First Bancorp, Inc /ME/ [FNLC] Filings

10-Q 1 fnlc-20230331.htm 10-Q fnlc-20230331

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

For the quarterly period ended March 31, 2023

Commission File Number 0-26589

THE FIRST BANCORP, INC.

(Exact name of Registrant as specified in its charter)


Maine			01-0404322
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


Main Street	Damariscotta	Maine	04543
(Address of principal executive offices)			(Zip code)

(207) 563-3195

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	FNLC	NASDAQ Global Select Market

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 12 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,

if any, every, Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, or a smaller

reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule

12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended

transition period for complying with any new or revised financial accounting standards provided pursuant to

Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant's classes of common stock as of May 1, 2023

Common Stock: 11,078,638 shares

Table of Contents


Part I. Financial Information			1
Selected Financial Data (Unaudited)			1
Item 1 – Financial Statements			2
Report of Independent Registered Public Accounting Firm			2
Consolidated Balance Sheets (Unaudited)			3
Consolidated Statements of Income and Comprehensive Income (Unaudited)			4
Consolidated Statements of Changes in Shareholders' Equity (Unaudited)			5
Consolidated Statements of Cash Flows (Unaudited)			6
Notes to Consolidated Financial Statements			8
Note 1 – Basis of Presentation			8
Note 2 –Investment Securities			9
Note 3 – Loans			14
Note 4 – Allowance for Credit Losses			24
Note 5 – Stock-Based Compensation			33
Note 6 – Preferred and Common Stock			33
Note 7 – Earnings Per Share			34
Note 8 – Employee Benefit Plans			34
Note 9 – Other Comprehensive Income (Loss)			35
Note 10 – Financial Derivative Instruments			36
Note 11 – Mortgage Servicing Rights			38
Note 12 – Income Taxes			38
Note 13 – Certificates of Deposit			39
Note 14 – Reclassifications			39
Note 15 – Fair Value Disclosures			39
Note 16 – Impact of Recently Issued Accounting Standards			46
Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations			47
Forward-Looking Statements			47
Critical Accounting Policies			47
Use of Non-GAAP Financial Measures			49
Executive Summary			51
Net Interest Income			52
Average Daily Balance Sheets			54
Non-Interest Income			54
Non-Interest Expense			55
Income Taxes			55
Investments			55
Debt Securities-Unrealized Loss Position			57
Federal Home Loan Bank Stock			59
Loans and Loans Held for Sale			59
Credit Risk Management and Allowance for Credit Losses			61
Non-Performing Loans and Loan Modifications			65
I ndividually Analyzed Loans			67
Past Due Loans			68
Potential Problem Loans and Loans in Process of Foreclosure			68
Other Real Estate Owned			69
Liquidity			69
Deposits			69
Borrowed Funds			70


Capital Resources			70
Off-Balance-Sheet Financial Instruments and Contractual Obligations			71
Item 3 – Quantitative and Qualitative Disclosures About Market Risk			73
Market-Risk Management			73
Asset/Liability Management			73
Interest Rate Risk Management			74
Item 4 - Controls and Procedures			75
Part II. Other Information			76
Item 1 – Legal Proceedings			76
Item 1a – Risk Factors			76
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds			76
Item 3 – Default Upon Senior Securities			76
Item 4 – Mine Safety Disclosures			76
Item 5 – Other Information			76
Item 6 – Exhibits			77
Signatures			78

Part I. Financial Information

Selected Financial Data (Unaudited)

The First Bancorp, Inc. and Subsidiary


Dollars in thousands,	As of and for the three months ended March 31,
except for per share amounts	2023			2022
Summary of Operations
Interest Income	$	28,914		$	20,533
Interest Expense	11,439			1,913
Net Interest Income	17,475			18,620
Provision for Credit Losses	550			450
Non-Interest Income	3,569			4,232
Non-Interest Expense	10,850			10,650
Net Income	7,971			9,705
Per Common Share Data
Basic Earnings per Share	$	0.73		$	0.89
Diluted Earnings per Share	0.72			0.88
Cash Dividends Declared	0.34			0.32
Book Value per Common Share	20.63			21.19
Tangible Book Value per Common Share2	17.84			18.39
Market Value	25.89			30.08
Financial Ratios
Return on Average Equity1	13.61		%	15.96		%
Return on Average Tangible Common Equity1,2	15.64		%	18.25		%
Return on Average Assets1	1.16		%	1.56		%
Average Equity to Average Assets	8.56		%	9.80		%
Average Tangible Equity to Average Assets2	7.45		%	8.57		%
Net Interest Margin Tax-Equivalent1,2	2.78		%	3.24		%
Dividend Payout Ratio	46.58		%	35.96		%
Allowance for Credit Losses/Total Loans	1.18		%	0.92		%
Non-Performing Loans to Total Loans	0.09		%	0.30		%
Non-Performing Assets to Total Assets	0.06		%	0.20		%
Efficiency Ratio2	49.98		%	45.42		%
At Period End
Total Assets	$	2,811,820		$	2,548,607
Total Loans	1,982,847			1,707,348
Total Investment Securities	683,961			695,600
Total Deposits	2,466,701			2,158,539
Total Shareholders' Equity	228,461			233,646

1Annualized using a 365-day basis in both 2023 and 2022.

2These ratios use non-GAAP financial measures. See Management's Discussion and Analysis of Financial Condition and Results of Operations for additional disclosures and information.

Item 1 – Financial Statements

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

The First Bancorp, Inc.

Results of Review of Interim Financial Information

We have reviewed the accompanying interim consolidated financial information of The First Bancorp, Inc. and Subsidiary as of March 31, 2023 and 2022 and for the three-months periods then ended, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for them to be in conformity with accounting principles generally accepted in the United States of America.

Basis for Review Results

This consolidated interim financial information is the responsibility of the Company's management. We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Berry Dunn McNeil & Parker, LLC

Portland, Maine

May 9, 2023

Consolidated Balance Sheets (Unaudited)

The First Bancorp, Inc. and Subsidiary


	March 31, 2023		December 31, 2022		March 31, 2022
Assets
Cash and cash equivalents	$	27,458,000	$	22,728,000	$	22,051,000
Interest bearing deposits in other banks	2,773,000		3,693,000		18,427,000
Securities available for sale	288,242,000		284,509,000		313,015,000
Securities held-to-maturity, net of allowance for credit losses of $438,000 at March 31, 20231 (fair value of $344,053,000 at March 31, 2023, $339,011,000 at December 31, 2022 and $353,191,000 at March 31, 2022)	391,845,000		393,896,000		377,183,000
Restricted equity securities, at cost	3,874,000		3,883,000		5,402,000
Loans held for sale	—		275,000		400,000
Loans	1,982,847,000		1,914,674,000		1,707,348,000
Less allowance for credit losses	23,458,000		16,723,000		15,766,000
Net loans	1,959,389,000		1,897,951,000		1,691,582,000
Accrued interest receivable	12,142,000		9,829,000		9,737,000
Premises and equipment, net	28,286,000		28,277,000		29,137,000

Goodwill	30,646,000		30,646,000		30,646,000
Other assets	67,165,000		63,491,000		51,027,000
Total assets	$	2,811,820,000	$	2,739,178,000	$	2,548,607,000
Liabilities
Demand deposits	$	293,123,000	$	318,626,000	$	321,971,000
NOW deposits	623,523,000		630,416,000		658,151,000
Money market deposits	194,183,000		192,632,000		197,176,000
Savings deposits	346,205,000		369,532,000		371,294,000
Certificates of deposit	1,009,667,000		867,671,000		609,947,000
Total deposits	2,466,701,000		2,378,877,000		2,158,539,000
Borrowed funds – short term	83,800,000		103,399,000		78,623,000
Borrowed funds – long term	81,000		84,000		55,089,000
Other liabilities	32,777,000		27,895,000		22,710,000
Total liabilities	2,583,359,000		2,510,255,000		2,314,961,000
Shareholders' equity

Common stock, one cent par value per share	111,000		110,000		110,000
Additional paid-in capital	68,830,000		68,435,000		67,246,000
Retained earnings	202,036,000		204,343,000		186,324,000
Accumulated other comprehensive income (loss)
Net unrealized loss on securities available-for-sale	(40,537,000)		(44,718,000)		(20,061,000)
Net unrealized loss on securities transferred from available-for-sale to held-to-maturity	(60,000)		(64,000)		(78,000)
Net unrealized gain (loss) on hedging derivative instruments	(2,192,000)		544,000		—
Net unrealized gain on postretirement costs	273,000		273,000		105,000
Total shareholders' equity	228,461,000		228,923,000		233,646,000
Total liabilities & shareholders' equity	$	2,811,820,000	$	2,739,178,000	$	2,548,607,000
Common Stock
Number of shares authorized	18,000,000		18,000,000		18,000,000
Number of shares issued and outstanding	11,074,182		11,045,186		11,024,086
Book value per common share	$	20.63	$	20.73	$	21.19
Tangible book value per common share	$	17.84	$	17.93	$	18.39

1December 31, 2022 and March 31, 2022 had no allowance for credit losses

See Report of Independent Registered Public Accounting Firm. The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Income and Comprehensive Income (Loss) (Unaudited)

The First Bancorp, Inc. and Subsidiary


	For the three months ended March 31,
	2023		2022
Interest income
Interest and fees on loans (includes YTD tax-exempt income of $329,000 for March 31, 2023 and $291,000 for March 31, 2022)	$	24,125,000	$	16,613,000
Interest on deposits with other banks	40,000		9,000
Interest and dividends on investments (includes YTD tax-exempt income of $2,002,000 for March 31, 2023 and $1,803,000 for March 31, 2022)	4,749,000		3,911,000
Total interest income	28,914,000		20,533,000
Interest expense
Interest on deposits	10,917,000		1,625,000
Interest on borrowed funds	522,000		288,000
Total interest expense	11,439,000		1,913,000
Net interest income	17,475,000		18,620,000
Provision for credit losses	550,000		450,000
Net interest income after provision for credit losses	16,925,000		18,170,000
Non-interest income
Investment management and fiduciary income	1,146,000		1,197,000
Service charges on deposit accounts	437,000		437,000
Net securities gains	—		2,000
Mortgage origination and servicing income, net of amortization	192,000		498,000
Debit card income	1,185,000		1,430,000
Other operating income	609,000		668,000
Total non-interest income	3,569,000		4,232,000
Non-interest expense
Salaries and employee benefits	5,720,000		5,937,000
Occupancy expense	868,000		829,000
Furniture and equipment expense	1,303,000		1,235,000
FDIC insurance premiums	344,000		218,000
Amortization of identified intangibles	7,000		17,000
Other operating expense	2,608,000		2,414,000
Total non-interest expense	10,850,000		10,650,000
Income before income taxes	9,644,000		11,752,000
Income tax expense	1,673,000		2,047,000
NET INCOME	$	7,971,000	$	9,705,000
Basic earnings per common share	$	0.73	$	0.89
Diluted earnings per common share	$	0.72	$	0.88
Other comprehensive income (loss) net of tax
Net unrealized gain (loss) on securities available for sale, net of taxes	$	4,181,000	$	(18,343,000)
Net unrealized gain on transferred securities, net of taxes	4,000		9,000
Net unrealized loss on hedging derivative instruments	(2,736,000)		—

Other comprehensive income (loss)	1,449,000		(18,334,000)
Comprehensive income (loss)	$	9,420,000	$	(8,629,000)

See Report of Independent Registered Public Accounting Firm.

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Changes in Shareholders' Equity (Unaudited)

The First Bancorp, Inc. and Subsidiary


Three Month Period Ended March 31, 2023 and 2022
		Common stock and additional paid-in capital			Retained earnings		Accumulated other comprehensive income (loss)		Total shareholders' equity
	Shares	Amount
Balance at December 31, 2021		10,998,765	66,940,000		180,417,000		(1,700,000)		245,657,000
Net income		—	—		9,705,000		—		9,705,000
Net unrealized loss on securities available for sale, net of tax		—	—		—		(18,343,000)		(18,343,000)
Net unrealized gain on securities transferred from available for sale to held to maturity, net of tax		—	—		—		9,000		9,000


Comprehensive income (loss)		—	—		9,705,000		(18,334,000)		(8,629,000)

Cash dividends declared ($0.32 per share)		—	—		(3,528,000)		—		(3,528,000)
Equity compensation expense		—	217,000		—		—		217,000

Payment to repurchase common stock		(8,444)	—		(270,000)		—		(270,000)

Issuance of restricted stock		27,495	—		—		—		—
Proceeds from sale of common stock		6,270	199,000		—		—		199,000
Balance at March 31, 2022		11,024,086	$	67,356,000	$	186,324,000	$	(20,034,000)	$	233,646,000

Balance at December 31, 2022		11,045,186	$	68,545,000	$	204,343,000	$	(43,965,000)	$	228,923,000
Net income		—	—		7,971,000		—		7,971,000
Net unrealized gain on securities available for sale, net of tax		—	—		—		4,181,000		4,181,000
Net unrealized gain on securities transferred from available for sale to held to maturity, net of tax		—	—		—		4,000		4,000
Net unrealized loss on hedging derivative instruments, net of tax		—	—		—		(2,736,000)		(2,736,000)

Comprehensive income		—	—		7,971,000		1,449,000		9,420,000

Cash dividends declared ($0.34 per share)		—	—		(3,764,000)		—		(3,764,000)
Equity compensation expense		—	184,000		—		—		184,000


Payment to repurchase common stock		(11,824)	—		(

First Bancorp, Inc /ME/ [FNLC] Filings
10-Q	[2023-05-09]
10-K	[2023-03-10]
10-Q	[2022-11-04]
10-Q	[2022-08-05]
10-Q	[2022-05-06]
10-K	[2022-03-11]
10-Q	[2021-11-05]
10-Q	[2021-08-06]
10-Q	[2021-05-07]
10-K	[2021-03-05]
10-Q	[2020-11-06]
10-Q	[2020-08-07]
10-Q	[2020-05-08]
10-K	[2020-03-06]
10-Q	[2019-11-12]
10-Q	[2019-08-09]
10-Q	[2019-05-09]
10-K	[2019-03-08]
10-Q	[2018-11-09]
10-Q	[2018-08-09]
10-Q	[2018-05-09]
10-K	[2018-03-14]
10-Q	[2017-11-09]
10-Q	[2017-08-09]
10-Q	[2017-05-09]
10-K	[2017-03-10]
10-Q	[2016-11-09]
10-Q	[2016-08-09]
10-Q	[2016-05-06]
10-K	[2016-03-11]
10-Q	[2015-11-06]
10-Q	[2015-08-07]
10-Q	[2015-05-08]
10-K	[2015-03-13]
10-Q	[2014-11-07]
10-Q	[2014-08-08]
10-Q	[2014-05-09]
10-K	[2014-03-14]
10-Q	[2013-11-08]
10-Q	[2013-08-09]
10-Q	[2013-05-09]
10-K	[2013-03-08]
10-Q	[2012-11-09]
10-Q	[2012-08-09]
10-Q	[2012-05-10]
10-K	[2012-03-12]