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FIRST BANCORP /NC/ (FBNC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered GAAP diluted EPS of $0.93 and net income of $38.6M, with NIM expanding 7 bps QoQ to 3.32% and 48 bps YoY; adjusted EPS was $0.87 after a $3.5M reserve release related to Hurricane Helene .
  • Funding costs continued to improve: total cost of deposits fell 3 bps QoQ to 1.43% and total cost of funds fell 3 bps to 1.48%; loan yield edged up 1 bp to 5.53% while securities yield rose 13 bps to 2.41%, aided by $127.0M of CMO purchases at a 5.16% yield .
  • Balance sheet growth was healthy: loans rose $122.6M (+6.1% annualized) and deposits increased $85.7M (+3.2% annualized); on-balance sheet liquidity was 20.0% and total liquidity 36.1%; the quarterly dividend was raised to $0.23 per share .
  • Versus S&P Global consensus, normalized EPS was essentially in line and revenue slightly missed; for traders, catalysts include ongoing NIM expansion, deposit cost tailwinds, and improving capital/TCE—though lack of a published Q2 call transcript limits incremental guidance color (see Estimates Context) .

What Went Well and What Went Wrong

What Went Well

  • NIM expansion and higher net interest income: NIM rose to 3.32% (+7 bps QoQ; +48 bps YoY) as net interest income increased to $96.7M; management highlighted disciplined deposit cost management and higher securities yields post the 4Q24 loss-earnback strategy .
  • Deposit franchise strength and mix: total cost of deposits fell to 1.43%; noninterest-bearing demand deposits reached $3.54B (33% of total), supporting low funding costs and stability .
  • Improving capital and liquidity: CET1 was 14.62%, total risk-based capital 16.87%, and TCE/TA rose to 8.83%; on-balance sheet liquidity was 20.0% with ~$2.3B off-balance sheet lines (total liquidity 36.1%) .
  • Quote: “We improved our liquidity position and increased our capital levels, while credit quality remains strong… We grew loans 6% annualized… benefited from favorable cost of funds and increased yields on earning assets” — Richard H. Moore, Chairman & CEO .

What Went Wrong

  • Provision increase and macro headwinds: provision for credit losses rose to $2.2M (from $1.1M), driven by $1.2M net charge-offs, loan growth, and declining macroeconomic projections; reserve release tied to Hurricane Helene offset some pressure .
  • Slight uptick in NPAs: NPAs were $35.8M (0.28% of assets), up modestly vs 1Q25; NPL ratio increased to 0.42% (from 0.36%) as nonaccrual loans rose .
  • Noninterest expense ticked up: noninterest expense increased $1.1M QoQ to $59.0M (personnel incentives and other operating expenses) though still well-controlled YoY .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Diluted EPS ($)$0.08 $0.88 $0.93
Adjusted EPS ($)$0.76 $0.84 $0.87
Net Income ($USD Millions)$3.6 $36.4 $38.6
Net Interest Income ($USD Millions)$88.8 $92.9 $96.7
Noninterest Income ($USD Millions)($23.2) $12.9 $14.3
NIM - Tax-Equivalent (%)3.07% 3.27% 3.32%
Cost of Total Deposits (%)1.57% 1.46% 1.43%
Loan Yield (%)5.47% 5.52% 5.53%
Total Loans ($USD Billions)$8.09 $8.10 $8.23
Total Deposits ($USD Billions)$10.53 $10.74 $10.83

Segment breakdown (Loan Portfolio Mix at Period End):

CategoryJun 30, 2025 Amount ($000)Jun 30, 2025 %Mar 31, 2025 Amount ($000)Mar 31, 2025 %Jun 30, 2024 Amount ($000)Jun 30, 2024 %
Commercial & Industrial$911,227 11% $890,071 11% $863,366 11%
Construction/Development/Land$633,529 8% $644,439 8% $764,418 9%
CRE – Owner Occupied$1,254,596 15% $1,233,732 15% $1,250,267 16%
CRE – Non-Owner Occupied$2,758,629 34% $2,701,746 34% $2,561,803 32%
Multi-Family$509,419 6% $512,958 6% $497,187 6%
Residential 1–4 Family$1,731,397 21% $1,709,593 21% $1,729,050 21%
HELOC/Lines$355,876 4% $341,240 4% $326,411 4%
Consumer$70,137 1% $68,115 1% $76,638 1%
Gross Loans$8,224,810 100% $8,101,894 100% $8,069,140 100%

Key Banking KPIs:

KPIQ4 2024Q1 2025Q2 2025
NPAs ($USD Millions)$46.9 $33.9 $35.8
NPA / Total Assets (%)0.39% 0.27% 0.28%
NPL / Total Loans (%)0.52% 0.36% 0.42%
ACL / Loans (%)1.51% 1.49% 1.47%
Net Charge-Offs (annualized, %)0.04% 0.17% 0.06%
On-Balance Sheet Liquidity (%)17.6% 19.8% 20.0%
Total Liquidity (%)34.9% 36.4% 36.1%
CET1 (%)14.33% 14.53% 14.62%
TCE / TA (%)8.22% 8.55% 8.83%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend per ShareQ2 2025 payable Jul 25, 2025$0.22 $0.23 Raised
NIM / Revenue / Margins / OpEx / Tax / Segment GuidanceN/AN/ANo formal quantitative guidance disclosed in Q2 materialsMaintained qualitative outlook

Earnings Call Themes & Trends

Note: A Q2 2025 earnings call transcript was not available in our document catalog at the time of analysis. Themes reflect Q4 2024, Q1 2025, and Q2 2025 earnings materials and investor presentations.

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
NIM and Deposit CostsNIM TE +17 bps QoQ to 3.07% in Q4; deposit cost down 19 bps to 1.57%. Q1 NIM TE 3.27%; deposit cost 1.46% .NIM 3.32%; deposit cost 1.43% (further improvement) .Improving tailwind.
Securities Repositioning4Q24 loss-earnback: Sold $283.8M AFS at loss; reinvested $495.0M at ~5.27%; boosted securities yield .Added $127.0M CMOs at 5.16%; securities yield +13 bps QoQ to 2.41% .Ongoing optimization.
Credit Quality & Helene ReservesHelene incremental reserve $13.0M at 4Q; NPAs 0.39% . Q1 reserve cut by $2.0M; NPAs 0.27% .Reserve cut by $3.5M to $7.5M; NPAs ~0.28%; net charge-offs 0.06% .Gradual normalization.
Capital & LiquidityCET1 14.33%; TCE/TA 8.22%; liquidity 17.6% on-balance, 34.9% total .CET1 14.62%; TCE/TA 8.83%; liquidity 20.0% on-balance, 36.1% total .Strengthening.
Deposit Growth & MixQ4 and Q1 deposits grew; noninterest-bearing ~32% .Deposits +$85.7M; noninterest-bearing 33% .Mixed stable/improving.

Management Commentary

  • Strategic positioning: “First Bancorp continues to improve financial results in 2025… expanded net interest margin and disciplined expense management… grew loans 6% annualized… favorable cost of funds and increased yields on earning assets… quarterly dividend to $0.23 per share” — Richard H. Moore, Chairman & CEO .
  • Balance sheet and risk: Management emphasized liquidity and capital strength (TCE/TA 8.83%; CET1 14.62%) while credit quality remained strong with low charge-offs and NPAs; securities yield continued to rise on reinvestment .

Q&A Highlights

  • The Q2 2025 earnings call transcript was not available in our source set; therefore, no Q&A items could be extracted. We will update this section if a transcript is published.

Estimates Context

  • Q2 2025 S&P Global consensus vs actual (normalized basis):
    • Primary EPS consensus mean: 0.868*; actual: 0.87* — essentially in line (company-reported GAAP diluted EPS was $0.93, and adjusted EPS was $0.87) .
    • Revenue consensus mean: $109.19M*; actual: $108.81M* — slight miss (company-reported NII + noninterest income totaled $111.02M) .

    • of estimates: EPS 5*, Revenue 4*; Target price consensus mean: $58.75*.

    Values retrieved from S&P Global.
Metric (SPGI)Q2 2025 ConsensusQ2 2025 Actual (SPGI)
Primary EPS ($)0.868*0.87*
Revenue ($USD Millions)109.19*108.81*
Primary EPS – # of Estimates5*—
Revenue – # of Estimates4*—
Target Price Consensus Mean ($)58.75*58.75*

Implication: With NIM/NET interest strength and deposit cost tailwinds, forward models may edge NII higher; revenue taxonomy differences (bank “revenue” vs SPGI’s normalized definition) can drive small variances and should be reconciled in models .

Key Takeaways for Investors

  • Margin expansion is intact: deposit costs continue to decline and securities yields are rising, supporting NIM and NII momentum into 2H25 .
  • Credit normalization is progressing: reserve reductions tied to Helene and low net charge-offs underpin benign credit trends, reducing tail risk to earnings .
  • Balance sheet resilience: capital ratios improved (CET1 14.62%; total RBC 16.87%; TCE/TA 8.83%) with strong liquidity buffers, enabling strategic flexibility and enhanced defense in a slower macro .
  • Growth optionality: loan growth (6.1% annualized) and deposit granularity (33% noninterest-bearing) position FBNC to leverage rate tailwinds and local-market strength without heavy wholesale funding .
  • Shareholder return uptick: the dividend increase to $0.23 signals confidence in earnings durability and capital position .
  • Near-term trading: absent a Q2 call transcript, the narrative is primarily quantitative—NIM tailwinds and capital strength are positive drivers; watch subsequent disclosures for guidance color and credit updates .
  • Medium-term thesis: a core-funded, granular deposit base plus improving asset yields and capital build supports improved ROA/ROCE trajectory; monitor macro CECL inputs and office CRE exposures (~6.5% of total loans) for risk calibration .