The First Bancorp Announces Third Quarter Results

Earning Asset Growth and Net Interest Margin Expansion Lead to a 17.5% Increase in Third 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 and nine months ended September 30, 2026. Net income for the third quarter was $10.7 million with fully diluted earnings per share of $0.95, increases of 17.5% and 16.8%, respectively, from net income of $9.1 million and diluted earnings per share of $0.81 for the quarter ended September 30, 2025. Strong earnings for the period were driven by growth in earning assets, continued net interest margin expansion, enhanced non-interest income, and disciplined expense control. Year-to-date in 2026, net income stands at $29.2 million with fully diluted earnings per share of $2.59, increases of 20.7% and 19.9%, respectively, from net income of $24.2 million and earnings per share of $2.16 for the nine months ended September 30, 2025.

Third Quarter Notable Items:

• Net Income of $10.7 million is a new quarterly earnings high mark, and represents increases of 17.5% from Q3 2025 and 11.6% from Q2 2026
• Diluted EPS of $0.95 is also a new quarterly EPS high mark, up 16.8% from Q3 2025, and up 11.6% from Q2 2026
• Net Interest Margin expanded to 2.99%, a 29-basis point increase from Q3 2025
• Loan growth in the period of $17.8 million
• Efficiency Ratio of 47.94%, improved from 50.40% in Q3 2025
• Tangible Book Value per share of $22.81, up 4.9% from Q3 2025
• Quarterly shareholder dividend paid of $0.38 per share

CEO COMMENTS

"I am pleased to report another quarter of strong year-over-year earnings growth," commented Tony C. McKim, the Company's President and Chief Executive Officer. "Net income of $10.7 million for the third quarter of 2026 represents an increase of 17.5% from the third quarter of 2025, and is a new quarterly record for The First Bancorp. Our Return on Average Assets for the period was 1.31% and our Return on Average Tangible Common Equity was 15.99%, both up nicely from 1.13% and 15.04%, respectively, a year ago."

"Our net interest margin improved for the ninth consecutive quarter, to 2.99% in the third quarter of 2026, up 11-basis points in the period and up 29-basis points from the third quarter of 2025. Margin expansion has been organic, driven by lower funding costs and supported by stable earning asset yields, which coupled with earning asset growth to produce a 12.2% lift in net interest income from the prior year quarter, and has driven a 14.4% increase year-to-date in 2026. Growth in non-interest income, notably wealth management, payments, and other operating revenue, was an additional catalyst for the bottom line. Revenue growth coupled with controlled operating expenses drove an improvement in our efficiency ratio to 47.94% for the period as compared to 50.40% a year ago."

"Total assets increased $35.7 million in the quarter, including net loan growth of $17.8 million. New loan production for the quarter was $180 million, up nearly $50 million from the second quarter. Total deposits increased $106.9 million in the period, with strong growth in non-maturity deposits leading to planned reductions in short-term time deposits and borrowings. We expect local deposit volumes to remain steady through year-end and have taken calculated steps throughout the year to protect margin gains from recent rate pressure in the market. The Company's capital position is strong, and overall liquidity continues to be more than sufficient."

Concluding, Mr. McKim shared, "We are pleased with the strong operating results produced in the third quarter. We were also pleased with asset quality improvements brought about through the resolution of several non-performing credits during the period. Our footings are solid and the Bank is well positioned to seize upon opportunities that become available."

OPERATING RESULTS Q3 2026 v. Q3 2025 (prior year quarter)

Net income was $10.7 million for the three months ended September 30, 2026, an increase of $1.6 million, or 17.5%, from the third quarter of 2025. Net interest income was $22.5 million for the three months ended September 30, 2026, an increase of $2.4 million, or 12.2%, from the third quarter of 2025. Net interest margin improved to 2.99% for the third quarter of 2026, up from 2.70% in the prior year quarter. The lift in margin was the result of stable yields on earning assets coupled with a 32-basis point decrease in the cost of total liabilities.

Total non-interest income was $5.0 million for the three months ended September 30, 2026, an increase of $503,000, or 11.2%, from the third quarter of 2025. Revenue at First National Wealth Management increased $119,000, or 8.9%, from the prior year period on strong growth in assets under management. Payments revenue increased $87,000, or 6.2%, while other operating income increased $263,000, or 26.8%, principally from derivative fees on new loan transactions. Total non-interest expense for the three months ended September 30, 2026, was $13.5 million, an increase of $795,000, or 6.2%, from the third quarter of 2025. The period-to-period change is centered in employee salaries and benefits, resulting primarily from annual salary adjustments and higher health insurance expenses.

OPERATING RESULTS Q3 2026 v. Q2 2026 (linked quarter)

Net income was $10.7 million for the three months ended September 30, 2026, an increase of $1.1 million or 11.6% from the second quarter of 2026. Net interest income of $22.5 million for the three months ended September 30, 2026, was an increase of $1.3 million or 6.3% from the linked quarter, resulting from expansion in both average earning assets and net interest margin. Average earning assets grew $14.8 million in the third quarter, while net interest margin increased to 2.99%, an improvement of 11-basis points from the linked quarter.

Total non-interest income of $5.0 million for the third quarter of 2026 was up $317,000 from the second quarter of 2026. The increase was centered in payments revenue, which grew $115,000 on strong transaction volume, and other operating income which increased $285,000, principally on higher loan-based derivative fees. Total non-interest expense for the three months ended September 30, 2026, was $13.5 million, an increase of $172,000, or 1.3%, from the second quarter. As compared to the linked quarter, salaries and benefit expense increased $234,000 due to seasonal hiring activity and furniture & equipment expense increased $104,000, while other operating expenses fell $174,000.

LOANS, TOTAL ASSETS & FUNDING

Total assets as of September 30, 2026, were $3.25 billion, up $35.7 million in the third quarter. Earning assets increased $24.7 million consisting of $17.8 million in loan growth and $6.3 million growth in investments during the period.

Loan growth in the third quarter was centered in commercial and industrial loan balances which increased $11.1 million. Also contributing to growth were the agricultural loan and residential mortgage loan segments, up $3.2 million and $2.5 million, respectively, during the period. Commercial real estate loan balances increased $2.5 million while multifamily balances fell $1.9 million. The annualized growth rate for the portfolio as a whole was 2.92%.

Total deposits as of September 30, 2026, were $2.79 billion, an increase of $106.9 million in the quarter. Non-maturity deposits had strong growth, up $139.7 million in the third quarter, and consistent with seasonal expectations. The increase in non-maturity deposits allowed for reductions in non-local, short-term time deposits and borrowed funds. Time deposit balances were reduced by $32.8 million and borrowings, principally short-term FHLB advances, were reduced by $69.2 million during the period. Uninsured deposits as of September 30, 2026, were estimated at 18.4% of total deposits, and 74% of uninsured deposits were fully collateralized. Available day-one liquidity was $763 million, sufficient to cover 149% of estimated uninsured deposits.

ASSET QUALITY

Overall asset quality remains satisfactory and improved in the third quarter. As of September 30, 2026, the ratio of non-performing assets to total assets was 0.44%, down from 0.54% as of June 30, 2026, and compares to 0.30% as of September 30, 2025. The ratio of non-performing loans to total loans was 0.58% as of September 30, 2026, down from 0.71% as of June 30, 2026, and compares to 0.40% as of September 30, 2025. Loans past due thirty days or more improved to 0.67% of total loans as of September 30, 2026, down from 0.93% as of June 30, 2026.

The Allowance for Credit Losses ("ACL") on loans stood at 0.98% of total loans as of September 30, 2026. ACL coverage was down modestly from the linked quarter and prior year quarter, resulting from resolution during the period of several non-performing loans that had carried specific reserves. A provision for credit losses of $845,000 was recorded in the third quarter of 2026, and net loan charge-offs in the third quarter totaled $1.6 million. Year-to-date, net charge-offs represent an annualized 0.22% of total loans.

CAPITAL

The Company’s regulatory capital position was strong as of September 30, 2026. The Leverage Capital ratio increased to an estimated 9.29% as of September 30, 2026, as compared to the 9.21% and 8.63% reported as of June 30, 2026, and as of September 30, 2025, respectively. The estimated Total Risk-Based Capital ratio was 14.27% as of September 30, 2026, as compared to the 14.23% and 13.56% reported as of June 30, 2026, and as of September 30, 2025, respectively.

The Company's tangible book value per share was $22.81 as of September 30, 2026, down from $23.25 as of June 30, 2026, and up from $21.74 as of September 30, 2025. The Tangible Common Equity ratio stood at 7.99% as of September 30, 2026, down from 8.23% as of June 30, 2026, and up from 7.70% as of September 30, 2025. The modest linked quarter decreases in tangible book value per share and tangible common equity ratio are attributable to an increase in unrealized losses on available for sale investment securities, consistent with market changes in interest rates during the quarter.

DIVIDEND

On September 24, 2026, the Company's Board of Directors declared a third quarter dividend of $0.38 per share. The dividend was paid on October 16, 2026, to shareholders of record as of October 6, 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 $3.22 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.

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.

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: