Camden National Corporation Reports A 24% Increase In Third Quarter 2018 Earnings

Q3 2018 Net Income of $14.1 Million Sets Company Record

Company Release - 10/30/2018 8:30 AM ET

CAMDEN, Maine, Oct. 30, 2018 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National" or the "Company"), a $4.2 billion bank holding company headquartered in Camden, Maine, reported net income for the third quarter of 2018 of $14.1 million and diluted earnings per share ("EPS") of $0.90, representing increases over the third quarter of 2017 of 24% and 25%, respectively. For the third quarter of 2018, the Company's return on average assets was 1.34%, return on average equity was 13.44% and efficiency ratio1 was 57.33%.

"Our ability to execute successfully on retail, business and treasury management initiatives has helped us reach a financial milestone as we report record earnings for the third quarter," said Gregory A. Dufour, President and Chief Executive Officer of the Company. "We are very pleased with our year-to-date financial results, which include net income and diluted EPS growth of 24% over the same period last year, solid loan growth of 5%, deposit growth of 7% and strong overall asset quality across our portfolio."

For the nine months ended September 30, 2018, the Company reported net income of $39.1 million and diluted EPS of $2.50, compared to $31.6 million and $2.02 for the same period last year, respectively. For the nine months ended September 30, 2018, the Company's return on average assets was 1.27%, return on average equity was 12.83% and efficiency ratio was 58.14%.

For the third quarter of 2018, the Company declared a $0.30 dividend per share, which represents a $0.07 per share, or 30%, increase over the third quarter of 2017, and a dividend yield of 2.76% as of September 28, 2018 (the last business day of the third quarter).

"In July, we announced Marie McCarthy was appointed as a member of the Company's Board of Directors," said Dufour. "We are thrilled to have Marie join the Company. Her knowledge and experience serving as Chief Operations and People Officer of L.L.Bean will prove beneficial as we work towards our strategic goals, including strong customer satisfaction, high employee engagement and creation of long-term shareholder value. As a result of Marie's appointment, four members of our 11-member Board of Directors are women, reflecting the Company's commitment to diversity."

1

This is a non-GAAP measure. Please refer to "Reconciliation of non-GAAP to GAAP Financial Measures" for further details.

 

THIRD QUARTER 2018 FINANCIAL HIGHLIGHTS

  • Net income for the third quarter of 2018 of $14.1 million increased $2.7 million, or 24%, over the third quarter of 2017 and $1.8 million, or 15%, over last quarter.
  • Total revenues2 for the third quarter of 2018 of $40.8 million increased $1.4 million, or 3%, over the third quarter of 2017 and $1.8 million, or 5%, over last quarter.
  • Total loan growth for the third quarter of 2018 and for the nine months ended September 30, 2018 was 6% on an annualized basis.
  • Average low-cost deposits3 for the third quarter of 2018 of $2.4 billion increased $237.7 million, or 11%, over the third quarter of 2017, and $84.5 million, or 4%, over last quarter.

FINANCIAL CONDITION

Total assets increased 3% since December 31, 2017 to $4.2 billion at September 30, 2018, driven primarily by loan growth of $126.4 million, or 5%. Loan growth for the nine months ended September 30, 2018 was led by residential mortgage growth of $83.1 million, or 10%, followed by commercial real estate loan growth of $52.0 million, or 4%, and an increase in consumer and home equity balances of $4.2 million, or 1%. At September 30, 2018, commercial loan balances decreased $12.9 million, or 3%, since December 31, 2017, largely due to the continued run-off of the Healthcare Professional Funding Corporation ("HPFC") loan portfolio, which has decreased $8.3 million since December 31, 2017.

The Company sold $167.6 million, or 46%, of its residential mortgage production originated for the nine months ended September 30, 2018, compared to $155.2 million sold, or 51%, for the same period last year.

Total deposits increased 7% since December 31, 2017 to $3.2 billion at September 30, 2018. At September 30, 2018, low-cost deposits were 67% of the Company's total funding, compared to 64% at December 31, 2017 and 62% at September 30, 2017. Since year end:

  • Demand deposits grew $85.5 million, or 18%.
  • Interest checking deposits grew $77.4 million, or 9%.
  • Brokered deposits increased $74.7 million, or 36%, as this option provided a more efficient source of short-term funding.

Total borrowings decreased 22% since December 31, 2017 to $479.5 million at September 30, 2018. The decrease in total borrowings was due to our strong deposit growth since year end and the use of brokered deposits to supplement other short-term borrowings.

At September 30, 2018, our loan-to-deposit ratio improved to 90%, compared to 93% at December 31, 2017 and September 30, 2017.

The Company's capital position at September 30, 2018 was well in excess of regulatory requirements, including a total risk-based capital ratio of 14.55% and a Tier I leverage ratio of 9.42%. At September 30, 2018, the Company's tangible common equity ratio1 was 7.78%.

1

This is a non-GAAP measure. Please refer to "Reconciliation of non-GAAP to GAAP Financial Measures" for further details.

2

Revenues is the sum of net interest income and non-interest income.

3

 Low-cost deposits include demand, interest checking, savings and money market.

 

OPERATING RESULTS (Third Quarter 2018 vs. Third Quarter 2017)

Net income for the third quarter of 2018 was $14.1 million, an increase of $2.7 million over the third quarter of 2017. Diluted EPS increased 25% over the same period to $0.90 for the third quarter of 2018.

Income tax expense for the third quarter of 2018 decreased $2.2 million to $3.2 million compared to the third quarter of 2017, primarily due to the decrease in the federal corporate income tax rate, effective January 1, 2018.

Total revenue for the third quarter of 2018 was $40.8 million, an increase of 3% over the same period last year. The increase was led by net interest income growth of $1.3 million, or 4%, to $30.4 million, while non-interest income increased 1% over the same period to $10.4 million.

  • Net interest income growth for the third quarter of 2018 over the same period last year was driven by average loan growth of $136.2 million, or 5%, and strong average deposit growth of $264.7 million, or 10%. As funding costs are on the rise, generating low-cost deposits continues to be a focus, highlighted by demand and interest checking average deposit growth of $204.4 million, or 17%, and average money market growth of $43.2 million, or 9%.
  • Net interest margin on a fully-taxable basis for the third quarter of 2018 decreased two basis points to 3.14% compared to the third quarter of 2017. The decrease in net interest margin on a fully-taxable basis between periods was due to lower accretion income on acquired loans and time deposits, and the decrease in the federal corporate income tax rate, which lowered the tax-equivalent yield for certain loans and investments.
  • Non-interest income totaled $10.4 million for the third quarter of 2018, compared to $10.3 million for the third quarter of 2017. Most fee categories were higher for the third quarter of 2018 compared to the same period of 2017, including debit card income, service charges, and other income, while mortgage banking income for the third quarter of 2018 decreased 15% over the same period.

The provision for credit losses for the third quarter of 2018 was $354,000, or 5 basis points of average loans for the quarter on an annualized basis, compared to $817,000 for the third quarter of 2017, or 12 basis points of average loans for the quarter on an annualized basis. The decrease in provision for credit losses was driven primarily by improvements in asset quality:

  • The non-performing loans to total loans ratio at September 30, 2018 was 0.65%, compared to 0.72% at September 30, 2017.
  • The third quarter 2018 annualized net charge-offs to average loans ratio was 0.07%, compared to 0.11% for the third quarter of 2017.
  • Criticized and classified loans decreased $15.4 million, or 23%, since September 30, 2017 to $52.4 million at September 30, 2018.

Non-interest expense for the third quarter of 2018 was $23.2 million, compared to $21.8 million for the same period last year. The increase of $1.3 million, or 6%, between periods was driven primarily by an increase in salaries and employee benefits expense of 8% due to merit increases, ongoing wage inflation and strategic hires. Our efficiency ratio for the third quarter of 2018 was 57.33% compared to 55.72% for the third quarter of 2017.

OPERATING RESULTS (Linked Quarter)

Net income for the third quarter of 2018 increased $1.8 million, or 15%, and diluted EPS increased $0.12, or 15%, compared to the previous quarter. The increase between periods was led by revenue growth of $1.8 million and a lower provision for credit losses of $629,000, but was partially offset by higher non-interest expense of $271,000.

Total revenue for the third quarter of 2018 increased 5% over last quarter due to net interest income growth of $942,000, or 3%, and an increase in non-interest income of $891,000, or 9%.

  • Net interest income growth for the third quarter of 2018 over last quarter was the result of average loan growth of $71.3 million, or 3%, and average deposit growth of $92.9 million, or 3%.
  • Net interest margin on a fully-taxable equivalent basis for the third quarter of 2018 was 3.14%, compared to 3.10% last quarter, as the yield on average earnings assets increased seven basis points between quarters while our cost of funds increased four basis points. In the third quarter of 2018, we experienced our seasonal growth in low-cost deposits, which resulted in lowering borrowing levels.
  • Non-interest income increased $891,000 in the third quarter of 2018 compared to last quarter due to an increase in investment security gains of $633,000, an increase in mortgage banking income of $149,000 and an increase in loan swap fee income of $108,000.

The provision for credit losses decreased $629,000 for the third quarter of 2018 compared to last quarter. The loan portfolio saw favorable migration in the third quarter of 2018 as criticized and classified loans decreased $4.6 million between quarters, and our non-performing loans to total loans ratio decreased four basis points between quarters.

Non-interest expense increased 1% between quarters to $23.2 million for the third quarter of 2018. Salaries and employee benefits costs was the primary driver, increasing 3% between quarters, largely due to strategic hires, seasonal summer employees and an increase in incentive compensation, reflective of our strong year-to-date performance.

CONFERENCE CALL

Camden National will host a conference call and webcast at 3:00 p.m., Eastern Time, on Tuesday, October 30, 2018 to discuss its third quarter 2018 financial results and outlook. Participants should dial in to the call 10 - 15 minutes before it begins. Information about the conference call is as follows:

Live dial-in (domestic):

(888) 349-0139

Live dial-in (international):

(412) 542-4154

Live webcast: 

https://services.choruscall.com/links/cac181030.html

A link to the live webcast will be available on Camden National's website under "Investor Relations" at www.CamdenNational.com prior to the meeting, and a replay of the webcast will be available on Camden National's website following the conference call. The transcript of the conference call will also be available on Camden National's website approximately two days after the conference call.

ABOUT CAMDEN NATIONAL CORPORATION

Camden National Corporation (NASDAQ:CAC), headquartered in Camden, Maine, is the largest publicly traded bank holding company in Northern New England with $4.2 billion in assets and nearly 650 employees. Camden National Bank, its subsidiary, is a full-service community bank founded in 1875 that offers an array of consumer and business financial products and services, accompanied by the latest in digital banking technology to empower customers to bank the way they want. The Bank provides personalized service through a network of 60 banking centers, 71 ATMs, and lending offices in New Hampshire and Massachusetts, all complemented by 24/7 live phone support. 2017 marked the eighth time Camden National Bank received the "Lender at Work for Maine" Award from the Finance Authority of Maine. Comprehensive wealth management, investment, and financial planning services are delivered by Camden National Wealth Management. To learn more, visit www.CamdenNational.com. Member FDIC.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including certain plans, expectations, goals, projections and other statements, which are subject to numerous risks, assumptions and uncertainties. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures; changes in the interest rate environment; changes in general economic conditions; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; legislative and regulatory changes that adversely affect the business in which Camden National is engaged; changes in the securities markets and other risks and uncertainties disclosed from time to time in in Camden National's Annual Report on Form 10-K for the year ended December 31, 2017, as updated by other filings with the Securities and Exchange Commission ("SEC"). Camden National does not have any obligation to update forward-looking statements.

USE OF NON-GAAP MEASURES

In addition to evaluating the Company's results of operations in accordance with generally accepted accounting principles in the United States ("GAAP"), management supplements this evaluation with certain non-GAAP financial measures, such as return on average tangible equity; the efficiency and tangible common equity ratios; and tangible book value per share. Management utilizes these non-GAAP financial measures for purposes of measuring our performance against our peer group and other financial institutions and analyzing our internal performance. We also believe these non-GAAP financial measures help investors better understand the Company's operating performance and trends and allow for better performance comparisons to other financial institutions. In addition, these non-GAAP financial measures remove the impact of unusual items that may obscure trends in the Company's underlying performance. These disclosures should not be viewed as a substitute for GAAP operating results, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other financial institutions. Reconciliation to the comparable GAAP financial measure can be found in this document.

ANNUALIZED DATA

Certain returns, yields and performance ratios are presented on an "annualized" basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full-year or year-over-year amounts. Annualized data may not be indicative of any four-quarter period, and are presented for illustrative purposes only.

 

Selected Financial Data

(unaudited)

 



At or For The

Three Months Ended


At or For The
Nine Months Ended

(In thousands, except number of shares and per share data)


September 30,
 2018


June 30,
 2018


September 30,
 2017


September 30,
 2018


September 30,
 2017

Financial Condition Data











Investments


$

890,177



$

918,404



$

916,018



$

890,177



$

916,018


Loans and loans held for sale


2,919,001



2,880,185



2,761,287



2,919,001



2,761,287


Allowance for loan losses


23,526



23,668



24,413



23,526



24,413


Total assets


4,191,584



4,193,782



4,039,943



4,191,584



4,039,943


Deposits


3,220,755



3,056,119



2,956,413



3,220,755



2,956,413


Borrowings


479,498



661,393



608,607



479,498



608,607


Shareholders' equity


417,525



409,939



414,366



417,525



414,366


Operating Data











Net interest income


$

30,423



$

29,481



$

29,160



$

88,806



$

85,641


Provision for credit losses


354



983



817



840



2,797


Non-interest income


10,392



9,501



10,299



28,697



28,759


Non-interest expense


23,166



22,895



21,825



68,365



65,411


Income before income tax expense


17,295



15,104



16,817



48,298



46,192


Income tax expense


3,238



2,887



5,478



9,204



14,543


Net income


$

14,057



$

12,217



$

11,339



$

39,094



$

31,649


Key Ratios











Return on average assets


1.34

%


1.19

%


1.12

%


1.27

%


1.07

%

Return on average equity


13.44

%


12.10

%


10.93

%


12.83

%


10.49

%

Net interest margin


3.14

%


3.10

%


3.16

%


3.11

%


3.16

%

Non-performing loans to total loans


0.65

%


0.69

%


0.72

%


0.65

%


0.72

%

Non-performing assets to total assets


0.46

%


0.48

%


0.50

%


0.46

%


0.50

%

Annualized net charge-offs to average loans


0.07

%


0.04

%


0.11

%


0.07

%


0.07

%

Tier I leverage capital ratio


9.42

%


9.30

%


9.01

%


9.42

%


9.01

%

Total risk-based capital ratio


14.55

%


14.33

%


14.09

%


14.55

%


14.09

%

Per Share Data











Basic earnings per share


$

0.90



$

0.78



$

0.72



$

2.50



$

2.03


Diluted earnings per share


$

0.90



$

0.78



$

0.72



$

2.50



$

2.02


Cash dividends declared per share


$

0.30



$

0.30



$

0.23



$

0.85



$

0.69


Book value per share


$

26.79



$

26.32



$

26.71



$

26.79



$

26.71


Weighted average number of common shares outstanding


15,580,782



15,572,848



15,515,189



15,565,355



15,505,698


Diluted weighted average number of common shares outstanding


15,638,986



15,629,779



15,589,008



15,621,400



15,580,072


Non-GAAP Measures(1)











Return on average tangible equity


17.84

%


16.23

%


14.85

%


17.15

%


14.40

%

Efficiency ratio


57.33

%


58.39

%


55.72

%


58.14

%


56.80

%

Tangible common equity ratio


7.78

%


7.59

%


7.98

%


7.78

%


7.98

%

Tangible book value per share


$

20.43



$

19.94



$

20.26



$

20.43



$

20.26




(1)

Please see "Reconciliation of non-GAAP to GAAP Financial Measures (unaudited)."

 

 

Consolidated Statements of Condition Data

(unaudited)




(In thousands, except number of shares)


September 30,
 2018


December 31,
 2017


September 30,
 2017

ASSETS







Cash and due from banks


$

48,124



$

44,057



$

49,435


Interest-bearing deposits in other banks


50,218



58,914



40,000


Total cash, cash equivalents and restricted cash


98,342



102,971



89,435


Investments:







Available-for-sale securities, at fair value


780,343



789,899



797,251


Held-to-maturity securities, at amortized cost (fair value of $90.6 million, $94.9 million and $95.1 million, respectively)


92,933



94,073



94,207


Other investments


16,901



23,670



24,560


Total investments


890,177



907,642



916,018


Loans held for sale, at fair value


10,158



8,103



12,997


Loans:







Residential real estate


941,488



858,369



852,851


Commercial real estate


1,215,979



1,164,023



1,131,883


Commercial(1)


405,666



418,520



417,105


Consumer and home equity


345,710



341,527



346,451


Total loans


2,908,843



2,782,439



2,748,290


      Less: allowance for loan losses


(23,526)



(24,171)



(24,413)


       Net loans


2,885,317



2,758,268



2,723,877


Goodwill


94,697



94,697



94,697


Other intangible assets


4,411



4,955



5,347


Bank-owned life insurance


89,312



87,489



86,869


Premises and equipment, net


41,277



41,891



42,422


Deferred tax assets


25,738



22,776



36,344


Other assets


52,155



36,606



31,937


Total assets


$

4,191,584



$

4,065,398



$

4,039,943


LIABILITIES AND SHAREHOLDERS' EQUITY







Liabilities







Deposits:







Demand


$

564,113



$

478,643



$

476,386


Interest checking


932,972



855,570



758,568


Savings and money market


996,790



985,508



976,246


Certificates of deposit


446,414



475,010



498,965


Brokered deposits


280,466



205,760



246,248


Total deposits


3,220,755



3,000,491



2,956,413


Short-term borrowings


409,732



541,796



538,927


Long-term borrowings


10,738



10,791



10,808


Subordinated debentures


59,028



58,911



58,872


Accrued interest and other liabilities


73,806



49,996



60,557


Total liabilities


3,774,059



3,661,985



3,625,577


Shareholders' equity


417,525



403,413



414,366


Total liabilities and shareholders' equity


$

4,191,584



$

4,065,398



$

4,039,943




(1)

Includes the HPFC loan portfolio.

 

 

Consolidated Statements of Income Data

(unaudited)



For The

Three Months Ended

(In thousands, except per share data)


September 30,
 2018


June 30,

2018


September 30,

2017

Interest Income







Interest and fees on loans


$

32,813



$

31,367



$

29,350


Interest on U.S. government and sponsored enterprise obligations (taxable)


4,408



4,386



4,177


Interest on state and political subdivision obligations (nontaxable)


659



658



686


Interest on deposits in other banks and other investments


677



678



497


Total interest income


38,557



37,089



34,710


Interest Expense







Interest on deposits


5,255



4,459



3,027


Interest on borrowings


2,021



2,298



1,665


Interest on subordinated debentures


858



851



858


Total interest expense


8,134



7,608



5,550


Net interest income


30,423



29,481



29,160


Provision for credit losses


354



983



817


Net interest income after provision for credit losses


30,069



28,498



28,343


Non-Interest Income







Debit card income


2,173



2,126



2,061


Service charges on deposit accounts


1,910



1,933



1,852


Mortgage banking income, net


1,758



1,609



2,076


Income from fiduciary services


1,339



1,407



1,229


Brokerage and insurance commissions


615



685



600


Bank-owned life insurance


606



609



603


Other service charges and fees


596



506



589


Net gain on sale of securities


664



31



827


Other income


731



595



462


Total non-interest income


10,392



9,501



10,299


Non-Interest Expense







Salaries and employee benefits


13,143



12,728



12,145


Furniture, equipment and data processing


2,575



2,549



2,429


Net occupancy costs


1,614



1,625



1,599


Consulting and professional fees


958



1,116



714


Debit card expense


833



776



662


Regulatory assessments


447



501



574


Other real estate owned and collection costs, net


239



251



258


Amortization of intangible assets


182



181



473


Other expenses


3,175



3,168



2,971


Total non-interest expense


23,166



22,895



21,825


Income before income tax expense


17,295



15,104



16,817


Income tax expense


3,238



2,887



5,478


Net Income


$

14,057



$

12,217



$

11,339


Per Share Data







Basic earnings per share


$

0.90



$

0.78



$

0.72


Diluted earnings per share


$

0.90



$

0.78



$

0.72


 

 

 

 

 

Consolidated Statements of Income Data

(unaudited)



For The

Nine Months Ended
September 30,

(In thousands, except per share data)


2018


2017

Interest Income





Interest and fees on loans


$

94,014



$

84,835


Interest on U.S. government and sponsored enterprise obligations (taxable)


13,019



12,788


Interest on state and political subdivision obligations (nontaxable)


1,989



2,079


Interest on federal funds sold and other investments


1,902



1,362


Total interest income


110,924



101,064


Interest Expense





Interest on deposits


13,463



8,568


Interest on borrowings


6,099



4,302


Interest on subordinated debentures


2,556



2,553


Total interest expense


22,118



15,423


Net interest income


88,806



85,641


Provision for credit losses


840



2,797


Net interest income after provision for credit losses


87,966



82,844


Non-Interest Income





Debit card income


6,228



5,887


Service charges on deposit accounts


5,679



5,632


Mortgage banking income, net


4,758



5,566


Income from fiduciary services


4,029



3,831


Brokerage and insurance commissions


1,950



1,601


Bank-owned life insurance


1,823



1,750


Other service charges and fees


1,564



1,558


Net gain on sale of securities


695



827


Other income


1,971



2,107


Total non-interest income


28,697



28,759


Non-Interest Expense





Salaries and employee benefits


38,433



36,240


Furniture, equipment and data processing


7,710



7,204


Net occupancy costs


5,112



5,234


Consulting and professional fees


2,878



2,412


Debit card expense


2,339



2,034


Regulatory assessments


1,447



1,607


Other real estate owned and collection costs


565



558


Amortization of intangible assets


544



1,417


Other expenses


9,337



8,705


Total non-interest expense


68,365



65,411


Income before income tax expense


48,298



46,192


Income tax expense


9,204



14,543


Net Income


$

39,094



$

31,649


Per Share Data





Basic earnings per share


$

2.50



$

2.03


Diluted earnings per share


$

2.50



$

2.02


 

 

Quarterly Average Balance and Yield/Rate Analysis

(unaudited)



For The Three Months Ended



Average Balance


Yield/Rate

(In thousands)


September 30,
 2018


June 30,

2018


September 30,

2017


September 30,
 2018


June 30,

2018


September 30,

2017

Assets













Interest-earning assets:













Interest-bearing deposits in other banks(1)


$

45,824



$

58,500



$

40,640



1.85

%


1.57

%


1.27

%

Securities - taxable


826,541



834,675



819,778



2.36

%


2.32

%


2.22

%

Securities - nontaxable(2)


97,775



98,015



101,507



3.41

%


3.40

%


4.16

%

Loans(3):













Residential real estate


934,029



884,977



851,828



4.16

%


4.20

%


4.09

%

Commercial real estate


1,198,677



1,180,421



1,136,851



4.46

%


4.35

%


4.07

%

Commercial(2)


351,980



351,711



347,469



4.56

%


4.42

%


4.18

%

Municipal(2)


24,603



21,993



24,847



3.06

%


3.13

%


3.24

%

Consumer and home equity


344,740



340,782



345,533



5.16

%


5.01

%


4.58

%

HPFC


38,356



41,182



49,619



7.64

%


7.80

%


8.38

%

     Total loans


2,892,385



2,821,066



2,756,147



4.49

%


4.43

%


4.23

%

Total interest-earning assets(1)


3,862,525



3,812,256



3,718,072



3.97

%


3.90

%


3.75

%

Other assets


301,489



294,752



312,071








Total assets


$

4,164,014



$

4,107,008



$

4,030,143





















Liabilities & Shareholders' Equity













Deposits:













Demand


$

517,651



$

464,164



$

450,350



%


%


%

Interest checking


865,012



839,510



727,959



0.54

%


0.47

%


0.19

%

Savings


483,577



483,192



493,447



0.06

%


0.06

%


0.07

%

Money market


512,650



507,545



469,458



0.89

%


0.82

%


0.53

%

Certificates of deposit


481,059



472,637



454,013



1.18

%


1.06

%


0.83

%

Total deposits


2,859,949



2,767,048



2,595,227



0.53

%


0.48

%


0.31

%

Borrowings:













Brokered deposits


272,471



239,105



310,207



2.07

%


1.89

%


1.30

%

Customer repurchase agreements


244,189



247,789



222,386



1.08

%


1.03

%


0.51

%

Subordinated debentures


59,009



58,970



58,853



5.77

%


5.79

%


5.78

%

Other borrowings


249,341



330,096



386,643



2.16

%


2.02

%


1.42

%

Total borrowings


825,010



875,960



978,089



2.07

%


1.96

%


1.43

%

Total funding liabilities


3,684,959



3,643,008



3,573,316



0.88

%


0.84

%


0.62

%

Other liabilities


64,119



59,126



45,330








Shareholders' equity


414,936



404,874



411,497








Total liabilities & shareholders' equity


$

4,164,014



$

4,107,008



$

4,030,143








Net interest rate spread (fully-taxable equivalent)(1)


3.09

%


3.06

%


3.13

%

Net interest margin (fully-taxable equivalent)(1)


3.14

%


3.10

%


3.16

%

Net interest margin (fully-taxable equivalent), excluding fair value mark accretion and collection of previously charged-off acquired loans(1)(4)


3.09

%


3.04

%


3.07

%



(1)

Balances for the three months ended September 30, 2017 were revised to include average interest-bearing deposits in other banks in total average interest-earning assets. Previously, average interest-bearing deposits in other banks was presented in other assets.

(2)

 Reported on a tax-equivalent basis using the corporate federal income tax rate in effect for the period, including certain commercial loans.

(3)

Non-accrual loans and loans held for sale are included in total average loans.

(4)

 Excludes the impact of the fair value mark accretion on loans and certificates of deposit generated in purchase accounting and collection of previously charged-off acquired loans for the three months ended September 30, 2018, June 30, 2018 and September 30, 2017 totaling $434,000, $578,000 and $804,000, respectively.

 

 

 

 

Year-to-Date Average Balance and Yield/Rate Analysis

(unaudited)



For The Nine Months Ended



Average Balance


Yield/Rate

(In thousands)


September 30,

2018


September 30,

2017


September 30,

2018


September 30,

2017

Assets









Interest-earning assets:









Interest-bearing deposits in other banks(1)


$

52,076



$

37,505



1.60

%


1.01

%

Securities - taxable


829,248



832,054



2.30

%


2.22

%

Securities - nontaxable(2)


98,443



102,075



3.41

%


4.18

%

Loans(3):









Residential real estate


893,531



831,072



4.16

%


4.10

%

Commercial real estate


1,183,666



1,109,386



4.34

%


4.02

%

Commercial(2)


351,224



334,247



4.42

%


4.17

%

Municipal(2)


21,318



19,761



3.16

%


3.34

%

Consumer and home equity


342,214



343,294



4.98

%


4.42

%

HPFC


41,079



53,873



7.82

%


8.50

%

     Total loans


2,833,032



2,691,633



4.41

%


4.20

%

Total interest-earning assets(1)


3,812,799



3,663,267



3.89

%


3.72

%

Other assets


296,395



308,322






Total assets


$

4,109,194



$

3,971,589















Liabilities & Shareholders' Equity









Deposits:









Demand


$

478,386



$

411,818



%


%

Interest checking


846,093



725,705



0.46

%


0.18

%

Savings


486,773



490,648



0.06

%


0.06

%

Money market


502,719



476,983



0.79

%


0.49

%

Certificates of deposit


475,336



458,208



1.08

%


0.88

%

Total deposits


2,789,307



2,563,362



0.48

%


0.31

%

Borrowings:









Brokered deposits


250,272



322,860



1.86

%


1.09

%

Customer repurchase agreements


243,037



225,426



0.95

%


0.44

%

Subordinated debentures


58,970



58,814



5.80

%


5.80

%

Other borrowings


302,238



354,443



1.93

%


1.34

%

Total borrowings


854,517



961,543



1.90

%


1.32

%

Total funding liabilities


3,643,824



3,524,905



0.81

%


0.58

%

Other liabilities


57,846



43,489






Shareholders' equity


407,524



403,195






Total liabilities & shareholders' equity


$

4,109,194



$

3,971,589






Net interest rate spread (fully-taxable equivalent)(1)


3.08

%


3.14

%

Net interest margin (fully-taxable equivalent)(1)


3.11

%


3.16

%

Net interest margin (fully-taxable equivalent), excluding fair value mark accretion and collection of previously charged-off acquired loans(1)(4)


3.06

%


3.07

%



(1)

Balances for the nine months ended September 30, 2017 were revised to include average interest-bearing deposits in other banks in total average interest-earning assets. Previously, average interest-bearing deposits in other banks was presented in other assets.

(2)

Reported on a tax-equivalent basis using the corporate federal income tax rate in effect for the period, including certain commercial loans.

(3)

Non-accrual loans and loans held for sale are included in total average loans.

(4)

Excludes the impact of the fair value mark accretion on loans and certificates of deposit generated in purchase accounting and collection of previously charged-off acquired loans for the nine months ended September 30, 2018 and 2017 totaling $1.6 million and $2.5 million, respectively.

 

 

Asset Quality Data

(unaudited)


(In thousands)


At or For The
Nine Months Ended
September 30, 2018


At or For The
Six Months Ended
June 30, 2018


At or For The
Three Months Ended
March 31, 2018


At or For The
Year Ended
December 31, 2017


At or For The
Nine Months Ended
September 30, 2017

Non-accrual loans:











Residential real estate


$

4,720



$

5,742



$

6,185



$

4,979



$

4,465


Commercial real estate


5,517



5,600



4,603



5,642



5,887


Commercial


2,402



1,934



1,991



2,000



1,830


Consumer


1,647



1,700



1,464



1,650



1,626


HPFC


591



834



655



1,043



838


Total non-accrual loans


14,877



15,810



14,898



15,314



14,646


Loans 90 days past due and accruing


14










 Accruing troubled-debt restructured 
loans not included above


4,039



4,000



4,361



5,012



5,154


Total non-performing loans


18,930



19,810



19,259



20,326



19,800


Other real estate owned


185



130



130



130



341


Total non-performing assets


$

19,115



$

19,940



$

19,389



$

20,456



$

20,141


Loans 30-89 days past due:











Residential real estate


$

3,816



$

2,222



$

2,777



$

5,277



$

3,169


Commercial real estate


574



309



1,121



1,135



2,297


Commercial


723



1,490



243



518



712


Consumer


902



1,258



1,190



1,197



1,256


HPFC


1,078



455



528



887



938


Total loans 30-89 days past due


$

7,093



$

5,734



$

5,859



$

9,014



$

8,372


Allowance for loan losses at the beginning of the period


$

24,171



$

24,171



$

24,171



$

23,116



$

23,116


Provision (credit) for loan losses


845



490



(500)



3,026



2,786


Charge-offs:











Residential real estate


231



116



31



482



433


Commercial real estate


512



512



426



124



81


Commercial


448



298



171



1,014



650


Consumer


451



266



175



558



493


HPFC


209







290



274


Total charge-offs


1,851



1,192



803



2,468



1,931


Total recoveries


(361)



(199)



(122)



(497)



(442)


Net charge-offs


1,490



993



681



1,971



1,489


Allowance for loan losses at the end of the period


$

23,526



$

23,668



$

22,990



$

24,171



$

24,413


Components of allowance for credit losses:











Allowance for loan losses


$

23,526



$

23,668



$

22,990



$

24,171



$

24,413


Liability for unfunded credit commitments


15



16



23



20



22


Allowance for credit losses


$

23,541



$

23,684



$

23,013



$

24,191



$

24,435


Ratios:











Non-performing loans to total loans


0.65

%


0.69

%


0.69

%


0.73

%


0.72

%

Non-performing assets to total assets


0.46

%


0.48

%


0.47

%


0.50

%


0.50

%

Allowance for loan losses to total loans


0.81

%


0.83

%


0.82

%


0.87

%


0.89

%

Net charge-offs to average loans (annualized):











Quarter-to-date


0.07

%


0.04

%


0.10

%


0.07

%


0.11

%

Year-to-date


0.07

%


0.07

%


0.10

%


0.07

%


0.07

%

Allowance for loan losses to non-performing loans


124.28

%


119.48

%


119.37

%


118.92

%


123.30

%

Loans 30-89 days past due to total loans


0.24

%


0.20

%


0.21

%


0.32

%


0.30

%

 

Reconciliation of non-GAAP to GAAP Financial Measures (unaudited)

 

Return on Average Tangible Equity:







For the
Three Months Ended


For the
Nine Months Ended

(In thousands)


September 30,

 2018


June 30,

 2018


September 30,

 2017


September 30,

 2018


September 30,

 2017

Net income, as presented


$

14,057



$

12,217



$

11,339



$

39,094



$

31,649


Add: amortization of intangible assets, net of tax(1)


144



143



307



430



921


Net income, adjusted for amortization of intangible assets


$

14,201



$

12,360



$

11,646



$

39,524



$

32,570


Average equity, as presented


$

414,936



$

404,874



$

411,497



$

407,524



$

403,195


Less: average goodwill and other intangible assets


(99,195)



(99,377)



(100,273)



(99,379)



(100,746)


Average tangible equity


$

315,741



$

305,497



$

311,224



$

308,145



$

302,449


Return on average tangible equity


17.84

%


16.23

%


14.85

%


17.15

%


14.40

%

Return on average equity


13.44

%


12.10

%


10.93

%


12.83

%


10.49

%



(1)

Reported on a tax-equivalent basis using the corporate federal income tax rate in effect for the respective period.

 

 

Efficiency Ratio:













For the

Three Months Ended


For the
Nine Months Ended

(In thousands)


September 30,
 2018


June 30,
 2018


September 30,
 2017


September 30,
 2018


September 30,
 2017

Non-interest expense, as presented


$

23,166



$

22,895



$

21,825



$

68,365



$

65,411


Net interest income, as presented


$

30,423



$

29,481



$

29,160



$

88,806



$

85,641


Add: effect of tax-exempt income(1)


260



257



535



771



1,580


Non-interest income, as presented


10,392



9,501



10,299



28,697



28,759


Less: net gain on sale of securities


(664)



(31)



(827)



(695)



(827)


Adjusted net interest income plus non-interest income


$

40,411



$

39,208



$

39,167



$

117,579



$

115,153


Non-GAAP efficiency ratio


57.33

%


58.39

%


55.72

%


58.14

%


56.80

%

GAAP efficiency ratio


56.76

%


58.73

%


55.31

%


58.18

%


57.18

%



(1)

Reported on a tax-equivalent basis using the corporate federal income tax rate in effect for the respective period.

 

 

Tangible Book Value Per Share and Tangible Common Equity Ratio:



September 30,
 2018


June 30,

 2018


September 30,
 2017

(In thousands, except number of shares and per share data)


Tangible Book Value Per Share:







Shareholders' equity, as presented


$

417,525



$

409,939



$

414,366


Less: goodwill and other intangible assets


(99,108)



(99,289)



(100,044)


Tangible shareholders' equity


$

318,417



$

310,650



$

314,322


Shares outstanding at period end


15,584,526



15,576,249



15,515,577


Tangible book value per share


$

20.43



$

19.94



$

20.26


Book value per share


$

26.79



$

26.32



$

26.71


Tangible Common Equity Ratio:

Total assets


$

4,191,584



$

4,193,782



$

4,039,943


Less: goodwill and other intangibles


(99,108)



(99,289)



(100,044)


Tangible assets


$

4,092,476



$

4,094,493



$

3,939,899


Tangible common equity ratio


7.78

%


7.59

%


7.98

%

Shareholders' equity to total assets


9.96

%


9.77

%


10.26

%

 

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SOURCE Camden National Corporation