The First Bancorp Announces First Quarter Results

Published: 2026-04-22 16:19:05 ET FNLC

Net Interest Margin Expansion and Improved Efficiency Drive a 27% Increase in First Quarter Earnings

Published on 04/22/2026 at 04:19 pm EDT

The First Bancorp (Nasdaq: FNLC), ("the Company", "we", "us", "our"), parent company of First National Bank, today reported unaudited results for the quarter ended March 31, 2026. Net income for the period was $9.0 million with fully diluted earnings per share of $0.80, as compared to net income of $7.1 million and diluted earnings per share of $0.63 for the three months ended March 31, 2025.

First Quarter Notable Items:

CEO COMMENTS

"I am pleased to report continued year-over-year quarterly earnings growth to kick off 2026," commented Tony C. McKim, the Company's President and Chief Executive Officer. "Net income of $9.0 million for the first quarter is an increase of 27.1% from the first quarter of 2025. Our Return on Average Assets for the period was 1.15% and our Return on Average Tangible Common Equity was 14.15%, both up nicely from 0.91% and 12.64%, respectively, a year ago.

"Earnings growth has been driven by continued expansion of our net interest margin, coupled with increased non-interest revenue and controlled expenses. Our margin improved for the seventh consecutive quarter, to 2.86% for the first quarter of 2026, up 38 basis points from the first quarter of 2025, with the improvement stemming from a combination of earning asset yield enhancement focused in the loan portfolio and reduced funding costs.

"Total assets increased $34 million in the quarter, including net loan growth of $11 million. New loan production for the quarter was $116 million. Total deposits were flat as non-maturity deposits followed a typical seasonal pattern, falling $58.6 million during the period, and were replaced by short-term time deposits and borrowings. Our capital position strengthened as compared to both the prior year quarter and the immediate prior quarter, and overall liquidity remains more than sufficient."

Concluding, Mr. McKim shared, "We are pleased to carry forward last year's earnings momentum into 2026 with positive first quarter results. The entire team at First National Bank is focused on delivering exceptional banking experiences to our growing customer base and building value for the communities and stakeholders we serve."

OPERATING RESULTS Q1 2026 v. Q1 2025 (prior year quarter)

Net income was $9.0 million for the three months ended March 31, 2026, an increase of $1.9 million or 27.1% from the first quarter of 2025. Net interest income was $20.7 million for the three months ended March 31, 2026, an increase of $2.9 million or 16.2% from the first quarter of 2025. Net interest margin improved to 2.86% for the first quarter of 2026, up from 2.48% in the prior year quarter. The lift in margin was the result of a 5 basis point increase in the tax equivalent yield on earning assets coupled with a 38 basis point decrease in the cost of total liabilities. Earning assets averaged a yield of 5.33% for the three months ended March 31, 2026, while total liabilities carried an average cost of 2.89%.

Total non-interest income was $4.5 million for the three months ended March 31, 2026, an increase of $449,000, or 11.2% from the first quarter of 2025. The increase was centered in Wealth Management revenue which was up $169,000 or 12.8% from the prior year, and other operating income which increased $228,000 or 28.9%. Total non-interest expense for the three months ended March 31, 2026, was $13.6 million, an increase of $772,000, or 6.0%, from the first quarter of 2025. The period-to-period change is centered in employee salaries and benefits, resulting from annual salary adjustments, lower deferred salaries, and higher health insurance expenses. The Company's efficiency ratio for the first quarter of 2026 was 52.64%, improved from 56.93% in the prior year quarter.

OPERATING RESULTS Q1 2026 v. Q4 2025 (linked quarter)

Net income was $9.0 million for the three months ended March 31, 2026, a decrease of $1.2 million or 11.6% from the fourth quarter of 2025. Net interest income of $20.7 million for the three months ended March 31, 2026, was a decrease of $422,000 or 2.0% from the linked quarter, attributable primarily to Q4 2025 having two more days of net interest income accrual than Q1 2026. The net interest margin increased to 2.86% in the first quarter of 2026, an improvement of 3 basis points from the linked quarter.

Total non-interest income of $4.5 million for the first quarter of 2026 was down $283,000 from the fourth quarter of 2025. The change is centered in a $396,000 decrease in Debit Card income stemming from seasonally lower transaction volume and recognition of an annual program incentive payment in the linked quarter. Other operating income increased $82,000, principally from loan-based derivative fees, and revenue increased $53,000 at First National Wealth Management. Total non-interest expense for the three months ended March 31, 2026 was $13.6 million, an increase of $485,000, or 3.7%, from the linked quarter.

LOANS, TOTAL ASSETS & FUNDING

Total assets as of March 31, 2026, were $3.20 billion, up $34.5 million in the first quarter. Earning assets grew $27.8 million with loan growth of $11.0 million during the period. Investment balances fell $9.5 million in the quarter while overnight funds sold increased by $26.0 million.

Loan balances grew at a modest pace in the first quarter, the net effect of new loan production, scheduled amortization, and payoffs during the period. The residential mortgage and home equity loan segments each contributed to loan portfolio growth, up $4.0 million and $4.9 million, respectively in the first quarter. Commercial and industrial loan balances increased $16.1 million, while commercial real estate loan balances and multifamily loan balances decreased by $5.3 million and $8.5 million, respectively.

Total deposits as of March 31, 2026 were $2.66 billion, unchanged from year-end 2025. Non-maturity deposits fell $58.6 million in the first quarter, in line with expectations. Time deposits increased $58.5 million and borrowed funds increased $8.0 million during the period. Uninsured deposits as of March 31, 2026 were estimated at 18.2% of total deposits, and 75% of uninsured deposits were fully collateralized. Available day-one liquidity was $721 million, sufficient to cover 149% of estimated uninsured deposits.

ASSET QUALITY

Overall asset quality remains satisfactory. As of March 31, 2026, the ratio of non-performing assets to total assets was 0.51%, compared to 0.41% as of December 31, 2025, and 0.19% as of March 31, 2025. The ratio of non-performing loans to total loans was 0.67% as of March 31, 2026, compared to 0.54% as of December 31, 2025, and 0.25% as of March 31, 2025. Loans past due thirty days or more were 1.14% of total loans as of March 31, 2026.

The Allowance for Credit Losses ("ACL") on loans stood at 1.05% of total loans as of March 31, 2026, in line with both the linked quarter and prior year quarter. A provision for credit losses of $620,000 was recorded in the first quarter of 2026. Net loan charge-offs in the first quarter totaled $806,000, or 0.034% of total loans. Net charge-offs included $671,000 in loans that had been individually analyzed and were fully reserved.

CAPITAL

The Company’s regulatory capital position was strong as of March 31, 2026. The Leverage Capital ratio increased to an estimated 9.09% as of March 31, 2026, as compared to the 8.84% and 8.40% reported as of December 31, 2025, and as of March 31, 2025, respectively. The estimated Total Risk-Based Capital ratio was 14.04% as of March 31, 2026, as compared to the 14.02% and 13.12% reported as of December 31, 2025, and as of March 31, 2025, respectively.

The Company's tangible book value per share was $22.71 as of March 31, 2026, up from $22.49 as of December 31, 2025, and up from $20.44 as of March 31, 2025. The Tangible Common Equity ratio increased to 8.08% as of March 31, 2026, up from 8.05% as of December 31, 2025, and 7.25% as of March 31, 2025.

DIVIDEND

On March 26, 2026, the Company's Board of Directors declared a first quarter dividend of $0.37 per share. The dividend was paid on April 17, 2026, to shareholders of record as of April 7, 2026.

ABOUT THE FIRST BANCORP

The First Bancorp, the parent company of First National Bank, is based in Damariscotta, Maine. Founded in 1864, First National Bank is a full-service community bank with $3.17 billion in assets. The Bank provides a complete array of commercial and retail banking services through eighteen locations in mid-coast and eastern Maine. First National Wealth Management, a division of the Bank, provides investment management and trust services to individuals, businesses, and municipalities. More information about The First Bancorp, First National Bank and First National Wealth Management may be found at www.thefirst.com.

The First Bancorp

Quarterly Selected Financial Data (Unaudited)

At or for the quarters ended

Dollars in thousands, except for per share amounts

3/31/2026

12/31/2025

9/30/2025

6/30/2025

3/31/2025

Financial Data

Total Assets

3,200,763

3,166,303

3,198,478

3,199,510

3,187,372

Total Loans

2,405,149

2,394,109

2,398,510

2,394,007

2,383,150

Total Investment Securities

619,159

628,683

642,961

653,855

656,844

Total Deposits

2,664,643

2,664,752

2,737,550

2,705,337

2,711,335

Total Shareholders’ Equity

286,784

283,143

274,566

265,492

259,681

Net Income

8,993

10,172

9,082

8,063

7,077

Per Common Share Data

Basic Earnings per Share

0.81

0.92

0.82

0.73

0.64

Diluted Earnings per Share

0.80

0.91

0.81

0.72

0.63

Cash Dividends Declared

0.37

0.36

Book Value per Common Share

25.44

25.23

24.48

23.69

23.19

Tangible Book Value per Common Share

22.71

22.49

21.74

20.94

20.44

Market Value

28.03

26.44

26.26

25.41

24.72

Financial Ratios

Return on Average Equity(1)

12.64

14.35

13.33

12.31

11.13

Return on Average Tangible Common Equity(1)

14.15

16.12

15.04

13.95

12.64

Return on Average Assets(1)

1.15

1.26

1.13

1.01

0.91

Pre-tax, pre-provision Return on Assets(1)

1.47

1.58

1.46

1.30

1.15

Net Interest Margin Tax-Equivalent(1)

2.86

2.83

2.70

2.52

2.48

Dividend Payout Ratio

45.74

40.39

45.18

50.89

56.34

GAAP Efficiency Ratio

54.16

50.81

51.99

54.13

58.91

Efficiency Ratio (non-GAAP)

52.64

49.33

50.40

52.39

56.93

Asset Quality Ratios

Allowance for Credit Losses/Total Loans

1.05

1.06

1.05

1.04

1.05

Allowance to Non-Performing Loans

155.73

196.95

261.36

411.13

414.88

Non-Performing Loans to Total Loans

0.67

0.54

0.40

0.25

Non-Performing Assets to Total Assets

0.51

0.41

0.30

0.19

Capital Ratios

Leverage Capital Ratio(2)

9.09

8.84

8.63

8.48

8.40

Tier 1 Capital Ratio(2)

12.89

12.84

12.39

12.15

11.96

Total Capital Ratio(2)

14.04

14.02

13.56

13.31

13.12

Tangible Common Equity Ratio

8.08

8.05

7.70

7.41

7.25

Average Equity to Average Assets

9.10

8.78

8.45

8.23

8.15

Average Tangible Equity to Average Assets

8.13

7.82

7.49

7.27

7.17

(1)Annualized using a 365-day basis for 2026 and 2025.

(2)Estimated for current period.

The First Bancorp

Consolidated Balance Sheets (Unaudited)

In thousands of dollars, except per share data

3/31/2026

12/31/2025

9/30/2025

6/30/2025

3/31/2025

Assets

Cash and due from banks

23,607

27,779

31,606

27,360

26,432

Interest-bearing deposits in other banks

30,075

4,124

7,225

3,253

2,938

Securities available-for-sale

256,788

264,480

273,493

278,248

280,764

Securities held-to-maturity

354,057

355,928

362,552

367,873

368,571

Restricted equity securities, at cost

8,314

8,275

6,916

7,734

7,509

Loans held for sale

—

333

—

Loans

2,405,149

2,394,109

2,398,510

2,394,007

2,383,150

Less allowance for credit losses

25,209

25,365

25,078

24,829

25,114

Net loans

2,379,940

2,368,744

2,373,432

2,369,178

2,358,036

Accrued interest receivable

19,247

14,185

16,256

19,386

17,923

Premises and equipment

28,720

28,767

27,919

28,198

28,626

Goodwill

30,646

Other assets

69,369

63,375

68,100

67,634

65,927

Total assets

3,200,763

3,166,303

3,198,478

3,199,510

3,187,372

Liabilities

Demand deposits

268,100

279,912

313,729

291,150

267,876

NOW deposits

660,511

689,083

638,090

590,536

613,245

Money market deposits

453,210

469,689

458,398

388,214

398,966

Savings deposits

247,084

248,805

255,806

256,584

261,732

Certificates of deposit

699,635

638,931

688,001

774,521

754,558

Certificates $100,000 to $250,000

184,486

190,676

210,741

231,926

241,536

Certificates $250,000 and over

151,617

147,656

172,785

172,406

173,422

Total deposits

2,664,643

2,664,752

2,737,550

2,705,337

2,711,335

Borrowed funds

195,796

187,821

152,968

196,170

185,444

Other liabilities

53,540

30,587

33,394

32,511

30,912

Total Liabilities

2,913,979

2,883,160

2,923,912

2,934,018

2,927,691

Shareholders' equity

Common stock

113

112

Additional paid-in capital

74,255

73,714

73,276

72,795

72,355

Retained earnings

245,001

240,456

234,435

229,511

225,592

Net unrealized loss on securities available-for-sale

(32,790

)

(31,341

)

(33,523

)

(37,237

)

(38,702

)

Net unrealized loss on transferred securities from available-for-sale to held-to-maturity

(35

)

(38

)

(40

)

(60

)

(45

)

Net unrealized gain on cash flow hedging derivative instruments

—

Net unrealized gain on postretirement costs

240

287

Total shareholders' equity

286,784

283,143

274,566

265,492

259,681

Total liabilities & shareholders' equity

3,200,763

3,166,303

3,198,478

3,199,510

3,187,372

Common Stock

Number of shares authorized

18,000,000

Number of shares issued and outstanding

11,271,014

11,222,363

11,214,455

11,205,861

11,196,881

Book value per common share

25.44

25.23

24.48

23.69

23.19

Tangible book value per common share

22.71

22.49

21.74

20.94

20.44

The First Bancorp

Quarterly Consolidated Statements of Income (Unaudited)

For the Quarters Ended

In thousands of dollars, except per share data

3/31/2026

12/31/2025

9/30/2025

6/30/2025

3/31/2025

Interest income

Interest and fees on loans

34,725

36,025

36,197

35,014

33,924

Interest on deposits with other banks

185

108

Interest and dividends on investments

4,384

4,522

4,700

4,760

4,729

Total interest income

39,139

40,732

41,005

39,825

38,709

Interest expense

Interest on deposits

16,702

18,323

19,380

19,725

19,269

Interest on borrowed funds

1,748

1,298

1,567

1,691

1,641

Total interest expense

18,450

19,621

20,947

21,416

20,910

Net interest income

20,689

21,111

20,058

18,409

17,799

Credit loss expense - loans

650

615

690

348

396

Credit loss expense (reduction) - debt securities held to maturity

)

(40

)

(12

)

Credit loss expense (reduction) - off-balance sheet credit exposures

(29

)

(303

)

137

)

Total credit loss expense

620

272

700

486

392

Net interest income after provision for credit losses

20,069

20,839

19,358

17,923

17,407

Non-interest income

Investment management and fiduciary income

1,486

1,433

1,341

1,336

1,317

Service charges on deposit accounts

560

559

532

539

531

Net securities gains

—

Mortgage origination and servicing income

176

211

219

221

195

Debit card income

1,200

1,596

1,403

1,286

1,170

Other operating income

1,017

935

980

747

789

Total non-interest income

4,451

4,734

4,475

4,129

4,002

Non-interest expense

Salaries and employee benefits

7,330

7,198

6,674

6,276

6,850

Occupancy expense

956

827

814

876

877

Furniture and equipment expense

1,543

1,487

1,491

1,438

1,462

FDIC insurance premiums

570

629

698

701

694

Amortization of identified intangibles

Other operating expense

3,210

2,984

3,070

2,902

2,954

Total non-interest expense

13,616

13,131

12,754

12,199

12,844

Income before income taxes

10,904

12,442

11,079

9,853

8,565

Applicable income taxes

1,911

2,270

1,997

1,790

1,488

Net Income

8,993

10,172

9,082

8,063

7,077

Basic earnings per share

0.81

0.92

0.82

0.73

0.64

Diluted earnings per share

0.80

0.91

0.81

0.72

0.63

Use of Non-GAAP Financial Measures

Certain information in this release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management uses these “non-GAAP” measures in its analysis of the Company's performance (including for purposes of determining the compensation of certain executive officers and other Company employees) and believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and with other financial institutions, as well as demonstrating the effects of significant gains and charges in the current period, in light of the disclosure practices employed by many other publicly-traded financial institutions. The Company believes that a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. Management believes that investors may use these non-GAAP financial measures to analyze financial performance without the impact of unusual items that may obscure trends in the Company's underlying performance. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

In several places net interest income is calculated on a fully tax-equivalent basis. Specifically included in interest income was tax-exempt interest income from certain investment securities and loans. An amount equal to the tax benefit derived from this tax-exempt income has been added back to the interest income total which, as adjusted, increased net interest income accordingly. Management believes the disclosure of tax-equivalent net interest income information improves the clarity of financial analysis, and is particularly useful to investors in understanding and evaluating the changes and trends in the Company's results of operations. Other financial institutions commonly present net interest income on a tax-equivalent basis. This adjustment is considered helpful in the comparison of one financial institution's net interest income to that of another institution, as each will have a different proportion of tax-exempt interest from its earning assets. Moreover, net interest income is a component of a second financial measure commonly used by financial institutions, net interest margin, which is the ratio of net interest income to average earning assets. For purposes of this measure as well, other financial institutions generally use tax-equivalent net interest income to provide a better basis of comparison from institution to institution. The Company follows these practices.

The following table provides a reconciliation of tax-equivalent financial information to the Company's consolidated financial statements, which have been prepared in accordance with GAAP. A 21.0% tax rate was used in both 2026 and 2025.

For the quarters ended

In thousands of dollars

3/31/2026

12/31/2025

3/31/2025

Net interest income as presented

20,689

21,111

17,799

Effect of tax-exempt income

663

701

711

Net interest income, tax equivalent

21,352

21,812

18,510

The Company presents its efficiency ratio using non-GAAP information which is most commonly used by financial institutions. The GAAP-based efficiency ratio is non-interest expenses divided by net interest income plus non-interest income from the Consolidated Statements of Income. The non-GAAP efficiency ratio excludes securities losses and provision for credit losses on securities from non-interest expenses, excludes securities gains from non-interest income, and adds the tax-equivalent adjustment to net interest income. The following table provides a reconciliation between the GAAP and non-GAAP efficiency ratio:

For the quarters ended

In thousands of dollars

3/31/2026

12/31/2025

3/31/2025

Non-interest expense, as presented

13,616

13,131

12,844

Net interest income, as presented

20,689

21,111

17,799

Effect of tax-exempt interest income

663

701

711

Non-interest income, as presented

4,451

4,734

4,002

Effect of non-interest tax-exempt income

Net securities gains

(12

)

—

Adjusted net interest income plus non-interest income

25,868

26,616

22,560

Non-GAAP efficiency ratio

52.64

49.33

56.93

GAAP efficiency ratio

54.16

50.81

58.91

The Company presents certain information based upon tangible common equity instead of total shareholders' equity. The difference between these two measures is the Company's intangible assets, specifically goodwill from prior acquisitions. Management, banking regulators and many stock analysts use the tangible common equity ratio and the tangible book value per common share in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions. The following table provides a reconciliation of average tangible common equity to the Company's consolidated financial statements, which have been prepared in accordance with U.S. GAAP:

For the quarters ended

In thousands of dollars

3/31/2026

12/31/2025

3/31/2025

Average shareholders' equity as presented

288,560

268,059

257,807

Less intangible assets

(30,775

)

(30,791

)

(30,801

)

Tangible average shareholders' equity

257,785

237,268

227,006

To provide period-to-period comparison of operating results prior to consideration of credit loss provision and income taxes, the non-GAAP measure of PTPP Net Income is presented. The following table provides a reconciliation to Net Income:

For the quarters ended

In thousands of dollars

3/31/2026

12/31/2025

3/31/2025

Net Income, as presented

8,993

10,172

7,077

Add: credit loss expense

620

272

392

Add: income taxes

1,911

2,270

1,488

Pre-Tax, pre-provision net income

11,524

12,714

8,957

Forward-Looking and Cautionary Statements

Except for the historical information and discussions contained herein, statements contained in this release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results and events to differ materially, as discussed in the Company's filings with the Securities and Exchange Commission.

Category: Earnings

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