of December 31, 2024. The Company's tangible book value was $22.49 per share as of December 31, 2025, an increase from $19.87 a year earlier, and up from $21.74 as of September 30, 2025.

DIVIDEND

On December 18, 2025, the Company's Board of Directors declared a fourth quarter dividend of $0.37 per share. The fourth quarter dividend represents a payout to shareholders of 40.39% of earnings per share for the period and was paid on January 16, 2026 to shareholders of record as of January 6, 2026.

ABOUT THE FIRST BANCORP

The First Bancorp, the parent company of First National Bank, is based in Damariscotta, Maine. Founded in 1864, First National Bank is a full-service community bank with $3.14 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
Selected Financial Data (Unaudited)
	At and for the year ended						At and for the quarter ended
Dollars in thousands, except for per share amounts	12/31/2025			12/31/2024			12/31/2025			12/31/2024
Financial Data
Total Assets	$	3,166,303		$	3,157,010		$	3,166,303		$	3,157,010
Total Loans		2,394,109			2,340,940			2,394,109			2,340,940
Total Investment Securities		628,683			651,587			628,683			651,587
Total Deposits		2,664,752			2,725,251			2,664,752			2,725,251
Total Shareholders’ Equity		283,143			252,493			283,143			252,493
Net Income		34,394			27,045			10,172			7,282
Per Common Share Data
Basic Earnings per Share	$	3.10		$	2.45		$	0.92		$	0.66
Diluted Earnings per Share		3.07			2.43			0.91			0.65
Cash Dividends Declared		1.47			1.43			0.37			0.36
Book Value per Common Share		25.23			22.63			25.23			22.63
Tangible Book Value per Common Share		22.49			19.87			22.49			19.87
Market Value		26.44			27.35			26.44			27.35
Financial Ratios
Return on Average Equity^(1)		12.83	%		10.83	%		14.35	%		11.27	%
Return on Average Tangible Common Equity^(1)		14.50	%		12.35	%		16.12	%		12.81	%
Return on Average Assets^(1)		1.08	%		0.89	%		1.26	%		0.92	%
Pre-tax, pre-provision Return on Assets^(1)		1.37	%		1.09	%		1.58	%		1.24	%
Net Interest Margin Tax-Equivalent^(1)		2.63	%		2.29	%		2.83	%		2.42	%
Dividend Payout Ratio		47.39	%		58.44	%		40.39	%		54.71	%
GAAP Efficiency Ratio		53.77	%		58.75	%		50.81	%		55.23	%
Efficiency Ratio (non-GAAP)		52.09	%		56.66	%		49.33	%		53.39	%
Asset Quality Ratios
Allowance for Credit Losses/Total Loans		1.06	%		1.06	%		1.06	%		1.06	%
Allowance to Non-Performing Loans		196.95	%		585.41	%		196.95	%		585.41	%
Non-Performing Loans to Total Loans		0.54	%		0.18	%		0.54	%		0.18	%
Non-Performing Assets to Total Assets		0.41	%		0.14	%		0.41	%		0.14	%
Capital Ratios
Leverage Capital Ratio^(2)		8.84	%		8.47	%		8.84	%		8.47	%
Tier 1 Capital Ratio^(2)		12.81	%		12.04	%		12.81	%		12.04	%
Total Capital Ratio^(2)		13.99	%		13.22	%		13.99	%		13.22	%
Tangible Common Equity Ratio		8.05	%		7.09	%		8.05	%		7.09	%
Average Equity to Average Assets		8.41	%		8.19	%		8.78	%		8.17	%
Average Tangible Equity to Average Assets		7.44	%		7.18	%		7.82	%		7.19	%
^(1)Annualized using a 365-day basis for 2025 and a 366-day basis for 2024.
^(2)Estimated for current period.

The First Bancorp
Consolidated Balance Sheets (Unaudited)
In thousands of dollars, except per share data	12/31/2025			12/31/2024
Assets
Cash and due from banks	$	27,779		$	27,636
Interest-bearing deposits in other banks		4,124			22,100
Securities available for sale		264,480			274,680
Securities to be held to maturity		355,928			369,704
Restricted equity securities, at cost		8,275			7,203
Loans		2,394,109			2,340,940
Less allowance for credit losses		25,365			24,871
Net loans		2,368,744			2,316,069
Accrued interest receivable		14,185			13,976
Premises and equipment		28,767			27,855
Other real estate owned		—			173
Goodwill		30,646			30,646
Other assets		63,375			66,968
Total assets	$	3,166,303		$	3,157,010
Liabilities
Demand deposits	$	279,912		$	292,255
NOW deposits		689,083			676,107
Money market deposits		469,689			376,627
Savings deposits		248,805			265,451
Certificates of deposit		638,931			702,632
Certificates $100,000 to $250,000		190,676			225,106
Certificates $250,000 and over		147,656			187,073
Total deposits		2,664,752			2,725,251
Borrowed funds		187,821			146,278
Other liabilities		30,587			32,988
Total Liabilities		2,883,160			2,904,517
Shareholders' equity
Common stock		112			112
Additional paid-in capital		73,714			71,832
Retained earnings		240,456			222,823
Accumulated other comprehensive income (loss)
Net unrealized loss on securities available for sale		(31,341	)		(42,671	)
Net unrealized loss on securities transferred from available for sale to held to maturity		(38	)		(47	)
Net unrealized gain on cash flow hedging derivative instruments		—			157
Net unrealized gain on postretirement costs		240			287
Total shareholders' equity		283,143			252,493
Total liabilities & shareholders' equity	$	3,166,303		$	3,157,010
Common Stock
Number of shares authorized		18,000,000			18,000,000
Number of shares issued and outstanding		11,222,363			11,155,528
Book value per common share	$	25.23		$	22.63
Tangible book value per common share	$	22.49		$	19.87

The First Bancorp
Consolidated Statements of Income (Unaudited)
	For the year ended						For the quarter ended
In thousands of dollars, except per share data	12/31/2025			12/31/2024			12/31/2025			12/31/2024
Interest income
Interest and fees on loans	$	141,160		$	129,440		$	36,025		$	33,899
Interest on deposits with other banks		400			550			185			360
Interest and dividends on investments		18,711			18,842			4,522			4,740
Total interest income		160,271			148,832			40,732			38,999
Interest expense
Interest on deposits		76,697			79,411			18,323			20,300
Interest on borrowed funds		6,197			5,511			1,298			1,146
Total interest expense		82,894			84,922			19,621			21,446
Net interest income		77,377			63,910			21,111			17,553
Credit loss expense - loans		2,049			1,304			615			1,246
Credit loss reduction - debt securities held to maturity		(50	)		(238	)		(40	)		(28	)
Credit loss reduction - off-balance sheet credit exposures		(149	)		(541	)		(303	)		(54	)
Total credit loss expense		1,850			525			272			1,164
Net interest income after provision for credit losses		75,527			63,385			20,839			16,389
Non-interest income
Investment management and fiduciary income		5,427			4,963			1,433			1,274
Service charges on deposit accounts		2,161			2,048			559			496
Mortgage origination and servicing income		846			794			211			282
Debit card income		5,455			5,456			1,596			1,572
Other operating income		3,451			3,094			935			812
Total non-interest income		17,340			16,355			4,734			4,436
Non-interest expense
Salaries and employee benefits		26,998			24,230			7,198			6,462
Occupancy expense		3,394			3,373			827			841
Furniture and equipment expense		5,878			5,622			1,487			1,440
FDIC insurance premiums		2,722			2,391			629			629
Amortization of identified intangibles		26			26			6			6
Other operating expense		11,910			11,514			2,984			2,767
Total non-interest expense		50,928			47,156			13,131			12,145
Income before income taxes		41,939			32,584			12,442			8,680
Applicable income taxes		7,545			5,539			2,270			1,398
Net Income	$	34,394		$	27,045		$	10,172		$	7,282
Basic earnings per share	$	3.10		$	2.45		$	0.92		$	0.66
Diluted earnings per share	$	3.07		$	2.43		$	0.91		$	0.65

The First Bancorp
Five Quarter Trend - Selected Financial Data (Unaudited)
	At or for the quarters ended
Dollars in thousands, except for per share amounts	12/31/2025			9/30/2025			6/30/2025			3/31/2025			12/31/2024
Financial Data
Total Assets	$	3,166,303		$	3,198,478		$	3,199,510		$	3,187,372		$	3,157,010
Total Loans		2,394,109			2,398,510			2,394,007			2,383,150			2,340,940
Total Investment Securities		628,683			642,961			653,855			656,844			651,587
Total Deposits		2,664,752			2,737,550			2,705,337			2,711,335			2,725,251
Total Shareholders’ Equity		283,143			274,566			265,492			259,681			252,493
Net Income		10,172			9,082			8,063			7,077			7,282
Per Common Share Data
Basic Earnings per Share	$	0.92		$	0.82		$	0.73		$	0.64		$	0.66
Diluted Earnings per Share		0.91			0.81			0.72			0.63			0.65
Cash Dividends Declared		0.37			0.37			0.37			0.36			0.36
Book Value per Common Share		25.23			24.48			23.69			23.19			22.63
Tangible Book Value per Common Share		22.49			21.74			20.94			20.44			19.87
Market Value		26.44			26.26			25.41			24.72			27.35
Financial Ratios
Return on Average Equity^(1)		14.35	%		13.33	%		12.31	%		11.13	%		11.27	%
Return on Average Tangible Common Equity^(1)		16.12	%		15.04	%		13.95	%		12.64	%		12.81	%
Return on Average Assets^(1)		1.26	%		1.13	%		1.01	%		0.91	%		0.92	%
Pre-tax, pre-provision Return on Assets^(1)		1.58	%		1.46	%		1.30	%		1.15	%		1.24	%
Net Interest Margin Tax-Equivalent^(1)		2.83	%		2.70	%		2.52	%		2.48	%		2.42	%
Dividend Payout Ratio		40.39	%		45.18	%		50.89	%		56.34	%		54.71	%
GAAP Efficiency Ratio		50.81	%		51.99	%		54.13	%		58.91	%		55.23	%
Efficiency Ratio (non-GAAP)		49.33	%		50.40	%		52.39	%		56.93	%		53.39	%
Asset Quality Ratios
Allowance for Credit Losses/Total Loans		1.06	%		1.05	%		1.04	%		1.05	%		1.06	%
Allowance to Non-Performing Loans		196.95	%		261.36	%		411.13	%		414.88	%		585.41	%
Non-Performing Loans to Total Loans		0.54	%		0.40	%		0.25	%		0.25	%		0.18	%
Non-Performing Assets to Total Assets		0.41	%		0.30	%		0.19	%		0.19	%		0.14	%
Capital Ratios
Leverage Capital Ratio^(2)		8.84	%		8.63	%		8.48	%		8.40	%		8.47	%
Tier 1 Capital Ratio^(2)		12.81	%		12.39	%		12.15	%		11.96	%		12.04	%
Total Capital Ratio^(2)		13.99	%		13.56	%		13.31	%		13.12	%		13.22	%
Tangible Common Equity Ratio		8.05	%		7.70	%		7.41	%		7.25	%		7.09	%
Average Equity to Average Assets		8.78	%		8.45	%		8.23	%		8.15	%		8.17	%
Average Tangible Equity to Average Assets		7.82	%		7.49	%		7.27	%		7.17	%		7.19	%
^(1)Annualized using a 365-day basis for 2025 and a 366-day basis for 2024.
^(2)Estimated for current period.

The First Bancorp
Five Quarter Trend - Consolidated Balance Sheets (Unaudited)
In thousands of dollars, except per share data	12/31/2025			9/30/2025			6/30/2025			3/31/2025			12/31/2024
Assets
Cash and due from banks	$	27,779		$	31,606		$	27,360		$	26,432		$	27,636
Interest-bearing deposits in other banks		4,124			7,225			3,253			2,938			22,100
Securities available for sale		264,480			273,493			278,248			280,764			274,680
Securities to be held to maturity		355,928			362,552			367,873			368,571			369,704
Restricted equity securities, at cost		8,275			6,916			7,734			7,509			7,203
Loans held for sale		—			333			—			—			—
Loans		2,394,109			2,398,510			2,394,007			2,383,150			2,340,940
Less allowance for credit losses		25,365			25,078			24,829			25,114			24,871
Net loans		2,368,744			2,373,432			2,369,178			2,358,036			2,316,069
Accrued interest receivable		14,185			16,256			19,386			17,923			13,976
Premises and equipment		28,767			27,919			28,198			28,626			27,855
Other real estate owned		—			—			—			—			173
Goodwill		30,646			30,646			30,646			30,646			30,646
Other assets		63,375			68,100			67,634			65,927			66,968
Total assets	$	3,166,303		$	3,198,478		$	3,199,510		$	3,187,372		$	3,157,010
Liabilities
Demand deposits	$	279,912		$	313,729		$	291,150		$	267,876		$	292,255
NOW deposits		689,083			638,090			590,536			613,245			676,107
Money market deposits		469,689			458,398			388,214			398,966			376,627
Savings deposits		248,805			255,806			256,584			261,732			265,451
Certificates of deposit		638,931			688,001			774,521			754,558			702,632
Certificates $100,000 to $250,000		190,676			210,741			231,926			241,536			225,106
Certificates $250,000 and over		147,656			172,785			172,406			173,422			187,073
Total deposits		2,664,752			2,737,550			2,705,337			2,711,335			2,725,251
Borrowed funds		187,821			152,968			196,170			185,444			146,278
Other liabilities		30,587			33,394			32,511			30,912			32,988
Total Liabilities		2,883,160			2,923,912			2,934,018			2,927,691			2,904,517
Shareholders' equity
Common stock		112			112			112			112			112
Additional paid-in capital		73,714			73,276			72,795			72,355			71,832
Retained earnings		240,456			234,435			229,511			225,592			222,823
Accumulated other comprehensive income (loss)
Net unrealized loss on securities available for sale		(31,341	)		(33,523	)		(37,237	)		(38,702	)		(42,671	)
Net unrealized loss on securities transferred from available for sale to held to maturity		(38	)		(40	)		(60	)		(45	)		(47	)
Net unrealized gain on cash flow hedging derivative instruments		—			19			84			82			157
Net unrealized gain on postretirement costs		240			287			287			287			287
Total shareholders' equity		283,143			274,566			265,492			259,681			252,493
Total liabilities & shareholders' equity	$	3,166,303		$	3,198,478		$	3,199,510		$	3,187,372		$	3,157,010
Common Stock
Number of shares authorized		18,000,000			18,000,000			18,000,000			18,000,000			18,000,000
Number of shares issued and outstanding		11,222,363			11,214,455			11,205,861			11,196,881			11,155,528
Book value per common share	$	25.23		$	24.48		$	23.69		$	23.19		$	22.63
Tangible book value per common share	$	22.49		$	21.74		$	20.94		$	20.44		$	19.87

The First Bancorp
Five Quarter Trend - Consolidated Statements of Income (Unaudited)
	For the quarters ended
In thousands of dollars, except per share data	12/31/2025			9/30/2025			6/30/2025		3/31/2025			12/31/2024
Interest income
Interest and fees on loans	$	36,025		$	36,197		$	35,014	$	33,924		$	33,899
Interest on deposits with other banks		185			108			51		56			360
Interest and dividends on investments		4,522			4,700			4,760		4,729			4,740
Total interest income		40,732			41,005			39,825		38,709			38,999
Interest expense
Interest on deposits		18,323			19,380			19,725		19,269			20,300
Interest on borrowed funds		1,298			1,567			1,691		1,641			1,146
Total interest expense		19,621			20,947			21,416		20,910			21,446
Net interest income		21,111			20,058			18,409		17,799			17,553
Credit loss expense - loans		615			690			348		396			1,246
Credit loss (reduction) expense - debt securities held to maturity		(40	)		(12	)		1		1			(28	)
Credit loss (reduction) expense - off-balance sheet credit exposures		(303	)		22			137		(5	)		(54	)
Total credit loss expense		272			700			486		392			1,164
Net interest income after provision for credit losses		20,839			19,358			17,923		17,407			16,389
Non-interest income
Investment management and fiduciary income		1,433			1,341			1,336		1,317			1,274
Service charges on deposit accounts		559			532			539		531			496
Mortgage origination and servicing income		211			219			221		195			282
Debit card income		1,596			1,403			1,286		1,170			1,572
Other operating income		935			980			747		789			812
Total non-interest income		4,734			4,475			4,129		4,002			4,436
Non-interest expense
Salaries and employee benefits		7,198			6,674			6,276		6,850			6,462
Occupancy expense		827			814			876		877			841
Furniture and equipment expense		1,487			1,491			1,438		1,462			1,440
FDIC insurance premiums		629			698			701		694			629
Amortization of identified intangibles		6			7			6		7			6
Other operating expense		2,984			3,070			2,902		2,954			2,767
Total non-interest expense		13,131			12,754			12,199		12,844			12,145
Income before income taxes		12,442			11,079			9,853		8,565			8,680
Applicable income taxes		2,270			1,997			1,790		1,488			1,398
Net Income	$	10,172		$	9,082		$	8,063	$	7,077		$	7,282
Basic earnings per share	$	0.92		$	0.82		$	0.73	$	0.64		$	0.66
Diluted earnings per share	$	0.91		$	0.81		$	0.72	$	0.63		$	0.65

Use of Non-GAAP Financial Measures

Certain information in this release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management uses these “non-GAAP” measures in its analysis of the Company's performance (including for purposes of determining the compensation of certain executive officers and other Company employees) and believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and with other financial institutions, as well as demonstrating the effects of significant gains and charges in the current period, in light of the disclosure practices employed by many other publicly-traded financial institutions. The Company believes that a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. Management believes that investors may use these non-GAAP financial measures to analyze financial performance without the impact of unusual items that may obscure trends in the Company's underlying performance. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

In several places net interest income is calculated on a fully tax-equivalent basis. Specifically included in interest income was tax-exempt interest income from certain investment securities and loans. An amount equal to the tax benefit derived from this tax-exempt income has been added back to the interest income total which, as adjusted, increased net interest income accordingly. Management believes the disclosure of tax-equivalent net interest income information improves the clarity of financial analysis, and is particularly useful to investors in understanding and evaluating the changes and trends in the Company's results of operations. Other financial institutions commonly present net interest income on a tax-equivalent basis. This adjustment is considered helpful in the comparison of one financial institution's net interest income to that of another institution, as each will have a different proportion of tax-exempt interest from its earning assets. Moreover, net interest income is a component of a second financial measure commonly used by financial institutions, net interest margin, which is the ratio of net interest income to average earning assets. For purposes of this measure as well, other financial institutions generally use tax-equivalent net interest income to provide a better basis of comparison from institution to institution. The Company follows these practices.

The following table provides a reconciliation of tax-equivalent financial information to the Company's consolidated financial statements, which have been prepared in accordance with GAAP. A 21.0% tax rate was used in both 2025 and 2024.

	For the years ended				For the quarters ended
In thousands of dollars	12/31/2025		12/31/2024		12/31/2025		09/30/2025		12/31/2024
Net interest income as presented	$	77,377	$	63,910	$	21,111	$	20,058	$	17,553
Effect of tax-exempt income		2,837		2,780		701		727		708
Net interest income, tax equivalent	$	80,214	$	66,690	$	21,812	$	20,785	$	18,261

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 years ended						For the quarters ended
In thousands of dollars	12/31/2025			12/31/2024			12/31/2025			09/30/2025			12/31/2024
Non-interest expense, as presented	$	50,928		$	47,156		$	13,131		$	12,754		$	12,145
Net interest income, as presented		77,377			63,910			21,111			20,058			17,553
Effect of tax-exempt interest income		2,837			2,780			701			727			708
Non-interest income, as presented		17,340			16,355			4,734			4,475			4,436
Effect of non-interest tax-exempt income		214			185			70			48			49
Adjusted net interest income plus non-interest income	$	97,768		$	83,230		$	26,616		$	25,308		$	22,746
Non-GAAP efficiency ratio		52.09	%		56.66	%		49.33	%		50.40	%		53.39	%
GAAP efficiency ratio		53.77	%		58.75	%		50.81	%		51.99	%		55.23	%

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. generally accepted accounting principles:

	For the years ended						For the quarters ended
In thousands of dollars	12/31/2025			12/31/2024			12/31/2025			09/30/2025			12/31/2024
Average shareholders' equity as presented	$	268,059		$	249,786		$	281,178		$	263,639		$	257,034
Less intangible assets		(30,791	)		(30,817	)		(30,801	)		(30,794	)		(30,827	)
Tangible average shareholders' equity	$	237,268		$	218,969		$	250,377		$	232,845		$	226,207

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 years ended				For the quarters ended
In thousands of dollars	12/31/2025		12/31/2024		12/31/2025		9/30/2025		12/31/2024
Net Income, as presented	$	34,394	$	27,045	$	10,172	$	9,082	$	7,282
Add: credit loss expense		1,850		525		272		700		1,164
Add: income taxes		7,545		5,539		2,270		1,997		1,398
Pre-Tax, pre-provision net income	$	43,789	$	33,109	$	12,714	$	11,779	$	9,844

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