What changed in this filing

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Item 1. Financial Statements

2025-05-09 compared with 2024-11-06 · 221 added, 343 removed, 761 unchanged (43% of the section changed)

Item 1 - Financial Statements

First Bancorp and Subsidiaries

First Bancorp

Consolidated Balance Sheets

($ in thousands - unaudited) September 30,

($ in thousands - unaudited) March 31,

2025 December 31,

38 unchanged sentences

Rabbi trust obligation 1,166 1,148

Accumulated other comprehensive loss ( 254,806 ) ( 308,030 )

Accumulated other comprehensive income (loss) ( 246,628 ) ( 282,029 )

Total shareholders’ equity 1,508,176 1,445,611

1 unchanged sentence

See accompanying notes to unaudited consolidated financial statements.

First Bancorp and Subsidiaries

First Bancorp

Consolidated Statements of Income

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

($ in thousands, except share data - unaudited) 2025 2024

42 unchanged sentences

See accompanying notes to unaudited consolidated financial statements.

First Bancorp and Subsidiaries

First Bancorp

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended

September 30, Nine Months Ended September 30,

($ in thousands - unaudited) 2025 2024

12 unchanged sentences

See accompanying notes to unaudited consolidated financial statements.

First Bancorp and Subsidiaries

Consolidated Statements of Shareholders’ Equity

($ and share data in thousands - unaudited) Common Stock Retained

Earnings Stock in

Acquisition Rabbi

Obligation Accumulated

Comprehensive

Shareholders’

Shares Amount

Three Months Ended September 30, 2023

Balances, July 1, 2023 41,083 $ 960,851 $ 674,933 $ ( 1,365 ) $ 1,365 $ ( 338,142 ) $ 1,297,642

Net income 29,893 29,893

Cash dividends declared ($ 0.22 per common share)

( 9,035 ) ( 9,035 )

Change in Rabbi Trust Obligation ( 10 ) 10 —

Stock options exercised 2 66 66

Stock-based compensation — 1,727 1,727

Other comprehensive loss ( 62,610 ) ( 62,610 )

Balances, September 30, 2023 41,085 $ 962,644 $ 695,791 $ ( 1,375 ) $ 1,375 $ ( 400,752 ) $ 1,257,683

Three Months Ended September 30, 2024

Balances, July 1, 2024 41,188 $ 967,239 $ 752,294 $ ( 1,139 ) $ 1,139 $ ( 315,191 ) $ 1,404,342

Net income 18,680 18,680

Cash dividends declared ($ 0.22 per common share)

( 9,093 ) ( 9,093 )

Change in Rabbi Trust Obligation ( 9 ) 9 —

Stock options exercised 111 2,324 2,324

Stock withheld for payment of taxes ( 11 ) ( 478 ) ( 478 )

Stock-based compensation 52 1,365 1,365

Other comprehensive income 60,385 60,385

Balances, September 30, 2024 41,340 $ 970,450 $ 761,881 $ ( 1,148 ) $ 1,148 $ ( 254,806 ) $ 1,477,525

See accompanying notes to unaudited consolidated financial statements.

First Bancorp and Subsidiaries

First Bancorp

Consolidated Statements of Shareholders’ Equity

($ and share data in thousands - unaudited) Common Stock Retained

Earnings Stock in

Acquisition Rabbi

Obligation Accumulated

Comprehensive

Shareholders’

($ in thousands, except per share data - unaudited) Common Stock Retained

earnings Stock in rabbi trust assumed in acquisition Rabbi trust obligation Accumulated other comprehensive income (loss) Total shareholders’ equity

Shares Amount

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Balances, January 1, 2024 41,110 $ 963,990 $ 716,420 $ ( 1,385 ) $ 1,385 $ ( 308,030 ) $ 1,372,380

3 unchanged sentences

Change in Rabbi Trust Obligation ( 11 ) 11 —

Equity issued related to acquisition 5,033 229,489 229,489

Stock options exercised 36 726 726

2 unchanged sentences

Other comprehensive loss ( 13,943 ) ( 13,943 )

Balances, September 30, 2023 41,085 $ 962,644 $ 695,791 $ ( 1,375 ) $ 1,375 $ ( 400,752 ) $ 1,257,683

Nine Months Ended September 30, 2024

Balances, March 31, 2024 41,156 $ 965,429 $ 732,643 $ ( 1,396 ) $ 1,396 $ ( 321,973 ) $ 1,376,099

Three Months Ended March 31, 2025

Balances, January 1, 2025 41,347 $ 971,313 $ 756,327 $ ( 1,148 ) $ 1,148 $ ( 282,029 ) $ 1,445,611

4 unchanged sentences

Stock options exercised 13 126 126

Stock repurchases ( 25 ) ( 992 ) ( 992 )

Stock withheld for payment of taxes ( 8 ) ( 293 ) ( 293 )

1 unchanged sentence

Other comprehensive income 35,401 35,401

Balances, September 30, 2024 41,340 $ 970,450 $ 761,881 $ ( 1,148 ) $ 1,148 $ ( 254,806 ) $ 1,477,525

Balances, March 31, 2025 41,369 $ 971,174 $ 783,630 $ ( 1,166 ) $ 1,166 $ ( 246,628 ) $ 1,508,176

See accompanying notes to unaudited consolidated financial statements.

First Bancorp and Subsidiaries

First Bancorp

Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

($ in thousands-unaudited) 2025 2024

22 unchanged sentences

Decrease (increase) in accrued interest receivable 877 2,204

(Increase) decrease in other assets ( 2,527 ) 10,713

(Decrease) increase in accrued interest payable ( 133 ) 2,391

Increase (decrease) in other liabilities 3,762 793

Decrease (increase) in other assets 8,702 ( 51,175 )

Increase (decrease) in accrued interest payable 331 4,148

(Decrease) Increase in other liabilities ( 3,829 ) ( 3,816 )

Net cash provided by (used in) operating activities 52,596 ( 20,092 )

Cash Flows From Investing Activities

Purchases of securities available for sale ( 10,000 ) —

Proceeds from maturities, calls and principal repayments of securities available for sale 35,050 81,700

Proceeds from maturities, calls and principal repayments of securities held to maturity 638 5,940

Proceeds from sales of securities available for sale 138,182 111,863

Proceeds from sale of VISA B shares 4,522 —

Purchases of Federal Reserve and FHLB stock ( 283 ) ( 15,778 )

2 unchanged sentences

Purchases of other investments ( 4,423 ) ( 251 )

Net decrease (increase) in loans 125,241 ( 347,419 )

Net (increase) decrease in loans ( 13,298 ) 72,244

Proceeds from sales of foreclosed properties 709 —

1 unchanged sentence

Proceeds from sales of premises and equipment 342 10

Net cash received in acquisition activities — 22,610

Net cash provided by (used in) investing activities 8,583 171,104

1 unchanged sentence

Net increase (decrease) in deposits 214,031 271,429

Proceeds from the issuance of other borrowings 986,000 1,665,000

Repayment of other borrowings ( 1,515,036 ) ( 1,590,099 )

Repayment of subordinated debentures ( 10,000 ) —

Proceeds from the issuance of FHLB and FRB borrowings — 481,000

Repayment of FHLB and FRB borrowings ( 12 ) ( 779,012 )

Cash dividends paid – common stock ( 9,105 ) ( 9,042 )

Repurchases of common stock ( 992 ) —

Proceeds from stock option exercises 126 726

Payment of taxes related to stock withheld ( 293 ) ( 126 )

Net cash (used) provided by financing activities ( 90,716 ) 12,542

Net cash provided by (used in) financing activities 203,755 ( 35,025 )

Increase (decrease) in cash and cash equivalents 264,934 115,987

1 unchanged sentence

Cash and cash equivalents, end of period $ 772,441 $ 353,842

First Bancorp and Subsidiaries

First Bancorp

Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

($ in thousands-unaudited) 2025 2024

3 unchanged sentences

Unrealized gain (loss) on securities available for sale, net of taxes 35,401 ( 13,962 )

Foreclosed loans transferred to other real estate 1,066 1,000

Foreclosed loans transferred to foreclosed real estate 495 —

Accrued dividends at end of period 9,103 9,052

Cancellation of operating lease right-of-use assets and operating lease liabilities ( 1,497 ) —

Initial recognition of operating lease right-of-use assets and operating lease liabilities — 260

Revision of operating lease right-of-use assets and operating lease liabilities — ( 562 )

Acquisition of GrandSouth Bancorporation — See Note 2

See accompanying notes to consolidated financial statements.

First Bancorp and Subsidiaries

First Bancorp

Notes to Consolidated Financial Statements

1 unchanged sentence

The consolidated financial statements include the accounts of First Bancorp (the “Company”) and its wholly owned subsidiary First Bank (the “Bank”).

The Bank has three wholly owned subsidiaries that are fully consolidated, SBA Complete, Inc.

(“SBA Complete”), Magnolia Financial, Inc.

The Bank has two wholly owned subsidiaries that are fully consolidated, Magnolia Financial, Inc.

("Magnolia Financial"), and First Troy SPE, LLC.

All significant intercompany accounts and transactions have been eliminated.

The Bank formerly operated a third subsidiary, SBA Complete, Inc.

("SBA Complete"), which specialized in providing consulting services for financial institutions across the country related to Small Business Administration (“SBA”) loan origination and servicing.

During the second quarter of 2024, SBA Complete became inactive with certain activities transitioning to the Bank.

1 unchanged sentence

Accordingly, they do not include all information and notes necessary for complete financial statements in accordance with GAAP.

In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position of the Company as of September 30, 2024, the consolidated results of income, comprehensive income and shareholders' equity for the three and nine months ended September 30, 2024 and 2023, and the consolidated cash flows for the nine months ended September 30, 2024 and 2023.

In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position of the Company as of March 31, 2025, the consolidated results of income, comprehensive income and shareholders' equity for the three months ended March 31, 2025 and 2024, and the consolidated cash flows for the three months ended March 31, 2025 and 2024.

Any such adjustments were of a normal, recurring nature.

6 unchanged sentences

Accounting Standards Adopted in 2025

Accounting Standards Update ("ASU") 2023-02 , “ Investments—Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method ” permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met.

This update is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

The adoption of ASU 2023-02 did not have a significant impact on the Company's consolidated financial statements.

The Company did not adopt any accounting standards during the first three months of 2025.

Accounting Standards Pending Adoption

ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures" amended existing guidance to improve disclosures about a public entity’s reportable segments and provide more detailed information about a reportable segment’s expenses.

ASU 2023-07 clarifies that an entity which has a single reportable segment is to provide all the disclosures required by Topic 280 and ASU 2023-07.

The amendment is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The adoption of ASU 2023-07 is not expected to have a significant impact on the Company's consolidated financial statements.

ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” amends existing guidance to improve the transparency of income tax disclosures, including disclosure of specific categories in the rate reconciliation, providing additional information for certain reconciling items, and providing details on income taxes

Improvements to Income Tax Disclosures” amended existing guidance to improve the transparency of income tax disclosures, including disclosure of specific categories in the rate reconciliation, providing additional information for certain reconciling items, and providing details on income taxes paid.

The amendments are effective for annual periods beginning after December 15, 2024.

The adoption of ASU 2023-09 is not expected to have a significant impact on the Company's consolidated financial statements.

ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses” amended the Income Statement—Reporting Comprehensive Income topic in the Accounting Standards Codification to require public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements.

The amendments are effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company will apply the amendments retrospectively to all prior periods presented in the financial statements after the effective date.

adoption of ASU 2023-09 is not expected to have a significant impact on the Company's consolidated financial statements.

ASU 2024-04, “Debt-Debt With Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments” amended the Debt topic in the Accounting Standards Codification to clarify requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06.

The Company will apply the amendments prospectively to any settlements of convertible debt instruments that occur after the effective date of the guidance.

The adoption of ASU 2024-04 is not expected to have a significant impact on the Company's consolidated financial statements.

Other accounting standards that have been issued or proposed by the Financial Accounting Standards Board ("FASB") or other standards-setting bodies are not expected to have a material impact on the Company’s consolidated financial statements.

On January 1, 2023, the Company completed its acquisition of GrandSouth Bancorporation ("GrandSouth"), in an all-stock transaction.

The results of GrandSouth are included beginning on the January 1, 2023 acquisition date.

This transaction was accounted for using the acquisition method of accounting for business combinations, and accordingly, the assets acquired, intangible assets identified, and liabilities assumed of GrandSouth were recorded based on estimates of fair values as of January 1, 2023.

The operations of GrandSouth have been integrated into existing First Bank operations and therefore separate results of operations or balance sheet information is not presented.

The book values and approximate fair values of investment securities at September 30, 2024 and December 31, 2023 are summarized as follows:

($ in thousands) September 30, 2024 December 31, 2023

The book values and approximate fair values of investment securities at March 31, 2025 and December 31, 2024 are summarized as follows:

($ in thousands) March 31, 2025 December 31, 2024

Value Unrealized Amortized

11 unchanged sentences

Total held to maturity $ 518,265 $ 430,601 $ 2 $ ( 87,666 ) $ 519,998 $ 428,571 $ 1 $ ( 91,428 )

All of the Company’s mortgage-backed securities were issued by government-sponsored enterprises ("GSEs"), except for private mortgage-backed securities with a fair value of $ 0.7 million as of September 30, 2024 and December 31, 2023.

The following table presents information regarding all securities with unrealized losses at September 30, 2024:

Accrued interest receivable on available for sale ("AFS") debt securities was $ 4.9 million and $ 4.6 million at March 31, 2025 and December 31, 2024, respectively.

Accrued interest receivable on held to maturity ("HTM") debt securities was $ 3.0 million and $ 4.2 million as of March 31, 2025 and December 31, 2024.

The following table presents information regarding all securities with unrealized losses at March 31, 2025:

Securities in an Unrealized

26 unchanged sentences

Total unrealized loss position $ 442,489 $ 2,441 $ 1,975,663 $ 457,102 $ 2,418,152 $ 459,543

As of September 30, 2024, the Company's securities portfolio included 620 securities of which 586 securities were in an unrealized loss position.

As of March 31, 2025, the Company's securities portfolio included 583 securities of which 543 securities were in an unrealized loss position.

As of December 31, 2024, the Company's securities portfolio included 584 securities of which 560 securities were in an unrealized loss position.

In the above tables, all of the securities that were in an unrealized loss position at September 30, 2024 and December 31, 2023 are bonds that the Company has determined are in a loss position due primarily to interest rate factors and not credit quality concerns.

In the above tables, all of the securities that were in an unrealized loss position at March 31, 2025 and December 31, 2024 are bonds that the Company has determined are in a loss position due primarily to interest rate factors and not credit quality concerns.

In arriving at this conclusion, the Company reviewed third-party credit ratings and considered the severity of the impairment.

The state and local government investments are comprised almost entirely of highly-rated municipal bonds issued by state and local governments throughout the nation.

The Company has no significant concentrations of bond holdings from one state or local government entity.

Nearly all of our mortgage-backed securities were issued by Federal Home Loan Mortgage Corporation ("FHLMC"), Federal National Mortgage Association ("FNMA"), Government National Mortgage Association ("GNMA"), or the Small Business Administration ("SBA"), each of which is a government agency or GSE and guarantees the repayment of the securities.

At September 30, 2024 and December 31, 2023, the Company determined that expected credit losses associated with held to maturity securities and available for sale debt securities were insignificant.

The book values and fair values of investment securities at September 30, 2024, by contractual maturity, are summarized in the table below.

The Company has no significant concentrations of bond holdings from any one state or local government entity.

Nearly all of the Company's mortgage-backed securities were issued by Federal Home Loan Mortgage Corporation ("FHLMC"), Federal National Mortgage Association ("FNMA"), Government National Mortgage Association ("GNMA"), or SBA, each of which is a government agency or GSE and guarantees the repayment of its securities.

The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell these securities before recovery of the amortized cost.

At March 31, 2025 and December 31, 2024, the Company determined that expected credit losses associated with HTM securities and AFS debt securities were insignificant.

The book values and fair values of investment securities at March 31, 2025, by contractual maturity, are summarized in the table below.

Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

7 unchanged sentences

Total securities $ 2,385,730 $ 2,064,516 $ 518,265 $ 430,601

At September 30, 2024 and December 31, 2023, investment securities with carrying values of $ 924.8 million and $ 971.3 million, respectively, were pledged as collateral for public deposits.

In addition, at September 30, 2024 and December 31, 2023, investment securities with carrying values of $ 582.6 million and $ 679.0 million, respectively, were pledged as collateral for Federal Reserve Bank ("Federal Reserve") borrowings.

At September 30, 2024 and December 31, 2023, there were no holdings of securities of any one issuer, other than the U.S.

At March 31, 2025 and December 31, 2024, investment securities with carrying values of $ 858.4 million and $ 806.0 million, respectively, were pledged as collateral for public deposits.

In addition, at March 31, 2025 and December 31, 2024, investment securities with carrying values of $ 664.0 million and $ 661.0 million, respectively, were pledged as collateral to the Federal Reserve Bank ("Federal Reserve") to secure any such borrowings.

At March 31, 2025 and December 31, 2024, there were no holdings of securities of any one issuer, other than the U.S.

Government and its agencies or GSEs, in an amount greater than 10% of shareholders' equity.

There were no sales of investment securities during the three months ended September 30, 2024.

During the second quarter of 2024, the Company sold all of its holdings of Class B shares of Visa, Inc.

(“Visa”) stock that were received upon Visa’s initial public offering and recognized a gain of $ 4.5 million.

As the Class B stock did not initially have a readily determinable fair value, it was carried at $0 prior to the sale.

During the second quarter of 2024, the Company received proceeds from sales of securities of $ 138.2 million and recorded $ 4.7 million in gross losses from the sales.

This loss was partially offset by the $ 4.5 million gain on the sale of the Visa stock discussed above.

Included in "Securities losses, net" in the consolidated statements of income, during the first quarter of 2024, the Company received proceeds from the call of a security of $ 5.2 million and recorded a $ 975 thousand loss related to the unamortized premium balance at the time of the call.

During the first quarter of 2023, the Company sold substantially all of the securities acquired from GrandSouth at their initially recorded fair values.

Accordingly, there was no gain or loss recorded on the sale of acquired securities.

Included in “Other assets” in the consolidated balance sheets are investments in Federal Home Loan Bank (“FHLB”) and Federal Reserve stock totaling $ 41.2 million and $ 54.5 million at September 30, 2024 and December 31, 2023, respectively.

There were no sales of investment securities during the three months ended March 31, 2025 or March 31, 2024.

During the first quarter of 2024, the Company received proceeds from the unanticipated call of a security of $ 5.2 million and recorded a $ 975.2 thousand loss related to the unamortized premium balance at the time of the call.

Included in “Other assets” in the consolidated balance sheets are investments in Federal Home Loan Bank (“FHLB”) and Federal Reserve stock totaling $ 41.5 million and $ 41.3 million at March 31, 2025 and December 31, 2024, respectively.

These investments do not have readily determinable fair values.

The FHLB stock had a cost of $ 8.5 million and $ 21.7 million at September 30, 2024 and December 31, 2023, respectively, and serves as part of the collateral for the Company’s line of credit with the FHLB and is also a requirement for membership in the FHLB system.

The Federal Reserve stock had a cost and fair value of $ 32.7 million and $ 32.8 million at September 30, 2024 and December 31, 2023, respectively, and is a requirement for Federal Reserve member bank qualification.

The FHLB stock had a cost of $ 8.5 million at March 31, 2025 and December 31, 2024, and serves as part of the collateral for the Company’s line of credit with the FHLB and is also a requirement for membership in the FHLB system.

The Federal Reserve stock had a cost of $ 33.0 million and $ 32.7 million at March 31, 2025 and December 31, 2024, respectively, and is a requirement for Federal Reserve member bank qualification.

Periodically, both the FHLB and Federal Reserve recalculate the Company’s required level of holdings, and the Company either buys more stock or redeems a portion of the stock at cost.

2 unchanged sentences

The following is a summary of the major categories of total loans outstanding:

($ in thousands) September 30, 2024 December 31, 2023

($ in thousands) March 31, 2025 December 31, 2024

Amount Percentage Amount Percentage

11 unchanged sentences

Also included in the table above are various SBA loans, generally originated under the SBA 7A program, with additional information on these loans presented in the table below.

($ in thousands) September 30, 2024 December 31, 2023

($ in thousands) March 31, 2025 December 31, 2024

Guaranteed portions of SBA loans included in table above $ 45,160 $ 34,095

2 unchanged sentences

Sold portions of SBA loans with servicing retained - not included in tables above $ 317,473 $ 330,482

At September 30, 2024 and December 31, 2023, there were remaining unaccreted discounts on the retained portion of sold SBA loans amounting to $ 3.3 million and $ 3.5 million, respectively.

At September 30, 2024 and December 31, 2023, l oans in the amount of $ 6.6 billion and $ 6.5 billion, respectively, were pledged as collateral for certain borrowings.

At September 30, 2024 and December 31, 2023, total loans included loans to executive officers and directors of the Company, and their associates, totaling approximately $ 63.3 million and $ 63.7 million, respectively.

While there was one new loan, advances on existing loans totaled approximately $ 1.3 million for the nine months ended September 30, 2024, and repayments amounted to $ 1.6 million for that period.

Available credit on related party loans totaled $ 1.0 million and $ 2.7 million at September 30, 2024 and December 31, 2023, respectively.

As of September 30, 2024 and December 31, 2023, unamortized discounts on all acquired loans totaled $ 17.3 million and $ 24.0 million, respectively.

At March 31, 2025 and December 31, 2024, there were remaining unaccreted discounts on the retained portion of sold SBA loans amounting to $ 2.5 million and $ 2.9 million, respectively.

At March 31, 2025 and December 31, 2024, l oans in the amount of $ 6.8 billion and $ 6.7 billion, respectively, were pledged as collateral for certain borrowings.

At March 31, 2025 and December 31, 2024, total loans included loans to directors and executive officers of the Company, and their associates, totaling approximately $ 62.3 million and $ 62.9 million, respectively.

While there were no new loans, advances on existing loans totaled approximately $ 5.0 thousand for the three months ended March 31, 2025, and repayments amounted to $ 0.6 million for that period.

Available credit on related party loans totaled $ 1.1 million and $ 1.0 million at March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025 and December 31, 2024, unamortized discounts on all acquired loans totaled $ 13.3 million and $ 15.1 million, respectively.

Loan discounts are generally amortized as yield adjustments over the respective lives of the loans, so long as the loans perform.

There was no impairment of acquired loans during the three and nine months ended September 30, 2024 that would require acceleration of amortization or charge off of unamortized discount.

Nonperforming assets ("NPAs") are defined as nonaccrual loans, modifications to borrowers in financial distress, loans past due 90 or more days and still accruing interest, and foreclosed real estate.

There was no impairment of acquired loans during the three months ended March 31, 2025 or March 31, 2024 that would require acceleration of amortization or charge off of unamortized discount.

Nonperforming assets ("NPAs") are defined as nonaccrual loans, loans past due 90 or more days and still accruing interest, and foreclosed properties.

The following table summarizes the NPAs for each date presented.

($ in thousands) September 30,

($ in thousands) March 31,

2025 December 31,

Nonaccrual loans $ 29,081 $ 31,779

Modifications to borrowers in financial distress 10,262 11,719

Accruing loans > 90 days past due — —

Total nonperforming loans 29,081 31,779

Foreclosed real estate 1,519 862

Foreclosed properties 4,769 4,965

Total nonperforming assets $ 33,850 $ 36,744

At September 30, 2024 and December 31, 2023, the Company had $ 0.8 million and $ 1.0 million, respectively, in residential mortgage loans in the process of foreclosure.

At September 30, 2024 and December 31, 2023, there were two and one loans, respectively, with commitments to lend an immaterial amount of additional funds to a borrower whose loan was nonperforming.

The following table is a summary of the Company’s nonaccrual loans by major categories as of September 30, 2024:

At March 31, 2025 and December 31, 2024, the Company had $ 0.9 million and $ 1.2 million, respectively, in residential mortgage loans in the process of foreclosure.

At March 31, 2025 and December 31, 2024, there was one nonperforming loan with a commitment to lend $ 0.2 million of additional funds to a borrower whose loan was nonperforming.

The following table is a summary of the Company’s nonaccrual loans by major categories as of March 31, 2025:

($ in thousands) Nonaccrual Loans with No Allowance Nonaccrual Loans with an Allowance Total Nonaccrual Loans

20 unchanged sentences

The following table represents the accrued interest receivables written off by reversing interest income during each period indicated:

($ in thousands) Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

($ in thousands) Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

Commercial and industrial $ 95 $ 216

6 unchanged sentences

Total $ 504 $ 400

The following table presents an analysis of the payment status of the Company’s loans as of September 30, 2024:

The following table presents an analysis of the payment status of the Company’s loans as of March 31, 2025:

($ in thousands) Accruing

32 unchanged sentences

These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the Allowance for Credit Losses ("ACL").

The following table presents an analysis of collateral dependent loans of the Company as of September 30, 2024:

($ in thousands) Residential Property Business Assets Commercial Property Total Collateral-Dependent Loans

The following table presents an analysis of collateral dependent loans of the Company as of March 31, 2025:

($ in thousands) Residential Property Commercial Property Total Collateral-Dependent Loans

Commercial real estate - owner occupied $ — $ 2,039 $ 2,039

Commercial real estate - non owner occupied — — 5,050 5,050

Residential 1-4 family real estate 868 — 868

Total $ 868 $ 2,039 $ 2,907

The following table presents an analysis of collateral dependent loans of the Company as of December 31, 2024:

($ in thousands) Residential Property Business Assets Commercial Property Total Collateral-Dependent Loans

Commercial and industrial $ — $ 2,385 $ — $ 2,385

($ in thousands) Commercial Property Total Collateral-Dependent Loans

Commercial real estate - owner occupied $ 879 $ 879

Commercial real estate - non owner occupied — — 6,121 6,121

Home equity loans/lines of credit 534 — — 534

Total $ 879 $ 879

There have been no material changes from the treatment of collateral dependent loans under CECL as discussed in Note 4 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

The following tables presents the activity in the ACL on loans for each of the periods indicated to include Purchase Credit Deterioration (“PCD”) activity in applicable periods.

Fluctuations in the ACL each period are based on loan mix and growth, changes in the levels of nonperforming loans, economic forecasts impacting loss drivers, other assumptions and inputs to the current expected credit loss ("CECL") model, and as occurred in 2023, adjustments for acquired loan portfolios.

The change to the level of ACL during the nine months ended September 30, 2024 was determined based primarily on updated economic forecasts, which are a key assumption in the CECL model and which indicated improvement in certain economic forecasts along with reductions in loan balances during the period, partially offset by a continued reduction of the commercial real estate pricing index.

Other than the impact from Hurricane Helene, there was little change to the ACL for the quarter or year to date.

The following tables present the activity in the ACL on loans for each of the periods indicated to include Purchase Credit Deterioration (“PCD”) activity in applicable periods.

The change to the level of ACL during the three months ended March 31, 2025 was determined based primarily on updated economic forecasts, which are a key assumption in the CECL model and which indicated improvement in certain economic forecasts along with reductions in loan balances during the period, partially offset by a continued reduction of the commercial real estate pricing index.

($ in thousands) Beginning balance Charge-offs Recoveries Provisions / (Reversals) Ending balance

As of and for the three months ended September 30, 2024

Commercial and industrial $ 19,837 $ ( 1,913 ) $ 246 $ ( 27 ) $ 18,143

Construction, development & other land loans 9,996 — 35 1,394 11,425

Commercial real estate - owner occupied 17,859 ( 21 ) 4 657 18,499

Commercial real estate - non owner occupied 25,876 — 3 2,754 28,633

Multi-family real estate 5,129 — — 161 5,290

Residential 1-4 family real estate 24,855 — 28 9,183 34,066

Home equity loans/lines of credit 3,177 — 232 165 3,574

Consumer loans 3,329 ( 754 ) 17 496 3,088

Total $ 110,058 $ ( 2,688 ) $ 565 $ 14,783 $ 122,718

As of and for the nine months ended September 30, 2024

Commercial and industrial $ 21,227 $ ( 5,976 ) $ 1,346 $ 1,546 $ 18,143

Construction, development & other land loans 13,940 ( 79 ) 182 ( 2,618 ) 11,425

Commercial real estate - owner occupied 18,218 ( 109 ) 12 378 18,499

Commercial real estate - non owner occupied 24,916 ( 158 ) 46 3,829 28,633

Multi-family real estate 3,825 — — 1,465 5,290

Residential 1-4 family real estate 21,396 ( 6 ) 255 12,421 34,066

Home equity loans/lines of credit 3,339 ( 2 ) 254 ( 17 ) 3,574

Consumer loans 2,992 ( 1,130 ) 197 1,029 3,088

Total $ 109,853 $ ( 7,460 ) $ 2,292 $ 18,033 $ 122,718

($ in thousands) Beginning balance Initial ACL for acquired PCD loans Charge-offs Recoveries Provisions / (Reversals) Ending balance

As of and for the three months ended September 30, 2023

As of and for the three months ended March 31, 2025

Commercial and industrial $ 19,474 $ ( 2,216 ) $ 497 $ 1,520 $ 19,275

7 unchanged sentences

Total $ 122,572 $ ( 4,120 ) $ 781 $ 1,398 $ 120,631

As of and for the nine months ended September 30, 2023

($ in thousands) Beginning balance Charge-offs Recoveries Provisions / (Reversals) Ending balance

As of and for the three months ended March 31, 2024

Commercial and industrial $ 21,227 $ ( 1,585 ) $ 243 $ 409 $ 20,294

14 unchanged sentences

($ in thousands) 2025 2024 2023 2022 2021 Prior Revolving Total

As of September 30, 2024

As of March 31, 2025

Commercial and industrial

112 unchanged sentences

For loans included in the “combination” columns below, multiple types of modifications have been made on the same loan within the current reporting period.

The followings tables present the amortized cost basis at September 30, 2024 and September 30, 2023 of the loans modified during the three and nine months then ended for borrowers experiencing financial difficulty, by loan category and type of concession granted.

($ in thousands) Payment Delay Term Extension Combination - Term Extension and Payment Delay Combination - Interest Rate Reduction and Term Extension Total Percent of Total Class of Loans

As of and for the three months ended September 30, 2024

Construction, development & other land loans $ — $ 143 $ — $ — $ 143 0.02 %

Home equity loans/lines of credit — 96 — — 96 0.03 %

Total $ — $ 239 $ — $ — $ 239 — %

As of and for the nine months ended September 30, 2024

The following table is a summary of the Company's nonaccrual and accruing modifications for borrowers experiencing financial difficulty by major categories for each date presented.

March 31, 2025 December 31, 2024

($ in thousands) Accruing loans Nonaccrual loans Total Accruing loans Nonaccrual loans Total

Commercial and industrial $ 158 $ 936 $ 1,094 $ 165 $ 2,118 $ 2,283

Construction, development & other land loans 311 — 311 212 — 212

Commercial real estate - owner occupied 3,943 913 4,856 3,974 175 4,149

Commercial real estate - non owner occupied 4,417 560 4,977 — 149 149

Multi-family real estate — — — — — —

Residential 1-4 family real estate 370 219 589 380 285 665

Home equity loans/lines of credit 2,383 503 2,886 2,143 572 2,715

Consumer loans — — — — — —

Total $ 11,582 $ 3,131 $ 14,713 $ 6,874 $ 3,299 $ 10,173

($ in thousands) Payment Delay Term Extension Combination - Interest Rate Reduction and Term Extension Total Percent of Total Class of Loans

As of and for the three months ended September 30, 2023

The following tables present the amortized cost basis at March 31, 2025 and March 31, 2024 of the loans modified during the three months then ended for borrowers experiencing financial difficulty, by loan category and type of concession granted.

($ in thousands) Payment Delay Term Extension Combination - Payment Delay and Term Extension Total Percent of Total Class of Loans

As of and for the three months ended March 31, 2025

Commercial and industrial $ 67 $ — $ — $ 67 0.01 %

Construction, development & other land loans — 594 — 594 0.06 %

Commercial real estate - owner occupied — 741 — 741 0.06 %

2 unchanged sentences

Home equity loans/lines of credit — 300 — 300 0.09 %

Consumer loans — 9 — 9 0.01 %

Total $ 535 $ 1,059 $ 4,371 $ 5,965 0.07 %

As of and for the nine months ended September 30, 2023

($ in thousands) Payment Delay Term Extension Combination - Principal Forgiveness and Term Extension Combination - Interest Rate Reduction and Term Extension Total Percent of Total Class of Loans

As of and for the three months ended March 31, 2024

Commercial and industrial $ 114 $ — $ 878 $ — $ 992 0.11 %

Construction, development & other land loans — 594 10 604 0.06 %

Commercial real estate - owner occupied 185 4,302 — 4,487 0.36 %

Commercial real estate - non owner occupied — 115 — — 115 — %

Residential 1-4 family real estate — 750 — 750 0.05 %

Home equity loans/lines of credit — 47 — 179 226 0.07 %

Consumer loans — 66 — 66 0.10 %

Total $ 114 $ 162 $ 878 $ 179 $ 1,333 0.02 %

For the three and nine months ended September 30, 2024 and September 30, 2023, there were no modifications for borrowers experiencing financial difficulty with principal forgiveness concessions.

The following table describes the financial effect for the three and nine months ended September 30, 2024 of the modifications made for borrowers experiencing financial difficulty:

For the three months ended March 31, 2025 and March 31, 2024, there were no modifications for borrowers experiencing financial difficulty with principal forgiveness concessions.

The following table describes the financial effect for the three months ended March 31, 2025 of the modifications made for borrowers experiencing financial difficulty:

Financial Effect of Modification to Borrowers Experiencing Financial Difficulty

Weighted Average Interest Rate Reduction Weighted Average Payment Delay

Weighted Average Payment Delay

(in months) Weighted Average Term Extension

For the three months ended September 30, 2024

Construction, development & other land loans — % 0 8

Home equity loans/lines of credit — % 0 40

For the nine months ended September 30, 2024

For the three months ended March 31, 2025

Commercial and industrial 5 0

Construction, development & other land loans — % 0 6

Commercial real estate - owner occupied 0 11

Commercial real estate - non owner occupied 7 7

1 unchanged sentence

Home equity loans/lines of credit 0 107

The following table describes the financial effect for the three and nine months ended September 30, 2023 of the modifications made for borrowers experiencing financial difficulty:

The following table describes the financial effect for the three months ended March 31, 2024 of the modifications made for borrowers experiencing financial difficulty:

Financial Effect of Modification to Borrowers Experiencing Financial Difficulty

1 unchanged sentence

(in months) Weighted Average Term Extension

For the three months ended September 30, 2023

Commercial and industrial — % 6 26

Construction, development & other land loans — % 0 8

Commercial real estate - owner occupied — % 0 32

Commercial real estate - non owner occupied — % 0 11

Residential 1-4 family real estate — % 0 23

Home equity loans/lines of credit 2.61 % 24 84

Consumer loans — % 0 24

For the nine months ended September 30, 2023

For the three months ended March 31, 2024

Commercial and industrial — % 36 12

Construction, development & other land loans 1.53 % 0 9

Commercial real estate - owner occupied — % 12 34

Commercial real estate - non owner occupied — % 0 13

Residential 1-4 family real estate — % 0 24

Home equity loans/lines of credit 2.09 % 0 32

Consumer loans — % 0 9

The Company closely monitors the performance of the loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table depicts the performance of loans that were modified in the last twelve months as of September 30, 2024:

The following table depicts the performance of loans that were modified in the last twelve months as of March 31, 2025:

Payment Status (Amortized Cost Basis)

2 unchanged sentences

Construction, development & other land loans 272 — — —

Commercial real estate - owner occupied 869 — — —

Commercial real estate - non owner occupied 4,418 — — 422

11 unchanged sentences

Home equity loans/lines of credit 583 — 68 —

Consumer loans 6 — — —

$ 2,307 $ — $ 68 $ 936

None of the modifications made for borrowers experiencing financial difficulty during the three and nine months ended September 30, 2024 and September 30, 2023 are considered to have had a payment default.

The following table presents the amortized cost basis of loans that had a payment default during the three months ended March 31, 2025 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty by loan category and type of concession granted.

Amortized Cost Basis of Modified Receivables That Subsequently Defaulted

($ in thousands) Term Extension Total

Residential 1-4 family real estate $ 51 $ 51

Total $ 51 $ 51

During the three months ended March 31, 2024, none of the loans to borrowers experiencing financial difficulty that were modified in the twelve months prior were considered to have had a payment default.

At March 31, 2025, there were no commitments to lend additional funds to a borrower experiencing financial difficulty for whom a modification had been made.

At December 31, 2024, there was a commitment to lend $ 0.1 million of additional funds to one borrower experiencing financial difficulty for whom a modification had been made.

Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off.

1 unchanged sentence

Concentration of Credit Risk

Most of the Company's business activity is with customers located within the markets where it has banking operations.

Therefore, the Company’s exposure to credit risk is significantly affected by changes in the economy within its markets.

The Company’s loan portfolio is not concentrated in loans to any single borrower or to a relatively small number of borrowers.

Additionally, management is not aware of any concentrations of loans to classes of borrowers or industries that would be similarly affected by economic conditions.

Approximately 88 % of the Company's loan portfolio is secured by real estate and is therefore susceptible to changes in real estate valuations.

1 unchanged sentence

Impact of Hurricane Helene

Within the portions of Western North and South Carolina that were significantly impacted by Hurricane Helene, the Company identified borrowers with approximately $ 755 million of loans outstanding.

The following is a summary of the categories of those loans outstanding as of September 30, 2024:

The Company identified borrowers with approximately $ 722 million of loans outstanding within the portions of Western North and South Carolina that were significantly impacted by Hurricane Helene.

The following is a summary of the categories of those loans outstanding as of March 31, 2025:

($ in thousands) Balance

8 unchanged sentences

Total $ 722,106

Given that the storm impacted the area just prior to September 30, 2024 and recovery continues in many communities, the Company performed analyses to identify possible impacts from the storm and has reserved accordingly based upon the information available at this time.

Given that the recovery from the storm is ongoing in many impacted communities, the Company continues to evaluate possible impacts from the storm on borrowers and has reserved accordingly based upon the information available as of March 31, 2025.

The Company applied increased reserve rates based upon severe economic factors to the approximately $ 722 million of loans in the most impacted path of Hurricane Helene.

Additionally, the Company performed an initial evaluation of the largest commercial loans in that area and applied incremental reserves to those loans that were suspected of having higher potential property damage or economic impact from the storm.

Due to the potential exposure from Hurricane Helene, the ACL on these impacted loans increased by $ 13.0 million, expanding the ACL as a percent of loans in the impacted geography from 1.29 % to 3.01 % as of September 30, 2024 and adding 16 basis points to the overall ACL as a percent of total loans, which was 1.53 % as of September 30, 2024.

Additionally, the Company continues to evaluate the largest commercial loans in that area and applied incremental reserves to those loans that were suspected of having higher potential property damage or economic impact from the storm.

Due to the potential exposure from Hurricane Helene, the ACL on these impacted loans was $ 11.0 million as of March 31, 2025, adding 14 basis points to the overall ACL as a percent of total loans,which was 1.49 % as of March 31, 2025.

Allowance for Unfunded Loan Commitments

1 unchanged sentence

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company.

The allowance for lending-related commitments on off-balance sheet credit exposures is adjusted as a provision for unfunded commitments expense.

The allowance for lending-related commitments on off-balance sheet credit exposures is adjusted as a provision for credit loss expense.

The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the ACL on loans.

The allowance for unfunded loan commitments of $ 9.3 million and $ 11.4 million at September 30, 2024 and

December 31, 2023, respectively, were separately classified on the consolidated balance sheets within "Other liabilities."

The following table presents the balance and activity in the allowance for unfunded loan commitments for the three and nine months ended September 30, 2024 and 2023:

Three months ended September 30, Nine months ended September 30,

The allowance for unfunded loan commitments were included in "Other liabilities" on the consolidated balance sheets.

The following table presents the balance and activity in the allowance for unfunded loan commitments for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

($ in thousands) 2025 2024

Beginning balance $ 9,066 $ 11,369

Initial provision for credit losses on unfunded commitments acquired from GrandSouth — — — 1,921

Charge-offs — —

2 unchanged sentences

Ending balance $ 8,784 $ 10,768

Allowance for Credit Losses - Securities Held to Maturity

The ACL for securities held to maturity was insignificant at September 30, 2024 and December 31, 2023.

Goodwill, Other Intangible Assets and Servicing Assets

The following is a summary of the gross carrying amount and accumulated amortization of amortizable intangible assets and the carrying amount of unamortized intangible assets as of the periods presented.

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

($ in thousands) Gross Carrying

11 unchanged sentences

Customer lists are generally amortized over five years and core deposit intangibles are generally amortized over 10 years, both at an accelerated rate.

Amortization expense of all amortizable intangible assets totaled $ 1.6 million and $ 2.0 million for the three months ended September 30, 2024 and 2023, respectively, and $ 5.0 million and $ 6.1 million for the nine months ended September 30, 2024 and 2023, respectively.

Amortization expense of all amortizable intangible assets totaled $ 1.5 million and $ 1.8 million for the three months ended March 31, 2025 and 2024, respectively.

Goodwill is evaluated for impairment on at least an annual basis, with the annual evaluation occurring as of October 31 of each year.

3 unchanged sentences

There was no change to carrying amounts of goodwill during 2025.

The following table presents the estimated amortization expense schedule related to acquisition-related amortizable intangible assets.

The following table presents the estimated amortization expense schedule related to amortizable intangible assets.

These amounts will be recorded as "Intangibles amortization expense" within the noninterest expense section of the consolidated statements of income.

These estimates are subject to change in future periods

to the extent management determines it is necessary to make adjustments to the carrying value or estimated useful lives of amortizable intangible assets.

These estimates are subject to change in future periods to the extent management determines it is necessary to make adjustments to the carrying value or estimated useful lives of amortizable intangible assets.

($ in thousands) Estimated Amortization

October 1, 2024 to December 31, 2024 $ 1,562

April 1, 2025 to December 31, 2025 $ 4,156

Thereafter 2,937

Total $ 21,388

The Company recorded SBA guaranteed servicing fee income of $ 0.8 million for the three months ended September 30, 2024 and 2023, and $ 2.3 million and $ 2.7 million for the nine months ended September 30, 2024 and 2023, respectively.

There was no impairment of SBA servicing assets at September 30, 2024 and December 31, 2023 and no significant methodology changes have been made since year end.

The following table presents the changes in the SBA servicing assets (included in "Other assets" in the Company's consolidated balance sheet) for the three and nine months ended September 30, 2024 and 2023:

Three months ended September 30, Nine months ended September 30,

During the three months ended March 31, 2025 and 2024, the Company recorded $ 0.7 million in SBA guaranteed servicing fee income.

There was no impairment of SBA servicing assets at March 31, 2025 and December 31, 2024 and no significant methodology changes have been made since year end.

The following table presents the changes in the SBA servicing assets (included in "Other assets" in the Company's consolidated balance sheet) for each period indicated:

Three months ended March 31,

($ in thousands) 2025 2024

3 unchanged sentences

Ending balance, net $ 2,256 $ 3,137

The following tables present information regarding the Company’s outstanding borrowings at September 30, 2024 ($ in thousands):

Description Due date Call Feature Balance at September 30, 2024 Interest Rate

The following tables present information regarding the Company’s outstanding borrowings at March 31, 2025:

($ in thousands)

Description Due date Call Feature Balance Interest Rate

FHLB Principal Reducing Credit 6/26/2028 to 12/20/2028

None $ 790 0.00 % to 1.00 % fixed

Trust Preferred Securities 1/23/2034 Quarterly by Company

beginning 1/23/2009 10,310 8.17 % at 9/30/24 adjustable rate 3 month CME Term SOFR+ 2.91 %

Trust Preferred Securities 1/23/2034 Quarterly by Company

beginning 1/23/2009 10,310 8.27 % at 9/30/24 adjustable rate 3 month CME Term SOFR + 3.01 %

Trust Preferred Securities 9/20/2034 Quarterly by Company

beginning 9/20/2009 12,372 7.23 % at 9/30/24 adjustable rate 3 month CME Term SOFR + 2.41 %

Trust Preferred Securities 1/7/2035 Quarterly by Company

beginning 1/7/2010 10,310 7.56 % at 9/30/24 adjustable rate 3 month CME Term SOFR + 2.00 %

Trust Preferred Securities 6/15/2036 Quarterly by Company

beginning 6/15/2011 25,774 6.60 % at 9/30/24 adjustable rate 3 month CME Term SOFR + 1.65 %

Trust Preferred Securities 6/23/2036 Quarterly by the Company beginning 6/23/2011 8,248 6.86 % at 9/30/24 adjustable rate 3 month CME Term SOFR + 2.11 %

Subordinated Debentures 11/15/2030 Continuous by Company beginning 11/15/2025 18,000 4.38 % fixed

Total borrowings / weighted average rate as of September 30, 2024

Trust Preferred Securities 1/23/2034 Quarterly by Company 10,310 7.20 % at 3/31/25 adjustable rate 3 month CME Term SOFR+ 2.91 %

Trust Preferred Securities 1/23/2034 Quarterly by Company 10,310 7.30 % at 3/31/25 adjustable rate 3 month CME Term SOFR + 3.01 %

Trust Preferred Securities 9/20/2034 Quarterly by Company 12,372 6.72 % at 3/31/25 adjustable rate 3 month CME Term SOFR + 2.41 %

Trust Preferred Securities 1/7/2035 Quarterly by Company 10,310 6.56 % at 3/31/25 adjustable rate 3 month CME Term SOFR + 2.00 %

Trust Preferred Securities 6/15/2036 Quarterly by Company 25,774 5.95 % at 3/31/25 adjustable rate 3 month CME Term SOFR + 1.65 %

Trust Preferred Securities 6/23/2036 Quarterly by Company 8,248 6.41 % at 3/31/25 adjustable rate 3 month CME Term SOFR + 2.11 %

Subordinated Debentures 11/15/2030 Continuous by Company beginning 11/15/2025 18,000 4.38 % fixed at 3/31/25 until 11/15/25, then adjustable rate 3 month CME Term SOFR + 4.16 %

Total borrowings / weighted average rate as of March 31, 2025

96,114 6.09 %

1 unchanged sentence

Total borrowings $ 92,055

The following tables present information regarding the Company’s outstanding borrowings at December 31, 2023 ($ in thousands):

Description Due date Call Feature Balance at December 31, 2023 Interest Rate

The following tables present information regarding the Company’s outstanding borrowings at December 31, 2024:

($ in thousands)

Description Due date Call Feature Balance Interest Rate

FHLB Principal Reducing Credit 6/26/2028 to 12/20/2028

None $ 802 0.00 % to 1.00 % fixed

FHLB Fixed Rate Credit 1/16/2024 None 80,000 5.59 % fixed

FHLB Fixed Rate Credit 2/27/2024 None 100,000 5.61 % fixed

FHLB Fixed Rate Credit 3/20/2024 None 100,000 5.61 % fixed

FRB Bank Term Funding Program 12/20/2024 None 224,000 4.85 % fixed

FRB Bank Term Funding Program 12/27/2024 None 25,000 4.83 % fixed

Trust Preferred Securities 1/23/2034 Quarterly by Company

beginning 1/23/2009 10,310 8.30 % at 12/31/23 adjustable rate 3 month CME Term SOFR + 2.91 %

Trust Preferred Securities 1/23/2034 Quarterly by Company

beginning 1/23/2009 10,310 8.40 % at 12/31/23 adjustable rate 3 month CME Term SOFR + 3.01 %

Trust Preferred Securities 9/20/2034 Quarterly by Company

beginning 9/20/2009 12,372 7.78 % at 12/31/23 adjustable rate 3 month CME Term SOFR + 2.41 %

Trust Preferred Securities 1/7/2035 Quarterly by Company

beginning 1/7/2010 10,310 7.66 % at 12/31/23 adjustable rate 3 month CME Term SOFR + 2.00 %

Trust Preferred Securities 6/15/2036 Quarterly by Company

beginning 6/15/2011 25,774 7.04 % at 12/31/23 adjustable rate 3 month CME Term SOFR + 1.65 %

Trust Preferred Securities 6/23/2036 Quarterly by Company beginning 6/23/2011 8,248 7.47 % at 12/31/23 adjustable rate 3 month CME Term SOFR + 2.11 %

Subordinated Debentures 11/30/2028 Continuous by Company beginning 11/30/2023 10,000 9.09 % at 12/31/23 adjustable rate 3 month CME Term SOFR + 3.69 %

Subordinated Debentures 11/15/2030 Continuous by Company beginning 11/15/2025 18,000 4.38 % fixed

Trust Preferred Securities 1/23/2034 Quarterly by Company 10,310 7.50 % at 12/31/24 adjustable rate 3 month CME Term SOFR + 2.91 %

Trust Preferred Securities 1/23/2034 Quarterly by Company 10,310 7.61 % at 12/31/24 adjustable rate 3 month CME Term SOFR + 3.01 %

Trust Preferred Securities 9/20/2034 Quarterly by Company 12,372 6.77 % at 12/31/24 adjustable rate 3 month CME Term SOFR + 2.41 %

Trust Preferred Securities 1/7/2035 Quarterly by Company 10,310 6.92 % at 12/31/24 adjustable rate 3 month CME Term SOFR + 2.00 %

Trust Preferred Securities 6/15/2036 Quarterly by Company 25,774 6.01 % at 12/31/24 adjustable rate 3 month CME Term SOFR + 1.65 %

Trust Preferred Securities 6/23/2036 Quarterly by Company 8,248 6.45 % at 12/31/24 adjustable rate 3 month CME Term SOFR + 2.11 %

Subordinated Debentures 11/15/2030 Continuous by Company beginning 11/15/2025 18,000 4.38 % fixed at 12/31/24 until 11/15/25, then adjustable rate 3 month CME Term SOFR + 4.16 %

Total borrowings / weighted average rate as of December 31, 2024

3 unchanged sentences

The Company enters into leases in the normal course of business.

As of September 30, 2024, the Company leased 14 bank branch offices for which the land and buildings are leased and ten branch offices for which the land is leased but the buildings are owned.

As of March 31, 2025, the Company leased 13 bank branch offices for which the land and buildings are leased and nine branch offices for which the land is leased but the buildings are owned.

The Company also leases office space for several operational departments.

The lease agreements have maturity dates ranging from November 2024 through May 2076, some of which include options for multiple five - and ten-year extensions.

The weighted average remaining life of the lease term for these leases was 21.1 years as of September 30, 2024.

All of the Company’s leases are operating leases and the lease agreements have maturity dates ranging from April 2026 through May 2076, some of which include options for multiple five - and ten-year extensions.

The Company includes lease extension options in the lease term if, after considering relevant economic, market, and strategic factors, it is reasonably certain the Company will exercise the option.

The weighted average remaining life of the lease term for these leases was 21.3 years as of March 31, 2025 and 21.2 years as of December 31, 2024.

Certain of the Company's lease agreements include variable lease payments based on changes in inflation, with the impact of that factor being insignificant to the Company's total lease expense.

As permitted by applicable accounting standards, the Company has elected not to recognize leases with original lease terms of twelve months or less (short-term leases) on the Company's consolidated balance sheets.

As permitted by applicable accounting standards, the Company has elected not to recognize leases with original lease terms of 12 months or less (short-term leases) on the Company's consolidated balance sheets.

The short-term lease cost for each period presented was insignificant.

4 unchanged sentences

The Company uses its incremental borrowing rate, on a collateralized basis, at lease commencement to calculate the present value of lease payments when the rate implicit in the lease is not known.

The weighted average discount rates for leases were 3.32 % and 3.19 % as of September 30, 2024 and December 31, 2023, respectively.

The right-of-use assets, included in "Other assets" on the Company's consolidated balance sheet, and lease liabilities, included in "Other liabilities" on the Company's consolidated balance sheet, were $ 14.1 million and $ 14.9 million as of September 30, 2024, respectively, and were $ 17.1 million and $ 17.8 million as of December 31, 2023, respectively.

Total operating lease expenses, included in "Other operating expenses" in the Company's consolidated statement of income, were $ 0.6 million and $ 0.8 million for the three months ended September 30, 2024 and 2023, respectively, and $ 1.8 million and $ 2.3 million for the nine months ended September 30, 2024 and 2023, respectively.

Future undiscounted lease payments for operating leases with initial terms of greater than one year as of September 30, 2024 are as follows:

The weighted average discount rates for leases were 3.34 % as of March 31, 2025 and December 31, 2024.

The right-of-use assets, included in "Other assets" on the Company's consolidated balance sheets, and lease liabilities, included in "Other liabilities" on the Company's consolidated balance sheets, were $ 13.4 million and $ 14.3

million as of March 31, 2025, respectively, and were $ 13.8 million and $ 14.6 million as of December 31, 2024, respectively.

Total operating lease expenses, included in "Other operating expenses" in the Company's consolidated statements of income, were $ 0.6 million and $ 0.7 million for the three months ended March 31, 2025 and 2024, respectively.

Future undiscounted lease payments for operating leases with initial terms of greater than one year as of March 31, 2025 are as follows:

($ in thousands)

October 1, 2024 to December 31, 2024 $ 550

April 1, 2025 to December 31, 2025 $ 1,333

Thereafter 15,033

2 unchanged sentences

Present value of estimated lease payments (lease liability) $ 14,257

Pension Plans

The Company recorded periodic pension cost totaling $ 63,000 and $ 51,000 for the three months ended September 30, 2024 and 2023, respectively, and $ 189,000 and $ 152,000 for the nine months ended September 30, 2024 and 2023, respectively.

Fair Value of Financial Instruments

5 unchanged sentences

Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring and nonrecurring basis at September 30, 2024:

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring and nonrecurring basis at March 31, 2025:

($ in thousands)

Description of Financial Instruments

Fair Value at September 30, 2024 Quoted Prices in Active Markets for Identical Assets

Fair Value at March 31, 2025 Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other

3 unchanged sentences

Securities available for sale:

Treasury $ 123,011 $ — $ 123,011 $ —

Government-sponsored enterprise securities $ 9,938 $ — $ 9,938 $ —

28 unchanged sentences

Matrix pricing is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities.

For the Company, Level 2 securities include U.S Treasury bonds, mortgage-backed securities, commercial mortgage-backed obligations, government-sponsored enterprise securities, and corporate bonds.

For the Company, Level 2 securities include U.S Treasury bonds, mortgage-

backed securities, commercial mortgage-backed obligations, government-sponsored enterprise securities, and corporate bonds.

In cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

12 unchanged sentences

Any fair value adjustments are recorded in the period incurred as provision for credit losses on the consolidated statements of income.

There were no significant changes in the reported amount of Level 3 assets and liabilities measured at fair value on either a recurring or a non-recurring basis as of September 30, 2024.

The carrying amounts and estimated fair values of financial instruments not carried at fair value at September 30, 2024 and December 31, 2023 were as follows:

September 30, 2024 December 31, 2023

There were no significant changes in the reported amount of Level 3 assets and liabilities measured at fair value on either a recurring or a non-recurring basis as of March 31, 2025.

The carrying amounts and estimated fair values of financial instruments not carried at fair value at March 31, 2025 and December 31, 2024 were as follows:

March 31, 2025 December 31, 2024

($ in thousands) Level in Fair

17 unchanged sentences

Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments.

Significant assets and liabilities that are not considered financial assets or liabilities include

net premises and equipment, intangible and other assets such as deferred income taxes, prepaid expense accounts, income taxes currently payable, and other various accrued expenses.

Significant assets and liabilities that are not considered financial assets or liabilities include net premises and equipment, intangible and other assets such as deferred income taxes, prepaid expense accounts, income taxes currently payable, and other various accrued expenses.

In addition, the income tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

Stock-Based Compensation

The Company recorded total stock-based compensation expense of $ 1.4 million and $ 1.2 million for the three months ended September 30, 2024 and 2023, respectively, and $ 3.0 million and $ 3.4 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company recorded total stock-based compensation expense of $ 1.0 million and $ 0.7 million for the three months ended March 31, 2025 and 2024, respectively.

These amounts are included in "Total personnel expense" on the accompanying consolidated statements of income.

The Company recog nized income tax benefits related to stock-based compensation expense in its income statement of $ 304,000 an d $ 278,000 for the three months ended September 30, 2024 and 2023, respectively, and $ 675,000 and $ 798,000 for the nine months ended September 30, 2024 and 2023, respectively.

At September 30, 2024, the sole equity-based compensation plan of the Company was the First Bancorp 2024 Equity Plan (the "Equity Plan"), which was approved by shareholders on May 31, 2024.

As of September 30, 2024, the Equity Plan had 1,929,731 shares remaining available for grant.

During the second quarter, the First Bancorp 2014 Equity Plan expired and was replaced by the Equity Plan.

The Company recog nized income tax benefits related to stock-based compensation expense in its income statement of $ 238,000 an d $ 153,000 for the three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025, the sole equity-based compensation plan of the Company was the First Bancorp 2024 Equity Plan (the "Equity Plan"), which was approved by shareholders on May 31, 2024.

As of March 31, 2025, the Equity Plan had 1,884,484 shares remaining available for grant.

The Equity Plan is intended to serve as a means to attract, retain, and motivate key employees and directors and to associate the interests of the Equity Plan's participants with those of the Company and its shareholders.

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There have been no material changes to the treatment of stock awards and equity grants as discussed in Note 15 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

In addition to employee equity awards, the Company's practice is to grant unrestricted common shares to each non-employee director (currently twelve in total) in June of each year.

The grants were valued at approximately $ 37,500 in 2024.

In addition to employee equity awards, the Company's practice is to grant unrestricted common shares to each non-employee director (currently eleven in total) in June of each year.

The grants were valued at approximately $ 37,500 in 2024 and are expected to be the same in 2025.

Compensation expense associated with these director awards is fully recognized by the date of the award since there are no vesting conditions.

The following table presents information regarding the activity for the first nine months of 2024 related to the Company’s outstanding restricted stock awards:

The following table presents information regarding the activity for the first three months of 2025 related to the Company’s outstanding restricted stock awards:

Long-Term Restricted Stock Awards

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Forfeited or expired during the period ( 4,069 ) 41.88

Nonvested at September 30, 2024 307,870 $ 37.42

Total unrecognized compensation expense as of September 30, 2024 amounted to $ 4.4 million with a weighted average remaining term of 1.9 years.

For the nonvested awards that were outstanding at September 30, 2024, the Company expects to record $ 2.9 million in compensation expense in the next twelve months, $ 1.3 million of which is expected to be recorded in the remaining quarter of 2024.

Nonvested at March 31, 2025 251,324 $ 36.51

Total unrecognized compensation expense as of March 31, 2025 amounted to $ 3.7 million with a weighted average remaining term of 2.3 years.

For the nonvested awards that were outstanding at March 31, 2025, the Company expects to record $ 2.0 million in compensation expense in the next twelve months, $ 1.7 million of which is expected to be recorded in the remaining quarters of 2025.

Earnings Per Share

The following is a reconciliation of the numerators and denominators used in computing Basic and Diluted Earnings Per Common Share ("EPS"):

For the Three Months Ended September 30,

($ in thousands except per share amounts) Income

(Numerator) Shares

(Denominator) Per Share

Amount Income

(Numerator) Shares

(Denominator) Per Share

Net income $ 18,680 $ 29,893

income allocated to restricted stock ( 134 ) ( 247 )

Basic EPS per common share $ 18,546 40,971,520 $ 0.45 $ 29,646 40,744,042 $ 0.73

Net income $ 18,680 40,971,520 $ 29,893 40,744,042

Effect of dilutive securities — 395,223 — 455,016

Diluted EPS per common share $ 18,680 41,366,743 $ 0.45 $ 29,893 41,199,058 $ 0.73

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

($ in thousands except per share amounts) Income

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The components of accumulated other comprehensive income (loss) ("AOCI") for the Company for the periods shown were as follows:

($ in thousands) September 30, 2024 December 31, 2023

($ in thousands) March 31, 2025 December 31, 2024

Unrealized loss on securities available for sale $ ( 321,214 ) $ ( 368,055 )

Deferred tax asset 76,751 92,767

Tax effect 74,501 85,941

Net unrealized loss on securities available for sale ( 246,713 ) ( 282,114 )

Postretirement plans liability ( 25 ) ( 100 )

Deferred tax asset 6 23

Net postretirement plans liability ( 19 ) ( 77 )

Total accumulated other comprehensive loss $ ( 254,806 ) $ ( 308,030 )

The following tables disclose the changes in AOCI for the three and nine months ended September 30, 2024 and 2023 (all amounts are net of tax):

For the Three Months Ended September 30, 2024

($ in thousands) Unrealized Loss on

Available for Sale Postretirement Plans Asset

(Liability) Total

Beginning balance $ ( 315,153 ) $ ( 38 ) $ ( 315,191 )

Other comprehensive income before reclassifications 60,366 — 60,366

Amounts reclassified from accumulated other comprehensive income

Net current period other comprehensive income 60,366 19 60,385

Ending balance $ ( 254,787 ) $ ( 19 ) $ ( 254,806 )

For the Three Months Ended September 30, 2023

($ in thousands) Unrealized Loss on

Available for Sale Postretirement Plans Asset

(Liability) Total

Beginning balance $ ( 338,251 ) $ 109 $ ( 338,142 )

Other comprehensive loss before reclassifications ( 62,644 ) — ( 62,644 )

Amounts reclassified from accumulated other comprehensive income

Net current period other comprehensive (loss) income ( 62,644 ) 34 ( 62,610 )

Ending balance $ ( 400,895 ) $ 143 $ ( 400,752 )

For the Nine Months Ended September 30, 2024

Postretirement plans asset (liability) 111 111

Tax effect ( 26 ) ( 26 )

Net postretirement plans asset (liability) 85 85

Total accumulated other comprehensive income (loss) $ ( 246,628 ) $ ( 282,029 )

The following tables disclose the changes in AOCI for the three months ended March 31, 2025 and 2024 (all amounts are net of tax):

For the Three Months Ended March 31, 2025

($ in thousands) Unrealized Loss on

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Other comprehensive income before reclassifications 35,401 — 35,401

Amounts reclassified from accumulated other comprehensive income

Net current period other comprehensive income 35,401 — 35,401

Ending balance $ ( 246,713 ) $ 85 $ ( 246,628 )

For the Nine Months Ended September 30, 2023

For the Three Months Ended March 31, 2024

($ in thousands) Unrealized Loss on

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Ending balance $ ( 321,915 ) $ ( 58 ) $ ( 321,973 )

Amounts reclassified from AOCI for unrealized gain (loss) on securities available for sale represent realized securities gains or losses, net of tax effects.

Amounts reclassified from AOCI for unrealized gain (loss) on securities AFS represent realized securities gains or losses, net of tax effects.

Amounts reclassified from AOCI for postretirement plans asset (liability) represent amortization of amounts included in AOCI, net of taxes, and are recorded in the "Other operating expenses" line item of the consolidated statements of income.

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All of the Company’s revenues that are in the scope of the “ Revenue from Contracts with Customers ” accounting standard (“ASC 606”) are recognized within noninterest income.

The following table presents the Company’s sources of noninterest income for the three and nine months ended September 30, 2024 and 2023.

The following table presents the Company’s sources of noninterest income for the three months ended March 31, 2025 and 2024.

Items outside the scope of ASC 606 are noted as such.

For the Three Months Ended For the Nine Months Ended

($ in thousands) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

For the Three Months Ended

($ in thousands) March 31, 2025 March 31, 2024

Noninterest Income in-scope of ASC 606:

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There have been no material changes from the Company's revenue streams accounted for under ASC 606 as discussed in Note 20 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Segment Reporting

The Company is a bank holding company, whose principal activity is the ownership and management of its wholly-owned subsidiary, First Bank (the "Bank").

As a community-oriented financial institution, substantially all of the Company’s operations involve the delivery of loan and deposit products or the provision of financial advice to customers.

Management makes operating decisions and assesses performance based on an ongoing review of these banking operations, which constitute the Company’s only operating segment for financial reporting purposes.

The accounting policies of the banking operations segment are the same as those described in the Summary of Significant Accounting Policies as discussed in Note 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

The role of chief operating decision maker is comprised of the executive leadership team to include the Company's Chief Executive Officer, the Bank's Chief Executive Officer, the Company's President, and the Company's Chief Financial Officer.

The chief operating decision makers use pre-tax net income to allocate resources in the annual budget and forecasting process.

The chief operating decision makers consider budget-to-actual variances on a monthly basis for profit measures when making decisions about allocating capital and personnel to the operating segment.

The chief operating decision makers use the Consolidated Statements of Income and Consolidated Balance Sheets to ascertain measures or performance such as revenue, profit or loss, significant expenses and assets.

Depreciation expense amounted to $ 1.8 million, and $ 2.0 million, for the three months ended March 31, 2025 and March 31, 2024, respectively, and is recorded in Occupancy and equipment expense on the Consolidated Statements of Income.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements