The First Bancorp (Nasdaq: FNLC), today announced unaudited results for the year ended December 31, 2012. Net income was $12.8 million, up $418,000 or 3.4% from 2011 and earnings per common share on a fully diluted basis of $1.22 were up $0.08 or 7.0% from 2011. For the quarter ended December 31, 2012, unaudited net income was $3.3 million, up $301,000 or 10.0% from the same period in 2011, and earnings per common share on a fully diluted basis of $0.32 were up $0.03 or 10.3% from the same period in 2011.
“These are the best earnings we have posted in the past three years, both for the year and for the quarter,” observed Daniel R. Daigneault, the Company’s President & Chief Executive Officer. “Our asset quality is significantly improved, with non-performing assets at 1.89% of total assets as of December 31, 2012, down from 2.32% at the end of 2011 and 2.04% at the end of the previous quarter. Our capital ratios are strong, our key operating ratios remain healthy and good earnings enable us to maintain our generous cash dividend.
“Like most banks in the country, we saw margin compression in 2012 as the unprecedented low interest rate environment enters its fifth straight year,” President Daigneault noted. “This resulted in net interest income on a tax-equivalent basis declining $1.7 million in 2012 compared to 2011. Interest income on a tax-equivalent basis declined $3.5 million in 2012 compared to 2011 while interest expense has declined only $1.8 million. The Federal Open Market Committee’s quantitative easing has been effective in reducing mid- and longer-term rates while short-term rates have remained near zero.
“The year-over-year decline in net interest income was offset by a lower provision for loan losses,” President Daigneault observed, “$7.8 million in 2012 compared to $10.5 million in 2011. Non-interest income was down $479,000 in 2012 compared to 2011, with strong mortgage origination income offsetting lower levels of securities gains. Non-interest expense was virtually unchanged in 2012, with a modest 3.6% increase in employee costs being offset by lower other operating expenses.