DAMARISCOTTA, Maine.--(BUSINESS WIRE)--The First Bancorp (Nasdaq: FNLC), the parent company of First National Bank, today announced operating results for the quarter ended June 30, 2016. Net income was $4.6 million, up $550,000 or 13.5% from the second quarter of 2015 and earnings per common share on a fully diluted basis of $0.43 were up $0.05 or 13.2% from the same period in 2015. The Company also announced unaudited results for the six months ended June 30, 2016. Net income was $9.1 million, up $878,000 or 10.6% from the same period in 2015 and earnings per common share on a fully diluted basis of $0.84 were up $0.07 or 9.1% from the same period in 2015.

“This was the best quarter in the Company’s history,” Tony C. McKim, the Company’s President and Chief Executive Officer observed, “with net income $121,000 above the record set in the first quarter of this year. It was also the fourth of the past six quarters which set a new net income record. Increased net interest income has been the key element in our strong performance in 2016, and has been driven by strong growth in earning assets. We also increased the dividend in the second quarter to 23 cents per share per quarter and we continue to pay out more than half of our net income to our shareholders in the form of cash dividends.

“Total assets are up $56.6 million year to date and $68.1 million from a year ago,” noted President McKim. “Total loans increased $49.6 million or 5.0% year to date, and year over year, total loans are up $75.1 million or 7.8%. After topping the $1.0 billion mark in the first quarter of this year, the loan portfolio continued to see very healthy demand in the second quarter. The majority of our loan growth has been in commercial and municipal loans, with modest growth in other loan categories. The investment portfolio is down $5.3 million from year end as a result of sale of securities in the first quarter. On the funding side of the balance sheet, low-cost deposits are up $77.1 million or 15.0% year over year and $13.9 million or 2.4% since year end.

“Net interest income on a tax equivalent basis for the first six months of 2016 was up $1.8 million or 8.7% from the same period in 2015,” President McKim continued, “with almost all of the increase attributable to growth in earning assets, specifically in the loan portfolio, and a small amount attributable to an improved net interest margin of 3.14% in 2016 versus 3.08% in 2015 due to lower funding costs. Non-interest income for the first six months of 2016 was down $522,000 or 8.0% from the first six months of 2015 due to a lower level of gains from sale of securities. Non-interest expense for the first six months of 2016 was only $200,000 or 1.4% above the same period in 2015, primarily due to increased marketing costs as part of the Bank’s rebranding campaign.

“Our credit quality metrics are excellent,” President McKim said. “Non-performing assets stood at 0.47% of total assets as of June 30, 2016 - well below the 0.72% level of non-performing assets a year ago, and down from 0.57% at year end. Past-due loans were 1.04% of total loans at June 30, 2016, down from 1.14% a year ago. We provisioned $750,000 for loan losses in the first six months of 2016, a $150,000 decrease from the $900,000 we provisioned in the first six months of 2015. The allowance for loan losses stood at 0.98% of total loans as of June 30, 2016, down from 1.00% at December 31, 2015 and down from 1.03% a year ago.”

“All of these positive factors can be seen in our operating ratios,” observed F. Stephen Ward, the Company’s Chief Financial Officer. “Our return on average assets was 1.16% for the first six months of 2016 compared to 1.12% return for the first six months of 2015, and our return on average tangible common equity was 12.85% compared to 12.35% for the same periods, respectively. At 50.15% for the first six months of 2016 compared to 53.71% for the first six months of 2015, our efficiency ratio remains well below the Bank’s UBPR peer group average which stood at 64.88% as of March 31, 2016.

“The First Bancorp’s price per share was $21.54 at June 30, 2016, up $1.07 from December 31, 2015, and with dividends reinvested, our total return for the first six months of 2016 was 7.59%,” Mr. Ward noted. “We outperformed the broad market during this period, as measured by the S&P 500 which had a total return with dividends reinvested of 3.84%, as well the Russell 2000 in which we are included, which had a total return of 2.21%. We also outperformed the banking industry, with total returns year to date of -1.12% for the KBW Regional Bank Index and -3.08% for the Nasdaq Bank Index.”

“The Board of Directors increased the quarterly dividend to 23 cents per share in the second quarter of 2016,” President McKim commented. “Based on the June 30, 2016 closing price of $21.54 per share, our annualized dividend yield is a very healthy 4.27%. The dividend continues to be one of the major reasons people invest in our stock and strong operating results enable us to periodically increase our dividend as well. That said, at all times we balance the dividend payout level with retaining sufficient earnings to remain well capitalized and support future asset growth.

“I am very pleased with our performance for the first half of 2016,” President McKim concluded, “The $1.8 million increase in net interest income on a tax-equivalent basis posted in the first six months of 2016, compared to the same period in 2015, was driven by the significant pickup in loan demand which began in the second half of 2015, and when combined with excellent credit quality, we have had two quarters in a row with record net income. While the Maine and national economies are doing very well, we continue to watch what is happening in other parts of the world, which is beyond our control. What is within our control, however, is the tremendous team of people we have at First National Bank. It is their dedication to superior customer service that results in our ongoing success.”