First Bancorp Reports Second Quarter Results

Second Quarter 2026 Financial Data (Dollars in 000s, except
per share data) Q2-2026 Q1-2026 Q2-2025 Summary Income Statement Total interest income $ 148,315 $ 142,390 $ 136,731 Total interest expense 37,049 35,274 40,065 Net interest income 111,266 107,116 96,666 Provision for credit losses 1,169 3,083 2,212 Noninterest income 16,034 15,178 14,292 Noninterest expenses 62,761 60,218 58,924 Income tax expense 12,851 12,334 11,256 Net income $ 50,519 $ 46,659 $ 38,566 Key Metrics Diluted EPS $ 1.22 $ 1.13 $ 0.93 Book value per share 41.49 40.68 37.53 Tangible book value per
share 29.84 29.01 25.82 ROA 1.56 % 1.48 % 1.24 % ROCE 11.89 % 11.22 % 10.11 % ROTCE 16.88 % 16.05 % 15.25 % NIM 3.71 % 3.67 % 3.32 % NIM- T/E 3.73 % 3.69 % 3.32 % Efficiency ratio 49.12 % 49.05 % 53.00 % Quarterly NCO ratio 0.04 % 0.06 % 0.06 % ACL ratio 1.39 % 1.42 % 1.47 % Capital Ratios (1) Tangible common equity
to tangible assets 9.83 % 9.63 % 8.83 % Common equity tier I
capital ratio 14.09 % 14.13 % 14.64 % Total risk-based capital
ratio 16.06 % 16.12 % 16.90 % (1) June 30, 2026 ratios are preliminary.

Second Quarter 2026 Highlights

D-EPS was $1.22 per share for the second quarter of 2026 compared to $1.13 for the linked quarter and $0.93 for the like quarter. The net interest margin was 3.71% for the quarter ended June 30, 2026, an expansion of 0.04% from the linked quarter and 0.39% from the like quarter. The efficiency ratio for the quarter ended June 30, 2026 was 49.12%, compared to 49.05% for the linked quarter and 53.00% for the like quarter. Total assets exceeded $13 billion at June 30, 2026, the highest level in First Bancorp's history. Total loans were $9.0 billion at June 30, 2026, representing an increase of $194.9 million, or 8.9% annualized. Total loan yield was 5.67%, up 10 basis points from the linked quarter and 14 basis points from the like quarter. The yield on securities decreased 3 basis points to 2.71% from 2.74% for the linked quarter. Total cost of funds increased 3 basis points to 1.34% for the quarter ended June 30, 2026 from 1.31% for the linked quarter and decreased 14 basis points from the like quarter. Average core deposits were $11.0 billion, an increase of $181.0 million for the linked quarter and $268.1 million from the like quarter. Total cost of deposits was 1.31%, an increase of 3 basis points for the linked quarter and a decrease of 12 basis points from the like quarter. Noninterest expenses of $62.8 million represented a $2.5 million increase from the linked quarter and a $3.8 million increase from the like quarter. The linked quarter increase was driven by a $2.0 million increase in Total personnel expense. Noninterest-bearing demand deposits were $3.6 billion, representing 32% of total deposits at June 30, 2026. During the second quarter of 2026, period end customer deposits grew by 2.6% annualized. The loan-to-deposit ratio was 81.1% as of June 30, 2026. On July 14, 2026, First Bancorp announced its pending acquisition of First Carolina Bancshares Corporation, scheduled to close in late 2026 or early 2027.

Story Continues

SOUTHERN PINES, N.C., July 22, 2026 /PRNewswire/ -- First Bancorp (the "Company") (NASDAQ - FBNC), the parent company of First Bank, reported unaudited second quarter earnings today. The Company reported net income of $50.5 million, or $1.22 diluted earnings per share ("D-EPS"), for the three months ended June 30, 2026 compared to $46.7 million, or $1.13 D-EPS, for the three months ended March 31, 2026 ("linked quarter") and $38.6 million, or $0.93 D-EPS, for the second quarter of 2025 ("like quarter").

On July 14, 2026, the Company announced an agreement to acquire First Carolina Bancshares Corporation ("First Carolina"), and its subsidiary, Carolina Bank & Trust Company ("Carolina Bank") headquartered in Florence, South Carolina, in a 75% stock and 25% cash transaction. This transaction is subject to regulatory approvals and approval of First Carolina's shareholders, and is expected to close in the late fourth quarter of 2026 or early first quarter of 2027. Carolina Bank operates 14 branches throughout the Pee Dee region of South Carolina and had approximately $831 million in total assets, $596 million in loans, and $714 million in deposits at June 30, 2026.

The Company continued to enhance net interest income and net interest margin ("NIM") during the second quarter of 2026. The Company recorded net interest income of $111.3 million for the current quarter, compared to $107.1 million for the linked quarter and $96.7 million for the like quarter. NIM for the second quarter of 2026 expanded to 3.71% from 3.67% for the linked quarter and 3.32% for the like quarter.

Noninterest expenses were $62.8 million for the second quarter of 2026, up from $60.2 million for the linked quarter, and $58.9 million for the like quarter. The efficiency ratio was 49.12% for the quarter ended June 30, 2026, compared to 49.05% for the linked quarter and 53.00% for the like quarter.

Richard H. Moore, Chairman and CEO of the Company, stated, "First Bancorp continued to build on its positive start to 2026 with strong second quarter financial results driven by continued margin expansion, prudent balance sheet execution, high quality loans and a controlled efficiency ratio. Earnings continue to benefit from the repositioning of lower-yielding assets into higher-yielding opportunities, while our liquidity position, capital levels, and credit quality remain strong. We are pleased with our performance through the first half of the year and remain confident in our ability to sustain positive momentum and deliver continued success in 2026. We are excited about the acquisition of First Carolina which brings talented bankers and will help us accelerate our South Carolina growth expansion."

Net Interest Income and Net Interest Margin

Net interest income for the second quarter of 2026 was $111.3 million, an increase of 3.9% from the linked quarter of $107.1 million and an increase of 15.1% from the like quarter of $96.7 million. The increase in net interest income from the linked and like quarters resulted from additional loan volume and increasing loan yield through originations as well as one additional earning day compared to the linked quarter. The increase from the like quarter also resulted from our focused efforts to manage deposit costs after the rate cuts by the Federal Reserve in 2025.

The Company's NIM for the second quarter of 2026 was 3.71%, an increase of 4 basis points from the linked quarter and 39 basis points from the like quarter.

The linked quarter expansion of NIM was driven a $114.9 million increase in average loans along with a 10 basis points expansion in loan yield. Additionally, short-term investments contributed an additional $1.5 million from increased balances partially reduced by lower yields. Offsetting these increases, the cost of interest bearing deposits increased 5 basis points on growth of $98.8 million in average balances. Driving these increases, the average balance of money market deposits increased $99.6 million while the cost of those deposits increased 8 basis points.

The like quarter expansion of NIM was driven by growth of $708.9 million in average loans, coupled with a 14 basis point yield increase as well as the cost of interest bearing deposits decreasing 20 basis points. The Company shifted its mix of interest-earning assets to higher yielding assets from the like quarter, with loans increasing from 70.1% of average interest-earning assets to 74.1% in the current quarter, while securities contracted from 25.6% of average interest-earning assets to 22.3% and short-term investments contracted from 4.3% of average interest-bearing assets to 3.7%.

For the Three Months Ended YIELD INFORMATION June 30,
2026 March 31,
2026 June 30,
2025 Yield on loans 5.67 % 5.57 % 5.53 % Yield on securities 2.71 % 2.74 % 2.41 % Yield on other earning assets 3.99 % 4.36 % 4.63 % Yield on total interest-earning assets 4.95 % 4.88 % 4.69 % Cost of interest-bearing deposits 1.94 % 1.89 % 2.14 % Cost of borrowings 6.64 % 6.68 % 7.22 % Cost of total interest-bearing liabilities 1.99 % 1.94 % 2.20 % Total cost of funds 1.34 % 1.31 % 1.48 % Cost of total deposits 1.31 % 1.28 % 1.43 % Net interest margin (1) 3.71 % 3.67 % 3.32 % Net interest margin - tax-equivalent (2) 3.73 % 3.69 % 3.32 % Average prime rate 6.75 % 6.75 % 7.50 %

(1) Calculated by dividing annualized net interest income by average earning assets for the period. (2) Calculated by dividing annualized tax-equivalent net interest income by average earning assets for the period. The tax-equivalent amount reflects the tax benefit that the Company receives related to its tax-exempt loans and securities, which carry interest rates lower than similar taxable investments due to their tax-exempt status. This amount has been computed using the expected tax rate and is reduced by the related nondeductible portion of interest expense.

See Appendix H regarding loan purchase discount accretion and its impact on the Company's NIM.

Provision for Credit Losses and Credit Quality

For the three months ended June 30, 2026, March 31, 2026 and June 30, 2025, the Company recorded $1.2 million, $3.1 million and $2.2 million in provision for credit losses, respectively. The provision for the second quarter of 2026 was driven by net charge-offs of $1.0 million. The Allowance for Credit Losses increased $0.2 million to $124.9 million, or 1.39% of loans. Additionally, the $22 thousand provision for unfunded commitments during the quarter was the result of additional unfunded lending commitments.

The Company did not adjust its incremental reserve for potential exposure from Hurricane Helene, maintaining a $1.9 million reserve as of June 30, 2026. The remaining incremental reserve contributed two basis points to the Allowance for Credit Losses at period end.

Asset quality remained strong with annualized net loan charge-offs of 0.04% for the second quarter of 2026. Total nonperforming assets ("NPAs") totaled $44.9 million at June 30, 2026, or 0.34% of total assets, up slightly from 0.32% at March 31, 2026 and 0.28% at June 30, 2025.

The following table presents the summary of NPAs and asset quality ratios for each period.

ASSET QUALITY DATA

($ in thousands) June 30,
2026 March 31,
2026 June 30,
2025 Nonperforming assets Nonaccrual loans $ 44,283 $ 41,032 $ 34,625 Accruing loans > 90 days past due — — — Total nonperforming loans 44,283 41,032 34,625 Foreclosed real estate 659 740 1,218 Total nonperforming assets $ 44,942 $ 41,772 $ 35,843 Asset Quality Ratios Quarterly net charge-offs to average loans - annualized 0.04 % 0.06 % 0.06 % Nonperforming loans to total loans 0.49 % 0.47 % 0.42 % Nonperforming assets to total assets 0.34 % 0.32 % 0.28 % Allowance for credit losses to total loans 1.39 % 1.42 % 1.47 %

Noninterest Income

Total noninterest income for the second quarter of 2026 was $16.0 million, a $0.9 million increase from the linked quarter, primarily related to a $0.7 million increase in Other income, net. The current quarter reflected a 12.2% increase from $14.3 million for the like quarter, primarily related to a $1.0 million increase in Other income net.

Noninterest Expenses

Noninterest expenses amounted to $62.8 million for the second quarter of 2026 compared to $60.2 million for the linked quarter and $58.9 million for the like quarter. The $2.5 million, or 4.2%, increase in noninterest expense from the linked quarter was driven by a $2.0 million increase in Total personnel expenses. The $3.8 million increase from the like quarter was driven by a $3.3 million increase in Total personnel expenses. While noninterest expenses have been increasing, they are the result of the Company's continued growth as the efficiency ratio was 49.12% for the quarter ended June 30, 2026, compared to 49.05% for the linked quarter and 53.00% for the like quarter.

Income Taxes

Income tax expense totaled $12.9 million for the second quarter of 2026 compared to $12.3 million for the linked quarter and $11.3 million for the like quarter, reflecting effective tax rates of 20.3%, 20.9% and 22.6% for the respective periods.

Balance Sheet

Total assets at June 30, 2026 were $13.0 billion, an increase of $93.9 million, or 2.9% annualized, from the linked quarter and $433.4 million, or 3.4%, from a year earlier.

Key period end balance sheet components are presented below.

BALANCES

($ in thousands) June 30,
2026 March 31,
2026 June 30,
2025 Change
2Q26 vs 1Q26 Change
2Q26 vs 2Q25 Total assets $ 13,041,615 $ 12,947,734 $ 12,608,265 0.7 % 3.4 % Loans 8,988,748 8,793,814 8,225,650 2.2 % 9.3 % Investment securities 2,448,787 2,491,035 2,661,236 (1.7) % (8.0) % Total cash and cash equivalents 550,332 597,991 711,286 (8.0) % (22.6) % Noninterest-bearing deposits 3,597,565 3,596,629 3,542,626 — % 1.6 % Interest-bearing deposits 7,487,302 7,415,854 7,287,754 1.0 % 2.7 % Borrowings 74,717 74,643 92,237 0.1 % (19.0) % Shareholders' equity 1,716,460 1,682,950 1,556,180 2.0 % 10.3 %

Driven by principal paydowns and maturities, total investment securities decreased to $2.4 billion at June 30, 2026, a $42.2 million decrease from the linked quarter. Total unrealized losses on available for sale investment securities were $204.5 million at June 30, 2026, as compared to $197.7 million at March 31, 2026 and $298.9 million at June 30, 2025.

Total loans were $9.0 billion at June 30, 2026, an increase of $194.9 million, or 8.9% annualized, from March 31, 2026 and an increase of $763.1 million, or 9.3%, from June 30, 2025. Adjusting for the paydown of one larger seasonal loan, loan growth for the current quarter was 10.9% annualized. Please see the below table for total loan portfolio mix. As of June 30, 2026, there were no notable concentrations in geographies within North Carolina or South Carolina or within industries, including in office or hospitality categories, which are included in the "commercial real estate - non-owner occupied" category in the table below. The Company's exposure to non-owner occupied office loans represented approximately 6.2% of the total portfolio at June 30, 2026, with the largest loan being $33.0 million and with an average loan outstanding balance of $1.4 million. Non-owner occupied office loans are generally in non-metro markets and the ten largest loans in this category represent less than 2% of the total loan portfolio.

The following table presents the period end balance and portfolio percentage by loan category.

LOAN PORTFOLIO June 30, 2026 March 31, 2026 June 30, 2025 ($ in thousands) Amount Percentage Amount Percentage Amount Percentage Commercial and industrial $ 1,014,295 11 % $ 1,000,037 11 % $ 911,227 11 % Construction, development & other land
loans 847,912 10 % 821,826 10 % 633,529 8 % Commercial real estate - owner occupied 1,358,100 15 % 1,352,473 15 % 1,254,596 15 % Commercial real estate - non-owner
occupied 2,974,749 33 % 2,921,210 33 % 2,758,629 34 % Multi-family real estate 619,489 7 % 545,586 6 % 509,419 6 % Residential 1-4 family real estate 1,728,367 19 % 1,717,550 20 % 1,731,397 21 % Home equity loans/lines of credit 377,949 4 % 369,062 4 % 355,876 4 % Consumer loans 68,692 1 % 66,430 1 % 70,137 1 % Loans, gross 8,989,553 100 % 8,794,174 100 % 8,224,810 100 % Unamortized net deferred loan
fees/(costs) (805) (360) 840 Total loans $ 8,988,748 $ 8,793,814 $ 8,225,650

Total deposits were $11.1 billion at June 30, 2026, an increase of $72.4 million, or 2.6% annualized, from March 31, 2026 and $254.5 million, or 2.3%, from June 30, 2025.

The Company has a diversified and granular deposit base which has remained a stable funding source with noninterest-bearing deposits comprising 32% of total deposits at June 30, 2026. As presented in the table below, our deposit mix has remained relatively consistent.

DEPOSIT PORTFOLIO June 30, 2026 March 31, 2026 June 30, 2025 ($ in thousands) Amount Percentage Amount Percentage Amount Percentage Noninterest-bearing checking accounts $ 3,597,565 32 % $ 3,596,629 33 % $ 3,542,626 33 % Interest-bearing checking accounts 1,422,592 13 % 1,462,606 13 % 1,443,010 13 % Money market accounts 4,754,782 43 % 4,631,619 42 % 4,446,485 41 % Savings accounts 510,392 5 % 519,266 5 % 536,247 5 % Other time deposits 475,744 4 % 489,257 4 % 514,865 5 % Time deposits >$250,000 318,821 3 % 308,177 3 % 337,382 3 % Total customer deposits 11,079,896 100 % 11,007,554 100 % 10,820,615 100 % Brokered deposits 4,971 — % 4,929 — % 9,765 — % Total deposits $ 11,084,867 100 % $ 11,012,483 100 % $ 10,830,380 100 %

As of June 30, 2026 and March 31, 2026, estimated insured deposits totaled $6.5 billion, or 58.9%, and $6.5 billion, or 59.0%, of total deposits, respectively. In addition, at June 30, 2026 and March 31, 2026, there were collateralized deposits of $748.7 million and $723.8 million, respectively, such that approximately 65.7% and 65.6%, respectively, of our total deposits were insured or collateralized at those dates.

Capital

The Company maintains capital in excess of well-capitalized regulatory requirements, with an estimated total risk-based capital ratio at June 30, 2026 of 16.06%, down from the linked quarter ratio of 16.12% and from the like quarter ratio of 16.90%.

The Company has elected to exclude accumulated other comprehensive income ("AOCI") related primarily to available for sale securities from common equity tier 1 capital. AOCI is included in the Company's tangible common equity ("TCE") to tangible assets ratio (a non-GAAP financial measure) which was 9.83% at June 30, 2026, an increase of 20 basis points from the linked quarter and 100 basis points from June 30, 2025. The increase in TCE from the like quarter was driven by improvements in the level of unrealized losses on the available for sale securities portfolio, arising from market value improvements and the 2025 securities loss-earnback transactions. Please refer to Appendix A for a reconciliation of common equity to TCE (a non-GAAP measure) and Appendix C for a calculation of the TCE ratio (a non-GAAP measure).

CAPITAL RATIOS June 30,
2026
(estimated) March 31,
2026 June 30,
2025 Tangible common equity to tangible assets (non-GAAP) 9.83 % 9.63 % 8.83 % Common equity tier I capital ratio 14.09 % 14.13 % 14.64 % Tier I leverage ratio 11.60 % 11.46 % 11.23 % Tier I risk-based capital ratio 14.81 % 14.87 % 15.45 % Total risk-based capital ratio 16.06 % ...

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