<SEC-DOCUMENT>0000765207-12-000040.txt : 20121016
<SEC-HEADER>0000765207-12-000040.hdr.sgml : 20121016
<ACCEPTANCE-DATETIME>20120905110100
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000765207-12-000040
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20120905

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			First Bancorp, Inc /ME/
		CENTRAL INDEX KEY:			0000765207
		STANDARD INDUSTRIAL CLASSIFICATION:	NATIONAL COMMERCIAL BANKS [6021]
		IRS NUMBER:				010404322
		STATE OF INCORPORATION:			ME
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		P.O. BOX 940
		STREET 2:		MAIN STREET
		CITY:			DAMARISCOTTA
		STATE:			ME
		ZIP:			04543
		BUSINESS PHONE:		2075633195

	MAIL ADDRESS:	
		STREET 1:		P.O. BOX 940
		CITY:			DAMARISCOTTA
		STATE:			ME
		ZIP:			04543

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FIRST NATIONAL LINCOLN CORP /ME/
		DATE OF NAME CHANGE:	19920703
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<div style="TEXT-ALIGN: center; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt"><u>The First Bancorp</u></div>

<div style="TEXT-ALIGN: center; FONT-STYLE: italic; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Post Office Box 940 &#8226; Damariscotta, Maine 04543</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt"><u>Via EDGAR Private Correspondence</u></div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">September 4, 2012</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">John Spitz, Staff Accountant</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Sharon Blume, Assistant Chief Accountant</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Securities and Exchange Commission</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Washington, DC 20549</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; MARGIN-LEFT: 36pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Re: The First Bancorp, Inc.</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; MARGIN-LEFT: 36pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Form 10-K for Fiscal Year ended December 31, 2011</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; MARGIN-LEFT: 36pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Filed March 12, 2012</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; MARGIN-LEFT: 36pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Form 10-Q for Fiscal Quarter ended June 30, 2012</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; MARGIN-LEFT: 36pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Filed August 9, 2012</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; MARGIN-LEFT: 36pt; FONT-SIZE: 10pt; FONT-WEIGHT: bold">File No. 000-26589</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Mr. Spitz and Ms. Blume:</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">The following should address the comments made in your letter of August 24, 2012, detailing the review you completed on the above referenced filings for our Company:</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><u>Comment 1.</u></div>

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<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Please revise your Summary of past-due status of loans tabular disclosure on page 12 in future filings to further breakout the amounts included in the 30-89 days past due bucket into loans past due 30-59 days and loans past due 60-89 days. Refer to ASC 310-10-55-9 for guidance.</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Our future filings will break out loans past due 30-89 days into two buckets: 30-59 days and 60-89 days.</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><u>Comment 2.</u></div>

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<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">We note that in your tabular presentations of impaired loans beginning on page 14 that the recorded investments and unpaid principle balances are the same for each period presented. Taking into consideration your charge-off policy disclosed on page 56 of your Form 10-K for the fiscal year ended December 31, 2011, the increase in the specific allowance attributable to impaired loans, and the charge-offs and recoveries recorded during each period, please explain the reasons for the unpaid principle balances approximating the recorded investment of your impaired loans. Refer to the FASB Accounting Standards Codification Master Glossary, which defines recorded investment as the amount of the investment in a loan, which is not net of a valuation allowance, but which does reflect any direct write-down of the investment.</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">The difference between the unpaid principle balances which approximated the recorded investment of impaired loans was due to a small level of partial chargeoffs that were not included. &#160;Our future filings will reflect the small level of partial chargeoffs that produce a difference between unpaid principle balances and the recorded investment in impaired loans.</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><u>Comment 3.</u></div>

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<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">You disclose that the third element of your allowance for loan loss consists of qualitative reserves judgmentally adjusted for local and national economic conditions, concentrations, portfolio composition, volume and severity of delinquencies and non-accrual loans, trends of criticized and classified loans, changes in credit policies, and underwriting standards, credit administration practices and other factors. Considering the judgment involved in estimating loan losses and the fact that your allowance for loan losses is a critical accounting policy, please tell us and revise future filings to disclose additional granularity about how these reserves for qualitative adjustments are determined along with the key drivers (e.g. trends of criticized and classified loans, volumes and severity of delinquencies and non-accrual loans) of these amounts. Additionally, please also discuss any significant adjustments made by loan class for each period presented and discuss the specific facts and circumstances for the adjustments.</div>

<div style="TEXT-ALIGN: left; MARGIN-TOP: 9pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Qualitative adjustment factors are taken into consideration when determining reserve estimates. These adjustment factors are based upon our evaluation of various current conditions, including those listed below.</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">General economic conditions.</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Credit quality trends with emphasis on loan delinquencies, nonaccrual levels and classified loans.</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Recent loss experience in particular segments of the portfolio.</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Loan volumes and concentrations, including changes in mix.</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Other factors, including changes in quality of the loan origination; loan policy changes; &#160;changes in credit risk management processes; Bank regulatory &#160;and external Loan Review examination results.</div>
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<div style="TEXT-ALIGN: left; MARGIN-TOP: 9pt; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">The qualitative amount assigned to the substandard commercial loan segments was reduced at June 30, 2012 from March 31, 2012 to adjust historical loss averages for the impact of recent write downs taken on a large, atypical credit. &#160;Changes to qualitative adjustments for other major portfolio segments were not material at June 30, 2012. &#160;We will include similar granularity and detail in future filings.</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><u>Comment 4.</u></div>

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<div style="TEXT-ALIGN: left; FONT-STYLE: italic; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">As a related matter we note that your unallocated reserves have decreased from $2 million as of December 31, 2011 to $1.69 million and $1.89 million as of March 31, 2012 and June 30, 2012, respectively. Please revise future filings to discuss in further detail how this amount is determined, the key drivers that impact the variability of this amount, and discuss the facts and circumstances related to any trends in this amount. Additionally, please also compare and contrast the reserve for qualitative factors to your unallocated reserves as it is unclear as to how you would distinguish between amounts determined in each of these reserve categories.</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">In future filings, we will include additional detail similar to the following:</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">The unallocated component of the Allowance totaled $1.89 million at June 30, 2012. &#160;This compares to $2.0 million as of December 31, 2011 and $1.69 million as of March 31, 2012. We view these fluctuations in the unallocated portion of the Allowance to be immaterial. The unallocated amount was justified<font style="FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</font>due to the following:</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">In general, the unallocated component is available to cover imprecision or uncertainties to incorporate the range of probable outcomes inherent in estimates used for the allowance, which may change from period to period. An example of this could be a delay in receiving an updated appraisal on a trouble credit.</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">An internal analysis completed on foreclosed property found that when these properties are sold, on average, the selling price is approximately 22% below the appraised value of the property at the time of take in. The unallocated provides for the uncertainty in the value of these properties when still in impaired loan status.</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Watch-rated commercial loans have increased after bottoming out in late 2009 and early 2010. Additional losses may exist in this portfolio segment, yet are not identifiable at present. The unallocated portion provides some level of support for this.</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">In addition to the above comments, we acknowledge the following:</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">The company is responsible for the adequacy and accuracy of the disclosure in the filing;</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">staff comments or changes to disclosure in response to staff comments do not foreclose The Commission from taking any action with respect to the filing; and</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">The company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.</div>
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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">If you have additional questions, please contact F. Stephen Ward, Executive Vice President &amp; Chief Financial &amp; Accounting Officer, at 207.563.3272, or via email at <font style="FONT-FAMILY: ''Times New Roman'', Times, serif; COLOR: #0000ff; FONT-SIZE: 10pt"><u>Stephen.ward@thefirst.com</u></font>.</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">With best regards,</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt"><u>/s/ Daniel R. Daigneault</u></div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Daniel R. Daigneault</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">President &amp; Chief Executive Officer</div>

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<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt"><u>/s/ F. Stephen Ward</u></div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">F. Stephen Ward</div>

<div style="TEXT-ALIGN: left; FONT-FAMILY: ''Times New Roman'', Times, serif; FONT-SIZE: 10pt">Executive Vice President &amp; Chief Financial &amp; Chief Accounting Officer</div>

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