Exhibit 99.1
First National Lincoln Corporation Reports Record Third Quarter Earnings Per
Share, Up 11.1% Over Prior Year
DAMARISCOTTA, Maine--(BUSINESS WIRE)--Oct. 20, 2004--First National Lincoln
Corporation (Nasdaq NM: FNLC), today announced earnings per share of $0.30 on a
fully diluted basis for the quarter ended September 30, 2004, an increase of
$0.03 or 11.1% over the $0.27 reported for the same period in 2003. Net income
for the third quarter was $2,216,000, an increase of $204,000 or 10.1% over the
$2,012,000 posted in the third quarter of 2003. Both earnings per share and net
income reported by the Company for 2004 set new single-quarter records. All
prior period results in this release have been adjusted to reflect the three-
for-one stock split in 2004.
The Company also announced earnings per share of $0.83 on a fully diluted basis
for the nine months ended September 30, 2004, an increase of $0.10 or 13.7%
over the $0.73 reported for the same period in 2003. Net income for the first
nine months of 2004 was $6,197,000, an increase of $777,000 or 14.3% over the
$5,420,000 posted in 2003. Both earnings per share and net income reported by
the Company for 2004 set new records for the first nine months of the year.
Year-to-date changes on the balance sheet showed total assets at $630.2 million
on September 30, 2004 - an increase of 10.8% over December 31, 2003. Loans
totaled $461.5 million, up 15.7% over December 31, 2003, while investments
increased by 0.4% to $137.2 million. Deposits of $401.5 million were up 11.8%
over year end. As of September 30, 2004, First National Lincoln Corporation had
total equity of $51.5 million, an increase of 8.0% or $3.8 million over
December 31, 2003.
"I am very pleased with the performance we have produced in the third quarter
and in the first nine months of 2004," commented Daniel R. Daigneault, First
National Lincoln Corporation's President and Chief Executive Officer. "Growth
in earning assets was the primary reason for our increase in earnings, with
total loans up by $62.6 million or 15.7% over December 31, 2003. While growth
has been very strong in commercial loans and home equity lines of credit, we
have had exceptional growth in residential mortgages, which are up $30.1
million or 17.3%.
"This asset growth has led to a 22.9% or $2.9 million increase in net interest
income for the first nine months of 2004 versus the same period in 2003,"
President Daigneault observed. "At the same time we have seen a healthy
increase in our net interest margin, which was 3.93% for the first nine months
of 2004 compared to 3.69% for the first nine months of 2003. This was the
result of liability costs rising more slowly than asset yields given recent
actions by the Federal Reserve to increase short-term interest rates.
"Near the end of the second quarter, we launched a new program designed to
attract a greater number of new checking accounts," President Daigneault
continued. "I am pleased with the results achieved in the early stages of this
initiative and feel it will result in increased levels of core deposits and
more non-interest income for the Company."
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"Another factor in our 2004 performance is our excellent efficiency ratio,"
President Daigneault noted, "which was 49.2% for the third quarter and 49.1%
for the first nine months of 2004. This is an important measure of how much we
spend to generate a dollar in revenue and continues to be much better than that
of our peers. Although non-interest income is down from last year's levels due
to lower mortgage origination income, we continue to make up for this in net
interest income from loan growth and controlled operating expenses.
"On August 26, 2004, we announced the signing of a definitive agreement for the
merger of FNB Bankshares of Bar Harbor, Maine, with First National Lincoln
Corporation," President Daigneault said. "At closing, the combined company will
have 14 banking offices and four investment management offices serving coastal
Maine communities from Brunswick to Calais. We will also become one of the four
largest banks headquartered in Maine. I continue to be excited by the
opportunities that will be created as a result of combining our companies, and
am optimistic the merger will be completed in the first quarter of 2005 once
all regulatory and shareholder approvals are received.
"Our excellent earnings performance enables us to continue to share our profits
with shareholders in the form of cash dividends," commented F. Stephen Ward,
the Company's Treasurer & Chief Financial Officer. "We increased our dividend
once again in the third quarter to $0.115 per share. The Company has raised its
dividend for 36 consecutive quarters, resulting in an annualized dividend of
$0.46 per share and an annual dividend yield of 2.39% based upon the September
30, 2004 closing price of $19.25 per share."
"Our earnings performance also results in very strong performance statistics,"
Mr. Ward concluded. "Our return on average equity was 17.78% in the third
quarter of 2004 compared to 17.24% for the third quarter of 2003, and year-to-
date stands at 16.85% in 2004 compared to 16.23% in 2003. Based upon return on
average equity, The First continues to be in the top ten percent of all banks
in the United States as of June 30, 2004, according to the most recent
BancIntelligence report. Because of the consistent performance we have posted
over many years, we continue to see First National Lincoln Corporation as an
excellent investment opportunity."
First National Lincoln Corporation, headquartered in Damariscotta, Maine, is
the holding company for The First National Bank of Damariscotta and Pemaquid
Advisors. The First is an independent community bank serving Mid-Coast Maine
with seven offices in Lincoln and Knox Counties that provide consumer and
commercial banking products and services. Pemaquid Advisors provides investment
advisory, private banking and trust services from offices in Damariscotta,
Boothbay Harbor, and Brunswick, Maine.
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Forward-looking and cautionary statements: except for the historical
information and discussions contained herein, statements contained in this
release may constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements involve a
number of risks, uncertainties and other factors that could cause actual
results to differ materially, as discussed in the Company's filings with the
Securities and Exchange Commission. Forward-looking statements regarding the
FNLC/FNB Bankshares merger involve certain risks and uncertainties that may
cause actual results to differ materially from those contemplated including,
among others, the following possibilities: (1) costs or difficulties related to
the integration of the businesses of the two banks are greater than expected;
(2) cost savings from the merger cannot be realized ; (3) revenues following
the merger are lower than expected; (4) deposit volumes will change over time;
(5) competitive pressure among depository institutions increases significantly;
(6) changes in the interest rate environment reduce net interest margins; (7)
general economic conditions, either nationally or in the markets in which the
two banks will be doing business, are less favorable than expected; (8)
legislation or changes in regulatory requirements adversely affect banks
operating in Maine, or (9) factors which would result in a condition to the
transaction not being met.
First National Lincoln Corporation has filed, and will be filing, relevant
documents concerning the merger with the Securities and Exchange Commission
(SEC), including a registration statement on Form S-4 containing a
prospectus/proxy statement. WE URGE INVESTORS TO READ THESE DOCUMENTS BECAUSE
THEY CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER. Investors may obtain these
documents free of charge at the SEC's website, www.sec.gov. In addition,
documents filed with the SEC are available free of charge from First National
Lincoln Corporation. The directors and executive officers of FNB Bankshares may
be deemed to be participants in the solicitation of proxies to approve the
merger. Additional information about the interest of those participants may be
obtained from reading the definitive prospectus/proxy statement regarding the
proposed merger. INVESTORS SHOULD READ THE PROSPECTUS/PROXY STATEMENT AND OTHER
DOCUMENTS TO BE FILED WITH THE SEC CAREFULLY BEFORE MAKING A DECISION
CONCERNING THE MERGER.
For more information, please contact F. Stephen Ward, Treasurer & Chief
Financial Officer, at 207.563.3195 ext. 5001
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First National Lincoln Corporation
Consolidated Balance Sheets (Unaudited)
- ------------------------------------------------- --------- ---------
Sept. 30, Sept. 30, Dec. 31,
In thousands of dollars 2004 2003 2003
- ------------------------------------------------- --------- ---------
Assets
- ----------------------------------------
Cash and due from banks $16,659 $13,758 $17,087
Overnight Funds Sold 0 0 0
Investments:
Available for sale 52,900 62,815 57,445
Held to maturity (market values $85,316
at 9/30/04, $78,174 at 9/30/03, and
$80,820 at 12/31/03) 84,310 76,381 79,244
Loans held for sale (fair value
approximates cost) 0 1,884 982
Loans 461,504 383,032 398,895
Less: allowance for loan losses 4,727 4,177 4,200
--------- --------- ---------
Net loans 456,777 378,855 394,695
--------- --------- ---------
Accrued interest receivable 3,026 2,814 2,743
Bank premises and equipment 9,149 7,466 9,007
Other real estate owned 0 51 51
Other assets 7,381 7,794 7,558
--------- --------- ---------
Total Assets $630,202 $551,818 $568,812
========= ========= =========
Liabilities & Stockholders' Equity
- ----------------------------------------
Demand deposits $33,734 $33,425 $28,874
NOW deposits 60,088 55,593 52,161
Money market deposits 85,651 86,366 80,586
Savings deposits 67,182 65,093 63,356
Certificates of deposit 75,423 69,522 69,880
Certificates $100,000 and over 79,401 60,953 64,220
--------- --------- ---------
Total deposits 401,479 370,952 359,077
Borrowed funds 172,442 129,583 157,822
Other liabilities 4,749 4,550 4,195
--------- --------- ---------
Total Liabilities 578,670 505,085 521,094
--------- --------- ---------
Shareholders' Equity:
Common stock 74 74 74
Additional paid-in capital 3,851 4,638 4,650
Retained earnings 45,378 41,707 42,988
Net unrealized gains on available-for-
sale securities 2,229 2,558 2,497
Treasury stock 0 (2,244) (2,491)
--------- --------- ---------
Total Stockholders' Equity 51,532 46,733 47,718
--------- --------- ---------
Total Liabilities & Stockholders'
Equity $630,202 $551,818 $568,812
========= ========= =========
Prior periods have been adjusted to reflect the three-for-one stock split in
2004
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First National Lincoln Corporation
Consolidated Statements of Income (Unaudited)
- ----------------------------------------------------------------------
For the For the
nine months quarters
ended ended
Sept. 30, Sept. 30,
---------------- ---------------
In thousands of dollars 2004 2003 2004 2003
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Interest Income:
Interest and fees on loans $17,470 $15,949 $6,172 $5,358
Interest on deposits with other
banks 4 52 1 4
Interest and dividends on
investments 4,940 4,486 1,702 1,453
---------------- ---------------
Total interest income 22,414 20,487 7,875 6,815
---------------- ---------------
Interest expense:
Interest on deposits 3,868 4,600 1,342 1,318
Interest on borrowed funds 2,748 3,037 921 911
---------------- ---------------
Total interest expense 6,616 7,637 2,263 2,229
---------------- ---------------
Net interest income 15,798 12,850 5,612 4,586
Provision for loan losses 720 675 240 225
---------------- ---------------
Net interest income after provision
for loan losses 15,078 12,175 5,372 4,361
---------------- ---------------
Other operating income:
Fiduciary income 644 577 214 203
Service charges on deposit
accounts 881 833 301 268
Net securities gains 0 0 0 0
Mortgage origination and
servicing income 310 794 59 304
Other operating income 1,688 1,772 726 768
---------------- ---------------
Total other operating income 3,523 3,976 1,300 1,543
---------------- ---------------
Other operating expenses:
Salaries and employee benefits 5,138 4,377 1,835 1,546
Occupancy expense 655 569 227 176
Furniture and equipment expense 1,094 1,039 340 338
Other 3,047 2,606 1,174 1,016
---------------- ---------------
Total other operating expenses 9,934 8,591 3,576 3,076
---------------- ---------------
Income before income taxes 8,667 7,560 3,096 2,828
Applicable income taxes 2,470 2,140 880 816
---------------- ---------------
NET INCOME $6,197 $5,420 $2,216 $2,012
================ ===============
Prior periods have been adjusted to reflect the three-for-one
stock split in 2004
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First National Lincoln Corporation
Selected Financial Data (Unaudited)
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For the nine For the quarters
months ended ended
September 30 September 30
Dollars in thousands, ---------------- ----------------
except for per share amounts 2004 2003 2004 2003
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Summary of Operations
Operating Income $25,937 $24,463 $9,175 $8,358
Operating Expense 17,270 16,903 6,079 $5,530
Net Interest Income 15,798 12,850 5,612 4,586
Provision for Loan Losses 720 675 240 225
Net Income 6,197 5,420 2,216 2,012
Per Common Share Data
Basic Earnings per Share $0.85 $0.75 $0.30 $0.28
Diluted Earnings per Share 0.83 0.73 0.30 0.27
Cash Dividends Declared 0.33 0.28 0.12 0.10
Book Value 7.01 6.42 7.01 6.42
Market Value 19.25 14.33 19.25 14.33
Financial Ratios
Return on Average Equity (a) 16.85% 16.23% 17.78% 17.24%
Return on Average Assets (a) 1.40% 1.40% 1.44% 1.49%
Average Equity to Average Assets 8.29% 8.63% 8.12% 8.64%
Net Interest Margin Tax-Equivalent (a) 3.93% 3.69% 4.04% 3.78%
Dividend Payout Ratio 38.59% 37.50% 38.33% 34.94%
Allowance for Loan Losses/Total Loans 1.02% 1.09% 1.02% 1.09%
Non-Performing Loans to Total Loans 0.37% 0.32% 0.37% 0.32%
Non-Performing Assets to Total Assets 0.28% 0.23% 0.28% 0.23%
Efficiency Ratio 49.07% 48.66% 49.18% 47.95%
At Period End
Total Assets 630,202 551,818 630,202 551,818
Total Loans 461,504 383,032 461,504 383,032
Total Investment Securities 137,210 139,196 137,210 139,196
Total Deposits 401,479 370,952 401,479 370,952
Total Shareholders' Equity 51,532 46,733 51,532 46,733
(a) Annualized using a 365-day basis
Prior periods have been adjusted to reflect the three-for-one stock
split in 2004
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