0-26589 | 01-0404322 |
(Commission file number) | (IRS employer identification no.) |
Main Street, Damariscotta, Maine | 04543 |
(Address of principal executive offices) | (Zip Code) |
Item 2.02 Results of Operations and Financial Condition | Page 1 |
Item 9.01 Financial Statements and Exhibits | Page 1 |
Signatures | Page 2 |
Exhibit Index | Page 3 |
• | Net Income for the third quarter of 2018 increased 19.1% over the third quarter of 2017 to $5.9 million. |
• | Total loans outstanding at September 30, 2018 were $1.24 billion, up $19.1 million in the third quarter and $122.5 million, or 10.9%, year-over-year. |
• | Low Cost deposits as of September 30, 2018 totaled $766 million, an increase of $107.1 million in the third quarter, and an increase of $47 million, or 6.5% year over year. |
• | Efficiency Ratio (non-GAAP) improved to 50.82% in the third quarter, down from 51.02% in the second quarter of 2018 (the GAAP Efficiency Ratio was 52.77% in the third quarter of 2018, down from 52.92% in the second quarter of 2018). |
• | The non-performing assets to total assets ratio at September 30, 2018 was 0.74%, down from 0.78% at June 30, 2018. |
• | Earning asset growth led to a $136,000 increase in tax-equivalent net interest income from the third quarter of 2017 despite a decline in the net interest margin period to period from 3.02% to 2.83%. Through the first nine months of 2018 the net interest margin is 2.90%, down from 3.03% for the first nine months of 2017. The quarterly and year-to-date margin declines are due to higher funding costs and a reduced benefit from tax-exempt assets. |
• | Non-interest income net of securities gains was $3.0 million for the three months ended September 30, 2018, in-line with the third quarter of 2017 as revenue growth from First Advisors and deposit-based charges offset a period to period decline in mortgage banking income. |
• | Non-interest expense for the period was up $203,000 or 2.5% from the third quarter of 2017 primarily due to increased employee expense incurred to support the Company’s growth. |
• | Continued benefits from the Tax Cuts and Jobs Act of 2017 which reduced income tax expense by $1.7 million for the nine months ended September 30, 2018 from the same period in 2017. |
The First Bancorp | |||||||||
Consolidated Balance Sheets (Unaudited) | |||||||||
In thousands of dollars, except per share data | September 30, 2018 | December 31, 2017 | September 30, 2017 | ||||||
Assets | |||||||||
Cash and due from banks | $ | 21,649 | $ | 19,207 | $ | 22,375 | |||
Interest-bearing deposits in other banks | 51,045 | 860 | 584 | ||||||
Securities available for sale | 305,444 | 300,172 | 298,999 | ||||||
Securities to be held to maturity | 257,395 | 256,567 | 242,679 | ||||||
Restricted equity securities, at cost | 11,586 | 10,358 | 10,798 | ||||||
Loans held for sale | 1,134 | 386 | 434 | ||||||
Loans | 1,243,558 | 1,164,139 | 1,121,086 | ||||||
Less allowance for loan losses | 11,682 | 10,729 | 11,012 | ||||||
Net loans | 1,231,876 | 1,153,410 | 1,110,074 | ||||||
Accrued interest receivable | 7,095 | 5,867 | 5,820 | ||||||
Premises and equipment | 21,451 | 22,502 | 21,731 | ||||||
Other real estate owned | 584 | 1,012 | 320 | ||||||
Goodwill | 29,805 | 29,805 | 29,805 | ||||||
Other assets | 42,790 | 42,784 | 38,082 | ||||||
Total assets | $ | 1,981,854 | $ | 1,842,930 | $ | 1,781,701 | |||
Liabilities | |||||||||
Demand deposits | $ | 170,728 | $ | 145,332 | $ | 158,797 | |||
NOW deposits | 357,834 | 318,043 | 325,695 | ||||||
Money market deposits | 129,516 | 163,898 | 134,257 | ||||||
Savings deposits | 237,424 | 232,605 | 234,456 | ||||||
Certificates of deposit | 389,317 | 284,066 | 250,865 | ||||||
Certificates $100,000 to $250,000 | 168,402 | 232,759 | 202,722 | ||||||
Certificates $250,000 and over | 61,690 | 42,176 | 43,257 | ||||||
Total deposits | 1,514,911 | 1,418,879 | 1,350,049 | ||||||
Borrowed funds | 265,274 | 228,758 | 234,328 | ||||||
Other liabilities | 17,008 | 13,972 | 17,442 | ||||||
Total Liabilities | 1,797,193 | 1,661,609 | 1,601,819 | ||||||
Shareholders' equity | |||||||||
Common stock | 109 | 108 | 108 | ||||||
Additional paid-in capital | 62,497 | 61,747 | 61,446 | ||||||
Retained earnings | 129,247 | 121,144 | 118,360 | ||||||
Net unrealized loss on securities available-for-sale | (9,133 | ) | (2,901 | ) | (825 | ) | |||
Net unrealized loss on securities transferred from available for sale to held to maturity | (194 | ) | (174 | ) | (140 | ) | |||
Net unrealized gain on cash flow hedging derivative instruments | 2,282 | 1,544 | 1,035 | ||||||
Net unrealized loss on postretirement benefit costs | (147 | ) | (147 | ) | (102 | ) | |||
Total shareholders' equity | 184,661 | 181,321 | 179,882 | ||||||
Total liabilities & shareholders' equity | $ | 1,981,854 | $ | 1,842,930 | $ | 1,781,701 | |||
Common Stock | |||||||||
Number of shares authorized | 18,000,000 | 18,000,000 | 18,000,000 | ||||||
Number of shares issued and outstanding | 10,857,116 | 10,829,918 | 10,824,724 | ||||||
Book value per common share | $ | 17.01 | $ | 16.74 | $ | 16.62 | |||
Tangible book value per common share | $ | 14.25 | $ | 13.97 | $ | 13.84 |
The First Bancorp | ||||||||||||
Consolidated Statements of Income (Unaudited) | ||||||||||||
For the nine months ended September 30, | For the quarter ended September 30, | |||||||||||
In thousands of dollars, except per share data | 2018 | 2017 | 2018 | 2017 | ||||||||
Interest income | ||||||||||||
Interest and fees on loans | $ | 39,164 | $ | 33,415 | $ | 13,735 | $ | 11,648 | ||||
Interest on deposits with other banks | 132 | 46 | 115 | 23 | ||||||||
Interest and dividends on investments | 12,446 | 11,549 | 4,236 | 3,846 | ||||||||
Total interest income | 51,742 | 45,010 | 18,086 | 15,517 | ||||||||
Interest expense | ||||||||||||
Interest on deposits | 11,131 | 6,769 | 4,274 | 2,473 | ||||||||
Interest on borrowed funds | 3,397 | 3,146 | 1,276 | 1,090 | ||||||||
Total interest expense | 14,528 | 9,915 | 5,550 | 3,563 | ||||||||
Net interest income | 37,214 | 35,095 | 12,536 | 11,954 | ||||||||
Provision for loan losses | 1,333 | 1,750 | 333 | 750 | ||||||||
Net interest income after provision for loan losses | 35,881 | 33,345 | 12,203 | 11,204 | ||||||||
Non-interest income | ||||||||||||
Investment management and fiduciary income | 2,285 | 1,995 | 743 | 655 | ||||||||
Service charges on deposit accounts | 1,624 | 1,562 | 527 | 511 | ||||||||
Net securities gains | 137 | 471 | 1 | 468 | ||||||||
Mortgage origination and servicing income | 1,042 | 1,260 | 350 | 499 | ||||||||
Other operating income | 4,259 | 4,050 | 1,413 | 1,360 | ||||||||
Total non-interest income | 9,347 | 9,338 | 3,034 | 3,493 | ||||||||
Non-interest expense | ||||||||||||
Salaries and employee benefits | 13,230 | 12,110 | 4,460 | 4,267 | ||||||||
Occupancy expense | 1,871 | 1,816 | 574 | 589 | ||||||||
Furniture and equipment expense | 2,816 | 2,702 | 972 | 942 | ||||||||
FDIC insurance premiums | 950 | 762 | 337 | 259 | ||||||||
Amortization of identified intangibles | 32 | 32 | 10 | 10 | ||||||||
Other operating expense | 6,072 | 5,929 | 1,863 | 1,946 | ||||||||
Total non-interest expense | 24,971 | 23,351 | 8,216 | 8,013 | ||||||||
Income before income taxes | 20,257 | 19,332 | 7,021 | 6,684 | ||||||||
Applicable income taxes | 3,084 | 4,830 | 1,088 | 1,702 | ||||||||
Net Income | $ | 17,173 | $ | 14,502 | $ | 5,933 | $ | 4,982 | ||||
Basic earnings per share | $ | 1.59 | $ | 1.35 | $ | 0.55 | $ | 0.46 | ||||
Diluted earnings per share | $ | 1.58 | $ | 1.34 | $ | 0.55 | $ | 0.46 |
The First Bancorp | ||||||||||||
Selected Financial Data (Unaudited) | ||||||||||||
As of and for the nine months ended September 30, | As of and for the quarter ended September 30, | |||||||||||
Dollars in thousands, except for per share amounts | 2018 | 2017 | 2018 | 2017 | ||||||||
Summary of Operations | ||||||||||||
Interest Income | $ | 51,742 | $ | 45,010 | $ | 18,086 | $ | 15,517 | ||||
Interest Expense | 14,528 | 9,915 | 5,550 | 3,563 | ||||||||
Net Interest Income | 37,214 | 35,095 | 12,536 | 11,954 | ||||||||
Provision for Loan Losses | 1,333 | 1,750 | 333 | 750 | ||||||||
Non-Interest Income | 9,347 | 9,338 | 3,034 | 3,493 | ||||||||
Non-Interest Expense | 24,971 | 23,351 | 8,216 | 8,013 | ||||||||
Net Income | 17,173 | 14,502 | 5,933 | 4,982 | ||||||||
Per Common Share Data | ||||||||||||
Basic Earnings per Share | $ | 1.59 | $ | 1.35 | $ | 0.55 | $ | 0.46 | ||||
Diluted Earnings per Share | 1.58 | 1.34 | 0.55 | 0.46 | ||||||||
Cash Dividends Declared | 0.82 | 0.71 | 0.29 | 0.24 | ||||||||
Book Value per Common Share | 17.01 | 16.62 | 17.01 | 16.62 | ||||||||
Tangible Book Value per Common Share | 14.25 | 13.84 | 14.25 | 13.84 | ||||||||
Market Value | 28.97 | 30.31 | 28.97 | 30.31 | ||||||||
Financial Ratios | ||||||||||||
Return on Average Equity (a) | 12.47 | % | 10.86 | % | 12.63 | % | 10.91 | % | ||||
Return on Average Tangible Common Equity (a) | 14.90 | % | 13.06 | % | 15.05 | % | 13.08 | % | ||||
Return on Average Assets (a) | 1.21 | % | 1.09 | % | 1.21 | % | 1.09 | % | ||||
Average Equity to Average Assets | 9.72 | % | 10.03 | % | 9.59 | % | 10.02 | % | ||||
Average Tangible Equity to Average Assets | 8.14 | % | 8.35 | % | 8.05 | % | 8.36 | % | ||||
Net Interest Margin Tax-Equivalent (a) | 2.90 | % | 3.03 | % | 2.83 | % | 3.02 | % | ||||
Dividend Payout Ratio | 51.57 | % | 52.59 | % | 52.73 | % | 52.17 | % | ||||
Allowance for Loan Losses/Total Loans | 0.94 | % | 0.98 | % | 0.94 | % | 0.98 | % | ||||
Non-Performing Loans to Total Loans | 1.14 | % | 1.46 | % | 1.14 | % | 1.46 | % | ||||
Non-Performing Assets to Total Assets | 0.74 | % | 0.94 | % | 0.74 | % | 0.94 | % | ||||
Efficiency Ratio | 51.86 | % | 49.51 | % | 50.82 | % | 49.88 | % | ||||
At Period End | ||||||||||||
Total Assets | $ | 1,981,854 | $ | 1,781,701 | $ | 1,981,854 | $ | 1,781,701 | ||||
Total Loans | 1,243,558 | 1,121,086 | 1,243,558 | 1,121,086 | ||||||||
Total Investment Securities | 574,425 | 552,476 | 574,425 | 552,476 | ||||||||
Total Deposits | 1,514,911 | 1,350,049 | 1,514,911 | 1,350,049 | ||||||||
Total Shareholders' Equity | 184,661 | 179,882 | 184,661 | 179,882 | ||||||||
(a) Annualized using a 365-day basis for both 2018 and 2017 |
For the nine months ended | For the quarters ended | |||||||||||
In thousands of dollars | September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | ||||||||
Net interest income as presented | $ | 37,214 | $ | 35,095 | $ | 12,536 | $ | 11,954 | ||||
Effect of tax-exempt income | 1,603 | 2,953 | 557 | 1,003 | ||||||||
Net interest income, tax equivalent | $ | 38,817 | $ | 38,048 | $ | 13,093 | $ | 12,957 |
For the nine months ended | For the quarters ended | |||||||||||
In thousands of dollars | September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | ||||||||
Non-interest expense, as presented | $ | 24,971 | $ | 23,351 | $ | 8,216 | $ | 8,013 | ||||
Net interest income, as presented | 37,214 | 35,095 | 12,536 | 11,954 | ||||||||
Effect of tax-exempt interest income | 1,603 | 2,953 | 557 | 1,003 | ||||||||
Non-interest income, as presented | 9,347 | 9,338 | 3,034 | 3,493 | ||||||||
Effect of non-interest tax-exempt income | 124 | 248 | 41 | 83 | ||||||||
Net securities gains | (137 | ) | (471 | ) | (1 | ) | (468 | ) | ||||
Adjusted net interest income plus non-interest income | $ | 48,151 | $ | 47,163 | $ | 16,167 | $ | 16,065 | ||||
Non-GAAP efficiency ratio | 51.86 | % | 49.51 | % | 50.82 | % | 49.88 | % | ||||
GAAP efficiency ratio | 53.63 | % | 52.55 | % | 52.77 | % | 51.87 | % |
For the nine months ended | For the quarters ended | |||||||||||
In thousands of dollars | September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | ||||||||
Average shareholders' equity as presented | $ | 184,132 | $ | 178,482 | $ | 186,399 | $ | 181,153 | ||||
Less intangible assets | (30,006 | ) | (30,049 | ) | (30,021 | ) | (30,064 | ) | ||||
Tangible average shareholders' equity | $ | 154,126 | $ | 148,433 | $ | 156,378 | $ | 151,089 |