FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: Commission File No. 0-26589
September 30, 1999
FIRST NATIONAL LINCOLN CORPORATION
(Exact name of registrant as specified in its charter)
MAINE 01-0404322
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No)
MAIN STREET, DAMARISCOTTA, MAINE 04543
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (207) 563 - 3195
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 twelve 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 XX No __
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at September 30, 1999
Common Stock, Par One Cent 2,405,840
FIRST NATIONAL LINCOLN CORPORATION
INDEX
PART 1 Financial Information
Page No.
Item 1: Financial Statements
Consolidated Balance Sheets - 1 - 2
September 30, 1999, September 30, 1998, and December 31, 1998.
Consolidated Statements of Income - 3 - 4
For the nine months ended September 30, 1999 and September 30, 1998.
Consolidated Statements of Income - 5 - 6
For the quarters ended September 30, 1999 and September 30, 1998.
Consolidated Statements of Cash Flows - 7 - 8
For the nine months ended September 30, 1999 and September 30, 1998.
Footnotes to Financial Statements - 9
Three months ended September 30, 1999 and September 30, 1998.
Item 2: Management's discussion and analysis of 10 - 15
financial condition and results of operations.
PART II Other Information
Item 1: Legal Proceedings 16
Item 2: Changes in Securities 17
Item 3: Defaults Upon Senior Securities 18
Item 4: Submission of Matters to a Vote of Security Holders 19
Item 5: Other Information 20
Item 6: Exhibits and reports on Form 8-K. 21
Signatures 22
FIRST NATIONAL LINCOLN CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
9/30/99 9/30/98 12/31/98
(000 OMITTED) (Unaudited) (Unaudited) (Unaudited)
Assets
Cash and due from banks $ 6,379 $10,091 $6,338
Interest bearing deposits in other banks 0 0 0
Investments:
Available for sale 35,325 13,876 18,858
Held to maturity (market values $45,032
at 9/30/99, $47,145 at 9/30/98 and
$40,702 at 12/31/98) 46,885 46,722 40,484
Loans held for sale (market value $209
At 12/31/98 0 0 209
Loans 229,057 207,231 209,224
Less allowance for loan losses 2,054 1,792 1,822
Net loans 227,003 205,439 207,402
Accrued interest receivable 2,301 1,898 1,770
Bank premises and equipment 5,524 4,869 5,866
Other real estate owned 191 339 303
Other assets 5,575 6,071 5,576
Total Assets $329,183 $289,305 $286,806
Page1
BALANCE SHEETS CONT.
9/30/99 9/30/98 12/31/98
(Unaudited) (Unaudited) (Unaudited)
Liabilities & Stockholders' Equity
Demand deposits $19,775 17,959 $17,649
NOW deposits 37,320 31,635 33,710
Money market deposits 10,740 7,714 9,793
Savings deposits 42,320 38,157 39,226
Certificates of deposit 75,002 70,429 72,294
Certificates $100M and over 25,792 30,480 29,131
Total deposits $210,949 196,374 $201,803
Borrowed funds 87,597 62,996 54,460
Other liabilities 1,695 1,632 1,767
Total Liabilities 300,241 261,002 258,030
Shareholders' Equity:
Common stock 25 25 25
Additional paid-in capital 4,686 4,686 4,687
Retained earnings 26,650 23,604 24,218
Net unrealized gains (losses) on available-
for-sale securities (874) 99 63
Treasury stock (1,545) (111) (217)
Total Stockholders' Equity 28,942 28,303 28,776
Total Liabilities & Stockholders'
Equity $329,183 289,305 $286,806
Page 2
FIRST NATIONAL LINCOLN CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
AND NON-OWNER CHANGES IN EQUITY
For the nine months ended September 30,
1999 1998
(000 OMITTED) (Unaudited) (Unaudited)
Interest Income:
Interest and fees on loans $13,642 12,858
Interest on deposits with other banks 17 24
Interest and dividends on investments 3,628 3,097
Total interest income 17,287 15,979
Interest expense:
Interest on deposits 5,388 5,012
Interest on borrowed funds 3,121 2,856
Total interest expense 8,509 7,868
Net interest income 8,778 8,111
Provision for loan losses 495 275
Net interest income after provision
for loan losses 8,283 7,836
Other operating income:
Fiduciary income 400 301
Service charges on deposit accounts 500 464
Net securities gains (losses) 0 (21)
Other operating income 1,232 899
Total other operating income 2,132 1,643
Other operating expenses:
Salaries and employee benefits 2,917 2,774
Occupancy expense 348 329
Furniture and equipment expense 526 436
Other 1,925 1,624
Total other operating expenses 5,716 5,163
Income before income taxes 4,699 4,316
Applicable income taxes 1,393 1,293
NET INCOME $3,306 $3,023
Page 3
STATEMENTS OF INCOME CONT.
1999 1998
(Unaudited) (Unaudited)
Non-owner changes in equity, net of tax:
Unrealized gains (losses)
arising during period (937) 6
Less: reclassification adjustment
for accumulated gains (losses)
included in net-income 0 (14)
Total non-owner changes in equity,
net of tax (937) (8)
INCOME AND NON-OWNER CHANGES IN EQUITY $2,369 $3,015
Earnings per common share:
Basic earnings per share $1.35 $1.22
Diluted earnings per share $1.30 $1.17
Cash dividends declared per share $0.36 $0.24
Weighted average number of shares
outstanding 2,451,199 2,478,642
Page 4
FIRST NATIONAL LINCOLN CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
AND NON-OWNER CHANGES IN EQUITY
For the quarters ended September 30,
1999 1998
(000 OMITTED) (Unaudited) (Unaudited)
Interest Income:
Interest and fees on loans $ 4,734 4,486
Interest on deposits with other banks 6 14
Interest and dividends on investments 1,347 952
Total interest income 6,087 5,452
Interest expense:
Interest on deposits 1,818 1,821
Interest on borrowed funds 1,191 856
Total interest expense 3,009 2,677
Net interest income 3,078 2,775
Provision for loan losses 120 170
Net interest income after provision
for loan losses 2,958 2,605
Other operating income:
Fiduciary income 130 113
Service charges on deposit accounts 172 163
Net securities gains (losses) 0 4
Other operating income 510 483
Total other operating income 812 763
Other operating expenses:
Salaries and employee benefits 1,005 975
Occupancy expense 118 115
Furniture and equipment expense 177 125
Other 808 685
Total other operating expenses 2,108 1,900
Income before income taxes 1,662 1,468
Applicable income taxes 490 437
NET INCOME $1,172 $1,031
Page 5
STATEMENTS OF INCOME CONT.
1999 1998
(Unaudited) (Unaudited)
Non-owner changes in equity, net of tax:
Unrealized gains (losses)
arising during period (207) (12)
Less: reclassification adjustment
for accumulated gains (losses)
included in net-income 0 3
Total non-owner changes in equity,
net of tax (207) (9)
INCOME AND NON-OWNER CHANGES IN EQUITY $965 $1,022
Earnings per common share:
Basic earnings per share $0.49 $0.42
Diluted earnings per share $0.47 $0.40
Cash dividends declared per share $0.13 $0.09
Weighted average number of shares
outstanding 2,405,080 2,477,530
Page 6
FIRST NATIONAL LINCOLN CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30,
1999 1998
(000 OMITTED) (Unaudited) (Unaudited)
Cash flows from operating activities:
Net income $3,306 3,023
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation 402 407
Provision for loan losses 495 275
Provision for losses on other real estate owned 10 0
Loans originated for resale (7,463) (11,719)
Proceeds from sales and transfers of loans 7,672 11,819
Net (gain) loss on sale or call of
securities held for sale 0 21
Net (gain) loss on sale of securities
to be held to maturity 0 0
Losses related to other real estate owned 10 0
Net change in other assets and accrued interest (530) (983)
Net change in other liabilities 469 145
Net amortization of premium on investments (5) 235
Net cash provided by operating activities 4,366 3,223
Cash flows from investing activities:
Proceeds from sales, maturities and calls of
securities available for sale 2,596 7,396
Proceeds from sales, maturities and calls of
securities to be held to maturity 11,579 23,212
Proceeds from sales of other real estate owned 239 0
Additional investment in other real estate owned 0 0
Purchases of securities available for sale (20,458) (4,918)
Purchases of securities to be held to maturity (18,000) (17,783)
Purchase of interest-bearing deposits 0 0
Maturities of interest-bearing deposits 0 0
Net decrease (increase) in loans (20,243) (26,159)
Capital expenditures (60) (405)
Net cash used in investing activities (44,347) (18,657)
Cash flows from financing activities:
Net increase (decrease) in demand deposits,
savings, money market and club accounts 9,777 11,801
Net increase (decrease) in certificates of deposit (631) 14,693
Net increase (decrease) in other borrowings 33,137 (6,041)
Payment to repurchase common stock (1,444) (191)
Proceeds from sale of Treasury stock 115 76
Net proceeds from stock issuance 0 95
Dividends paid (932) (591)
Net cash provided by financing activities 40,022 19,842
Page 7
STATEMENTS OF CASH FLOWS CONT.
1999 1998
(Unaudited) (Unaudited)
Net increase (decrease) in cash and
cash equivalents 41 4,408
Cash and cash equivalents at beginning
of period 6,338 5,683
Cash and cash equivalents at end of
period $ 6,379 $10,091
Interest paid $8,509 $7,868
Income taxes paid 1,450 1,341
Non-cash transactions:
Loans transferred to other real estate
owned (net) 147 155
Net change in unrealized gain (loss) on
available for sale securities (1,420) 16
Page 8
FOOTNOTES TO FINANCIAL STATEMENTS
1. The quarterly financial statements in the opinion of Management fairly
represent all adjustments made to reflect the current financial condition of
the Company for this interim period just ended. All such adjustments were of a
normal recurring nature.
Page 9
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
EARNINGS SUMMARY
Net income for the nine months ended September 30, 1999 was $3,306,000, an
increase of 9.4% over 1998's net income of $3,023,000. Net income for the
quarter ended September 30, 1999 was $1,172,000. This is a 13.7% increase over
1998's net income of $1,031,000. Net income for both year-to-date and the third
quarter set new earnings records for the Company.
Earnings growth for the first nine months of 1999 has been at a higher
rate than in 1998 due to several factors. Net interest income has benefited
from strong growth in both the loan and investment portfolios as well as from
the current interest rate environment with a yield curve that has steepened. At
the same time, operating expenses are increasing at a lower rate since the
increased costs from new offices opened in 1997 and 1998 have been absorbed.
NET INTEREST INCOME
Net interest income for the nine months ended September 30, 1999 was
$8,778,000, an 8.2% increase over 1998's net interest income of $8,111,000.
Total interest income of $17,287,000 is an 8.2% increase over 1998's total
interest income of $15,979,000. Total interest expense of $8,509,000 is a 8.1%
increase over 1998's total interest expense of $7,868,000.
Net interest income for the quarter ended September 30, 1999 was
$3,078,000. This is a 10.9% increase over 1998's net interest income of
$2,775,000. Total interest income was $6,087,000, an 11.6% increase over 1998's
total interest income of $5,452,000. Total interest expense of $3,009,000 is an
12.4% increase over 1998's total interest expense of $2,677,000.
PROVISION FOR LOAN LOSSES
A $495,000 provision to the allowance for loan losses was made during the
first nine months of 1999. The allowance for loan losses is deemed adequate as
calculated in accordance with Banking Circular #201 and with respect to SFAS
114/118. During the second quarter of 1999, the Bank made an additional
provision of $180,000 in addition to a planned provision of $105,000 due to
unexpected and rapid deterioration in the quality of one commercial credit
relationship. In Management's opinion, this was an isolated circumstance and is
not indicative of a general decline in the credit quality of the entire loan
portfolio.
Loans considered to be impaired according to SFAS 114/118 totaled $746,000
at September 30, 1999. The portion of the allowance for loan losses allocated
to impaired loans at September 30, 1999 was $397,000.
NON-INTEREST INCOME
Non-interest income was $2,132,000 for the nine months ended September
30, 1999. This is an increase of 29.8% from 1998's non-interest income of
$1,643,000, due to strong mortgage origination and merchant credit card income.
Non-interest income for the quarter ended September 30, 1999 was $812,000, a
6.4% increase over the same period a year ago.
In the second quarter of 1999, the Company adopted FAS 125 which governs
the accounting treatment for mortgage servicing rights. As a result of this
action, the Company recognized a net one-time gain of $189,000, before taxes. A
20% valuation allowance was also established to compensate for unexpected
mortgage prepayments.
Page 10
MANAGEMENT'S DISCUSSION CONT.
NON-INTEREST EXPENSE
Non-interest expense of $5,716,000 for the nine months ended September 30,
1999 is an increase of 10.7% from 1998's non-interest expense of $5,163,000.
Non-interest expense for the quarter ended September 30, 1999 was $2,108,000,
an 10.9% increase over the same period a year ago. This increase was due in
large part to significantly higher merchant credit card expenses, which were
offset with a comparable increase in non-interest income.
INCOME TAXES
Income taxes on operating earnings increased to $1,393,000 for the first
nine months of 1999 from $1,293,000 for the same period a year ago. The level
of income taxes increased as a result of the Company's higher net income.
ASSETS
Investments as of September 30, 1999 were $22.9 million or 38.5% above
December 31, 1998. Additions to the investment portfolio were made due to
favorable investment opportunities and a positively sloped yield curve. Loans
as of September 30, 1999, totaled $19.9 million or 9.5% above December 31,
1998. Loan growth was seen in all categories, with the largest growth coming in
commercial and mortgage loans. Total assets as of September 30, 1999 were
$329.2 million, an increase of $42.4 million or 14.8% over December 31, 1998.
LIABILITIES
Deposits as of September 30, 1999 were $9.1 million above December 31,
1999. Demand deposits increased by 12.1% or $2.1 million, NOW accounts
increased by 10.7% or $3.6 million, savings deposits increased by 7.9% or $3.1
million, money market deposits increased by 9.7% or $0.9 million and
certificates of deposit decreased by 0.6% or $0.6 million. These changes were
due to normal seasonal flow and pricing strategies for the Bank's CD products.
Deposits were supplemented by borrowings from the Federal Home Loan Bank
and repurchase agreements. Due to strong asset growth, total borrowed funds
increased by 60.9% or $33.1 million from December 31, 1998.
SHAREHOLDERS' EQUITY AND CAPITAL RESOURCES
Shareholders' equity as of September 30, 1999 was $28,943,000 compared to
$28,303,000 at September 30, 1998. While the Company has had strong earnings
performance in the 12-month period, it repurchased common shares which reduced
shareholder's equity by $1.3 million. The Company has increased its dividend by
1 cent each quarter during the past four quarters, with a dividend of 12 cents
per share declared in the second quarter of 1999. In addition, a special cash
dividend of 5 cents per share was declared in the fourth quarter of 1998.
Leverage capital ratios for the Company were 8.79% and 9.78%,
respectively, at September 30, 1999 and September 30, 1998. This decline was
due to repurchase of shares into treasury. The Bank had a tier one risk-based
capital ratio of 14.15% and tier two risk-based capital ratio of 15.16% at
September 30, 1999, compared to 14.47% and 15.44%, respectively, at September
30, 1998. These were comfortably above the standards to be rated "well-
capitalized" by the regulatory authorities. As of September 30, 1999
stockholders' equity was decreased by $874,000 due to a net unrealized loss in
the available-for-sale portfolio.
Page 11
MANAGEMENT'S DISCUSSION CONT.
LIQUIDITY MANAGEMENT
As of September 30, 1999 the Bank had primary sources of liquidity of
$49.8 million, or 15.2% of its assets. It is Management's opinion that this is
adequate. In its Asset/Liability policy, the Bank has adopted guidelines for
liquidity.
The Company is not aware of any current recommendations by the regulatory
authorities which, if they were to be implemented, would have a material effect
on the Corporation's liquidity, capital resources or results of operations.
LOAN POLICIES
Real estate values:
A. Residential properties. We loan up to 80% of the appraised value of
properties without mortgage insurance and up to 95% of the appraised value of
properties with mortgage insurance. No further appraisals are done as long as
the payment history remains satisfactory. If a loan becomes delinquent, a
review might be done of the loan. When a loan becomes 90 or more days past due,
an in-depth review is made of the loan and a determination made as to whether
or not a reappraisal is required.
B. Land only properties. We do not have many of these but we do loan up to 65%
of the appraised value of the property. They are handled the same way as above
from booking date on.
C. Commercial properties. We loan up to 75% of the appraised value and, once
the loan is closed, the decision to re-appraise a property is subjective and
depends on a variety of factors, such as: the payment status of the loan, the
risk rating of the loan, the amount of time that has passed since the last
appraisal, changes in the real estate market, availability of financing,
inventory of competing properties, and changes in condition of the property
i.e. zoning changes, environmental contamination, etc. A certified or licensed
appraiser is used for all appraisals.
At September 30, 1999 and 1998, loans on a non-accrual status totaled
$1,196,000 and $721,000, respectively. In addition to loans on a non-accrual
status at September 30, 1999 and 1998, loans past due greater than 90 days
totaled $592,000 and $370,000 respectively. The Company continues to accrue
interest on these loans because it believes collection of the interest is
reasonably assured.
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS
No material off-balance sheet risk exists that requires a separate
liability presentation.
SALE OF LOANS
No recourse obligations have been incurred in connection with the sale of
loans.
Page 12
MANAGEMENT'S DISCUSSION CONT.
RISK ELEMENTS
Any loans classified for regulatory purposes as loss, doubtful,
substandard, or special mention that have not been disclosed under Item III of
Industry Guide 3 do not represent or result from trends or uncertainties which
Management reasonably expects will materially impact future operating results,
liquidity or capital resources.
There are no known potential problem loans which are not now disclosed
pursuant to Item III. C. 1. of Industry Guide 3. Item III. C. 2. is not
applicable.
REGULATORY MATTERS
Procedures for monitoring Bank Loan Administration:
A. Loan reviews are done on a regular basis.
B. An action plan is prepared quarterly on all classified commercial loans
greater than $100,000, and semi-annually on all criticized loans greater than
$100,000.
C. Delinquent loans are reviewed weekly by the Bank's Collections Officer and
Senior Credit Officer.
D. A tickler system is utilized to insure timely receipt of current information
(such as financial statements, appraisals and/or credit memos to the credit
file).
Note: Most of the above applies only to commercial loans, but retail loans are
reviewed periodically, usually around a delinquency.
Procedures for monitoring Bank Other Real Estate Owned:
The O.R.E.O. portfolio is handled by the Collections Officer, with backup
by the Senior Credit Officer. Most properties are listed with real estate
brokers for sale. All properties are appraised periodically for market value,
and provision is made to the allowance for O.R.E.O. losses if the estimated
market value after selling costs is lower than the carrying value of the
property.
ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board has issued SFAS No. 133, Accounting
For Derivative Instruments and Hedging Activities and is effective for fiscal
years beginning after June 15, 1999. Management has not determined the impact
of SFAS No. 133 on the financial statements.
Page 13
MANAGEMENT'S DISCUSSION CONT.
YEAR 2000 READINESS
With the year 2000 approaching, all businesses and governments are facing the
challenge of assessing and preparing their computer systems to handle dates
beyond 1999. First National Lincoln Corporation and its subsidiary, The First
National Bank of Damariscotta, have taken steps to address the many issues
related to the transition to the next century. The Bank's actions with regard
to Year 2000 compliance have been reviewed by the Board of Directors, its
internal audit department, and its Federal Regulators.
The awareness phase of the Company's Year 2000 readiness began with the
creation of a Year 2000 Task Force, overseen by the Board of Directors, which
includes top management and staff from each division. It has been working since
the summer of 1997 towards full Year 2000 compliance.
From this, the Company began its assessment phase, during which a Year
2000 Plan was formulated to direct and coordinate activities related to Year
2000 preparedness. Development of this plan began with an examination of all
internal systems and identification of those which are considered "mission-
critical" and requiring the highest priority in evaluation and remediation.
This process included not only computer hardware and software, but also non-
information-technology systems, such as alarms and heating control systems.
From this evaluation, the scope of the Year 2000 remediation project was
developed and target dates were set for any necessary systems changes. A test
plan was also developed for the testing of all mission-critical systems. The
assessment phase of the project was complete in the first quarter of 1998.
The major project in the remediation phase was the acquisition of a new
core banking system which became operational in the third quarter of 1998. The
system has been certified by the vendor as Year 2000 compliant and offers many
features which Management believes will enhance customer service. In addition,
several stand-alone hardware and software systems have been upgraded or
replaced.
At September 30, 1999, the Company had, in Management's opinion, completed
all phases of its Year 2000 plan. At that point all hardware and software
changes required in the remediation phase were complete and operational, and
the testing required in the validation phase of the plan was complete.
The estimated cost to address Year 2000 issues was approximately $1
million. This included $400,000 for the purchase of hardware and software for
the new core banking system, $250,000 for new personal computers and networking
hardware, and $50,000 for new telephone equipment. The purchase of new hardware
and personal computers, although required for operation of the new core banking
system, was part of the Bank's planned upgrade of computers. The phone system
is a more modern system that was installed irrespective of Year 2000 issues,
but has been certified by the vendor as Year 2000 compliant. All of these
expenditures have been incurred and will be amortized over a three-to-five year
period.
In addition to hardware and software, the above-mentioned estimated total
cost included a human-resources allocation of $300,000 which has been expensed
as incurred. Of this, it is estimated that only $25,000 was an incremental
expense, which included summer college students, overtime for existing
personnel, and outside support. The remaining $275,000 was an allocation of
existing human resources to effectively implement and bring to a successful
conclusion the Year 2000 Plan.
Page 14
MANAGEMENT'S DISCUSSION CONT.
Externally, both business relationships and significant counterparties
have been evaluated for their state of Year 2000 preparedness. The Company has
verified that all key vendors, suppliers and other business partners will be
ready for Year 2000, and has created a team to work with bank customers to
assess their Year 2000 awareness and readiness.
At this time, it is Management's opinion that the Company's major Year
2000 risks are primarily related to key counterparties which are beyond the
Company's control. The two most significant counterparties are U.S. Government
Agencies -- the Federal Reserve Bank and the Federal Home Loan Bank -- upon
which the Company is dependent for liquidity and funds transfer needs. The
Company continues to closely monitor the Year 2000 preparation and readiness of
both agencies.
The Company has developed contingency plans for all mission critical
systems. Since the Company's primary business is providing traditional banking
services, the creation of additional liquidity capacity to meet the potential
needs of its customers and communities is a key part of contingency planning. A
separate liquidity contingency plan was finalized during the second quarter of
1999.
With Year 2000 assessment, remediation and validation now complete, in
Management's opinion the worst-case scenario the Company envisions involves
electric power and telecommunication interruptions. For electric power, the
Company has installed a back-up generator for its operations facility and three
of its baranches. While no formal plans are in place to address
telecommunication disruptions, in Management's opinion this is not a
significant issue due to the general state of preparedness of the
telecommunications industry.
FORWARD-LOOKING STATEMENTS
Certain disclosures in Management's Discussion and Analysis of Financial
Condition and Results of Operations contain certain forward-looking statements
(as defined in the Private Securities Litigation Reform Act of 1995). In
preparing these disclosures, Management must make assumptions, including, but
not limited to, the level of future interest rates, prepayments on loans and
investment securities, required levels of capital, needs for liquidity, and the
adequacy of the allowance for loan losses. These forward-looking statements may
be subject to significant known and unknown risks uncertainties, and other
factors, including, but not limited to, those matters referred to in the
preceding sentence.
Although First National Lincoln Corporation believes that the expectations
reflected in such forward-looking statements are reasonable, actual results may
differ materially from the results discussed in these forward-looking
statements. Readers are cautioned not to place undue reliance on these forward
looking statements, which speak only as of the date hereof. The Company
undertakes no obligation to republish revised forward-looking statements to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events. Readers are also urged to carefully review
and consider the various disclosures made by the Company which attempt to
advise interested parties of the facts which affect the Company's business.
Page 15
PART II
ITEM 1. LEGAL PROCEEDINGS
The Company was not involved in any legal proceedings requiring disclosure
under Item 103 of Regulation S-K during the reporting period.
Page 16
ITEM 2. CHANGES IN SECURITIES
None
Page 17
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None.
Page 18
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Page 19
ITEM 5: Other Information
On July 2, 1999, the Company filed form 8-A 12G with the Securities and
Exchange Commission to change its form of registration from Section 15(d) to
Section 12(g). This change was in preparation for the Company's listing of its
common shares on the Nasdaq National Market.
On July 14, 1999, the Company's commom shares began trading on the
National Market under the symbol of FNLC. Prior to this, the Company's shares
traded in the over-the-counter market.
Page 20
ITEM 6: Exhibits, Financial Statement Schedules, and reports on Form 8-K
A. EXHIBITS
EXHIBIT 27. Financial Data Schedule.
B. REPORTS ON FORM 8-K
None.
Page 21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST NATIONAL LINCOLN CORPORATION
November 12, 1999 Daniel R. Daigneault
Date Daniel R. Daigneault
President and CEO
November 12, 1999 F. Stephen Ward
Date F. Stephen Ward
Treasurer
Page 22