The First Bancorp (Nasdaq: FNLC) has announced unaudited results for the year ended Dec. 31, 2008, with earnings per share on a fully diluted basis of $1.44, up $0.10 or 7.5 percent from the $1.34 reported for the year ended Dec. 31, 2007.
Net income for the year was $14.0 million, an increase of $0.9 million or 7.1 percent from the $13.1 million posted for 2007.
The company also announced unaudited results for the quarter ended Dec. 31, 2008, with earnings per share on a fully diluted basis of $0.31, down $0.05 or 13.9 percent from the $0.36 reported for the fourth quarter of 2007.
Net income for the quarter ended Dec. 31, 2008, was $3.0 million, a decrease of $480,000 or 13.8 percent from the fourth quarter of 2007.
“Our earning assets grew nearly $100 million in 2008,” said Daniel R. Daigneault, the company’s president and chief executive officer, “which we feel is especially good given current economic conditions.
“Our 2008 growth was funded entirely with deposits, which were up $144.5 million or 18.5 percent,” Daigneault said. “We are especially pleased with our growth in core deposits, with low-cost deposits increasing $9.5 million or 3.8 percent. The remaining growth was in certificates of deposit – primarily from wholesale or national market sources – which were up $129.7 million or 31.8 percent. As a result, we saw borrowed funds decline $44.6 million or 14.1 percent.
“I am very pleased with our operating results for 2008, especially the record earnings of $14.0 million that were posted despite the weakening economy and recession,” Daigneault said.
“For the quarter, net interest income was up $1.8 million or 21.4 percent compared to the fourth quarter of 2007,” Daigneault went on.
“While the weakness in the national economy has not hit coastal Maine as hard as many other parts of the country, we nevertheless have seen a deterioration in asset quality,” Daigneault said. “Net charge-offs were $2.7 million in 2008 – with $1.1 million coming from one borrowing relationship – compared to net charge-offs of $1.0 million in 2007.
“Our level of non-performing loans stood at 1.27 percent of total loans on Dec. 31, compared to 0.31 percent on Dec. 31, 2007,” Daigneault said. “To provide perspective, our peer group’s non-performing loans stood at 1.80 percent as of Sept. 30, 2008, the latest peer data available. Other real estate owned increased $1.6 million to $2.4 million or 0.18 percent of total assets during 2008, which is comparable to the 0.20 percent reported for our peer group as of Sept. 30, 2008. The level of delinquent loans increased modestly in 2008 and remained level during the fourth quarter of 2008.
“Although we are always concerned when we see a deterioration in asset quality, our balance sheet is sound and I feel that The First’s conservative approach to loan underwriting will enable us to weather the current economic storm better than most banks,” Daigneault added. “We have not traded quality for higher levels of asset growth, and most importantly, we have not originated sub-prime mortgages.”
“In the company’s investment portfolio of $262.5 million, only $2.4 million or less than 1 percent is rated sub-investment grade,” said F. Stephen Ward, The First Bancorp’s Chief Financial Officer. “These corporate debt securities had an unrealized loss of $1.1 million as of December 31, 2008, and this was reflected as an adjustment to equity on the balance sheets as of that date. During the fourth quarter we significantly reduced the amount of corporate debt securities in the portfolio and for the year booked a net pre-tax loss of $89,000 on sale of securities.
“In challenging economic times, capital levels become increasingly important for every bank,” CFO Ward said. “We continue to be considered well-capitalized by FDIC standards, and on January 9 we added an additional $25 million to capital with a preferred stock investment from the U.S. Treasury under its Capital Purchase Program. Participating in the program will provide the company with greater ability to ride out the current economic storm, especially if conditions worsen, and will give us greater ability to work with individuals and businesses as they also struggle through these adverse economic conditions.
“Our operating ratios were very strong in 2008,” CFO Ward said, “with a return on average tangible equity of 15.75 percent for the year.”
“One highlight of 2008 for The First Bancorp was our stock price performance,” Daigneault said. “Our price per share increased from $14.64 on Dec. 31, 2007 to $19.89 per share on Dec. 31, 2008, which produced a total return with dividends reinvested of 43.7 percent for the year.
“In 2008, we increased our dividend by 10.9 percent from $0.690 per share to $0.765 per share,” Daigneault said. “I am very pleased with our results for 2008, which demonstrate that we continue to do better than most banks.
“Low interest rates were good for The First Bancorp and when combined with our growth in earning assets, these led to higher net interest income in 2008. Although there has been a deterioration in asset quality, we feel that our conservative approach to banking is serving us well in these challenging economic times and that our balance sheet remains sound. Our price per share was up nicely this year and compares extremely well to our industry and broader market indices. And finally, we remain well-capitalized, which is an important concern for all banks today.”
The First Bancorp, headquartered in Damariscotta, Maine, is the holding company for The First, N.A. Founded in 1864.
For more information, please contact F. Stephen Ward, The First Bancorp’s Treasurer and Chief Financial Officer, at 563-3195.
