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First Bancorp closes expansion 2022 with 54% profit hike

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First Bancorp bucked a banking industry trend during the fourth quarter, reporting Tuesday a lower loan-loss provision along with a slight increase in loan revenue.

Southern Pines-based First Bancorp continued to benefit from its recent acquisition of Select Bancorp in posting $38.4 million in fourth-quarter net income.

By comparison, the bank had $37.9 million in the third quarter and $10.5 million a year ago.

Fourth-quarter diluted earnings were $1.08 per share, compared with $1.06 in the third quarter and 30 cents a year ago.

The average earnings forecast was $1.02 by four analysts surveyed by Zacks Investment Research. Analysts typically do not include one-time gains and charges in their forecasts.

For the full year, net income was $146.9 million, up 53.6% from a year ago.

“First Bank had another strong year of continued growth” counting a near 10% increase in loans and improved credit quality, Richard Moore, chairman and chief executive, said in a statement.

The bank recorded a $5 million loan-loss provision in the fourth quarter, compared with $5.4 million in the third quarter and $10.4 million a year ago.

The provision offers a glimpse at how a bank expects its loan portfolio and revenue stream to perform as customers struggle to make monthly payments. It has a bottom-line effect on a bank’s profitability.

First Bancorp had loan revenue of $79.4 million, down 0.7% from the third quarter, but up 31.4% from a year ago.

Fee revenue was $14.5 million, down 13.9% from the third quarter and down 3.3% from a year ago.

The bank had a 92.7% year-over-year drop in mortgage loan fees to $151,000, as higher interest rates deterred more would-be homeowners.

There was a 27.6% decrease in other service charges, commissions and fees to $5.1 million, along with a 15.9% jump in service charges on deposit accounts of $4.1 million.

First Bancorp received a major ancillary benefit from its entrance during the third quarter of 2016 into the national Small Business Administration lending business.

For the fourth quarter, the bank reported SBA consulting fees of $645,000, compared with $1.15 million a year ago. It also had gains of $967,000 on the sales of the guaranteed portions of SBA loans, compared with $940,000 a year ago.

Nonperforming assets were at $38.3 million as of Dec. 31, compared with at $40.7 million on Sept. 30 and $52.6 million on Dec. 31, 2021.

First Bancorp has 110 branches, including four in Forsyth, six in Guilford and 17 overall in the Triad.

First Bancorp had $10.6 billion in total assets as of Dec. 31.

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@rcraverWSJ

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