Business
First Bancorp Q2 Profit Boosted by Enhanced Loan Portfolio
By Jack Simpson
July 26, 2024
![](http://storage.financialnews.com/15858/66a40da0ae4bd.webp)
First Bancorp, a Southern Pines-based bank, has reported a 2.3% increase in net income to $28.7 million during the second quarter of this year, primarily due to a significant reduction in its loan-loss provision. This figure was significantly lower than the $2.3 million set aside for potential loan losses in the same period last year.
The bank’s diluted earnings per share stood at 70 cents, slightly down from 71 cents a year ago but higher than two analysts’ average forecast of 66 cents by Zacks Investment Research.
With a network of 118 branches across several locations, including Forsyth and Guilford, as well as the Triad area, First Bancorp is an established player in North Carolina's banking sector.
Loan-loss provisions are important financial indicators for banks because they give insight into how institutions expect their loans and revenue streams to perform if customers fail to meet repayment obligations. A reduction or increase can have a significant impact on bottom-line profitability.
In the case of First Bancorp, the company attributed the increased provision during H1-2023 directly to the initial provisions made for non-credit deteriorated loans and unfunded loan commitments procured after acquiring GrandSouth Bancorp for $118.1 million earlier that year.
Despite witnessing robust YoY growth rates in both loan revenues and expenses related to its acquisition of GrandSouth Bancorp., First Bancorp's Q2 report showed total loan income falling by just over five percent to $80.5 million while fee income rose by nearly three percent, reaching $14.6 million.
Accordingly, Richard Moore, Chairman & CEO at First Bankcorp, said, "Our company had strong performance in the second quarter with an expanded net interest margin, improved liquidity, and increases in all capital levels." He also emphasized that their credit quality remains strong despite historically low levels of non-performing assets without any substantial exposure to the office or hospitality commercial real estate sectors, which have been under pressure in recent years.
As of June 30, the bank's non-performing assets were $44.75 million, a slight decrease from $47.55 million in Q1 but an increase from $35.8 million a year earlier due to the bank's participation in the federal Small Business Administration loan program.
During Q2, First Bancorp reported a fee income gain of $1.3 million from selling SBA loans, nearly double that achieved during the same period last year, which was around $696,000.
This report further demonstrates how shifts and changes within economic environments can significantly impact banking operations and profitability levels. First Bancorp's strategic decision to lower its loan-loss provision has paid off this quarter with increased net income figures.
LATEST ARTICLES IN Business
UN Urges Investment in Air Pollution Solutions for Global Prosperity.
Newfoundland Distillery Launches Unique Fog-Flavored Vodka.
Krishko, India's Top Freight Firm, Unveils Rebranding.
Self-Service Checkouts: From Boom to Bust.
Join Our Newsletter
Popular Articles
-
Mar 13, 2024
Anyone But You - A Romantic Comedy Surprise of 2023 -
Feb 01, 2024
AI Company About to Revolutionize the Medical Space? -
Jul 31, 2024
Apple Anticipates Higher Revenue in Thursday's Earnings Report -
Aug 01, 2024
Samsung Galaxy S25: Potential Big Screen and Camera Upgrades