First Bancorp Sets Record Third-Quarter Profit
Net income reached $10.7 million, or $0.95 a share, as the net interest margin widened to 2.99% for a ninth straight quarter.
The First Bancorp (FNLC), parent of First National Bank in Damariscotta, Maine, reported net income of $10.7 million for the third quarter ended September 30, 2026, a 17.5% increase from $9.1 million a year earlier and a new quarterly high. Fully diluted earnings were $0.95 a share.
The company said the lift came from growth in earning assets, continued net interest margin expansion, higher non-interest income and controlled expenses. Return on average assets was 1.31% and return on average tangible common equity 15.99%, versus 1.13% and 15.04% a year earlier.
Net interest income was $22.5 million, up 12.2% from the year-ago quarter. The tax-equivalent net interest margin expanded to 2.99%, an 11-basis-point sequential gain and the ninth consecutive quarterly expansion. President and Chief Executive Officer Tony C. McKim said the margin improvement was organic, driven by lower funding costs and supported by stable earning-asset yields. Average earning assets grew $14.8 million in the quarter. The cost of total liabilities fell 32 basis points from the year-ago period.
Loans rose $17.8 million, an annualized 2.92% growth rate, following $18.6 million of growth in the second quarter. New loan production was $180 million, up nearly $50 million from the prior quarter. Commercial and industrial balances increased $11.1 million; agricultural and residential mortgage loans rose $3.2 million and $2.5 million. Commercial real estate was up $2.5 million and multifamily down $1.9 million. Total assets were $3.25 billion.
Total deposits increased $106.9 million to $2.79 billion. Non-maturity deposits rose $139.7 million, which the company said allowed planned reductions in short-term time deposits and borrowings. Time deposits fell $32.8 million and short-term FHLB advances declined $69.2 million. McKim said the company expects local deposit volumes to remain steady through year-end and has taken steps to protect margin gains from recent rate pressure.
Non-interest income was $5.0 million, up $317,000 from the second quarter. Payments revenue rose $115,000 on transaction volume and other operating income increased $285,000, principally on loan-based derivative fees. Wealth-management revenue was $1.46 million. Non-interest expense was $13.5 million, up only 1.3% sequentially. The non-GAAP efficiency ratio improved to 47.94% from 50.33% in the second quarter.
Asset quality improved. Non-performing assets were 0.44% of total assets at September 30, down from 0.54% at June 30. Non-performing loans were 0.58% of loans, and loans 30 days or more past due were 0.67% of loans. The allowance for credit losses was 0.98% of loans after the company resolved several non-performing credits that had carried specific reserves. The provision for credit losses was $845,000 and net charge-offs $1.6 million.
Estimated leverage capital was 9.29% and total risk-based capital 14.27%. Tangible book value was $22.81 a share, down from $23.25 at June 30 on higher unrealized losses on available-for-sale securities. The board declared a $0.38 quarterly dividend, matching the second-quarter rate.
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