Net Interest Margin Expansion and Improved Efficiency

Drive a 27% Increase in First Quarter Earnings

The First Bancorp (NASDAQ:FNLC), ("the Company", "we", "us", "our"), parent company of First National Bank, today reported unaudited results for the quarter ended March 31, 2026. Net income for the period was $9.0 million with fully diluted earnings per share of $0.80, as compared to net income of $7.1 million and diluted earnings per share of $0.63 for the three months ended March 31, 2025.

First Quarter Notable Items:

Net Income of $9.0 million is an increase of 27.1% as compared to Q1 2025
Diluted EPS of $0.80 is an increase of 26.2% from Q1 2025
Net Interest Margin expanded to 2.86%, a 38 basis point increase from Q1 2025
Loan growth in the period of $11.0 million
Efficiency Ratio of 52.64%, improved from 56.93% in Q1 2025
Tangible Book Value per share rose to $22.71, up 11.1% from Q1 2025
Quarterly shareholder dividend of $0.37 per share

CEO COMMENTS

"I am pleased to report continued year-over-year quarterly earnings growth to kick off 2026," commented Tony C. McKim, the Company's President and Chief Executive Officer. "Net income of $9.0 million for the first quarter is an increase of 27.1% from the first quarter of 2025. Our Return on Average Assets for the period was 1.15% and our Return on Average Tangible Common Equity was 14.15%, both up nicely from 0.91% and 12.64%, respectively, a year ago.

"Earnings growth has been driven by continued expansion of our net interest margin, coupled with increased non-interest revenue and controlled expenses. Our margin improved for the seventh consecutive quarter, to 2.86% for the first quarter of 2026, up 38 basis points from the first quarter of 2025, with the improvement stemming from a combination of earning asset yield enhancement focused in the loan portfolio and reduced funding costs.

"Total assets increased $34 million in the quarter, including net loan growth of $11 million. New loan production for the quarter was $116 million. Total deposits were flat as non-maturity deposits followed a typical seasonal pattern, falling $58.6 million during the period, and were replaced by short-term time deposits and borrowings. Our capital position strengthened as compared to both the prior year quarter and the immediate prior quarter, and overall liquidity remains more than sufficient."

Concluding, Mr. McKim shared, "We are pleased to carry forward last year's earnings momentum into 2026 with positive first quarter results. The entire team at First National Bank is focused on delivering exceptional banking experiences to our growing customer base and building value for the communities and stakeholders we serve."

OPERATING RESULTS Q1 2026 v. Q1 2025 (prior year quarter)

Net income was $9.0 million for the three months ended March 31, 2026, an increase of $1.9 million or 27.1% from the first quarter of 2025. Net interest income was $20.7 million for the three months ended March 31, 2026, an increase of $2.9 million or 16.2% from the first quarter of 2025. Net interest margin improved to 2.86% for the first quarter of 2026, up from 2.48% in the prior year quarter. The lift in margin was the result of a 5 basis point increase in the tax equivalent yield on earning assets coupled with a 38 basis point decrease in the cost of total liabilities. Earning assets averaged a yield of 5.33% for the three months ended March 31, 2026, while total liabilities carried an average cost of 2.89%.

Total non-interest income was $4.5 million for the three months ended March 31, 2026, an increase of $449,000, or 11.2% from the first quarter of 2025. The increase was centered in Wealth Management revenue which was up $169,000 or 12.8% from the prior year, and other operating income which increased $228,000 or 28.9%. Total non-interest expense for the three months ended March 31, 2026, was $13.6 million, an increase of $772,000, or 6.0%, from the first quarter of 2025. The period-to-period change is centered in employee salaries and benefits, resulting from annual salary adjustments, lower deferred salaries, and higher health insurance expenses. The Company's efficiency ratio for the first quarter of 2026 was 52.64%, improved from 56.93% in the prior year quarter.

OPERATING RESULTS Q1 2026 v. Q4 2025 (linked quarter)

Net income was $9.0 million for the three months ended March 31, 2026, a decrease of $1.2 million or 11.6% from the fourth quarter of 2025. Net interest income of $20.7 million for the three months ended March 31, 2026, was a decrease of $422,000 or 2.0% from the linked quarter, attributable primarily to Q4 2025 having two more days of net interest income accrual than Q1 2026. The net interest margin increased to 2.86% in the first quarter of 2026, an improvement of 3 basis points from the linked quarter.

Total non-interest income of $4.5 million for the first quarter of 2026 was down $283,000 from the fourth quarter of 2025. The change is centered in a $396,000 decrease in Debit Card income stemming from seasonally lower transaction volume and recognition of an annual program incentive payment in the linked quarter. Other operating income increased $82,000, principally from loan-based derivative fees, and revenue increased $53,000 at First National Wealth Management. Total non-interest expense for the three months ended March 31, 2026 was $13.6 million, an increase of $485,000, or 3.7%, from the linked quarter.

LOANS, TOTAL ASSETS & FUNDING

Total assets as of March 31, 2026, were $3.20 billion, up $34.5 million in the first quarter. Earning assets grew $27.8 million with loan growth of $11.0 million during the period. Investment balances fell $9.5 million in the quarter while overnight funds sold increased by $26.0 million.

Loan balances grew at a modest pace in the first quarter, the net effect of new loan production, scheduled amortization, and payoffs during the period. The residential mortgage and home equity loan segments each contributed to loan portfolio growth, up $4.0 million and $4.9 million, respectively in the first quarter. Commercial and industrial loan balances increased $16.1 million, while commercial real estate loan balances and multifamily loan balances decreased by $5.3 million and $8.5 million, respectively.

Total deposits as of March 31, 2026 were $2.66 billion, unchanged from year-end 2025. Non-maturity deposits fell $58.6 million in the first quarter, in line with expectations. Time deposits increased $58.5 million and borrowed funds increased $8.0 million during the period. Uninsured deposits as of March 31, 2026 were estimated at 18.2% of total deposits, and 75% of uninsured deposits were fully collateralized. Available day-one liquidity was $721 million, sufficient to cover 149% of estimated uninsured deposits.

ASSET QUALITY

Overall asset quality remains satisfactory. As of March 31, 2026, the ratio of non-performing assets to total assets was 0.51%, compared to 0.41% as of December 31, 2025, and 0.19% as of March 31, 2025. The ratio of non-performing loans to total loans was 0.67% as of March 31, 2026, compared to 0.54% as of December 31, 2025, and 0.25% as of March 31, 2025. Loans past due thirty days or more were 1.14% of total loans as of March 31, 2026.

The Allowance for Credit Losses ("ACL") on loans stood at 1.05% of total loans as of March 31, 2026, in line with both the linked quarter and prior year quarter. A provision for credit losses of $620,000 was recorded in the first quarter of 2026. Net loan charge-offs in the first quarter totaled $806,000, or 0.034% of total loans. Net charge-offs included $671,000 in loans that had been individually analyzed and were fully reserved.

CAPITAL

The Company's regulatory capital position was strong as of March 31, 2026. The Leverage Capital ratio increased to an estimated 9.09% as of March 31, 2026, as compared to the 8.84% and 8.40% reported as of December 31, 2025, and as of March 31, 2025, respectively. The estimated Total Risk-Based Capital ratio was 14.04% as of March 31, 2026, as compared to the 14.02% and 13.12% reported as of December 31, 2025, and as of March 31, 2025, respectively.

The Company's tangible book value per share was $22.71 as of March 31, 2026, up from $22.49 as of December 31, 2025, and up from $20.44 as of March 31, 2025. The Tangible Common Equity ratio increased to 8.08% as of March 31, 2026, up from 8.05% as of December 31, 2025, and 7.25% as of March 31, 2025.

DIVIDEND

On March 26, 2026, the Company's Board of Directors declared a first quarter dividend of $0.37 per share. The dividend was paid on April 17, 2026, to shareholders of record as of April 7, 2026.

ABOUT THE FIRST BANCORP

The First Bancorp, the parent company of First National Bank, is based in Damariscotta, Maine. Founded in 1864, First National Bank is a full-service community bank with $3.17 billion in assets. The Bank provides a complete array of commercial and retail banking services through eighteen locations in mid-coast and eastern Maine. First National Wealth Management, a division of the Bank, provides investment management and trust services to individuals, businesses, and municipalities. More information about The First Bancorp, First National Bank and First National Wealth Management may be found at www.thefirst.com.

The First Bancorp
*Quarterly Selected Financial Data (Unaudited)*

	At or for the quarters ended
*Dollars in thousands, except for per share amounts*	3/31/2026			12/31/2025			9/30/2025			6/30/2025			3/31/2025
*Financial Data*
Total Assets	$	3,200,763		$	3,166,303		$	3,198,478		$	3,199,510		$	3,187,372
Total Loans		2,405,149			2,394,109			2,398,510			2,394,007			2,383,150
Total Investment Securities		619,159			628,683			642,961			653,855			656,844
Total Deposits		2,664,643			2,664,752			2,737,550			2,705,337			2,711,335
Total Shareholders' Equity		286,784			283,143			274,566			265,492			259,681
Net Income		8,993			10,172			9,082			8,063			7,077
*Per Common Share Data*
Basic Earnings per Share	$	0.81		$	0.92		$	0.82		$	0.73		$	0.64
Diluted Earnings per Share		0.80			0.91			0.81			0.72			0.63
Cash Dividends Declared		0.37			0.37			0.37			0.37			0.36
Book Value per Common Share		25.44			25.23			24.48			23.69			23.19
Tangible Book Value per Common Share		22.71			22.49			21.74			20.94			20.44
Market Value		28.03			26.44			26.26			25.41			24.72
*Financial Ratios*
Return on Average Equity⁽¹⁾		12.64	%		14.35	%		13.33	%		12.31	%		11.13	%
Return on Average Tangible Common Equity⁽¹⁾		14.15	%		16.12	%		15.04	%		13.95	%		12.64	%
Return on Average Assets⁽¹⁾		1.15	%		1.26	%		1.13	%		1.01	%		0.91	%
Pre-tax, pre-provision Return on Assets⁽¹⁾		1.47	%		1.58	%		1.46	%		1.30	%		1.15	%
Net Interest Margin Tax-Equivalent⁽¹⁾		2.86	%		2.83	%		2.70	%		2.52	%		2.48	%
Dividend Payout Ratio		45.74	%		40.39	%		45.18	%		50.89	%		56.34	%
GAAP Efficiency Ratio		54.16	%		50.81	%		51.99	%		54.13	%		58.91	%
Efficiency Ratio (non-GAAP)		52.64	%		49.33	%		50.40	%		52.39	%		56.93	%
*Asset Quality Ratios*
Allowance for Credit Losses/Total Loans		1.05	%		1.06	%		1.05	%		1.04	%		1.05	%
Allowance to Non-Performing Loans		155.73	%		196.95	%		261.36	%		411.13	%		414.88	%
Non-Performing Loans to Total Loans		0.67	%		0.54	%		0.40	%		0.25	%		0.25	%
Non-Performing Assets to Total Assets		0.51	%		0.41	%		0.30	%		0.19	%		0.19	%
*Capital Ratios*
Leverage Capital Ratio⁽²⁾		9.09	%		8.84	%		8.63	%		8.48	%		8.40	%
Tier 1 Capital Ratio⁽²⁾		12.89	%		12.84	%		12.39	%		12.15	%		11.96	%
Total Capital Ratio⁽²⁾		14.04	%		14.02	%		13.56	%		13.31	%		13.12	%
Tangible Common Equity Ratio		8.08	%		8.05	%		7.70	%		7.41	%		7.25	%
Average Equity to Average Assets		9.10	%		8.78	%		8.45	%		8.23	%		8.15	%
Average Tangible Equity to Average Assets		8.13	%		7.82	%		7.49	%		7.27	%		7.17	%
⁽¹⁾Annualized using a 365-day basis for 2026 and 2025.
⁽²⁾Estimated for current period.

The First Bancorp
*Consolidated Balance Sheets (Unaudited)*

*In thousands of dollars, except per share data*	3/31/2026			12/31/2025			9/30/2025			6/30/2025			3/31/2025
Assets
Cash and due from banks	$	23,607		$	27,779		$	31,606		$	27,360		$	26,432
Interest-bearing deposits in other banks		30,075			4,124			7,225			3,253			2,938
Securities available-for-sale		256,788			264,480			273,493			278,248			280,764
Securities held-to-maturity		354,057			355,928			362,552			367,873			368,571
Restricted equity securities, at cost		8,314			8,275			6,916			7,734			7,509
Loans held for sale		—			—			333			—			—
Loans		2,405,149			2,394,109			2,398,510			2,394,007			2,383,150
Less allowance for credit losses		25,209			25,365			25,078			24,829			25,114
Net loans		2,379,940			2,368,744			2,373,432			2,369,178			2,358,036
Accrued interest receivable		19,247			14,185			16,256			19,386			17,923
Premises and equipment		28,720			28,767			27,919			28,198			28,626
Goodwill		30,646			30,646			30,646			30,646			30,646
Other assets		69,369			63,375			68,100			67,634			65,927
Total assets	$	3,200,763		$	3,166,303		$	3,198,478		$	3,199,510		$	3,187,372
Liabilities
Demand deposits	$	268,100		$	279,912		$	313,729		$	291,150		$	267,876
NOW deposits		660,511			689,083			638,090			590,536			613,245
Money market deposits		453,210			469,689			458,398			388,214			398,966
Savings deposits		247,084			248,805			255,806			256,584			261,732
Certificates of deposit		699,635			638,931			688,001			774,521			754,558
Certificates $100,000 to $250,000		184,486			190,676			210,741			231,926			241,536
Certificates $250,000 and over		151,617			147,656			172,785			172,406			173,422
Total deposits		2,664,643			2,664,752			2,737,550			2,705,337			2,711,335
Borrowed funds		195,796			187,821			152,968			196,170			185,444
Other liabilities		53,540			30,587			33,394			32,511			30,912
Total Liabilities		2,913,979			2,883,160			2,923,912			2,934,018			2,927,691
Shareholders' equity
Common stock		113			112			112			112			112
Additional paid-in capital		74,255			73,714			73,276			72,795			72,355
Retained earnings		245,001			240,456			234,435			229,511			225,592
Net unrealized loss on securities available-for-sale		(32,790	)		(31,341	)		(33,523	)		(37,237	)		(38,702	)
Net unrealized loss on transferred securities from available-for-sale to held-to-maturity		(35	)		(38	)		(40	)		(60	)		(45	)
Net unrealized gain on cash flow hedging derivative instruments		—			—			19			84			82
Net unrealized gain on postretirement costs		240			240			287			287			287
Total shareholders' equity		286,784			283,143			274,566			265,492			259,681
Total liabilities & shareholders' equity	$	3,200,763		$	3,166,303		$	3,198,478		$	3,199,510		$	3,187,372


Common Stock
Number of shares authorized		18,000,000			18,000,000			18,000,000			18,000,000			18,000,000
Number of shares issued and outstanding		11,271,014			11,222,363			11,214,455			11,205,861			11,196,881
Book value per common share	$	25.44		$	25.23		$	24.48		$	23.69		$	23.19
Tangible book value per common share	$	22.71		$	22.49		$	21.74		$	20.94		$	20.44

The First Bancorp
*Quarterly Consolidated Statements of Income (Unaudited)*

	For the Quarters Ended
*In thousands of dollars, except per share data*	3/31/2026			12/31/2025			9/30/2025			6/30/2025		3/31/2025
Interest income
Interest and fees on loans	$	34,725		$	36,025		$	36,197		$	35,014	$	33,924
Interest on deposits with other banks		30			185			108			51		56
Interest and dividends on investments		4,384			4,522			4,700			4,760		4,729
Total interest income		39,139			40,732			41,005			39,825		38,709
Interest expense
Interest on deposits		16,702			18,323			19,380			19,725		19,269
Interest on borrowed funds		1,748			1,298			1,567			1,691		1,641
Total interest expense		18,450			19,621			20,947			21,416		20,910
Net interest income		20,689			21,111			20,058			18,409		17,799
Credit loss expense - loans		650			615			690			348		396
Credit loss expense (reduction) - debt securities held to maturity		(1	)		(40	)		(12	)		1		1
Credit loss expense (reduction) - off-balance sheet credit exposures		(29	)		(303	)		22			137		(5	)
Total credit loss expense		620			272			700			486		392
Net interest income after provision for credit losses		20,069			20,839			19,358			17,923		17,407
Non-interest income
Investment management and fiduciary income		1,486			1,433			1,341			1,336		1,317
Service charges on deposit accounts		560			559			532			539		531
Net securities gains		12			—			—			—		—
Mortgage origination and servicing income		176			211			219			221		195
Debit card income		1,200			1,596			1,403			1,286		1,170
Other operating income		1,017			935			980			747		789
Total non-interest income		4,451			4,734			4,475			4,129		4,002
Non-interest expense
Salaries and employee benefits		7,330			7,198			6,674			6,276		6,850
Occupancy expense		956			827			814			876		877
Furniture and equipment expense		1,543			1,487			1,491			1,438		1,462
FDIC insurance premiums		570			629			698			701		694
Amortization of identified intangibles		7			6			7			6		7
Other operating expense		3,210			2,984			3,070			2,902		2,954
Total non-interest expense		13,616			13,131			12,754			12,199		12,844
Income before income taxes		10,904			12,442			11,079			9,853		8,565
Applicable income taxes		1,911			2,270			1,997			1,790		1,488
Net Income	$	8,993		$	10,172		$	9,082		$	8,063	$	7,077
Basic earnings per share	$	0.81		$	0.92		$	0.82		$	0.73	$	0.64
Diluted earnings per share	$	0.80		$	0.91		$	0.81		$	0.72	$	0.63

Use of Non-GAAP Financial Measures

Certain information in this release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Management uses these "non-GAAP" measures in its analysis of the Company's performance (including for purposes of determining the compensation of certain executive officers and other Company employees) and believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and with other financial institutions, as well as demonstrating the effects of significant gains and charges in the current period, in light of the disclosure practices employed by many other publicly-traded financial institutions. The Company believes that a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. Management believes that investors may use these non-GAAP financial measures to analyze financial performance without the impact of unusual items that may obscure trends in the Company's underlying performance. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

In several places net interest income is calculated on a fully tax-equivalent basis. Specifically included in interest income was tax-exempt interest income from certain investment securities and loans. An amount equal to the tax benefit derived from this tax-exempt income has been added back to the interest income total which, as adjusted, increased net interest income accordingly. Management believes the disclosure of tax-equivalent net interest income information improves the clarity of financial analysis, and is particularly useful to investors in understanding and evaluating the changes and trends in the Company's results of operations. Other financial institutions commonly present net interest income on a tax-equivalent basis. This adjustment is considered helpful in the comparison of one financial institution's net interest income to that of another institution, as each will have a different proportion of tax-exempt interest from its earning assets. Moreover, net interest income is a component of a second financial measure commonly used by financial institutions, net interest margin, which is the ratio of net interest income to average earning assets. For purposes of this measure as well, other financial institutions generally use tax-equivalent net interest income to provide a better basis of comparison from institution to institution. The Company follows these practices.

The following table provides a reconciliation of tax-equivalent financial information to the Company's consolidated financial statements, which have been prepared in accordance with GAAP. A 21.0% tax rate was used in both 2026 and 2025.

	For the quarters ended
In thousands of dollars	3/31/2026		12/31/2025		3/31/2025
Net interest income as presented	$	20,689	$	21,111	$	17,799
Effect of tax-exempt income		663		701		711
Net interest income, tax equivalent	$	21,352	$	21,812	$	18,510

The Company presents its efficiency ratio using non-GAAP information which is most commonly used by financial institutions. The GAAP-based efficiency ratio is non-interest expenses divided by net interest income plus non-interest income from the Consolidated Statements of Income. The non-GAAP efficiency ratio excludes securities losses and provision for credit losses on securities from non-interest expenses, excludes securities gains from non-interest income, and adds the tax-equivalent adjustment to net interest income. The following table provides a reconciliation between the GAAP and non-GAAP efficiency ratio:

	For the quarters ended
In thousands of dollars	3/31/2026			12/31/2025			3/31/2025
Non-interest expense, as presented	$	13,616		$	13,131		$	12,844
Net interest income, as presented		20,689			21,111			17,799
Effect of tax-exempt interest income		663			701			711
Non-interest income, as presented		4,451			4,734			4,002
Effect of non-interest tax-exempt income		77			70			48
Net securities gains		(12	)		—			—
Adjusted net interest income plus non-interest income	$	25,868		$	26,616		$	22,560
Non-GAAP efficiency ratio		52.64	%		49.33	%		56.93	%
GAAP efficiency ratio		54.16	%		50.81	%		58.91	%

The Company presents certain information based upon tangible common equity instead of total shareholders' equity. The difference between these two measures is the Company's intangible assets, specifically goodwill from prior acquisitions. Management, banking regulators and many stock analysts use the tangible common equity ratio and the tangible book value per common share in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions. The following table provides a reconciliation of average tangible common equity to the Company's consolidated financial statements, which have been prepared in accordance with U.S. GAAP:

	For the quarters ended
In thousands of dollars	3/31/2026			12/31/2025			3/31/2025
Average shareholders' equity as presented	$	288,560		$	268,059		$	257,807
Less intangible assets		(30,775	)		(30,791	)		(30,801	)
Tangible average shareholders' equity	$	257,785		$	237,268		$	227,006

To provide period-to-period comparison of operating results prior to consideration of credit loss provision and income taxes, the non-GAAP measure of PTPP Net Income is presented. The following table provides a reconciliation to Net Income:

	For the quarters ended
In thousands of dollars	3/31/2026		12/31/2025		3/31/2025
Net Income, as presented	$	8,993	$	10,172	$	7,077
Add: credit loss expense		620		272		392
Add: income taxes		1,911		2,270		1,488
Pre-Tax, pre-provision net income	$	11,524	$	12,714	$	8,957

Forward-Looking and Cautionary Statements

Except for the historical information and discussions contained herein, statements contained in this release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results and events to differ materially, as discussed in the Company's filings with the Securities and Exchange Commission.

Category: Earnings

View source version on businesswire.com: https://www.businesswire.com/news/home/20260422888641/en/

The First Bancorp

Richard M. Elder, EVP, Chief Financial Officer

207-563-3195

rick.elder@thefirst.com

The First Bancorp Announces First Quarter Results