First Bancorp Reports $5.9 Million First Quarter Loss
First Bancorp, the parent company of First Bank, announced a net loss to common shareholders of $5.9 million, or 35 cents per diluted common share, for the three months ending March 31.
That compared with net income available to common shareholders of $5.3 million, or 32 cents per diluted common share, for the same period in 2011. The net loss reported for the first quarter of 2012 was caused primarily by a higher provision for loan losses related to noncovered loans, a news release said.
"While we are disappointed with the quarterly loss, the underlying fundamentals of our company remain strong, including a strong net interest margin and high capital levels," said Jerry L. Ocheltree, president and CEO of First Bancorp. "The high provision for loan losses that drove our loss was not the result of any major surprises that occurred during the quarter, but rather a more conservative view of probable losses involving problem loans that we have been closely monitoring."
Also impacting comparison from 2011 to 2012 was a significant gain recorded by the company in 2011.
In the first quarter of 2011, the company realized a $10.2 million bargain purchase gain related to the acquisition of the Bank of Asheville. The after-tax impact of this gain was $6.2 million, or 37 cents per diluted common share.
The company's results are also significantly affected by the ongoing accounting for two FDIC-assisted failed bank acquisitions, the release said.
Net interest income for the first quarter of 2012 did not vary significantly compared with the first quarter of 2011, amounting to $32.1 million in the first quarter of 2012 compared with $32.3 million in the first quarter of 2011.
The company's net interest margin for the first quarter of 2012 was 4.59 percent compared with 4.62 percent for the first quarter of 2011.
For the three months ending March 31, the company recorded total provisions for loan losses of $21.6 million, compared with $11.3 million for the same period of 2011. The large increase in 2012 related to the company's noncovered loans, with the provision for loan losses on noncovered loans amounting to $18.6 million in the first quarter of 2012, compared with $7.6 million in the first quarter of 2011.
The company's provisions for loan losses for covered loans amounted to $3 million for the first quarter of the year, compared with $3.8 million for the same three-months in 2011 The majority of the provisions for loan losses on covered loans in 2011 and 2012 relate to loans assumed in the company's June 2009 acquisition of Cooperative Bank, the news release said.
Total noninterest income was $5.3 million in the first quarter of 2012, compared with $14.2 million for the first quarter of 2011. The decrease in 2012 compared with 2011 was primarily the result of the acquisition of the Bank of Asheville during the first quarter of 2011.
The company continues to experience losses and write-downs on its foreclosed properties due to declining property values in its market area. For the first quarter of 2012, these losses amounted to $4.5 million for covered properties, compared with $4.9 million in the first quarter of 2011.
Noninterest expenses amounted to $24.4 million in the first quarter of 2012, a 2.7 percent decrease from the $25 million recorded in the same period of 2011.
Personnel expense for the three months ended March 31, amounted to $14.1 million, a 9.1 percent increase from the $12.9 million recorded in the first quarter of 2011. The higher level of expense in 2012 was primarily due to higher employee health care expense as a result of higher claims activity and increased pension expense
Total assets as of March 31 amounted to $3.3 billion, a 1.9 percent decrease from a year earlier. Total loans as of March 31 amounted to $2.4 billion, a 2 percent decrease from a year earlier, and total deposits amounted to $2.8 billion as of March 31, a 0.5 percent decrease from a year earlier.
Since the onset of the recession, the company has generally experienced declines in loans and deposits, the news release said.
In September 2011, the company issued $63.5 million in preferred stock to the U.S. Treasury as part of the its participation in the Small Business Lending Fund (SBLF). The goal of the SBLF is to incentivize healthy banks to make loans to small businesses.
Depending on the bank's success in making small business loans, the dividend rate on the preferred stock could range from 5 percent to as low as 1 percent for several years, the release said. For the second quarter of 2012, the company expects to pay a dividend rate of 4.8 percent.
The company remains well-capitalized by all regulatory standards, with a total risk-based capital ratio as of March 31 of 16.34 percent, compared with the 10 percent minimum to be considered well-capitalized.
First Bancorp is a bank holding company headquartered in Troy. It owns and operates First Bank, a state-chartered community bank that operates 97 branches, with 82 in North Carolina, nine in South Carolina and six in Virginia, where First Bank does business as First Bank of Virginia. First Bank also has a loan production office in Blacksburg, Va.
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