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

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

Q3 2018 Net Income of $14.1 Million Sets Company Record

PR Newswire

CAMDEN, Maine, Oct. 30, 2018 /PRNewswire/ -- Camden National Corporation 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 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

%

 

www.camdennational.com.  (PRNewsFoto/Camden National Corporation) (PRNewsfoto/Camden National Corporation)

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/camden-national-corporation-reports-a-24-increase-in-third-quarter-2018-earnings-300739650.html

SOURCE Camden National Corporation

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