First Bancorp Lifts Profit as Interest Margin Expands
The bank’s tax-equivalent net interest margin reached 2.88%, extending its expansion to eight consecutive quarters.
First Bancorp (FNLC), the bank holding company, posted an 18.6% increase in second-quarter net income as lower funding costs widened its interest margin.
The results extended a steady margin recovery while credit quality weakened and deposit growth shifted toward more expensive funding. The margin has risen from 2.52% a year earlier, progressing through 2.70%, 2.83% and 2.86% before the latest quarter.
Net income rose to $9.6 million from a year earlier and increased 6.3% from $9.0 million in the first quarter. Diluted earnings climbed 17.8% to $0.85 a share and rose sequentially from $0.80 a share.
Net interest income increased 15.0% from a year earlier to $21.2 million and rose 2.3% sequentially. Year-over-year margin expansion was driven by stable earning-asset yields and a 40-basis-point decline in the cost of total liabilities.
Fee-based businesses added to the growth. Non-interest income rose 12.9% to $4.7 million, led by a 15.9% increase in wealth-management revenue and gains in debit-card and other operating income. Sequential growth came mainly from higher debit-card transaction volume and wealth-management revenue.
Loans grew $18.6 million during the quarter as increases in residential mortgages and home-equity loans outweighed declines in commercial real-estate and multifamily balances. Deposits increased $15.1 million to $2.68 billion, though non-maturity deposits fell as short-term time deposits and borrowings increased.
Credit measures were mixed. Non-performing assets rose to 0.54% of assets from 0.51% in the prior quarter, while loans at least 30 days past due declined to 0.93% from 1.14%. Net charge-offs totaled $1.6 million and were concentrated in one credit relationship.
First Bancorp strengthened its capital ratios and increased tangible book value 11.0% from a year earlier to $23.25 a share. The company also raised its quarterly dividend to $0.38 a share from $0.37, pairing the higher payout with a larger capital cushion.