Shareholder letter
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January 21, 2026 Dear First Bancorp Shareholders: The First Bancorp concluded 2025 with robust annual earnings of $34.4 million. Our performance was driven by a 21.1% increase in annual net interest income, and bolstered by a 6.0% rise in non-interest revenue. Return on Average Assets for 2025 was 1.08%, with a Return on Average Tangible Common Equity of 14.50%. We continued to expand the loan portfolio with total loans increasing $53.2 million, or 2.3% for the year, while maintaining generally favorable asset quality. Local deposit generation has been a focus of business development efforts leading to year- over-year core deposit growth of $77.0 million, fully funding our loan growth and allowing for a reduction in more expensive wholesale funding balances. Total assets at December 31, 2025 were $3.17 billion, up $9.3 million from the prior year end. Earning assets increased $15.7 million year-over- year, as loan balances grew $53.2 million, and investments declined by $22.9 million. Loan portfolio growth in 2025 was led by commercial loans which increased $17.5 million. Within commercial loans, CRE term loan balances increased $25.0 million, C&I loans increased $11.1 million and multifamily loans increased $50.2 million; construction loan balances fell by $64.7 million. Residential mortgage loans increased $28.4 million year-over-year, and home equity loan balances increased by $19.2 million. Overall loan balances fell $4.4 million in the fourth quarter following the payoff of several short-term municipal loans. Total deposits at December 31, 2025 were $2.66 billion, down $60.5 million or 2.2% from December 31, 2024, and decreased $72.8 million in the fourth quarter. Deposit balance reductions were centered in planned replacement of higher-cost, wholesale time deposits with locally sourced non-maturity deposits and a modest increase in borrowings. Core non-maturity deposits increased $77.0 million for the year centered in money market and NOW account balances, including an increase of $21.5 million in the fourth quarter. Borrowed funds increased $41.5 million year- over-year, principally in Federal Home Loan Bank term advances, and increased $34.9 million in the quarter. Uninsured deposits were 19.4% of total deposits as of December 31, 2025, and 74% of uninsured deposits were fully collateralized. Available day-one liquidity was in excess of $700 million, sufficient to cover approximately 542% of estimated uninsured, uncollateralized deposits. The Company’s capital position was strong as of December 31, 2025, with a total risk-based capital ratio of 14.02%, and a leverage capital ratio of 8.84%. Each compares favorably to 13.22% and 8.47% respectively as of December 31, 2024. The Company’s tangible book value was $22.49 per share as of December 31, 2025, an increase from $19.87 a year earlier, and up from $21.74 as of September 30, 2025. Net Income was $10.2 million, or $0.91 per diluted share, for the three months ended December 31, 2025. Results compare favorably to the fourth quarter of 2024, with net income up $2.9 million, or 39.7%, and diluted earnings per share up $0.25, or 38.9%. The current quarter also compares favorably to the third quarter of 2025 (“linked quarter”) in which net income was $9.1 million and diluted earnings per share were $0.81. Total non-interest income was $4.7 million for the three months ended December 31, 2025, up $259,000 from the third quarter. The linked quarter increase was centered in debit card revenue which grew $193,000 and Wealth Management revenue which increased $92,000. As compared to the fourth quarter of 2024, total non-interest income increased $298,000, centered in Wealth Management revenue growth of $159,000, or 12.5%, and an increase in other operating income, principally loan-based derivative fees, of $123,000. On December 18, 2025, the Company’s Board of Directors declared a fourth quarter dividend of $0.37 per share. The fourth quarter dividend represents a payout to shareholders of 40.39% of earnings per share for the period and was paid on January 16, 2026 to shareholders of record as of January 6, 2026. We are pleased to close out 2025 with a strong earnings quarter and look forward to continued earnings momentum in the new year. The dedication and commitment of our entire team to work through a challenging period for earnings has been admirable. Best always, Tony C. McKim President & Chief Executive Officer Fourth Quarter 2025 Financial Results
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Consolidated Balance Sheets (Unaudited) In thousands of dollars, except per share data 12/31/2025 12/31/2024 12/31/2024 Assets Cash and due from banks $27,779 $27,636 $27,636 Interest-bearing deposits in other banks 4,124 22,100 22,100 Securities available for sale 264,480 274,680 274,680 Securities to be held to maturity - net 355,928 369,704 369,704 Restricted equity securities, at cost 8,275 7,203 7,203 Loans held for sale - - - Loans 2,394,109 2,340,940 2,340,940 Less allowance for credit losses - loans 25,365 24,871 24,871 Net loans 2,368,744 2,316,069 2,316,069 Accrued interest receivable 14,185 13,976 13,976 Premises and equipment 28,767 27,855 27,855 Other real estate owned - 173 173 Goodwill 30,646 30,646 30,646 Other assets 63,375 66,968 66,968 Total assets $3,166,303 $3,157,010 $3,157,010 Liabilities Demand deposits 279,912 292,255 292,255 NOW deposits 689,083 676,107 676,107 Money market deposits 469,689 376,627 376,627 Savings deposits 248,805 265,451 265,451 Certificates of deposit 977,263 1,114,811 1,114,811 Total deposits 2,664,752 2,725,251 2,725,251 Borrowed funds 187, 82 1 146,278 146,278 Other liabilities 30,587 32,988 32,988 Total Liabilities 2,883,160 2,904,517 $2,904,517 Shareholders’ equity Common stock 112 112 112 Additional paid-in capital 73,714 71,832 71,832 Retained earnings 240,456 222,823 222,823 Net unrealized loss on securities available-for-sale (31,341) (42,671) (42,671) Net unrealized loss on transferred securities (38) (47) (47) Net unrealized gain (loss) on cash flow hedging derivatives 0 157 157 Net unrealized gain on postretirement benefit costs 240 287 287 Total shareholders’ equity 283,143 252,493 252,493 Total liabilities & shareholders’ equity $3,166,303 $3,157,010 $3,157,010 Common Stock Number of shares authorized 18,000,000 18,000,000 18,000,000 Number of shares issued and outstanding 11,222,363 11,155,528 11,155,528 Tangible book value per common share $22.49 $19.87 $19.87 Leverage capital ratio 8.84% 8.47% 8.47% Total risk-based capital ratio 14.02% 13.22% 13.22%
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Consolidated Statements of Income and Comprehensive Income (Unaudited) For the year ended For the quarters ended In thousands of dollars, except per share data 12/31/2025 12/31/2024 12/31/2025 12/31/2024 Interest income Interest and fees on loans 141,160 129,440 $36,025 $33,899 Interest on deposits with other banks 400 550 185 360 Interest and dividends on investments 18,711 18,842 4,522 4,740 Total interest income 160,271 148,832 40,732 38,999 Interest expense Interest on deposits 76,697 79,411 18,323 20,300 Interest on borrowed funds 6,197 5,511 1,298 1,146 Total interest expense 82,894 84,922 19,621 21,446 Net interest income 77,377 63,910 21,111 17,553 Provision for credit losses 1,850 525 272 1,164 Net interest income after provision for credit losses 75,527 63,385 20,839 16,389 Non-interest income Investment management and fiduciary income 5,427 4,963 1,433 1,274 Service charges on deposit accounts 2,161 2,048 559 496 Net securities gains - - - - Mortgage origination and servicing income 846 794 211 282 Debit Card Income 5,455 5,456 1,596 1,572 Other operating income 3,451 3,094 935 812 Total non-interest income 17,340 16,355 4,734 4,436 Non-interest expense Salaries and employee benefits 26,998 24,230 7,198 6,462 Occupancy expense 3,394 3,373 827 841 Furniture and equipment expense 5,878 5,622 1,487 1,440 FDIC insurance premiums 2,722 2,391 629 629 Acquisition Related Expenses - - - - Amortization of identified intangibles 26 26 6 6 Other operating expense 11,910 11,514 2,984 2,767 Total non-interest expense 50,928 47,156 13,131 12,145 Income before income taxes 41,939 32,584 12,442 8,680 Applicable income taxes 7,545 5,539 2,270 1,398 Net income $34,394 $27,045 $10,172 $7,282 Basic earnings per common share $3.10 $2.45 $0.92 $0.66 Diluted earnings per common share $3.07 $2.43 $0.91 $0.65 Net unrealized gain (loss) on securities available for sale 11,330 (3,096) 2,182 (8,277) Net unrealized gain on transferred securities 9 9 2 2 Net unrealized gain (loss) on hedging derivatives (157) (143) (19) 293 Unrecognized transition obligation for postretirement (47) (16) (47) (16) Other comprehensive income gain (loss) 11,135 (3,246) 2,118 ( 7,998) Comprehensive income gain (loss) $45,529 $23,799 $12,290 $(716) Financial Ratios Return on average tangible common equity 14.50% 12.35% 16.12% 12.81% Net interest margin, tax equivalent 2.63% 2.29% 2.83% 2.42%
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Board of Directors Bruce B. Tindal Chair of the Board Robert B. Gregory Ingrid H.W. Kachmar Renee W. Kelly Tony C. McKim Cornelius J. Russell Stuart G. Smith Kimberly Swan F. Stephen Ward Executive Officers Tony C. McKim President & Chief Executive Officer Richard M. Elder Executive Vice President & Chief Financial Officer Christopher J. Austin Executive Vice President & Clerk Corporate Counsel Pierce Atwood Portland, Maine Independent Auditors BerryDunn Portland, Maine The First Bancorp P .O. Box 940, Damariscotta, Maine 04543 207.563.3195 FNLC OUR BEST DAYS ARE AHEAD