First Bancorp (FBNC) Q3 2024 earnings summary

Executive summary

• Q3 net income was $18.7 million, or $0.45 diluted EPS, versus $29.9 million, or $0.73, a year earlier; Hurricane Helene and higher funding costs pressured results.

• Excluding Helene’s estimated impact, Q3 adjusted net income was $29.0 million, or $0.70 diluted EPS; 9M adjusted net income was $83.0 million, or $2.01 per diluted share.

• Total assets reached $12.2 billion; deposits grew from year-end while loans and investment securities contracted.

Financial highlights

• Q3 net interest income was $83.0 million, up 2.4% QoQ and down 2.0% YoY; tax-equivalent NIM rose 3 bps QoQ to 2.90%, versus 2.97% a year earlier.

• Q3 provision for credit losses was $14.2 million, including a $13.0 million Helene-related provision; noninterest income was $13.6 million and noninterest expense was $59.9 million.

• 9M net income was $72.7 million, or $1.76 diluted EPS, versus $74.5 million, or $1.81; net interest income declined 7.9% to $243.4 million.

• 9M noninterest expense fell 10.4% to $177.3 million, mainly reflecting lower merger costs, other operating expenses and personnel expense.

Outlook and guidance

• Interest-rate simulations indicated slight asset sensitivity over one year; an immediate +200 bps rate shock was modeled to lift net interest income ~3% over one- and two-year horizons.

• Market consensus anticipated further Federal Reserve rate reductions through late 2024 and into 2025; deposit competition and repricing of variable-rate assets may challenge funding-cost management.

• Helene recovery continued in affected communities at quarter-end; reserves were based on information available at the time.

• The September Federal Reserve rate reduction had minimal benefit to Q3 NIM because it occurred near quarter-end.