The First Bancorp, Inc. (FNLC) Bundle
Understanding The First Bancorp, Inc. (FNLC) Revenue Streams
Understanding First Bancorp, Inc.’s Revenue Streams
The revenue analysis of First Bancorp, Inc. focuses on the breakdown of its primary revenue sources, year-over-year revenue growth rates, contributions from different business segments, and significant changes in revenue streams.
Breakdown of Primary Revenue Sources
- Net Interest Income: For the nine months ended September 30, 2024, net interest income was $46.4 million, a decrease of 6.1% from $49.4 million for the same period in 2023.
- Non-Interest Income: Total non-interest income for the nine months ended September 30, 2024 was $11.9 million, an increase of 5.2% from $11.3 million in the same period of 2023.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rates for key components are as follows:
| Revenue Source | 2024 (9 months) | 2023 (9 months) | Growth Rate |
|---|---|---|---|
| Net Interest Income | $46.4 million | $49.4 million | -6.1% |
| Non-Interest Income | $11.9 million | $11.3 million | 5.2% |
Contribution of Different Business Segments to Overall Revenue
The contribution of various segments to the overall revenue for the nine months ended September 30, 2024, is outlined below:
- Investment Management and Fiduciary Income: $3.7 million
- Service Charges on Deposit Accounts: $1.6 million
- Mortgage Origination and Servicing Income: $512,000
- Debit Card Income: $3.9 million
- Other Operating Income: $2.3 million
Analysis of Significant Changes in Revenue Streams
Significant changes in revenue streams include:
- Net Interest Income: Decreased by $3.0 million or 6.1% due to higher funding costs.
- Service Charges: Increased by 10.9%, contributing positively to non-interest income.
- Mortgage Banking Revenue: Decreased by 16.2% due to lower origination activity.
Summary of Key Financial Metrics
| Metric | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Net Interest Income | $46.4 million | $49.4 million |
| Non-Interest Income | $11.9 million | $11.3 million |
| Total Revenue | $58.3 million | $60.7 million |
A Deep Dive into The First Bancorp, Inc. (FNLC) Profitability
A Deep Dive into First Bancorp, Inc.'s Profitability
Gross Profit, Operating Profit, and Net Profit Margins
For the nine months ended September 30, 2024, net income was $19.8 million, a decrease of 13.5% from $22.8 million in the same period of 2023. The diluted earnings per share (EPS) were $1.78 compared to $2.06 in 2023.
Trends in Profitability Over Time
The following table illustrates the trends in profitability metrics over the past two years:
| Metric | 2024 (9 months) | 2023 (9 months) | 2022 (9 months) |
|---|---|---|---|
| Net Income | $19.8 million | $22.8 million | $20.1 million |
| Diluted EPS | $1.78 | $2.06 | $1.83 |
| Return on Average Assets (ROAA) | 0.87% | 1.08% | 1.02% |
| Return on Average Equity (ROAE) | 10.67% | 13.00% | 12.50% |
Comparison of Profitability Ratios with Industry Averages
The profitability ratios for First Bancorp, Inc. compared to industry averages are as follows:
| Ratio | First Bancorp, Inc. (2024) | Industry Average |
|---|---|---|
| Return on Average Assets (ROAA) | 0.87% | 1.05% |
| Return on Average Equity (ROAE) | 10.67% | 12.00% |
| Net Interest Margin | 2.25% | 2.50% |
Analysis of Operational Efficiency
The non-GAAP efficiency ratio for the nine months ended September 30, 2024 stood at 57.88%, compared to 51.88% in the same period of 2023. This increase reflects higher non-interest expenses driven by:
- Salaries and employee benefits increased by 8.2%, totaling $17.8 million.
- FDIC insurance premiums increased by $333,000.
- Other operating expenses rose to $8.7 million, reflecting a 6.7% increase.
Net interest income for the nine months ended September 30, 2024 was $46.4 million, a decrease of 6.1% from $49.4 million in 2023. The tax-equivalent net interest margin was 2.25%, down from 2.54% in the prior year.
Debt vs. Equity: How The First Bancorp, Inc. (FNLC) Finances Its Growth
Debt vs. Equity: How First Bancorp, Inc. (FNLC) Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, First Bancorp, Inc. reported total liabilities of $2.77 billion, which includes both long-term and short-term debt. The breakdown is as follows:
- Short-term borrowed funds: $72.68 million
- Long-term borrowed funds: $95.00 million
This indicates a total debt of $167.68 million on the balance sheet, representing a modest proportion of the overall liabilities.
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio for First Bancorp, Inc. is calculated as follows:
Debt-to-Equity Ratio = Total Debt / Total Shareholders' Equity
As of September 30, 2024:
- Total Shareholders' Equity: $256.78 million
- Calculated Debt-to-Equity Ratio: 0.65
This ratio is below the industry average of approximately 1.0, suggesting a conservative approach to leveraging.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In the nine months ending September 30, 2024, First Bancorp increased its total borrowed funds by $81.4 million, which includes:
- Increase in long-term FHLBB advances: $95.0 million
- Decrease in short-term advances from the FHLBB: $20.1 million
As of the latest reports, the company maintains a strong credit rating, reflecting its stable financial position and ability to manage debt.
How the Company Balances Between Debt Financing and Equity Funding
First Bancorp employs a balanced approach in financing its growth through both debt and equity. The company's total shareholders' equity as of September 30, 2024, is $256.78 million, with a book value per share of $23.03. This equity base supports its ability to leverage additional debt while maintaining a healthy balance sheet.
| Financial Metric | Value |
|---|---|
| Total Liabilities | $2.77 billion |
| Short-term Debt | $72.68 million |
| Long-term Debt | $95.00 million |
| Total Debt | $167.68 million |
| Total Shareholders' Equity | $256.78 million |
| Debt-to-Equity Ratio | 0.65 |
| Book Value per Share | $23.03 |
Assessing The First Bancorp, Inc. (FNLC) Liquidity
Assessing Liquidity and Solvency
Current and Quick Ratios
The current ratio of the company as of September 30, 2024, is 1.07, indicating that for every dollar of current liabilities, the company has $1.07 in current assets. The quick ratio is 0.83, suggesting that the company has sufficient liquid assets to cover its current liabilities, excluding inventory.
Analysis of Working Capital Trends
As of September 30, 2024, the working capital stands at $150.2 million, reflecting an increase from $135.7 million at the end of 2023. This growth in working capital indicates improved operational efficiency and liquidity management.
Cash Flow Statements Overview
For the nine months ended September 30, 2024, the cash flows from operating activities totaled $14.6 million, down from $26.2 million in 2023. The cash flows from investing activities were ($184.4 million), reflecting significant investments in loans and securities. Financing activities provided $103.1 million, primarily due to an increase in deposits.
| Cash Flow Category | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Operating Activities | 14.6 | 26.2 |
| Investing Activities | (184.4) | (208.4) |
| Financing Activities | 103.1 | 79.6 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the total sources of liquidity amount to $1.408 billion, which is 45.3% of total assets. This includes $886 million in cash and equivalents and $266 million in borrowing capacity from the Federal Reserve. The company’s liquidity position is strong, with a solid base of contingent liquidity measures in place.
Estimated uninsured deposits were $470.9 million, representing 17.4% of total deposits as of September 30, 2024, which may pose a liquidity risk if a significant portion of these deposits were to be withdrawn simultaneously.
Is The First Bancorp, Inc. (FNLC) Overvalued or Undervalued?
Valuation Analysis
In evaluating the financial health of the company, key metrics such as the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios provide essential insights into whether the company is overvalued or undervalued.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is 14.73, calculated using the diluted earnings per share of $1.78 for the nine months ended September 30, 2024, and the market price of $26.32.
Price-to-Book (P/B) Ratio
The P/B ratio stands at 1.14, derived from the book value per common share of $23.03.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is calculated using an enterprise value of $294.2 million and EBITDA of $30.1 million, resulting in a ratio of 9.77.
Stock Price Trends
Over the past 12 months, the stock price has shown an upward trend, increasing from $23.50 to $26.32, reflecting a growth of 11.5%.
Dividend Yield and Payout Ratios
The current dividend yield is 4.07%, based on the annual dividend of $1.07 per share. The dividend payout ratio is 59.81%, indicating a significant portion of earnings is returned to shareholders.
Analyst Consensus on Stock Valuation
Analyst consensus indicates a "Hold" rating for the stock, with expectations for moderate growth based on current market conditions.
| Metric | Value |
|---|---|
| P/E Ratio | 14.73 |
| P/B Ratio | 1.14 |
| EV/EBITDA Ratio | 9.77 |
| Current Stock Price | $26.32 |
| Dividend Yield | 4.07% |
| Dividend Payout Ratio | 59.81% |
| Analyst Consensus | Hold |
Key Risks Facing The First Bancorp, Inc. (FNLC)
Key Risks Facing First Bancorp, Inc.
First Bancorp, Inc. is exposed to various internal and external risks that can significantly impact its financial health. Understanding these risks is crucial for investors.
Industry Competition
The financial services industry is highly competitive, with numerous banks and financial institutions vying for market share. This competition can lead to pricing pressures and reduced profit margins. In the nine months ended September 30, 2024, the company's net interest income decreased by $2.9 million or 5.6% compared to the same period in 2023, primarily due to increased funding costs.
Regulatory Changes
Changes in regulations can pose significant risks. The company is subject to various federal and state regulations, which can affect its operations and profitability. As of September 30, 2024, the total risk-based capital ratio was 13.11%, well above the 10.0% threshold set by regulators. However, increased compliance costs can affect overall profitability.
Market Conditions
Fluctuations in market conditions, especially interest rates, can impact the company's financial performance. The net interest margin on a tax-equivalent basis decreased to 2.25% for the nine months ended September 30, 2024, down from 2.54% for the same period in 2023. This reduction indicates the sensitivity of the company to changes in interest rates.
Operational Risks
Operational risks include potential losses resulting from inadequate or failed internal processes, systems, or external events. Non-interest expenses increased by $2.4 million or 7.5% year-over-year, driven by higher salaries, employee benefits, and FDIC insurance premiums. This rise in operational costs can impact profitability.
Credit Risk
The company faces credit risk, particularly from its loan portfolio. As of September 30, 2024, total loans stood at $2.31 billion, an increase of 8.3% year-to-date. However, the allowance for credit losses decreased to 1.04% of loans outstanding. A lower allowance can indicate higher risk if economic conditions deteriorate.
Mitigation Strategies
To mitigate these risks, the company has implemented several strategies:
- Maintaining a strong capital position with a total risk-based capital ratio of 13.11%.
- Diversifying the loan portfolio to reduce concentration risk.
- Investing in technology to enhance operational efficiency and reduce costs.
Financial Performance Overview
The following table summarizes key financial metrics for the nine months ended September 30, 2024, compared to the same period in 2023:
| Metric | 2024 | 2023 |
|---|---|---|
| Net Income | $19.8 million | $22.8 million |
| Earnings Per Share (Diluted) | $1.78 | $2.06 |
| Net Interest Income | $46.4 million | $49.4 million |
| Non-Interest Income | $11.9 million | $11.3 million |
| Total Assets | $3.14 billion | $2.94 billion |
These metrics reflect the ongoing challenges and opportunities faced by the company in the current market environment.
Future Growth Prospects for The First Bancorp, Inc. (FNLC)
Growth Opportunities
Future growth prospects for the company are influenced by several key drivers:
Key Growth Drivers
- Product Innovations: The company has been focusing on enhancing its digital banking services, which has led to an increase in customer engagement and transaction volumes.
- Market Expansions: The expansion into new geographic areas has resulted in a loan portfolio increase of $177.8 million or 8.3% from December 31, 2023, to September 30, 2024.
- Acquisitions: The company is strategically positioned to pursue acquisitions that can enhance its market presence and operational efficiencies.
Revenue Growth Projections
For the nine months ended September 30, 2024, total interest income reached $109.8 million, an increase of 17.7% compared to $93.4 million for the same period in 2023. This growth is attributed to higher interest rates and increased earning assets.
Earnings Estimates
Net income for the nine months ended September 30, 2024, was $19.8 million, down from $22.8 million in the same period in 2023. Earnings per share for the nine months ended September 30, 2024, on a fully diluted basis were $1.78, compared to $2.06 for the same period in 2023.
Strategic Initiatives
The company has implemented several strategic initiatives aimed at driving future growth:
- Digital Transformation: Investment in technology to enhance online banking capabilities and streamline operations.
- Customer-Centric Programs: Initiatives focused on improving customer service and satisfaction, leading to increased retention rates.
Competitive Advantages
The company benefits from several competitive advantages that position it for growth:
- Strong Asset Quality: Non-performing assets stood at 0.08% of total assets as of September 30, 2024.
- Robust Capital Position: The total risk-based capital ratio was 13.11% as of September 30, 2024, exceeding the well-capitalized threshold of 10.0%.
Financial Performance Summary
| Metric | 2024 (9 months) | 2023 (9 months) | Change (%) |
|---|---|---|---|
| Total Interest Income | $109.8 million | $93.4 million | +17.7% |
| Net Income | $19.8 million | $22.8 million | -13.5% |
| Earnings per Share (Diluted) | $1.78 | $2.06 | -13.5% |
| Net Interest Margin (Tax-Equivalent) | 2.25% | 2.54% | -11.4% |
| Total Loans | $2.31 billion | $2.13 billion | +8.3% |
| Total Deposits | $2.70 billion | $2.60 billion | +4.0% |
The First Bancorp, Inc. (FNLC) DCF Excel Template
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Updated on 16 Nov 2024
Resources:
- The First Bancorp, Inc. (FNLC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The First Bancorp, Inc. (FNLC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The First Bancorp, Inc. (FNLC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.