The First Bancorp(US:FNLC)2022-11-03 16:00Financial Performance - Net income for the nine months ended September 30, 2022, was $29,793,000, a 11.5% increase from $26,723,000 in the prior year[16]. - Basic earnings per common share increased to $2.73 for the nine months ended September 30, 2022, compared to $2.45 in the same period of 2021[16]. - Net interest income for the nine months ended September 30, 2022, was $56,682,000, up 16.6% from $48,607,000 in the same period of 2021[16]. - Non-interest income decreased to $13,027,000 for the nine months ended September 30, 2022, down from $14,584,000 in the previous year[16]. - Total non-interest expense increased to $32,193,000 for the nine months ended September 30, 2022, compared to $29,302,000 in the same period of 2021[16]. - The efficiency ratio for the nine months ended September 30, 2022, was 44.99%, slightly improved from 45.04% in the same period of 2021[204]. - The provision for loan losses for the first nine months of 2022 was $1.3 million, down from $1.6 million in the same period in 2021[189]. Asset and Loan Growth - Total assets increased to $2,735,065,000 as of September 30, 2022, up from $2,527,099,000 at December 31, 2021, representing an 8.2% growth[15]. - Net loans rose to $1,841,588,000, a 12.8% increase from $1,632,128,000 in the previous year[15]. - Total deposits reached $2,369,949,000, reflecting a 11.6% increase compared to $2,123,297,000 at the end of 2021[15]. - The loan portfolio totaled $1,857,975,000 as of September 30, 2022, an increase from $1,647,649,000 at December 31, 2021[42]. - The total number of common shares outstanding as of September 30, 2022, was 11,038,224, an increase from 10,992,950 shares as of September 30, 2021[19]. Investment and Securities - The company reported a net unrealized loss on securities available for sale of $45,943,000 for the nine months ended September 30, 2022[16]. - As of September 30, 2022, the amortized cost of investment securities was $343,599,000, with an estimated fair value of $283,268,000, reflecting unrealized losses of $60,335,000[30]. - The total investment securities held to maturity amounted to $381,906,000, with a fair value of $313,796,000, indicating unrealized losses of $68,196,000[30]. - The Company reported a significant increase in the fair value of mortgage-backed securities from $254,900,000 on December 31, 2021, to $229,178,000 by September 30, 2022, despite unrealized losses[30]. - The fair value of performing loans is estimated using market discount rates, with impaired loans showing specific allowances of $151,000, $441,000, and $457,000 at September 30, 2022, December 31, 2021, and September 30, 2021, respectively[150]. Loan Quality and Allowance for Losses - The total allowance for loan losses was $16,387,000 as of September 30, 2022, with specific reserves on loans evaluated individually at $420,000 and general reserves based on historical loss experience at $1,891,000[67]. - The allowance for loan losses as a percentage of total loans was 0.88% as of September 30, 2022, down from 0.94% at December 31, 2021, and 1.08% at September 30, 2021[72]. - Total past-due loans amounted to $1,461,000 as of September 30, 2022, with $867,000 in the 30-59 days category and $440,000 in the 90+ days category[43]. - Non-accrual loans as of September 30, 2022, totaled $1,860,000, a significant decrease from $5,602,000 as of December 31, 2021[45]. - The company reported that COVID-19 related loan modifications have all been resolved as of September 30, 2022[43]. Economic and Market Conditions - The Federal Reserve has aggressively increased short-term interest rates to combat inflation, which has reached levels not seen since the 1980s, potentially impacting the Company's operating results[27]. - The ongoing geopolitical instability, particularly due to the conflict between Russia and Ukraine, adds to economic uncertainty that may negatively impact the Company[27]. - The labor market remains tight, contributing to inflationary pressures that could affect the Company’s financial condition and results of operations[27]. - The Company noted ongoing uncertainties related to the COVID-19 pandemic and its potential economic ramifications, which could impact future financial results[174]. Employee Compensation and Benefits - The company recognized $610,000 in expense for restricted stock grants in the nine months ended September 30, 2022, with $994,000 remaining in unrecognized expense[103]. - The expense related to the 401(k) plan increased to $752,000 for the nine months ended September 30, 2022, from $593,000 in 2021, reflecting a growth of 26.9%[107]. - The expense for supplemental retirement benefits rose to $231,000 for the nine months ended September 30, 2022, compared to $126,000 in 2021, marking an increase of 83.3%[109]. - The accumulated postretirement benefit obligation decreased to $1,311,000 as of September 30, 2022, down from $1,472,000 in 2021, a reduction of 10.9%[111]. Derivatives and Interest Rate Management - The Company recognizes all derivatives at fair value, with changes in fair value recorded in earnings or other comprehensive income depending on the type of hedge[173]. - The Bank's interest rate risk management strategy aims to minimize fluctuations in earnings and cash flows due to interest rate volatility, utilizing derivative instruments for this purpose[117]. - The total notional amount of interest rate swaps as of September 30, 2022, was $30,000,000 with a fair value of $633,000[119]. - The Company has six customer loan swap arrangements in place with a total notional amount of $38,628,000 and a fair value of $5,365,000 as of September 30, 2022[122].