First Bancorp Inc ME

Net income for the three months ended March 31, 2024 was $6.0 million, down $2.0 million or 24.5% from the same period in 2023 due primarily to a decrease in net interest income resulting from higher funding costs. Earnings per common share on a fully diluted basis were $0.54 for the three months ended March 31, 2024, down $0.18 or 25.0% from the $0.72 posted for the same period in 2023. Dividends totaling $0.35 per share have been declared year-to-date, representing a payout to our shareholders of 63.64% of basic earnings per share for the period.

Net interest income on a tax-equivalent basis was down $2.5 million or 14.1% in the three months ended March 31, 2024 compared to the same period in 2023. The tax equivalent net interest margin for the three months ended March 31, 2024, was 2.22%, down from 2.78% for the same period in 2023. The period to period change in net interest income and net interest margin is primarily attributable to increased funding costs.

Non-interest income for the three months ended March 31, 2024 was $3.6 million, up $71,000 or 2.0%, from the three months ended March 31, 2023. As compared to the prior year period, mortgage banking revenue decreased $62,000 or 32.3% on lower volume of mortgage sales and negative marks taken against mortgage servicing rights valuation. Service charges on deposit accounts were up $62,000, or 14.2%, while debit card revenue was even with the three months ended March 31, 2024. Revenue at First National Wealth Management increased $42,000 or 3.7% over the same period.

Non-interest expense for the three months ended March 31, 2024 was $11.8 million, up $911,000 or 8.4% from the three months ended March 31, 2023. FDIC insurance premiums increased $220,000 from the same period in 2023, salaries and employee benefits increased 5.9% and other operating expense increased 10.4% over the same period.

Asset quality continues to be strong and stable. Non-performing assets stood at 0.09% of total assets as of March 31, 2024, up slightly from 0.07% of total assets as of December 31, 2023 and 0.06% of total assets as of March 31, 2023. Total past-due loans remain low and were 0.09% of total loans as of March 31, 2024, down from 0.18% and 0.10% of total loans as of December 31, 2023 and March 31, 2023, respectively.

The provision for credit losses on loans for the first three months of 2024 was $99,000, down from the $550,000 provisioned in the same period in 2023. The effects of improved economic projections and strong asset quality offset the effects of loan growth and other factors in the first quarter model, resulting in lower provision expense for the current period as compared to the prior period. Recoveries in the first quarter of prior period loan charge-offs outpaced current period charge-offs, resulting in a net addition to the allowance for credit losses on loans. Net recoveries for the three months ended March 31, 2024 was $78,000 or 0.015% of average loans on an annualized basis, compared to net charge-offs of $25,000 or 0.010% of three months ended March 31, 2023. The ACL for loans increased $177,000 between December 31, 2023 and March 31, 2024, and now stands at 1.11% of loans outstanding as of March 31, 2024, down from 1.13% at December 31, 2023 and 1.18% at March 31, 2023.

The Company's balance sheet continued to expand in the first three months of 2024 as total assets increased $31.5 million or 1.1% year-to-date. The loan portfolio increased $44.3 million or 2.1% in the three months ended March 31, 2024 and $190.9 million or 9.6% from a year ago. Loan growth in the first three months of 2024 was centered in the commercial and residential portfolios. Commercial loans increased by $34.0 million during the period, led by increases in owner-occupied commercial real estate of $12.7 million, non-owner occupied commercial real estate of $9.5 million, commercial & industrial loans of $6.8 million and multifamily of $7.9 million; commercial construction balances decreased by $2.9 million as a number of projects converted to permanent financing. Residential term loans increased by $3.2 million in the first three months of 2024 and residential construction loans increased by $2.5 million during the same period. The investment portfolio decreased $10.8 million year-to-date and decreased $24.1 million from a year ago based upon cash flow of amortizing securities, limited reinvestment or new purchases, and changes in the carrying value of AFS securities.

On the liability side of the balance sheet, total deposits decreased $50.7 million, or 1.9%, year-to-date to $2.55 billion. Low-cost deposits decreased $61.7 million, in line with seasonal deposit patterns. Money market balances increased $15.9 million and local CDs decreased $10.2 million. To balance the seasonal changes and to support earning asset growth, wholesale CDs increased $5.4 year-to-date and borrowings increased by $85.1 million.

Remaining well capitalized is a top priority for The Company. The Company's total risk-based capital ratio was 13.54% as of March 31, 2024, solidly above the well-capitalized threshold of 10.0% set by the FDIC, the FRBB, and the OCC.

Among the Company's operating ratios, the return on average assets was 0.82% and return on average tangible common equity of 11.36% for the three months ended March 31, 2024 compared to 1.16% and 15.64%, respectively, for the same period in 2023. Our non-GAAP efficiency ratio continues to be an important component in the Company's overall performance and stood at 61.15% for the three months ended March 31, 2024 compared to 49.98% for the same period in 2023.