FIRST BANCORP /NC/FBNC
FIRST BANCORP /NC/ Commitments Disclosure
Commitments and Contingencies
In the normal course of business, there are various outstanding commitments to extend credit that are not reflected in the financial statements. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment. Commitments may expire without being used. The following table presents the Company’s outstanding loan commitments, including credit cards, at December 31, 2025 and December 31, 2024.
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| ($ in thousands) | Fixed Rate | Variable Rate | Total | Fixed Rate | Variable Rate | Total | ||||||||||||||||||||||||||||||||
Loan commitments | $ | 219,520 | $ | 379,963 | $ | 599,483 | $ | 157,221 | $ | 266,425 | $ | 423,646 | ||||||||||||||||||||||||||
Unused lines of credit | 403,740 | 1,684,204 | 2,087,944 | 384,078 | 1,538,439 | 1,922,517 | ||||||||||||||||||||||||||||||||
| Total | $ | 623,260 | $ | 2,064,167 | $ | 2,687,427 | $ | 541,299 | $ | 1,804,864 | $ | 2,346,163 | ||||||||||||||||||||||||||
In addition to loan commitments, at December 31, 2025 and 2024, the Company had $30.8 million and $24.5 million, respectively, in standby letters of credit outstanding. The Company has no carrying amount for these standby letters of credit at either of those dates. The nature of the standby letters of credit is a stand-alone
obligation made on behalf of the Company’s customers to suppliers of the customers to guarantee payments owed to the supplier by the customer. The standby letters of credit are generally for a term of one year, at which time they may be renewed for another year if both parties agree.
The Company maintains an allowance for unfunded loan commitments which is included in "Other liabilities" in the consolidated balance sheets. The allowance for unfunded loan commitments is determined as part of the quarterly ACL analysis.
The Company, in the normal course of business, may be subject to various pending and threatened lawsuits in which claims for monetary damages are asserted. The Company is not involved in any legal proceedings which, in management’s opinion, could have a material effect on the consolidated financial position of the Company.
Affordable Housing and Certain Other Equity Method Investments
The Company invests in affordable housing projects throughout its market area as a means of supporting local communities. The Company receives tax credits related to these investments. For qualifying affordable housing projects, the Company recognizes the liability for future contribution commitments at the date of investment in the entity. The Company may also provide construction financing to these and other similar projects; however, permanent financing is generally obtained by the projects from independent third parties upon completion of construction. Any unfunded portion of these lending commitments is included above in loan commitments. In certain circumstances, the Company may participate in the permanent financing through a nonprofit third party. The Company’s maximum exposure to losses relative to investments in the entities is generally limited to the sum of the investments, future funding commitments and any related loans to the entity. Loans to these entities are underwritten in substantially the same manner as the Company’s other loans and are generally secured.
The Company has investments in and future funding commitments related to small business investment companies ("SBICs") and certain other equity method investments. The risk exposure relating to such commitments is generally limited to the amount of investments and future funding commitments made. The Company generally does not lend to these entities.
The following table summarizes affordable housing and other equity investments.
| ($ in thousands) | Balance Sheet Location | December 31, 2025 | December 31, 2024 | |||||||||||||||||
| Investments in affordable housing projects: | ||||||||||||||||||||
| Carrying amount | $ | 135,992 | $ | 20,432 | ||||||||||||||||
| Amount of future funding commitments included in carrying amount | Other liabilities | $ | 110,856 | $ | 15,752 | |||||||||||||||
| SBIC and certain other equity method investments: | ||||||||||||||||||||
| Carrying amount | Other assets | $ | 36,524 | $ | 27,210 | |||||||||||||||
| Amount of future funding commitments not included in carrying amount | NA | $ | 16,054 | $ | 14,930 | |||||||||||||||
During the year ended December 31, 2025, the Company recognized proportional amortization expense of $1.0 million, which is included within "Income tax expense" on the consolidated statements of income. During 2024, and 2023, these amounts were de minimis. Additionally, during the years ended December 31, 2025, 2024, and 2023, the Company recognized tax credits of $1.1 million, $0.6 million and $0.6 million, respectively, which was included within income tax expense on the consolidated statements of income.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 15, 2017 | |
| 2015 | Mar 14, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.