-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JjvbhzxhHCtSML9UyFu0gkNQBdqzkgt904LqdCGscTyHfDYyFQ5bGntVPfjA5N4X GeeZ0PI4j74BY7tWqX497A== 0000765207-97-000004.txt : 19970515 0000765207-97-000004.hdr.sgml : 19970515 ACCESSION NUMBER: 0000765207-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST NATIONAL LINCOLN CORP /ME/ CENTRAL INDEX KEY: 0000765207 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 010404322 STATE OF INCORPORATION: ME FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 002-96573 FILM NUMBER: 97605472 BUSINESS ADDRESS: STREET 1: P.O. BOX 940 STREET 2: MAIN STREET CITY: DAMARISCOTTA STATE: ME ZIP: 04543 BUSINESS PHONE: 2075633195 MAIL ADDRESS: STREET 1: P.O. BOX 940 CITY: DAMARISCOTTA STATE: ME ZIP: 04543 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended: Commission File No. 2-96573 March 31, 1997 FIRST NATIONAL LINCOLN CORPORATION (Exact name of registrant as specified in its charter) MAINE 01-0404322 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No) MAIN STREET, DAMARISCOTTA, MAINE 04543 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (207) 563 - 3195 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes XX No __ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at March 31, 1997 Common Stock, Par One Cent 616,125 FIRST NATIONAL LINCOLN CORPORATION INDEX PART 1 Financial Information Page No. Item 1: Financial Statements Consolidated Balance Sheets - 1 - 2 March 31, 1997, March 31, 1996, and December 31, 1996. Consolidated Statements of Income - 3 - 4 Three months ended March 31, 1997 and March 31, 1996. Consolidated Statements of Cash Flows - 5 - 6 Three months ended March 31, 1997 and March 31, 1996. Footnotes to Financial Statements - 7 Three months ended March 31, 1997 and March 31, 1996. Item 2: Management's discussion and analysis of 8 - 11 financial condition and results of operations. PART II Other Information Item 1: Legal Proceedings 12 Item 2: Changes in Securities 13 Item 3: Defaults Upon Senior Securities 14 Item 4: Submission of Matters to a Vote of Security Holders 15 Item 5: Other Information 16 Item 6: Exhibits and reports on Form 8-K. 17 Signatures 18 FIRST NATIONAL LINCOLN CORPORATION AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (000 OMITTED) 3/31/97 3/31/96 12/31/96 (Unaudited) (Unaudited) (Unaudited) Assets Cash and due from banks $5,981 $4,044 $6,023 Interest bearing deposits in other banks 1 0 975 Investments: Available for sale 16,168 29,672 18,492 Held to maturity (market values $54,589 at 3/31/97, $35,729 at 3/31/96 and $41,873 at 12/31/96) 55,059 36,351 42,072 Loans held for sale (market value $302 at 12/31/96) 0 0 302 Loans 161,432 140,705 156,970 Less allowance for loan losses 1,852 1,961 1,906 Net loans 159,580 138,744 155,064 Accrued interest receivable 1,830 1,788 1,702 Bank premises and equipment 4,164 4,057 4,172 Other real estate owned 674 889 814 Other assets 1,174 914 1,152 Total Assets $244,631 $216,459 $230,768 Liabilities & Stockholders' Equity Demand deposits $12,625 $12,820 $14,786 NOW deposits 24,858 25,830 26,349 Money market deposits 5,073 5,771 6,314 Savings deposits 34,004 33,733 34,688 Certificates of deposit 63,796 58,883 61,476 Certificates $100M and over 13,520 13,015 12,061 Total deposits $153,876 $150,052 $155,674 Page1 BALANCE SHEETS CONT. 3/31/97 3/31/96 12/31/96 (Unaudited) (Unaudited) (Unaudited) Borrowed funds 65,694 44,692 51,148 Other liabilities 1,807 1,617 1,469 Total Liabilities 221,377 196,361 208,291 Shareholders' Equity: Common stock 6 1,527 6 Additional paid-in capital 4,486 2,753 4,486 Retained earnings 18,754 15,765 17,971 Net unrealized gains (losses) on available- for-sale securities 10 53 14 Treasury stock (2) 0 0 Total Stockholders' Equity 23,254 20,098 22,477 Total Liabilities & Stockholders' $244,631 $216,459 $230,768 Page 2 FIRST NATIONAL LINCOLN CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (000 OMITTED) For the three months ended March 31, 1997 1996 (Unaudited) (Unaudited) Interest Income: Interest and fees on loans $3,513 $3,130 Interest on deposits with other banks 13 4 Interest and dividends on investments 1,087 1,091 Total interest income 4,613 4,225 Interest expense: Interest on deposits 1,378 1,440 Interest on borrowed funds 780 587 Total interest expense 2,158 2,027 Net interest income 2,455 2,198 Provision for loan losses 0 0 Net interest income after provision for loan losses 2,455 2,198 Other operating income: Trust department income 81 80 Service charges on deposit accounts 130 119 Net securities gains (losses) 0 6 Other operating income 105 95 Total other operating income 316 300 Other operating expenses: Salaries and employee benefits 809 758 Occupancy expense 87 86 Furniture and equipment expense 141 145 Other 403 411 Total other operating expenses 1,440 1,400 Page 3 STATEMENTS OF INCOME CONT. 1997 1996 (Unaudited) (Unaudited) Income before income taxes 1,331 1,098 Applicable income taxes 418 353 NET INCOME $913 $745 Earnings per common share: Net income $1.48 $1.22 Dividends declared $0.21 $0.17 Page 4 FIRST NATIONAL LINCOLN CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS For the three months ended March 31, 1997 1996 (Unaudited) (Unaudited) Cash flows from operating activities: Net income $913 $745 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 131 132 Provision for loan losses 0 0 Loans originated for resale (402) 0 Proceeds from sales and transfers of loans 704 0 Net (gain) loss on sale of investments 0 (6) Provision for losses on other real estate owned 0 0 Losses related to other real estate owned 14 11 Net change in other assets (150) 64 Net change in other liabilities 455 141 Net amortization of premium on investments 47 17 Net cash provided by operating activ 1,712 1,104 Cash flows from investing activities: Proceeds from sales of investments 0 3,500 Proceeds from maturities of investments 5,819 4,370 Maturities of interest-bearing deposits 974 2,700 Proceeds from sales of other real estate 126 170 Additional investment in other real estat 0 0 Purchase of investments (16,535) (12,319) Net decrease (increase) in loans (4,516) (3,831) Capital expenditures (122) (42) Net cash used in investing activities (14,254) (5,452) Cash flows from financing activities: Net increase (decrease) in demand deposits, savings, money market and club accounts (5,577) (2,021) Net increase (decrease) in certificates of deposit 3,779 1,605 Net increase (decrease) in other borrowings 14,546 3,467 Proceeds from sale of Treasury stock 45 3 Payment to repurchase common stock (47) 0 Net proceeds from stock issuance 0 38 Dividends paid (246) (104) Net cash provided by financing activities 12,500 2,988 Page 5 STATEMENTS OF CASH FLOWS CONT. 1997 1996 (Unaudited) (Unaudited) Net increase (decrease) in cash and cash equivalents (42) (1,360) Cash and cash equivalents at beginning of period 6,023 5,404 Cash and cash equivalents at end of period $5,981 $4,044 Interest paid $2,056 $1,947 Income taxes paid 25 8 Non-cash transactions: Loans transferred to other real estate owned (net) 0 423 Loans held for sale transferred to loan portfolio 0 4,066 Net change in unrealized gain (loss) on available for sale securities (6) (226) Page 6 FOOTNOTES TO FINANCIAL STATEMENTS 1. At the Company's annual meeting held on April 30, 1996, shareholders approved an amendment to increase the number of shares of common stock authorized for issuance from 1,200,000 to 6,000,000, and to change the par value of the common stock from no par value to $.01 cent per share. 2. The quarterly financial statements in the opinion of Management fairly represent all adjustments made to reflect the current financial condition of the Company for this interim period just ended. All such adjustments were of a normal recurring nature. Page 7 Item 2 - MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION & RESULTS OF OPERATIONS EARNINGS SUMMARY Net income for the three months ended March 31, 1997 was $913,000, an increase of 22.6% over 1996's net income of $745,000. NET INTEREST INCOME Net interest income for the three months ended March 31, 1997 was $2,455,000, a 11.7% increase over 1996's net interest income of $2,198,000. Total interest income of $4,613,000 is a 9.2% increase over 1996's total interest income of $4,225,000. Total interest expense of $2,158,000 is a 6.5% increase over 1996's total interest expense of $2,027,000. PROVISION FOR LOAN LOSSES No provision to the allowance for loan losses was made during the first three months of 1997. The allowance for loan losses is deemed adequate as calculated in accordance with Banking Circular #201 and with respect to SFAS 114/118. Loans considered to be impaired according to SFAS 114/118 totalled $174,000 at March 31, 1997. The portion of the allowance for loan losses allocated to impaired loans at March 31, 1997 was $34,000. NON-INTEREST INCOME Non-interest income of $316,000 for the three months ended March 31, 1997 was an increase of 5.3% from 1996's non-interest income of $300,000. NON-INTEREST EXPENSE Non-interest expense of $1,440,000 for the three months ended March 31, 1997 is an increase of 2.9% from 1996's non-interest expense of $1,400,000. INCOME TAXES Income taxes on operating earnings increased to $418,000 for the first three months of 1997 from $353,000 for the same period a year ago. The level of income taxes has increased as a result of the Company's increased earnings. DEPOSITS AND BORROWED FUNDS Deposits as of March 31, 1997 increased by 2.5% or $3,824,000 from March 31, 1996. Demand deposits decreased by 1.5% or $195,000, NOW deposits decreased by 3.8% or $972,000, savings deposits increased by 0.8% or $271,000, money market deposits decreased by 12.1% or $698,000 and certificates of deposit increased by 7.5% or $5,418,000. Deposits were supplemented by borrowings from the Federal Home Loan Bank and repurchase agreements. Total borrowed funds increased by 47.0% or $21,002,000 from the same period a year ago. Page 8 STOCKHOLDERS' INVESTMENT AND CAPITAL RESOURCES Stockholders' investment as of March 31, 1997 was $23,254,000 compared to $20,098,000 for the same period in 1996. The reason for this increase was the strong earnings performance in the year 1996 and the first three months of 1997. During 1996, the Company increased its dividend once cent each quarter to end the year at a dividend rate of 20 cents per share. In addition, a special cash dividend of 20 cents per share was declared in the fourth quarter of 1996. In the first quarter of 1997, dividends were increased one cent again to 21 cents per share. Leverage capital ratios for the Company were 9.51% and 9.28%, respectively, at March 31, 1997 and March 31, 1996. The Bank had a tier one risk-based capital ratio of 15.21% and tier two risk-based capital ratio of 16.46% at March 31, 1997, compared to 13.94% and 15.19%, respectively, at March 31, 1996. These were comfortably above the standards to be rated "well- capitalized" by the regulatory authorities. LIQUIDITY MANAGEMENT As of March 31, 1997 the Bank had primary sources of liquidity of $40,278,000, or 16.5% of its assets. It is Management's opinion that this is adequate. In its Asset/Liability policy, the Bank has adopted guidelines for liquidity. We are not aware of any current recommendations by the regulatory authorities which, if they were to be implemented, would have a material effect on the Corporation's liquidity, capital resources or results of operations. LOAN POLICIES Real estate values: A. Residential properties We loan up to 80% of the appraised value of properties without mortgage insurance and up to 95% of the appraised value of properties with mortgage insurance. No further appraisals are done as long as the payment history remains satisfactory. If a loan becomes delinquent, a review might be done of the loan. When a loan becomes 90 or more days past due, an in-depth review is made of the loan and a determination made as to whether or not a reappraisal is required. B. Land only properties We do not have many of these but we do loan up to 65% of the appraised value of the property. They are handled the same way as above from booking date on. C. Commercial properties We loan up to 75% of the appraised value and, once the loan is closed, the decision to re-appraise a property is subjective and depends on a variety of factors, such as: the payment status of the loan, the risk rating of the loan, the amount of time that has passed since the last appraisal, changes in the real estate market, availability of financing, inventory of competing properties, and changes in condition of the property i.e. zoning changes, environmental contamination, etc. Page 9 Note: A certified or licensed appraiser is used for all appraisals. At March 31, 1997 and 1996, loans on a non-accrual status totaled $439,000 and $526,000, respectively. In addition to loans on a non-accrual status at March 31, 1997 and 1996, loans past due greater than 90 days totaled $221,000 and $111,000 respectively. The Company continues to accrue interest on these loans because it believes collection of the interest is reasonably assured. INVESTMENTS As of March 31, 1997 stockholders' equity was increased by $10,000 due to a net unrealized gain in the available-for-sale portfolio. OFF-BALANCE SHEET FINANCIAL INSTRUMENTS No material off-balance sheet risk exists that requires a separate liability presentation. SALE OF LOANS No recourse obligations have been incurred in connection with the sale of loans. RISK ELEMENTS Any loans classified for regulatory purposes as loss, doubtful, substandard, or special mention that have not been disclosed under Item III of Industry Guide 3 do not represent or result from trends or uncertainties which Management reasonably expects will materially impact future operating results, liquidity or capital resources. There are no known potential problem loans which are not now disclosed pursuant to Item III. C. 1. of Industry Guide 3. Item III. C. 2. is not applicable. REGULATORY MATTERS Procedures for monitoring Bank Loan Administration: A. Loan reviews are done on a regular basis. B. An action plan is prepared quarterly on all criticized commercial loans greater than $100,000. C. Delinquent loans are reviewed weekly by the Bank's Collections Officer and Senior Loan Officer. D. A tickler system is utilized to insure timely receipt of current information (such as financial statements, appraisals and/or credit memos to the credit file). Note: Most of the above applies only to commercial loans, but retail loans are reviewed periodically, usually around a delinquency. Page 10 Procedures for monitoring Bank Other Real Estate Owned: The O.R.E.O. portfolio is handled by the Collections Officer, with backup by the Senior Loan Officer. Most properties are listed with real estate brokers for sale. All properties are appraised periodically for market value, and provision is made to the allowance for O.R.E.O. losses if the estimated market value after selling costs is lower than the carrying value of the property. ACCOUNTING PRONOUNCEMENTS SFAS No. 122, "Accounting for Mortgage Servicing Rights" was adopted in 1996. SFAS requires the recognition of rights to service mortgage loans for others as separate assets, regardless of whether the rights were originated or purchased, and subsequent, periodic evaluations of the capitalized rights for impairment. The adoption of this statement did not have a material effect on the financial statements. The Company adopted SFAS No. 123, "Accounting for Stock Based Compensation," and has elected the intrinsic value method. The financial statements are not affected. SFAS No. 125, as amended by SFAS No. 127, relates to the the accounting for transfers and servicing of financial assets and extinguishments of certain liabilities and is effective for years beginning January 1, 1997. The adoption of this statement did not have an effect on the financial statements. SFAS No. 128, "Earnings per Share", and SFAS No. 129, Disclosure of Information about Capital Structure", were issued in February 1997 and are effective for interim and annual periods ending after December 15, 1997. The effect of adopting these statements has not been determined. Page 11 PART II ITEM 1. LEGAL PROCEEDINGS The Company was not involved in any legal proceedings requiring disclosure under Item 103 of Regulation S-K during the reporting period. Page 12 ITEM 2. CHANGES IN SECURITIES None Page 13 ITEM 3. DEFAULT UPON SENIOR SECURITIES None. Page 14 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None Page 15 ITEM 5: Other Information None. Page 16 ITEM 6: Exhibits, Financial Statement Schedules, and reports on Form 8-K A. EXHIBITS EXHIBIT 27. Financial Data Schedule. B. REPORTS ON FORM 8-K During the registrant's first six months ended March 31, 1997 the registrant was not required to and did not file any reports on Form 8-K. Page 17 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FIRST NATIONAL LINCOLN CORPORATION May 13, 1997 Daniel R. Daigneault Date Daniel R. Daigneault President and CEO May 13, 1997 F. Stephen Ward Date F. Stephen Ward Treasurer Page 18 EX-27 2
9 1000 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 5981 1 0 0 16168 55059 54589 161432 1852 244631 153876 64050 1807 1644 6 0 0 23248 244631 3513 1087 13 4613 1378 2158 2455 0 0 1440 1331 1331 0 0 913 1.48 1.48 4.22 439 221 0 0 1906 75 21 1852 1852 0 0
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