FIRST BANCORP /NC/
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
FBNC$64.60-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0000811589-25-000024
Item 2. – Management’s Discussion and Analysis of Consolidated Results of Operations and Financial ConditionCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0000811589-25-000041
Item 2. – Management’s Discussion and Analysis of Consolidated Results of Operations and Financial ConditionThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 121 previous paragraphs and 145 current paragraphs.
54 unchanged; 55 reworded; 31 added; 9 removed; 3 previous and 5 current paragraphs rearranged.
Tables are not compared: 13 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
Overview and Highlights for the Three Months Ended June 30, 2025
Current report
See the discussion and reconciliations of net income and diluted EPS to adjusted net income and adjusted diluted EPS for the quarter ended June 30, 2025 in the Overview and Highlights for the Six Months Ended June 30, 2025 section below.
Current report
Overview and Highlights for the Six Months Ended June 30, 2025
Current report
We earned net income of $75.0 million, or $1.81 diluted EPS, during the six months ended June 30, 2025 compared to net income of $54.0 million, or $1.31 diluted EPS, for the six months ended June 30, 2024. Adjusting for the potential impact from Hurricane Helene, our adjusted net income was $70.7 million, or $1.71 per diluted share, for the six months ended June 30, 2025.
Current report
•Net interest income for the six months ended June 30, 2025 was $189.6 million, an 18.2% increase from the $160.4 million recorded for the comparable period of 2024. The increase in net interest income was driven by lower cost of funds and higher yields on interest earning assets.
Current report
•NIM increased 48 basis points to 3.29% for the six months ended June 30, 2025 from 2.81% for the six months ended June 30, 2024 as a result of the lower cost of funds and higher yields on loans and securities
Current report
as well as the repayment of short-term borrowings which contributed to the reduced cost of funds from the prior period.
Current report
• For the six months ended June 30, 2025, the Company recorded $3.3 million in provision for credit losses as compared to $1.7 million for the six months ended June 30, 2024. The higher provision in 2025 was significantly impacted by loan growth in 2025, net charge off activity of $4.5 million, partially offset by a $5.5 million reduction in the incremental provision related to potential exposure from Hurricane Helene. The 2024 provision was dampened by lower loan balances as of June 30, 2024
Current report
•Noninterest income for the six months ended June 30, 2025 totaled $27.2 million, a decrease of $0.3 million, from the comparable period of 2024 primarily related to a decrease in SBA loan sale gains of $2.0 million and a decrease in Other income, net of $0.8 million, partially offset by an increase in Other service charges, commissions and fees of $1.6 million and the securities losses of $1.2 million experienced during the first six months of 2024.
Current report
•Noninterest expense decreased $0.6 million to $116.9 million for the six months ended June 30, 2025 as compared to the prior year period, primarily driven by a $1.1 million decrease in Other operating expenses. Personnel expenses increased $1.5 million between the periods resulting from an increase in incentives expense.
Current report
•AFS securities increased $101.8 million, or 5.0%, during the six months ended June 30, 2025.
Current report
Net interest income for the second quarter of 2025 amounted to $96.7 million, an increase of $15.6 million, or 19.2%, from the $81.1 million recorded in the second quarter of 2024. The increase was primarily driven by higher yields on interest-earning assets and lower cost of funds.
Current report
For the second quarter of 2025, average interest-earning assets increased $216.6 million, or 1.9%, from the comparable period of the prior year, with average loans and taxable securities growing $116.8 million and $105.7 million, respectively.
Current report
The cost of interest bearing deposits decreased 40 basis points from the second quarter of 2024 to the second quarter of 2025, with the biggest impact coming from the cost of Other time deposits, which decreased $3.0 million and the cost of Money market deposits, which decreased $2.5 million. Additionally, the cost of short-term borrowings decreased $0.9 million between the periods, mostly attributable to the payoff of Federal Reserve Bank Term Funding Program borrowings, which decreased the average borrowing balance by $68.1 million from the like quarter.
Current report
Net interest income for the six months ended June 30, 2025 amounted to $189.6 million, an increase of $29.2 million, or 18.2%, from the $160.4 million recorded in the six months ended June 30, 2024. As described above, the rate cuts by the Federal Reserve in the second half of 2024 affected market rates which had resulting impacts on the rates we paid or received in 2024 and 2025. Similar to the impact during the three months ended June 30, 2025, the increase for the six months ended June 30, 2025 was also driven by lower cost of funds, and increased yields on interest-earning assets. Our NIM increased to 3.29% for the six months ended June 30, 2025 from 2.81% for the six months ended June 30, 2024 as discussed further below.
Current report
(2) Includes accretion of discount on acquired loans of $3.2 million and $4.7 million for six months ended June 30, 2025 and 2024, respectively.
Current report
Overall, as demonstrated in the table above, the expansion in NIM, coupled with higher earning asset volumes, drove the increase in net interest income.
Current report
•During the second half of 2024, the Federal Reserve decreased the fed funds rate a total of 100 basis points, after substantial increases occurring in 2022 and 2023. During the first six months of 2025, the Federal Reserve has not changed fed funds rates, resulting in a 100 basis points decrease in fed funds rates between June 2024 and June 2025. The average prime rate was 7.50% for the six months ended June 30, 2025, compared to 8.50% for the prior year period. During much of 2024, the market yield curve was inverted, while during 2025, the yield curve has been positively sloping beyond three years, although longer term treasury rates are still fairly close to fed funds rates.
Current report
•Average loan volumes for the six months ended June 30, 2025 were $60.6 million higher than the same period in 2024 due to organic loan growth. In addition, interest rates on loans increased 5 basis points to 5.52% for the six months ended June 30, 2025, collectively resulting in an increase in loan interest income of $3.2 million.
Current report
•Due to lower market rates and a shift from higher costing deposits to lower costing deposits, partially offset by an overall growth of deposits, interest expense on deposits for the six months ended June 30, 2025 decreased $7.4 million compared to the same period in 2024. Average total interest-bearing deposit balances increased $292.0 million while rates on those deposits decreased 30 basis points as compared to the same period in the prior year. Within this population, average balances on Money market deposits increased $493.8 million while rates on those accounts decreased 40 basis points as compared to the same period in the prior year, both resulting in a $1.1 million decrease in interest expense. Average balances on Other time deposits decreased $177.5 million and rates on these accounts decreased 82 basis points as compared to the same period in the prior year, collectively resulting in a $5.1 million decrease in interest expense.
Current report
•Interest expense on borrowings decreased $7.9 million for the six months ended June 30, 2025 as compared to the same period in 2024 due to the $280.9 million decrease in the average volume of borrowings between periods, partially offset by a 125 basis point increase in the rates on the remaining borrowings. The lower balances were due in large part to a decreased reliance on short-term borrowings during as deposit growth provided additional liquidity. The remaining borrowings are longer term in nature and generally carry higher interest rates than those that were paid off.
Current report
•NIM increased 48 basis points between the comparable periods due higher interest-earning asset balances and yields, lower rates on interest bearing deposits and lower average balances on borrowings, partially offset by higher deposit average balances higher rates on borrowings.
Current report
Provision for Credit Losses
Current report
The provision for credit losses was $2.2 million and $0.5 million for the three months ended June 30, 2025 and 2024, respectively, and $3.3 million and $1.7 million for the six months ended June 30, 2025 and 2024, respectively.
Current report
The provision for unfunded commitments reflected an expense of $1.1 million and a reversal of $0.9 million for the three months ended June 30, 2025 and 2024, respectively, and an expense of $0.9 million and a reversal of $1.5 million for the six months ended June 30, 2025 and 2024, respectively.
Current report
Our noninterest income amounted to $14.3 million and $14.6 million for the three months ended June 30, 2025 and 2024, respectively, and $27.2 million and $27.5 million for the six months ended June 30, 2025 and 2024, respectively. In comparing the three months ended June 30, 2025 to the like quarter, a decrease of $1.2 million in SBA loan sale gains was partially offset by the $1.1 million increase in Other service charges - other. For the year to date periods, decreases of $2.0 million in SBA loan sale gains and $0.8 million in Other income were partially offset by an increase of $1.4 million in Other service charges and fees - other and the $1.2 million Securities losses recognized during the six months ended June 2024.
Current report
Total noninterest expenses totaled $59.0 million and $58.3 million for the three months ended June 30, 2025 and 2024, respectively, and $116.9 million and $117.5 million for the six months ended June 30, 2025 and 2024, respectively.
Current report
Index
Current report
There have been no material changes to the treatment of capital resources as discussed in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.
Current report
Index
Current report
The Company did not complete any share repurchases during the three months ended June 30, 2025. The dollar value of shares that may yet be repurchased under the program was $39.0 million as of June 30, 2025.
Removed paragraphs (9)
Previous report
Overview and Highlights at and for Three Months Ended March 31, 2025
Previous report
•The first quarter results include the $2.0 million reversal of provision related to the potential impact of Hurricane Helene. On an after-tax basis, this reversal increased our current quarter earnings by $1.5 million.
Previous report
•AFS securities increased $21.5 million, or 1.1%, during the quarter ended March 31, 2025.
Previous report
The provision for credit losses was $1.1 million and $1.2 million for the three months ended March 31, 2025 and 2024, respectively.
Previous report
Total investment securities were $2.6 billion at March 31, 2025, a decrease of $19.7 million from December 31, 2024. During the three months ended March 31, 2025, the Company purchased $10.0 million of investment
Previous report
The Company is regulated by the Federal Reserve and is subject to the securities registration and public reporting regulations of the SEC. Our Bank is also regulated by the Federal Reserve and the North Carolina Office of the Commissioner of Banks ("NCCOB"). We must comply with regulatory capital requirements established by the Federal Reserve and the NCCOB. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on our financial statements. We are not aware of any recommendations of regulatory authorities or otherwise which, if they were to be implemented, would have a material effect on our liquidity, capital resources, or operations.
Previous report
Under Basel III standards and capital adequacy guidelines and the regulatory framework for prompt corrective action, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. Our capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
Previous report
The Federal Reserve's capital standards require us to maintain minimum ratios of “common equity tier 1” capital to total risk-weighted assets, “tier 1” capital to total risk-weighted assets, and total capital to risk-weighted assets of 4.50%, 6.00% and 8.00%, respectively. Common equity tier 1 capital is comprised of common stock and related surplus, plus retained earnings, and is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities. Tier 1 capital is comprised of common equity tier 1 capital plus "additional tier 1 capital", which includes non-cumulative perpetual preferred stock and trust preferred securities. Total risk-based capital is comprised of tier 1 capital plus qualifying subordinated debentures, and certain adjustments, the largest of which is our ACL and allowance for unfunded commitments. The Company has elected to exclude AOCI related primarily to AFS securities from common equity tier 1 capital. Risk-weighted assets refer to our on- and off-balance sheet exposures, adjusted for their related risk levels using formulas set forth in Federal Reserve regulations.
Previous report
The following table discloses shares of our common stock repurchased during the three months ended March 31, 2025.
Reworded paragraphs (55)
Previous wording
Highlights of the results for the first quarter of 2025 is presented below. Refer also to additional discussion in the "Results of Operations" and "Financial Condition" sections following.
Current wording
Highlights of the results for the second quarter and year-to-date period of 2025 are presented below. Refer also to additional discussion in the "Results of Operations" and "Financial Condition" sections following.
Previous wording
We earned net income of $36.4 million, or $0.88 diluted EPS, during the first quarter of 2025 compared to net income of $25.3 million, or $0.61 diluted EPS, for the first quarter of 2024. The increase in net income in the current year was driven primarily by a $13.6 million increase in net interest income due to lower cost of funds and higher yield on interest earning assets, both of which were driven by the overall interest rate environment for the past year. Adjusting for the impact of the $2.0 million reversal of provision related to Hurricane Helene, our adjusted net income, which is a non-GAAP financial measure, was $34.9 million, or $0.84 per diluted share, for the first quarter.
Current wording
We earned net income of $38.6 million, or $0.93 diluted EPS, during the second quarter of 2025 compared to net income of $28.7 million, or $0.70 diluted EPS, for the second quarter of 2024. The $15.6 million increase in net interest income in the second quarter of 2025 from the like quarter was driven primarily by a lower cost of funds and a higher yield on interest earning assets, both of which were driven by the overall interest rate environment throughout the past year. Adjusting for the impact of the $3.5 million reversal of provision related to Hurricane Helene, our adjusted net income, which is a non-GAAP financial measure, was $35.9 million, or $0.87 per diluted share, for the second quarter.
Previous wording
•Net interest income for the first quarter of 2025 was $92.9 million, a 17.2% increase from the $79.3 million recorded in the first quarter of 2024. The increase in net interest income from the like quarter was driven by higher yields on earning assets and lower cost of funds. We also grew deposits and repaid the majority of our borrowings, thereby further reducing the cost of borrowings.
Current wording
•Net interest income for the second quarter of 2025 was $96.7 million, a 19.2% increase from the $81.1 million recorded in the second quarter of 2024. The increase in net interest income from the like quarter was driven by lower cost of funds and higher yields on earning assets. We also grew deposits and repaid the majority of our short-term borrowings during the second quarter of 2024, thereby further reducing the cost of funding.
Previous wording
•Net interest margin ("NIM") on a tax-equivalent basis ("NIM-T/E") increased 47 basis points to 3.27% in the first quarter of 2025 from 2.80% in the first quarter of 2024 as a result of the lower cost of funds and higher yields on loans, securities, and other earning assets. The aforementioned decrease in borrowings along with a reduction in deposit costs further enhanced NIM-T/E from the prior year's like quarter.
Current wording
•Net interest margin ("NIM") increased 48 basis points to 3.32% in the second quarter of 2025 from 2.84% in the second quarter of 2024 as a result of the lower cost of funds and higher yields on loans and securities. The aforementioned decrease in short-term borrowings along with a reduction in deposit costs further enhanced NIM from the prior year's like quarter.
Previous wording
•We remained well-capitalized by all regulatory standards. Capital grew during the quarter with a total common equity Tier 1 ratio of 14.52%, Tier 1 risk-based capital ratio of 15.34% and total risk-based capital ratio of 16.80% at March 31, 2025, all increasing from March 31, 2024.
Current wording
•We remained well-capitalized by all regulatory standards. Capital grew during the quarter with a total common equity Tier 1 ratio of 14.64%, Tier 1 risk-based capital ratio of 15.45% and total risk-based capital ratio of 16.90% at June 30, 2025, all increasing from June 30, 2024.
Previous wording
•The provision for credit losses for the first quarter of 2025 was $1.1 million, driven by $3.3 million of net charge-off activity, partially offset by a $2.0 million reduction in the incremental provision related to potential exposure from Hurricane Helene. Net charge-offs for the first quarter of 2025 included $1.3 million related to the sale of a credit relationship as the result of an accelerated resolution.
Current wording
•The provision for credit losses for the second quarter of 2025 was $2.2 million, driven by loan growth and $1.2 million of net charge-offs, partially offset by a $3.5 million reduction in the incremental provision related to potential exposure from Hurricane Helene.
Previous wording
•Noninterest income for the three months ended March 31, 2025 totaled $12.9 million, which was consistent with the comparable prior year period. Decreases from the like quarter of $0.8 million in SBA loan sale gains and $0.6 million in other income were partially offset by the $1.0 million securities loss in the first quarter of 2024.
Current wording
•Noninterest income for the three months ended June 30, 2025 totaled $14.3 million, which was down slightly from the $14.6 million for the comparable prior year period. An increase from the like quarter in Other service charges, commissions and fees of $1.3 million was partially offset by a decrease of $1.2 million in SBA loan sale gains.
Previous wording
•Noninterest expense of $57.9 million decreased $1.3 million, or 2.2%, for the quarter ended March 31, 2025 from the prior year. This decrease is attributable to a $1.0 million decrease in other operating expenses and a $0.9 million decrease in occupancy and equipment expenses, partially offset by a $0.8 million increase in personnel costs resulting from increased incentives and commissions driven by improved performance.
Current wording
•Noninterest expense of $59.0 million increased $0.7 million, or 1.2%, for the quarter ended June 30, 2025 from the prior year. The increase is attributable to a $0.7 million increase in personnel costs resulting from increased incentives and commissions driven by improved performance.
Previous wording
Adjusted net income and adjusted diluted EPS are non-GAAP financial measures that exclude the effect of the $2.0 million reversal of provision related to Hurricane Helene to GAAP basis net income and diluted EPS. Management believes these non-GAAP financial measures provide additional information that is useful to investors in evaluating our performance and may facilitate comparisons with other institutions in the banking industry as well as period-to-period comparisons. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, are not audited, and may not be comparable to other similarly titled financial measures used by other companies. Investors should not consider non-GAAP measures in isolation or as a substitute for analysis of the Company’s
Current wording
Adjusted net income and adjusted diluted EPS are non-GAAP financial measures that exclude the effect of the $3.5 million and $5.5 million reversals of provision related to Hurricane Helene for the three and six months ended June 30, 2025, respectively, to GAAP basis net income and diluted EPS. Management believes these non-GAAP financial measures provide additional information that is useful to investors in evaluating our performance and may facilitate comparisons with other institutions in the banking industry as well as period-to-period comparisons. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, are not audited, and may not be comparable to other similarly titled financial measures used by other companies. Investors should not consider non-GAAP measures in isolation or as a substitute for analysis of the Company’s results or financial condition as reported under GAAP. The following table reconciles net income and diluted EPS to adjusted net income and adjusted diluted EPS for the three and six ended June 30, 2025:
Previous wording
Total assets were $12.4 billion at March 31, 2025, a 2.4% increase from December 31, 2024. The increase was driven primarily by deposit growth generating investable funds that were deployed in interest-bearing cash, securities and loan balances. The primary balance sheet changes are presented below.
Current wording
Total assets were $12.6 billion at June 30, 2025, a 3.8% increase from December 31, 2024. The increase was driven primarily by deposit growth generating investable funds that were deployed in interest-bearing cash, securities and loan balances. The primary balance sheet changes are presented below.
Previous wording
•Total cash and cash equivalents amounted to $772.4 million at March 31, 2025, representing a $264.9 million, or 52.2%, increase from December 31, 2024. Interest-bearing cash comprised $193.7 million of this increase.
Current wording
•Total cash and cash equivalents amounted to $711.3 million at June 30, 2025, representing a $203.8 million, or 40.2%, increase from December 31, 2024. Interest-bearing cash comprised $142.9 million of this increase.
Previous wording
•Total loans amounted to $8.1 billion at March 31, 2025, reflecting an increase of $8.4 million from December 31, 2024.
Current wording
•Total loans amounted to $8.2 billion at June 30, 2025, reflecting an increase of $131.0 million, or 1.6%, from December 31, 2024.
Previous wording
•Total deposits were $10.7 billion at March 31, 2025, an increase of $214.1 million, or 2.03%, from December 31, 2024. Deposit growth during the quarter was evenly split between noninterest-bearing deposits, which saw an increase of $109.2 million, and interest-bearing deposits, which increased $105.0 million.
Current wording
•Total deposits were $10.8 billion at June 30, 2025, an increase of $299.9 million, or 2.85%, from December 31, 2024. Deposit growth during the period was split between noninterest-bearing deposits, which saw an increase of $175.0 million, and interest-bearing deposits, which increased $124.9 million.
Previous wording
•Credit quality continued to be strong at March 31, 2025, with NPAs of 0.27% of total assets as of March 31, 2025, down 3 basis points from 0.30% at December 31, 2024.
Current wording
•Credit quality continued to be strong at June 30, 2025, with NPAs of 0.28% of total assets as of June 30, 2025, down 2 basis points from 0.30% at December 31, 2024.
Previous wording
•Our on-balance sheet liquidity ratio was 19.8% at March 31, 2025. Available off-balance sheet sources totaled $2.4 billion at quarter end, resulting in a total liquidity ratio of 36.4%.
Current wording
•Our on-balance sheet liquidity ratio was 20.0% at June 30, 2025. Available off-balance sheet sources totaled $2.3 billion at quarter end, resulting in a total liquidity ratio of 36.1%.
Previous wording
Net interest income for the first quarter of 2025 amounted to $92.9 million, an increase of $13.6 million, or 17.2%, from the $79.3 million recorded in the first quarter of 2024. The increase was primarily driven by lower cost of funds and higher yields on interest-earning assets. While average interest-earning assets for the first quarter of 2025 increased $38.9 million, or 0.3%, from the comparable period of the prior year, the mix of assets shifted to higher earning assets, with average short-term investments growing $225.4 million, while average taxable securities decreased $186.2 million. While the cost of interest bearing deposits decreased 19 basis points between the first quarter of 2024 and the first quarter of 2025, the biggest decrease within interest expense between the first quarter of 2025 and the like quarter was in cost of short-term borrowings, which decreased $6.5 million. This decrease was mostly attributable to the payoff of FRB Bank Term Funding Program borrowings, which decreased the average borrowing balance by $476.8 million from the like quarter. This resulted in the 47 basis point improvement in our NIM-T/E (see discussion below) from the like quarter to 3.27% for the first quarter of 2025.
Current wording
These changes resulted in the 48 basis point improvement in our NIM (see discussion below) from the like quarter to 3.32% for the second quarter of 2025.
Previous wording
The following table presents an analysis of net interest income for the first quarter of 2025 and 2024:
Current wording
The following table presents an analysis of net interest income for the second quarter of 2025 and 2024:
Previous wording
(1) Average loans include nonaccruing loans, the effect of which is to lower the average rate shown. Interest earned includes recognized net loan fees, including late fees, prepayment fees, and net deferred loan (cost)/fee amortization in the amounts of $(0.4) million, and $(0.1) million for three months ended March 31, 2025 and 2024, respectively.
Current wording
(1) Average loans include nonaccruing loans, the effect of which is to lower the average rate shown. Interest earned includes recognized net loan fees, including late fees, prepayment fees, and net deferred loan (cost)/fee amortization in the amounts of $(0.3) million, and $(0.4) million for three months ended June 30, 2025 and 2024, respectively.
Previous wording
(2) Includes accretion of discount on acquired loans of $2.2 million and $2.9 million for three months ended March 31, 2025 and 2024, respectively.
Current wording
(2) Includes accretion of discount on acquired loans of $1.5 million and $2.3 million for three months ended June 30, 2025 and 2024, respectively.
Previous wording
Overall, as demonstrated in the table above, the change in the mix of earning assets to higher yielding assets and a decrease in the cost of liabilities drove the expansion in NIM and net interest income. While not impacting NIM-T/E, net interest income was impacted by the one less earning day in the first quarter of 2025 compared to the first quarter of 2024.
Current wording
Overall, as demonstrated in the table above, the growth in earning assets and a decrease in the cost of liabilities drove the expansion in NIM and net interest income.
Previous wording
•Net interest income for the first quarter of 2025 was $92.9 million, an increase of $13.6 million from the like quarter. The increase in net interest income was primarily driven by our focused efforts to reduce borrowings and manage deposit costs after the rate cuts by the Federal Reserve in the second half of 2024, which saw the federal funds rate fall 100 basis points. We also focused on increasing loan yields as new originations were at higher rates than older loans. Further, securities yields increased as a result of the loss-earnback transaction in the fourth quarter of 2024.
Current wording
•Net interest income for the second quarter of 2025 was $96.7 million, an increase of $15.6 million from the like quarter. The increase in net interest income was primarily driven by our focused efforts to increase interest-earning assets and to manage deposit costs after the rate cuts by the Federal Reserve between September and December of 2024, which saw the federal funds rate fall 100 basis points. We also focused on increasing loan yields as new originations were at higher rates than older loans. Further, securities yields increased as a result of the loss-earnback transaction in the fourth quarter of 2024 along with continued paydowns and payoffs on lower-yielding bonds.
Previous wording
•The Company’s NIM for the first quarter of 2025 was 3.27%, an increase of 47 basis points from the like quarter. Within interest-earning assets, the loss-earnback transaction in the securities portfolio during the fourth quarter of 2024 resulted in an increase of 50 basis points as compared to the like quarter. In addition, loan yields increased 7 basis points to 5.52%. Following the three rate cuts by the Federal Reserve between September and December of 2024, the rate on interest-bearing deposits fell 19 basis points from the like quarter to the first quarter of 2025.
Current wording
•The Company’s NIM for the second quarter of 2025 was 3.32%, an increase of 48 basis points from the like quarter. Within interest-earning assets, the securities loss-earnback transaction during the fourth quarter of 2024 resulted in an increase of 69 basis points as compared to the like quarter. In addition, loan yields increased 3 basis points to 5.53%. Following the rate cuts by the Federal Reserve in late 2024, the rate on interest-bearing deposits fell 40 basis points from the like quarter to the second quarter of 2025.
Previous wording
•Average loan volumes for the three months ended March 31, 2025 were $4.0 million higher than the same period in 2024. In addition, interest rates on loans increased 7 basis points to 5.52% for the first quarter of 2025, resulting in an increase in interest income on loans of $0.7 million.
Current wording
•Average loan volumes for the three months ended June 30, 2025 were $116.8 million higher than the same period in 2024. In addition, interest rates on loans increased 3 basis points to 5.53% for the second quarter of 2025, resulting in an increase in interest income on loans of $2.5 million.
Previous wording
•Due to the impact of the aforementioned Federal Reserve rate cuts in 2024 and the resulting decreased market rates partially offset by higher average balances, deposit interest expense for the three months ended March 31, 2025 decreased $1.0 million compared to the same period in 2024. Average interest-bearing deposit balances increased $453.1 million while rates on those deposits decreased 19 basis points basis points as compared to the same period in the prior year.
Current wording
•Due to the impact of the aforementioned Federal Reserve rate cuts in 2024 and the resulting decreased market rates partially offset by higher average balances, deposit interest expense for the three months ended June 30, 2025 decreased $6.3 million compared to the same period in 2024. Average interest-bearing deposit balances increased $130.9 million while rates on those deposits decreased 40 basis points as compared to the like quarter.
Previous wording
•Average borrowings were $486.0 million lower in the first quarter of 2025 as compared to the first quarter of 2024 due in large part to the decreased utilization of short-term borrowings. This decrease in volume of borrowings between periods was mainly attributable to the pay off of the FRB Bank Term Funding Program and FHLB Fixed Rate Credit borrowings, which,during the first quarter of 2024, had an average balance of approximately $477.6 million and carried an interest rate of 5.15%. Coupled with the payoff of $10.0 million of subordinated debt with an interest rate of 8.99% as of March 31, 2024, these changes resulted in the $6.5 million decrease in interest expense on borrowings.
Current wording
•Average borrowings were $75.8 million lower in the second quarter of 2025 as compared to the second quarter of 2024 due in large part to the decreased utilization of short-term borrowings. This decrease in volume of borrowings was mainly attributable to the pay off of the Federal Reserve Bank Term Funding Program borrowings, which,during the second quarter of 2024, had an average balance of approximately $68.1 million and carried an average interest rate of 4.84%. Interest expense on borrowings decreased $1.3 million.
Previous wording
For internal purposes, we evaluate our NIM-T/E, which is a non-GAAP financial measure, by adding the tax benefit realized from tax-exempt loans and securities to reported interest income then dividing by total average earning assets. We believe that analysis of NIM-T/E is useful and appropriate because it allows a comparison of net interest income in different periods without taking into account the different mix of taxable versus non-taxable loans and investments that may have existed during those periods.The following is a reconciliation of reported net interest income to tax-equivalent net interest income and the resulting NIM to NIM-T/E.
Current wording
For internal purposes, we also evaluate our NIM on a tax equivalent basis ("NIM-T/E"), which is a non-GAAP financial measure, by adding the tax benefit realized from tax-exempt loans and securities to reported interest income then dividing by total average earning assets. We believe that analysis of NIM-T/E is useful and appropriate because it allows a comparison of net interest income in different periods without taking into account the different mix of taxable versus non-taxable loans and investments that may have existed during those periods.The following is a reconciliation of reported net interest income to tax-equivalent net interest income and the resulting NIM to NIM-T/E.
Previous wording
At March 31, 2025 and 2024, unaccreted loan discounts on purchased loans amounted to $13.3 million and $21.6 million, respectively. The portfolio acquired with the GrandSouth Bancorporation acquisition on January 1, 2023 comprised the majority of the remaining unaccreted loan discount.
Current wording
At June 30, 2025 and 2024, unaccreted loan discounts on purchased loans amounted to $11.8 million and $19.3 million, respectively. The portfolio acquired with the GrandSouth Bancorporation acquisition on January 1, 2023 comprised the majority of the remaining unaccreted loan discount.
Previous wording
In addition to the loan discount accretion recorded on acquired loans, we recorded accretion on the discounts associated with the retained unguaranteed portions of SBA loans sold in the secondary market. The level of SBA loan discount accretion will fluctuate relative to the SBA loan portfolio balances. At March 31, 2025 and 2024, the unaccreted loan discounts on SBA loans amounted to $2.5 million and $3.4 million, respectively.
Current wording
In addition to the loan discount accretion recorded on acquired loans, we recorded accretion on the discounts associated with the retained unguaranteed portions of SBA loans sold in the secondary market. The level of SBA loan discount accretion will fluctuate relative to the SBA loan portfolio balances. At June 30, 2025 and 2024, the unaccreted loan discounts on SBA loans amounted to $2.3 million and $3.2 million, respectively.
Previous wording
The provision for loan losses for the first quarter of 2025 included $2.0 million reversal specifically attributed to Hurricane Helene and totaled $1.4 million as compared to $1.8 million for the first quarter of 2024. The provision for unfunded commitments reflected reversals of $0.3 million and $0.6 million for the three months ended March 31, 2025 and 2024, respectively.
Current wording
The provision for loan losses for the second quarter of 2025 included $3.5 million reversal specifically attributed to Hurricane Helene and totaled $1.1 million as compared to $1.5 million for the second quarter of 2024.
Previous wording
Within the portions of Western North and South Carolina that were significantly impacted by Hurricane Helene, the Company identified borrowers with approximately $722 million of loans outstanding. The Company continues to evaluate possible impacts from the storm and has reserved accordingly based upon the information available at each reporting period since September 30, 2024. The Company applied increased reserve rates based upon severe economic factors to the approximately $722 million of loans in the path of Helene. Additionally, the Company performed an evaluation of the largest commercial loans in its impacted markets and applied incremental reserves to those loans that were suspected of having higher potential property damage or economic impact from the storm The incremental reserve related to the potential exposure from Hurricane Helene added 0.14% to the ACL as of March 31, 2025.
Current wording
Within the portions of Western North and South Carolina that were significantly impacted by Hurricane Helene, the Company identified borrowers with approximately $703 million of loans outstanding. The Company continues to evaluate possible impacts from the storm and has reserved accordingly based upon the information available at each reporting period since September 30, 2024. The Company applied increased reserve rates based upon severe economic factors to the approximately $703 million of loans in the path of Helene. Additionally, the Company performed an evaluation of the largest commercial loans in its impacted markets and applied incremental reserves to those loans that were suspected of having higher potential property damage or economic impact from the storm The incremental reserve related to the potential exposure from Hurricane Helene added 0.10% to the ACL as of June 30, 2025.
Previous wording
Our noninterest income amounted to $12.9 million for the three months ended March 31, 2025 and 2024. Decreases of $0.8 million in SBA loan sale gains and $0.6 million in Other income were partially offset by the $1.0 million Securities losses, net in the first quarter of 2024. Details of the more significant components of noninterest income are presented in the table below.
Current wording
Details of the more significant components of noninterest income are presented in the table below.
Previous wording
Total noninterest expenses totaled $57.9 million and $59.2 million for the three months ended March 31, 2025 and 2024, respectively. The primary contributors to the $1.3 million, or 2.2%, decrease in noninterest expense for the first quarter of 2025 were the $0.9 million decrease in Occupancy and equipment expenses, the $0.4 million decrease in FDIC insurance costs, the $0.4 million decrease in Professional fees and the $0.4 million decrease in software licenses and other software costs, partially offset by increases of $0.8 million in Total personnel costs and $0.4 million in Non-credit losses. For the three months ended March 31, 2025, there was a continued overall effort by management to control costs and reduce expenses.
Current wording
The primary contributor to the $0.7 million, or 1.2%, increase in noninterest expense for the second quarter of 2025 was the $0.7 million increase in Total personnel costs. For the six months ended June 30, 2025, there was a continued overall effort by management to control costs and reduce expenses, with decreases in FDIC insurance costs of $0.8 million and professional fees of $0.7 million being partially offset by an increase of $1.5 million in Total personnel costs.
Previous wording
We recorded income tax expense of $10.4 million and $6.5 million for the three months ended March 31, 2025 and 2024, respectively. Our effective tax rate was 22.2% and 20.5% for the three months ended March 31, 2025 and 2024, respectively.
Current wording
We recorded income tax expense of $11.3 million and $8.2 million for the three months ended June 30, 2025 and 2024, respectively. Our effective tax rate was 22.6% and 22.2% for the three months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025 and 2024, we recorded tax expense of $21.6 million and $14.7 million, respectively. Our effective tax rate was 22.4% and 21.4% for the six months ended June 30, 2025 and 2024, respectively.
Previous wording
Total assets at March 31, 2025 amounted to $12.4 billion, a $288.6 million, or 2.4%, increase from December 31, 2024 and was primarily related to higher interest-bearing cash, investment securities and loan balances.
Current wording
Total assets at June 30, 2025 amounted to $12.6 billion, a $460.6 million, or 3.8%, increase from December 31, 2024 and was primarily related to higher interest-bearing cash, AFS securities and loans.
Previous wording
Total loans at March 31, 2025 were $8.1 billion, an increase of $8.4 million, or 0.1%, from December 31, 2024. The mix of our loan portfolio remained substantially the same at March 31, 2025 as compared to December 31, 2024. The majority of our real estate loans were personal mortgages and commercial loans where real estate provides additional security for the loan. Note 3 to the consolidated financial statements presents additional detail regarding our mix of loans. At March 31, 2025, we had no notable concentrations in geographies or industries, including in office or hospitality categories. The Company's exposure to non-owner occupied commercial office loans represented approximately 6.0% of the total portfolio at March 31, 2025, with the largest loan being $26.3 million and the average outstanding loan balance being $1.3 million. Non-owner occupied office loans were generally in non-metro markets and the 10 largest loans in this category represented less than 2% of the total loan portfolio at March 31, 2025.
Current wording
Total loans at June 30, 2025 were $8.2 billion, an increase of $131.0 million, or 1.6%, from December 31, 2024. The mix of our loan portfolio remained substantially the same at June 30, 2025 as compared to December 31, 2024. Note 3 to the consolidated financial statements presents additional detail regarding our mix of loans. At June 30, 2025, we had no notable concentrations in geographies or industries, including in office or hospitality categories. The Company's exposure to non-owner occupied commercial office loans represented approximately 6.5% of the total portfolio at June 30, 2025, with the largest loan being $30.0 million and the average outstanding loan balance being $1.4 million. Non-owner occupied office loans were generally in non-metro markets and the 10 largest loans in this category represented less than 2% of the total loan portfolio at June 30, 2025.
Previous wording
securities. There were no sales of investment securities during the first quarter of 2025. The unanticipated call of a security during the first quarter of 2024 resulted in a loss of $975 thousand related to the unamortized premium balance. In addition, the Company continues to utilize cash flows from investment securities to fund other earning assets.
Current wording
Total investment securities were $2.7 billion at June 30, 2025, an increase of $98.2 million from December 31, 2024. During the six months ended June 30, 2025, the Company purchased $137.0 million of investment securities. There were no sales of investment securities during the six months ended June 30, 2025. In addition, the Company continues to utilize cash flows from investment securities to fund other earning assets.
Previous wording
The composition of our investment portfolio remained substantially the same at March 31, 2025 as at December 31, 2024, with the exception of Corporate bonds, which increased $10.0 million due to the aforementioned purchase.
Current wording
The composition of our investment portfolio remained substantially the same at June 30, 2025 as at December 31, 2024, with the exception of Mortgage-backed securities, which increased due to the aforementioned purchase, partially offset by paydowns.
Previous wording
The unrealized loss on AFS securities totaled $321.2 million at March 31, 2025. Refer to Note 2 to the consolidated financial statements for additional detailed information regarding our mix of investments and the unrealized losses for each category. We evaluated the unrealized losses on individual securities at March 31, 2025 and determined them to be of a temporary nature due primarily to interest rate factors and not credit quality concerns. In arriving at this conclusion, we reviewed third-party credit ratings and considered the severity of the impairment.
Current wording
The unrealized loss on AFS securities totaled $298.9 million at June 30, 2025. Refer to Note 2 to the consolidated financial statements for additional detailed information regarding our mix of investments and the unrealized losses for each category. We evaluated the unrealized losses on individual securities at June 30, 2025 and determined
Previous wording
Total deposits amounted to $10.7 billion at March 31, 2025, an increase of $214.1 million, or 2.0%, from December 31, 2024. Organic growth accounted for the growth, as brokered deposits remained flat during the quarter.
Current wording
Total deposits amounted to $10.8 billion at June 30, 2025, an increase of $299.9 million, or 2.8%, from December 31, 2024. Organic growth accounted for the growth, as brokered deposits remained flat from year-end.
Previous wording
We continue to have a diversified and granular deposit base which has remained stable with continued growth in customer deposits, primarily money market accounts. Our deposit mix has remained relatively consistent and has not changed significantly.
Current wording
We continue to have a diversified and granular deposit base which has remained stable with continued growth in customer deposits, primarily Noninterest-bearing checking accounts and Money market accounts. Our deposit mix has remained relatively consistent and has not changed significantly.
Showing the first 40 of 55 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
The following table presents an analysis of net interest income for the six months ended June 30, 2025 and 2024.
Current report — wording carried from elsewhere
(1) Average loans include nonaccruing loans, the effect of which is to lower the average rate shown. Interest earned includes recognized net loan fees, including late fees, prepayment fees, and deferred loan (cost)/fee amortization (including deferred PPP fees), in the amounts of $(590,000), and $(886,000) for six months ended June 30, 2025 and 2024, respectively.
Current report — wording carried from elsewhere
(3) Includes tax-equivalent adjustments to reflect the tax benefit that we receive related to tax-exempt securities and loans as reduced by the related nondeductible portion of interest expense.
Current report — wording carried from elsewhere
The following is a reconciliation of reported net interest income to tax-equivalent net interest income and the resulting NIM to NIM-T/E.
Current report — wording carried from elsewhere
them to be of a temporary nature due primarily to interest rate factors and not credit quality concerns. In arriving at this conclusion, we reviewed third-party credit ratings and considered the severity of the impairment.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
results or financial condition as reported under GAAP. The following table reconciles net income and diluted EPS to adjusted net income and adjusted diluted EPS for the quarter ended March 31, 2025:
Previous report — wording carried elsewhere
Provision for Credit Losses and Provision for Unfunded Commitments
Previous report — wording carried elsewhere
information available at the time of their examinations. Refer also to “Critical Accounting Policies – Allowance for Credit Losses on Loans and Allowance for Unfunded Commitments” in Note 1 to the 2024 Annual Report on Form 10-K filed with the SEC for more information.