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First National Lincoln Corp. Reports Operating Results (10-Q)

May 07, 2009 | About:

First National Lincoln Corp. (NASDAQ:FNLC) filed Quarterly Report for the period ended 2009-03-31.

The FIRST BANCORP headquartered in Damariscotta Maine is the holding company for The First N.A. an independent community bank in coastal Maine. The Bank provides a full range of consumer and commercial banking products and services from fourteen offices in Lincoln Knox Hancock and Washington Counties. First Advisors a division of The First provides investment advisory private banking and trust services from two offices in Lincoln and Hancock Counties. First National Lincoln Corp. has a market cap of $147.5 million; its shares were traded at around $15.19 with a P/E ratio of 10.5 and P/S ratio of 1.8. The dividend yield of First National Lincoln Corp. stocks is 5.2%.

Highlight of Business Operations:

Total interest income of $16.6 million for the three months ended March 31, 2009 is a 9.3% decrease from total interest income of $18.3 million in the comparable period of 2008. Total interest expense of $5.5 million for the first three months of 2009 is an 41.7% decrease from total interest expense of $9.5 million for the first three months of 2008. Net interest income increased 25.6% or $2.3 million to $11.1 million for the three months ended March 31, 2009, from the $8.8 million reported for the same period in 2008.

During the first quarter 2009, the Company took an after-tax charge of $596,000 for other-than-temporary impairment related to one automotive company holding in the investment portfolio. In the past six months, the Company has sold most of the corporate securities held to reduce the level of credit risk in the investment portfolio. As of March 31, 2009, corporate securities totaled only $3.1 million, of which $1.5 million is rated sub-investment grade. These securities are less than 0.5% of the Companys $323.8 million investment portfolio and had an after-tax unrealized loss of $70,000 as of March 31, 2009. In Managements opinion, no additional writedown for other-than-temporary impairment is warranted for these sub-investment-grade securities.

During the first three months of 2009, loans grew by $10.7 million or 1.1%. The growth in commercial loans was $18.1 million or 4.3% while municipal loans increased by $8.4 million or 23.2%. The residential mortgage portfolio decreased by $15.3 million or 4.0% and home equity lines of credit increased $4.3 million or 5.8% year-to-date. Between March 31, 2008 and March 31, 2009 the loan portfolio increased $56.2 million or 6.0%, as a result of customer demand.

All of these analyses are reviewed and discussed by the Directors Loan Committee, and recommendations from these processes provide Management and the Board of Directors with independent information on loan portfolio condition. As a result of these analyses, the Company has concluded that the level of the allowance for loan losses was adequate as of March 31, 2009. As of that date, the balance of $9.8 million was 0.99% of total loans, compared to 0.90% at December 31, 2008 and 0.77% at March 31, 2008. Loans considered to be impaired according to SFAS Nos. 114/118 totaled $13.1 million at March 31, 2009 compared to $12.4 million at December 31, 2008. At March 31, 2009 impaired loans with specific reserves totaled $7.9 million compared to $7.4 million at December 31, 2008. The portion of the allowance for loan losses allocated to impaired loans at March 31, 2009, was $2.3 million compared to $2.0 million at December 31, 2008.

At March 31, 2009, loans on non-accrual status totaled $13.1 million, which compares to non-accrual loans of $12.4 million as of December 31, 2008. In addition to loans on non-accrual status at March 31, 2009, loans past due 90 days or more and accruing (calculated on a constant 30-day month basis) totaled $3.9 million which compares to $5.0 million as of December 31, 2008. The Company continues to accrue interest on these loans because it believes collection of the interest is reasonably assured. The level of non-performing loans stood at 1.32% on March 31, 2009 compared to 1.27% of total loans on December 31, 2008 and 0.36% of total loans on March 31, 2008. In comparison, our peer groups non-performing loans stood at 2.30% as of December 31, 2008.

of 2009, and during the same period, certificates of deposit increased $92.6 million or 17.2%. Between March 31, 2008, and March 31, 2009, deposits increased by 19.5%, or $161.0 million. Certificates of deposit increased by $169.9 million, while low-cost deposits increased by $6.5 million and money market accounts decreased $15.5 million or 12.1%. The majority of the growth in certificates of deposit, both year-to-date and year-over-year, was primarily from wholesale and brokered sources, resulting from a change in funding from borrowed funds to certificates of deposit. The decline in low-cost deposits in the first quarter of 2009 is typical of the seasonality we experience each year in our marketplace.

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Rating: 2.3/5 (3 votes)

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