What changed in this filing

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Item 1. Business

2026-02-25 compared with 2025-02-26 · 50 added, 49 removed, 350 unchanged (22% of the section changed)

General Description

The Company is the fourth largest bank holding company headquartered in North Carolina.

The Company is the fourth largest commercial bank holding company headquartered in North Carolina.

At December 31, 2025, the Company had total consolidated assets of $12.7 billion, total loans of $8.7 billion, total deposits of $10.7 billion, and shareholders’ equity of $1.7 billion.

Our principal activity is the ownership and operation of the Bank, a state-chartered bank with its headquarters in Southern Pines, North Carolina, through which we engage in a full range of banking activities.

Our principal executive offices are located at 300 SW Broad St., Southern Pines, North Carolina 28387, and our telephone number is (910) 246-2500.

Our principal executive offices are located at 205 SE Broad St., Southern Pines, North Carolina 28387, and our telephone number is (910) 246-2500.

The Company was incorporated in North Carolina on December 8, 1983 for the purpose of acquiring 100% of the outstanding common stock of the Bank through a stock-for-stock exchange.

The Bank began banking operations in 1935 as the Bank of Montgomery, named for the county in which it operated.

The Bank began banking operations in 1935 as the Bank of Montgomery, named for the county in which it originally operated.

In 1985, its name was changed to First Bank and in September 2013, the Company and the Bank moved their headquarters and main offices to Southern Pines, North Carolina.

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Magnolia Financial is a business financing company that offers accounts receivable financing and factoring, inventory financing, and purchase order financing throughout the southeastern United States.

First Troy SPE, LLC is a holding entity for certain foreclosed properties.

First Troy SPE, LLC is a holding entity for certain foreclosed real estate.

SBA Complete, which was in the process of dissolution as of December 31, 2024, was formerly a subsidiary of the Bank and specialized in providing consulting services for financial institutions across the country related to SBA loan origination and servicing.

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We maintain a diversified loan portfolio by providing a broad range of commercial and retail lending services to business entities and individuals.

We provide commercial business loans, commercial and residential real estate construction and mortgage loans, revolving lines of credit, letters of credit, and loans for personal uses, home improvement, and automobiles.

Commercial real estate loans include loans secured by owner-occupied and non-owner occupied commercial buildings for improved commercial, office, retail, and warehouse and shopping center space.

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These lines of credit are typically offered to small used car dealers and are subject to traditional floor-plan administration procedures.

We generally do not buy loan participations or portions of national credits, but we may acquire balances subject to participation agreements through acquisition.

The total of loan participations purchased at December 31, 2024 was nominal.

In 2025, we established a loan participation initiative to engage with regional and national commercial borrowers within the Bank’s footprint and nearby jurisdictions.

The total of loan participations as of December 31, 2025 was nominal.

Because the majority of our customers are individuals and small- to medium-sized businesses, we do not believe that the loss of a single customer or group of customers would have a material adverse impact on the Bank.

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Loans are approved under our loan policy, which provides that lending officers have sole authority to approve loans of various amounts commensurate with their seniority, experience and needs within the market.

All requests for extensions of credit in excess of any individual lending officer's authority are reviewed by one of our regional credit officers, who can approve loans up to their respective lending authority of $10 million.

When the request for approval exceeds the authority level of the regional credit officer, the request is then reviewed for approval by the Bank’s Chief Credit Officer who has $25 million in lending authority.

For loans in excess of this amount, the Chief Executive Officer, the President and the Chief Credit Officer have joint authority to approve loans up to the in-house limit of $150 million.

The Board, generally through its Executive Loan Committee, approves loans in excess of the in-house limit.

For loans in excess of this amount, the Bank's Chief Executive Officer, the Company's President and the Bank's Chief Credit Officer have joint authority to approve loans up to $125 million.

The Board, generally through its Executive Loan Committee, approves loans in excess of $125 million.

In addition, the Executive Loan Committee reviews and approves loans to executive officers, directors, and their affiliates and recommends those loans to the Board for its approval.

Our legal lending limit to any one borrower is approximately $223.5 million.

All lending authorities are based on the borrower’s total credit exposure, which is an aggregate of the Bank’s lending relationship with the borrower either directly or indirectly through loan guarantees or other borrowing entities related to the borrower through ownership or other control relationship.

We continually monitor our loan portfolio to identify areas of concern and to enable us to take corrective action.

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Guilford County, North Carolina 4.9 % 4.9 %

No other market (as defined by county) had total loans outstanding in excess of 5% of the total portfolio at either period presented.

No other county had total loans outstanding in excess of 5% of the total portfolio at either period presented.

We have no significant concentrations in a few borrowers or in individual Metropolitan Statistical Areas.

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Securities rated below Moody’s BAA or Standard and Poor’s BBB generally will not be purchased.

Securities rated below a single-A rating are periodically reviewed for creditworthiness.

We may purchase non-rated municipal bonds only if the issues of bonds are located in our general market area and we determine these bonds have a credit risk no greater than the minimum ratings referred to above.

We also are authorized by our Board to invest a portion of our securities portfolio in high quality corporate bonds, with the amount of such bonds not to exceed 15% of the entire securities portfolio.

We also are authorized to invest a portion of our securities portfolio in high quality corporate bonds, with the amount of such bonds not to exceed 15% of the entire securities portfolio.

Prior to purchasing a corporate bond, the Bank’s management performs due diligence on the issuer of the bond, and the purchase is not made unless we believe that the purchase of the bond bears no more risk to the Bank than would an unsecured loan to the same company.

On a periodic basis, as determined based on materiality and other relevant factors, we review the financial statements of the issuers of the corporate bonds that we own for any signs of deterioration so that we can take timely action if deemed necessary.

Our Chief Investment Officer implements the investment policy, monitors the investment portfolio, recommends portfolio strategies, and reports to the Bank’s Asset Liability Committee ("ALCO"), which also has oversight of the Bank's investment activities.

ALCO generally meets at least quarterly and reviews investment activity, portfolio composition, portfolio tenure, and other elements as necessary to assess the overall position of the securities portfolio and risk of the portfolio relative to the overall balance sheet.

Our Chief Investment Officer implements the investment policy, monitors the investment portfolio, recommends portfolio strategies, and reports to the Bank’s Investment Committee.

The Investment Committee generally meets at least quarterly and reviews investment activity, portfolio composition, portfolio tenure, and other elements as necessary to assess the overall position of the securities portfolio and risk of the portfolio relative to the overall balance sheet.

In addition, reports of all purchases, sales, issuer calls, net profits or losses and market appreciation or depreciation of the securities portfolio are reviewed by the Board.

Once a quarter, our interest rate risk exposure is evaluated by ALCO and a summary report is presented to the Board.

Once a quarter, our interest rate risk exposure is evaluated by the Bank’s Asset Liability Committee ("ALCO") and a summary report is presented to the Board.

A subset of the Bank's ALCO meets more regularly to evaluate a number of possible interest rate related activities.

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These deposit accounts have a variety of interest rates and terms and consist of interest-bearing and noninterest-bearing accounts, including commercial and retail checking accounts, savings accounts, money market accounts, and time deposits, including various types of certificates of deposits and individual retirement accounts.

The Bank is a member of the CDARS program, which gives our customers the ability to obtain FDIC insurance on deposits of up to $50 million, while continuing to work directly with their local First Bank deposit team.

The Bank is a member of the CDARS and ICS programs, which gives our customers the ability to obtain FDIC insurance on deposits of up to $50 million, while continuing to work directly with their local First Bank deposit team.

Brokered deposits are deposits obtained by utilizing an outside broker that is paid a fee.

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Market Area and Competition

We are a community-oriented commercial bank offering a wide variety of financial services to meet the needs of the communities we serve.

We are a community-oriented commercial bank offering a wide variety of financial services to meet the needs of our customers and communities.

As of December 31, 2025, we conducted business from 113 branches, with 100 branch offices located across North Carolina and 13 branches in South Carolina.

Our branches and facilities are located in small- to medium-sized communities and in larger metropolitan areas with economies based primarily on a variety of industries, including services and manufacturing.

Our branch footprint includes larger North Carolina cities, including Charlotte, Raleigh (Triangle region), Greensboro/Winston-Salem (Triad region), Asheville and Wilmington, and larger South Carolina cities including Greenville, Columbia and Charleston.

Our branch footprint includes larger North Carolina cities, including Charlotte, Raleigh (Triangle region), Greensboro/Winston-Salem/High Point (Triad region), Asheville and Wilmington, and larger South Carolina cities including Greenville, Columbia and Charleston.

Our primary loan markets were previously presented in the Loan Concentrations section above.

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Human Capital Resources

At First Bank, we consider our associates to be one of our competitive advantages, and continued investment in human capital is a top priority for us.

At First Bank, we consider our associates to be our primary competitive advantage, and continued investment in human capital is a top priority for us.

We have historically focused on building a rewarding work environment as we believe that valued and engaged associates lead to satisfied and active customers, which contributes to enriched shareholder value.

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Our workforce consists of approximately 72% females and 19% minorities.

Of our officer population, 73% are female or minorities, while our executive management team consists of 27% female or minority executives.

Of our officer population, 73% are female or minorities, while our senior management team consists of 29% female or minority executives.

In 2020, we formed a Diversity Council, which is chaired by our CEO and meets regularly.

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We are proud to offer a comprehensive benefits package that includes medical, dental, vision and life insurance, paid time-off, 401(k) profit-sharing plan participation and an employee stock purchase plan.

In 2024, the Company’s 401(k) plan matched 100% of each employee’s elective deferral amount, up to the first 4% of their contribution.

The Company will pay a 2% non-elective employer contribution to each associate based on 2024 eligible 401(k) compensation to make up the difference from the 6% that the Company historically matched.

The Company’s benefits programs also include an Employee Assistance Program which provides all associates a comprehensive and personalized process to meet their individual needs and support them through issues they may

In 2025, the Company’s 401(k) plan matched 100% of each employee’s elective deferral amount, up to 6% of their compensation.

The program provides unlimited phone access for information, resources, and referrals and provides sessions with a counselor for the associate and their family members.

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Under Federal Reserve policy and the Dodd-Frank Act, the Company is required to act as a source of financial and managerial strength to the Bank.

This means that the Company is required to commit, as necessary, capital and resources to support the Bank, including at times when the Company may not be in a financial position to provide such resources or when it may not be in the Company’s or its shareholders’ best interests to do so.

This means that the Company is required to

commit, as necessary, capital and resources to support the Bank, including at times when the Company may not be in a financial position to provide such resources or when it may not be in the Company’s or its shareholders’ best interests to do so.

Any capital loans a bank holding company makes to a bank subsidiary are subordinate to deposits and to certain other indebtedness of that subsidiary.

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The Bank is a North Carolina state-chartered bank and is a member of the Federal Reserve.

Federal banking regulations applicable to all depository financial institutions that, among other things, provide federal bank regulatory agencies with powers to prevent unsafe and unsound banking practices, restrict preferential loans by banks to their “insiders," require banks to keep information on loans to major shareholders and executive officers, and bar certain director and officer interlocks between financial institutions.

Federal banking regulations applicable to all depository financial institutions provide federal bank regulatory agencies with powers to prevent unsafe and unsound banking practices, restrict preferential loans by banks to their “insiders," require banks to keep information on loans to major shareholders and executive officers, and bar certain director and officer interlocks between financial institutions.

As a state-chartered bank, the Bank is subject to regulation by the Commissioner.

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The Bank is subject to a variety of federal and state consumer protection laws and regulations that govern its relationships and interactions with consumers, including those that impose certain disclosure requirements and that govern the manner in which the Bank takes deposits, makes and collect loans, and provides other services.

In recent years, examination and enforcement by federal and state banking agencies for non-compliance with consumer protection laws and regulations have increased and become more intense.

Failure to comply with these laws and regulations may subject the Bank to various penalties.

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A bank's community reinvestment record is also considered by the applicable banking agencies in evaluating mergers, acquisitions, and applications to open a branch or facility.

In some cases, a bank's failure to comply with the CRA or the filing of CRA protests by interested parties during applicable comment periods can result in the denial or delay of such transactions.

In some cases, a bank's failure to comply with the CRA or the filing of CRA protests by interested parties during applicable comment periods can result in the denial of approval or delay of such transactions.

Insider Credit Transactions.

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Banks are also subject to certain lending limits and restrictions on overdrafts to insiders.

A violation of these restrictions may result in the assessment of substantial civil monetary penalties, regulatory enforcement actions, and other regulatory sanctions.

A violation of these restrictions may

result in the assessment of substantial civil monetary penalties, regulatory enforcement actions, and other regulatory sanctions.

The Dodd-Frank Act and federal regulations place additional restrictions on loans to insiders and generally prohibit loans to executive officers other than for certain specified purposes.

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Certain non-capital safety and soundness standards also are imposed upon banks.

These standards cover, among other things, internal controls, information systems and internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, fees and benefits, such other operational and managerial standards as the agency determines to be appropriate, and standards for asset quality, earnings, regulatory capital and liquidity.

These standards cover, among other things, internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, fees and benefits, such other operational and managerial standards as the applicable regulator determines to be appropriate, and standards for asset quality, earnings, regulatory capital and liquidity.

In addition, each bank must implement a comprehensive written information security program that includes administrative, technical, and physical safeguards appropriate to the institution's size and complexity and the nature and scope of its activities.

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In general, these rules limit the Bank's ability to pay dividends unless the Bank's common equity conservation buffer exceeds the minimum required capital ratio by at least 2.5% of risk-weighted assets.

and a prospective rate of earnings retention that is consistent with the bank holding company's capital needs, asset quality, and overall financial condition.

The Federal Reserve has also issued a policy statement expressing the view that although no specific regulations restrict dividend payments by bank holding companies other than state corporate laws, a bank holding company should not pay cash dividends unless its earnings for the past year are sufficient to cover both the cash dividends and a prospective rate of earnings retention that is consistent with the bank holding company's capital needs, asset quality, and overall financial condition.

A bank holding company's ability to pay dividends may also be restricted if a subsidiary bank becomes under-capitalized.

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Dodd-Frank Act

The Dodd-Frank Act and its related regulations significantly changed the bank regulatory structure and affects the lending, deposit, investment, trading, and operating activities of banks and bank holding companies, including the Bank and the Company.

The Dodd-Frank Act and its related regulations significantly changed the bank regulatory structure and affect the lending, deposit, investment, trading, and operating activities of banks and bank holding companies, including the Bank and the Company.

Some of the provisions of the Dodd-Frank Act that impact the Company's and the Bank's business and operations are summarized below.

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Additionally, management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption, and maintenance of the institution’s operations after a cyber-attack involving destructive malware.

A financial institution is also expected to develop appropriate processes to enable recovery of data and business operations and address rebuilding network capabilities and restoring data if

the institution or its critical service providers fall victim to this type of cyber-attack.

A financial institution is also expected to develop appropriate processes to enable recovery of data and business operations and address rebuilding network capabilities and restoring data if the institution or its critical service providers fall victim to this type of cyber-attack.

The Company has multiple information security programs that reflect the requirements of this guidance.

If, however, we fail to observe the regulatory guidance in the future, we could be subject to various regulatory sanctions, including financial penalties.

In November 2021, the federal banking regulators adopted a regulation that, among other things, requires a banking organization to notify its primary federal regulators as soon as possible and within 36 hours after identifying a “computer-security incident” that the banking organization believes in good faith is reasonably likely to materially disrupt or degrade its business or operations in a manner that would, among other things, jeopardize the viability of its operations, result in customers being unable to access their deposit and other accounts, result in a material loss of revenue, profit or stock price, or pose a threat to the financial stability of the U.S.

In July, 2023, the SEC adopted new cybersecurity disclosure rules for public companies that require disclosure regarding cybersecurity risk management (including the role of the Board in overseeing cybersecurity risks, management’s role and expertise in assessing and managing cybersecurity risks, and processes for assessing, identifying and managing cybersecurity risks) in annual reports.

These new cybersecurity disclosure rules also require the disclosure of material cybersecurity incidents in a Form 8-K, generally within four days of determining an incident is material.

A banking organization is required to notify its primary federal regulators as soon as possible and within 36 hours after identifying a “computer-security incident” that the banking organization believes in good faith is reasonably likely to materially disrupt or degrade its business or operations in a manner that would, among other things, jeopardize the viability of its operations, result in customers being unable to access their deposit and other accounts, result in a material loss of revenue, profit or stock price, or pose a threat to the financial stability of the U.S.

The SEC cybersecurity disclosure rules for public companies require disclosures regarding cybersecurity risk management (including the role of the Board in overseeing cybersecurity risks, management’s role and expertise in assessing and managing cybersecurity risks, and processes for assessing, identifying and managing cybersecurity risks) in annual reports.

These cybersecurity disclosure rules also require the disclosure of material cybersecurity incidents in a Form 8-K, generally within four business days of determining an incident is material.

Refer to Item 1A, “Risk Factors,” and Item 1C, "Cybersecurity," for additional disclosures related to cybersecurity.

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Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations.

The AML, which amended the BSA, is intended to be a comprehensive reform and modernization of the United States bank secrecy and anti-money laundering laws.

The AML, which amended the BSA, was intended to be a comprehensive reform and modernization of the United States bank secrecy and anti-money laundering laws.

Among other things, it codifies a risk-based approach to anti-money laundering compliance for financial institutions;

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The United States has imposed economic sanctions that affect transactions with designated foreign countries, nationals, and others which are administered by OFAC.

Failure to comply with these sanctions could have serious legal and reputational consequences, including causing applicable

bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required.

Failure to comply with these sanctions could have serious legal and reputational consequences, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required.

Community Reinvestment Act.

In October 2023, the Federal Reserve, FDIC, and OCC issued a final rule to amend their regulations implementing the CRA.

The rule materially revises the current CRA framework, including the assessment areas in which a bank is evaluated to include activities associated with online and mobile banking, the tests used to evaluate the bank in its assessment areas, new methods of calculating credit for lending, investment and service activities, and additional data collection and reporting requirements.

The rule is expected to result in a significant increase in the thresholds for large banks to receive “Outstanding” ratings in the future.

Most of the provisions become applicable on January 1, 2026.

Reporting of the collected data will not be required until 2027.

The rule would have materially revised the current CRA framework, including the assessment areas in which a bank is evaluated to include activities associated with online and mobile

banking, the tests used to evaluate the bank in its assessment areas, new methods of calculating credit for lending, investment and service activities, and additional data collection and reporting requirements.

The rule would have resulted in a significant increase in the thresholds for large banks to receive “Outstanding” ratings in the future.

Most of the provisions of the rule were scheduled to become applicable on January 1, 2026.

Reporting of the collected data would be required in 2027.

The 2023 rule was preliminarily enjoined in March 2024, following legal challenge.

In July 2025, the Federal Reserve, the OCC and the FDIC proposed to rescind the 2023 rule and replace it with the prior CRA regulations.

The Federal Reserve continues to apply the 1995 CRA regulations.

Incentive Compensation.

In June 2010, the federal bank regulatory agencies issued comprehensive final guidance on incentive compensation policies intended to ensure that the incentive compensation policies of financial institutions are not detrimental to the safety and soundness of such institutions by encouraging excessive risk-taking.

The federal bank regulatory agencies comprehensive guidance on incentive compensation policies are intended to ensure that the incentive compensation policies of financial institutions are not detrimental to the safety and soundness of such institutions by encouraging excessive risk-taking.

This guidance covers all employees who have the ability to materially affect the risk profile of a financial institution, either individually or as part of a group, and is based upon the key principles that a financial institution’s incentive compensation arrangements should (1) provide incentives that do not encourage risk-taking beyond the institution’s ability to effectively identify and manage risks;

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Digital Asset Regulation

Although the federal banking agencies have not developed formal regulations governing the digital asset activities of banking organizations, the supervisory framework dictates that, in order to effectively identify and manage digital asset-related risks and obtain supervisory non-objection to the proposed engagement in digital asset activities, banking organizations must implement appropriate risk management practices, including with respect to board and management oversight, policies and procedures, risk assessments, internal controls and monitoring.

Although the federal banking and securities agencies are in the process of considering regulations governing the digital asset activities of banking organizations, it is not expected that such regulations will be issued until the third quarter of 2026.

The existing supervisory framework dictates that, in order to effectively identify and manage digital asset-related risks and obtain supervisory non-objection to the proposed engagement in digital asset activities, banking organizations must implement appropriate risk management practices, including with respect to board and management oversight, policies and procedures, risk assessments, internal controls and monitoring.

Future Legislation and Regulation

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Federal and state regulatory agencies governing the Company and the Bank also periodically propose and adopt changes to their regulations or change the manner in which existing regulations are applied.

The substance or impact of pending or future legislation or regulation, or the application thereof, cannot be predicted, although enactment of the proposed legislation could impact the regulatory structure under which we operate and may significantly increase costs, impede the efficiency of internal business processes, require an increase in regulatory capital, require modifications to business strategy, and limit the ability to pursue business opportunities in an efficient manner, or otherwise adversely affect our operations and financial condition.

The substance or impact of pending or future legislation or regulation, or the application thereof, cannot be predicted, although enactment of future legislation or the issuance of new regulations could impact the regulatory structure under which we operate and may significantly increase costs, impede the efficiency of internal business processes, require an increase in regulatory capital, require modifications to business strategy, and limit the ability to pursue business opportunities in an efficient manner, or otherwise adversely affect our operations and financial condition.

Available Information

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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-K

Item 1. Business