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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 21, 2004
FIRST NATIONAL LINCOLN CORPORATION
(Exact name of Registrant as specified in charter)
MAINE
(State or other jurisdiction of incorporation)
0-26589 01-0404322
(Commission file number) (IRS employer identification no.)
Main Street, Damariscotta, Maine 04853
(Address of principal executive offices) (Zip Code)
(207) 563-3195
(Registrant's telephone number, including area code)
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Item 5. Other Events
This information is being provided under Item 12 of Form 8-K.
The Company today issued the following press release:
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First National Lincoln Corporation Reports Record First Quarter Earnings Per
Share, Up 13.2% Over Prior Year
DAMARISCOTTA, ME., April 21 -- First National Lincoln Corporation (Nasdaq NM:
FNLC), today announced earnings per share of $0.77 on a fully diluted basis for
the three months and for the quarter ended March 31, 2004, an increase of $0.09
or 13.2% over the $0.68 reported for the same periods in 2003. Net income for
both the quarter and year to date was $1,924,000, an increase of $245,000 or
14.6% over the $1,679,000 posted in 2003. Both earnings per share and net
income reported by the Company for 2004 set new first-quarter records.
Year-to-date changes on the balance sheet showed total assets at $578.2 million
on March 31, 2004 -- an increase of 1.7% over December 31, 2003. Loans totaled
$415.5 million, up 4.2% over December 31, 2003, while investments increased by
1.0% to $138.1 million. Deposits of $384.3 million were up 7.0% over year end.
As of March 31, 2004, First National Lincoln Corporation had total equity of
$49.4 million, an increase of 3.4% or $1.6 million over December 31, 2003.
"I am pleased to report that we are starting off 2004 with a very strong first
quarter," commented the Company's President and Chief Executive Officer, Daniel
R. Daigneault. "While our results are slightly below those posted in the third
and fourth quarters of 2003, net income of $1,924,000 significantly surpassed
our previous first-quarter record by 14.6% which was set in 2003. This was
primarily attributable to a 20.8% increase in net interest income and keeping
the increase in operating expenses to a reasonable level -- it is also
reflected in our excellent efficiency ratio, which was 49.3% for the first
quarter of 2004.
"The continued record-low level of interest rates in 2004 remains an operating
challenge for many other banks," President Daigneault continued, "Fortunately,
we have managed our balance sheet so that we have a relatively low level of
interest rate risk. As a result, we have not seen a decline in net interest
income due to the current level of historically low interest rates.
"Loan growth was very strong in the first quarter," President Daigneault went
on, "with total loans increasing $16.6 million or 4.2% over December 31, 2003.
We experienced this growth in most loan categories, and at the same time our
credit quality remained excellent with continued low levels of loan losses and
delinquencies. While much of our residential mortgage production was placed
into our portfolio -- $7.3 million -- we also increased total loans sold to the
secondary market by $2.2 million to $90.1 million.
"We continue to be very pleased with the performance of our three newest
offices in Knox county," President Daigneault observed. "In the six-plus years
since we opened our first office in Rockport, we have continued to gain market
share in both loans and deposits. A recent report produced by the Maine Credit
Bureau indicates we were the number two mortgage originator in Knox County in
2003. And, when we put together data for both Knox and Lincoln Counties, it
shows we were the number one originator of mortgages on a combined basis in
2003."
"In addition to our strong earnings, we continue to post excellent results in
other areas," commented F. Stephen Ward, the Company's Treasurer & Chief
Financial Officer. "Our return on average equity was 16.14% in the first
quarter of 2004 compared to 15.77% for the first quarter of 2003, both of which
are above the important 15.00% benchmark that is commonly viewed as defining a
high-performance bank. To put this in even greater perspective, according to a
recently BankIntelligence report, The First's return on average equity as of
December 31, 2003 was in the 93rd percentile of all banks in the United States.
"Our dividend increased once again by $0.01 in the first quarter of 2004 to
$0.31 per share per quarter. This results in an annualized dividend of $1.24
per share, which translates into an annual dividend yield of 2.6% based upon
our March 31, 2004 closing price. The Company has now raised its dividend for
34 consecutive quarters, and given the favorable tax treatment of dividend
income, we recognize that the level to which we share our profitability in the
form of cash dividends is very important to our shareholders."
"The market price of First National Lincoln Corporation stock ended the quarter
at $48.00 per share" President Daigneault concluded. "While this is a decline
from the $49.90 closing price on December 31, 2003, it is still a $14.05 or
41.4% increase over the $33.95 closing price of a year ago on March 31, 2003.
During the first quarter of 2004, our stock traded at a high of $50.50 per
share, and we continue to maintain a very strong trailing-twelve-month
price/earnings ratio of 15.6. Because of the consistent performance we have
posted over many years, I continue to see First National Lincoln Corporation as
an excellent investment opportunity."
First National Lincoln Corporation, headquartered in Damariscotta, Maine, is
the holding company for The First National Bank of Damariscotta and Pemaquid
Advisors. The First is an independent community bank serving Mid-Coast Maine
with seven offices in Lincoln and Knox Counties that provide consumer and
commercial banking products and services. Pemaquid Advisors provides investment
advisory, private banking and trust services from offices in Damariscotta,
Boothbay Harbor, and Portland, Maine.
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 to differ materially, as discussed in the Company's filings with the
Securities and Exchange Commission.
For more information, please contact F. Stephen Ward, Treasurer & Chief
Financial Officer, at 207.563.3195 ext. 5001
First National Lincoln Corporation
Consolidated Balance Sheets (Unaudited)
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March 31, March 31, December 31,
In thousands of dollars 2004 2003 2003
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Assets
Cash and due from banks $ 9,236 $ 10,146 $ 17,087
Overnight Funds Sold 0 3,800 0
Investments:
Available for sale 55,570 63,652 57,445
Held to maturity (market values $84,455
at 3/31/04, $66,771 at 3/31/03, and
$80,820 at 12/31/03) 82,499 65,015 79,244
Loans held for sale (fair value
approximates cost) 295 1,535 982
Loans 415,460 346,095 398,895
Less: allowance for loan losses 4,392 3,809 4,200
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Net loans 411,068 342,286 394,695
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Accrued interest receivable 3,147 3,051 2,743
Bank premises and equipment 8,948 7,657 9,007
Other real estate owned 44 75 51
Other assets 7,412 6,871 7,558
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Total Assets $ 578,219 $ 504,088 $ 568,812
======= ======= =======
Liabilities & Stockholders' Equity
Demand deposits $ 26,581 $ 23,501 $ 28,874
NOW deposits 51,346 46,736 52,161
Money market deposits 80,837 91,611 80,586
Savings deposits 63,085 60,116 63,356
Certificates of deposit 77,840 69,110 69,880
Certificates $100,000 and over 84,562 49,303 64,220
------- ------- -------
Total deposits 384,251 340,377 359,077
Borrowed funds 139,515 115,151 157,822
Other liabilities 5,101 4,608 4,195
------- ------- -------
Total Liabilities 528,867 460,136 521,094
------- ------- -------
Shareholders' Equity:
Common stock 25 25 25
Additional paid-in capital 4,046 4,687 4,699
Retained earnings 44,155 39,348 42,988
Net unrealized gains on available-for-
sale securities 2,805 2,339 2,497
Treasury stock (1,679) (2,447) (2,491)
------- ------- -------
Total Stockholders' Equity 49,352 43,952 47,718
------- ------- -------
Total Liabilities
& Stockholders' Equity $ 578,219 $ 504,088 $ 568,812
======= ======= =======
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First National Lincoln Corporation
Consolidated Statements of Income (Unaudited)
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For the three months and
quarters ended March 31,
In thousands of dollars 2004 2003
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Interest Income:
Interest and fees on loans $ 5,553 $ 5,265
Interest on deposits with other banks 3 43
Interest and dividends on investments 1,565 1,560
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Total interest income 7,121 6,868
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Interest expense:
Interest on deposits 1,260 1,704
Interest on borrowed funds 908 1,064
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Total interest expense 2,168 2,768
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Net interest income 4,953 4,100
Provision for loan losses 240 225
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Net interest income after provision for loan losses 4,713 3,875
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Other operating income:
Fiduciary income 214 189
Service charges on deposit accounts 271 267
Mortgage origination and servicing income 165 292
Other operating income 453 475
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Total other operating income 1,103 1,223
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Other operating expenses:
Salaries and employee benefits 1,664 1,412
Occupancy expense 213 192
Furniture and equipment expense 366 358
Other 881 796
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Total other operating expenses 3,124 2,758
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Income before income taxes 2,692 2,340
Applicable income taxes 768 661
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NET INCOME $ 1,924 $ 1,679
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First National Lincoln Corporation
Selected Financial Data (Unaudited)
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For the three months and
Dollars in thousands, quarters ended March 31,
except for per share amounts 2004 2003
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Summary of Operations
Operating Income $ 8,224 $ 8,091
Operating Expense 5,532 5,751
Net Interest Income 4,953 4,100
Provision for Loan Losses 240 225
Net Income 1,924 1,679
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Per Common Share Data
Basic Earnings per Share $ 0.79 $ 0.69
Diluted Earnings per Share 0.77 0.68
Cash Dividends Declared 0.31 0.27
Book Value 20.22 18.16
Market Value 48.00 33.95
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Financial Ratios
Return on Average Equity (a) 16.14% 15.77%
Return on Average Assets (a) 1.36% 1.36%
Average Equity to Average Assets 8.43% 8.59%
Net Interest Margin Tax-Equivalent (a) 3.87% 3.66%
Dividend Payout Ratio 39.24% 39.13%
Allowance for Loan Losses/Total Loans 1.06% 1.10%
Non-Performing Loans to Total Loans 0.40% 0.34%
Non-Performing Assets to Total Assets 0.30% 0.25%
Efficiency Ratio 49.26% 49.42%
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At Period End
Total Assets $ 578,219 $ 504,088
Total Loans 415,460 346,095
Total Investment Securities 138,069 128,667
Total Deposits 384,251 340,377
Total Shareholders' Equity 49,352 43,952
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(a) Annualized using a 365-day basis
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-30-
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Company has duly caused this report to be filed on its behalf by
the undersigned thereunto duly authorized.
FIRST NATIONAL LINCOLN CORPORATION
By: /s/ F. Stephen Ward
F. Stephen Ward
Treasurer & Chief Financial Officer
April 21, 2004