Camden National Corporation Reports Fourth Quarter And Year End 2020 Financial Results

CAMDEN, Maine, Jan. 26, 2021 /PRNewswire/ -- Camden National Corporation CAC ", Camden National", or the ", Company", ))), a $4.9 billion bank holding company headquartered in Camden, Maine, reported net income of $18.3 million and diluted earnings per share ("EPS") of $1.22 for the fourth quarter of 2020, an increase of 20% and 23% over the fourth quarter of 2019, respectively.

Net income for the year ended 2020 was $59.5 million, an increase of 4% over the year ended 2019. Over the same period, diluted EPS increased 7% to $3.95 for the year ended 2020. Strong earnings translated into a return on average assets of 1.23%, a return on average equity of 11.81%, and a return on average tangible equity (non-GAAP) of 14.79% for the year ended 2020.

"We have a lot to be proud about at Camden National this year," said Gregory A. Dufour, President and Chief Executive Officer of the Company. "2020 was a year unlike any other with so many personal and professional challenges, as the COVID-19 health crisis disrupted the lives of the people and businesses across all communities we serve. Despite these challenges, we were able to support our employees, as well as provide outstanding service to our customers and communities in their time of need through various offerings, including our Employee Assistance Program, SBA Paycheck Protection Program, short-term loan deferrals, and continued generous donations to our communities."

"Our annual financial results speak to the dedication, hard work and resiliency of our employees across all areas of our company. One great example that highlights the effort and teamwork across the organization is from our residential mortgage team. The team worked tirelessly this past year to support our customers as interest rates hit a historical low, and we were able reach a new record of $1 billion in mortgage originations this past year." Dufour added, "While our methods for conducting business may have changed this year in response to COVID-19, our focus on and ability to deliver an excellent customer experience didn't. Recently, we were named a Customer Experience Leader by a leading independent research firm, Greenwich Associates, for U.S. Retail Banking and U.S. Commercial Small Business."

The Company ended 2020 with excellent asset quality, including non-performing assets of 0.22% of total assets and short-term loan modifications of 0.8% of total loans.

Q4 2020 FINANCIAL HIGHLIGHTS

  • Fourth quarter 2020 net income and diluted EPS increased 20% and 23% over the fourth quarter of 2019, respectively, and 9% and 10% over the third quarter of 2020, respectively.
  • Fourth quarter 2020 pre-tax, pre-provision earnings (non-GAAP) increased 19% over the fourth quarter of 2019 and 5% over the third quarter of 2020.
  • Fourth quarter 2020 return on average assets was 1.45%, return on average equity was 13.94%, and return on average tangible equity (non-GAAP) was 17.27%.
  • Fourth quarter 2020 net interest margin was 3.06%, compared to 3.12% for the fourth quarter of 2019 and 3.00% for the third quarter of 2020.
  • In the fourth quarter of 2020, the Company adopted the new accounting standard for credit loss provisions, commonly referred to as "CECL" (Current Expected Credit Losses), effective as of January 1, 2020. Under CECL, the allowance for loan losses was 1.18% of total loans at December 31, 2020.
  • At December 31, 2020, loans operating under a short-term deferral arrangement due to COVID-19 were negligible at 0.8% of total loans, compared to 5.5% at September 30, 2020.
  • Non-performing assets were 0.22% of total assets at December 31, 2020, and annualized net (recoveries) / charge-offs were (0.02)% and 0.02% of average loans for the fourth quarter and year ended 2020, respectively.
  • Repurchased 9,408 shares of Camden National common stock in the fourth quarter of 2020 and 274,354 shares for the year ended 2020.

FINANCIAL CONDITION

As of December 31, 2020, total assets were $4.9 billion, an 11% increase over last year. Asset growth during 2020 was driven by an increase in investment balances of $195.6 million, or 21%, loan balances of $124.8 million, or 4%, and cash balances of $70.1 million, or 93%. The increase in cash and investment balances during the year was primarily driven by elevated deposits resulting from government stimulus in response to COVID-19, and loan balances increased primarily due to PPP loans. Commercial and commercial real estate loan originations slowed during the year in response to COVID-19, while residential mortgage loan originations soared and reached a new record during the year of $1.0 billion, an increase of 79% over 2019. The increase was largely driven by refinancing activities as interest rates hit record lows in response to economic uncertainty related to COVID-19. For the fourth quarter and year ended 2020, the Company sold 59% and 61% of its residential mortgage originations to the secondary market, respectively, compared to 59% for the fourth quarter of 2019, 69% for the third quarter of 2020, and 51% for the year ended 2019.

As of December 31, 2020, deposits totaled $4.0 billion, an increase of 13% during the year. The increase was driven by core deposit (non-GAAP) growth of $539.0 million, or 19%, which was fueled by government stimulus programs in response to COVID-19. Over the same period, certificates of deposits ("CD's") and total borrowings decreased $164.1 million, or 31%, and $91.1 million, or 27%, respectively, given the influx of core deposits.

The Company's total loan-to-deposit ratio at December 31, 2020 was 80%, compared to 87% at December 31, 2019.

At December 31, 2020, the Company's capital position remained well in excess of regulatory requirements, including a total risk-based capital ratio of 15.40% and a tier 1 leverage ratio of 9.13%.

In December 2020, the Company announced a cash dividend to shareholders of $0.33 per share, payable on January 29, 2021, to shareholders of record as of January 15, 2021. As of December 31, 2020, the Company's annualized dividend yield was 3.69% based on Camden National's closing share price of $35.78, as reported by NASDAQ.

For the year ended 2020, the Company repurchased 274,354 shares of its common stock. The Company continues to monitor and evaluate its use of capital, particularly during these volatile and uncertain times.

ASSET QUALITY AND COVID-19 SHORT TERM LOAN DEFERMENTS

As of December 31, 2020, the Company's asset quality metrics remained very strong with non-performing assets of 0.22% of total assets and loans 30-89 days past due of 0.10% of total loans. In comparison, at September 30, 2020 and December 31, 2019, non-performing assets were 0.22% and 0.25% of total assets, respectively, and loans 30-89 days past due were 0.18% and 0.17% of total loans, respectively.

In March 2020, the Company began offering temporary debt relief to business and retail customers impacted by COVID-19. All loan modifications made by the Company complied with the terms of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") or bank regulator guidance, and, thus, were not individually assessed, designated or accounted for as troubled-debt restructurings.

Short-term debt payment relief was provided to commercial and retail customers for periods up to 180 days, including full and partial principal and/or interest payment relief. At December 31, 2020, loans operating under a short-term deferral arrangement totaled $26.5 million, or 0.8% of total loans, in comparison to 5.5% of total loans at September 30, 2020.

In late December 2020, another stimulus package was signed into law to provide additional COVID-19 relief for business and consumers. This stimulus package allows the Company the opportunity to again provide temporary debt relief to those impacted by COVID-19. At this time, the Company believes that any additional temporary debt relief would be made on a case-by-case basis.

CECL ADOPTION

In the fourth quarter of 2020, the Company adopted the CECL methodology for accounting for provision for loan losses and certain off-balance credit exposures, effective as of January 1, 2020. Upon the adoption of CECL, the Company recorded a net cumulative-effect adjustment that decreased retained earnings by $2.8 million. This adjustment was the net result of: (1) a $233,000 increase in the allowance for loan losses, (2) a $3.3 million increase in other liabilities related to the allowance for off-balance sheet credit exposures, and (3) a $769,000 increase in deferred tax assets. Interim period financial statements for 2020 were not restated for CECL adoption, but rather continue to be reported under the incurred loss methodology.

The adoption of CECL did not result in the recording of an allowance for credit losses on the Company's held-to-maturity debt securities.

FINANCIAL OPERATING RESULTS (Q4 2020 vs. Q3 2020)

Net income for the fourth quarter of 2020 was $18.3 million, an increase of $1.5 million, or 9%, over the third quarter of 2020. Diluted EPS for the fourth quarter of 2020 was $1.22, an increase of $0.11, or 10%, over the previous quarter.

Net Interest Income.  Net interest income for the fourth quarter of 2020 was $35.5 million, an increase of $980,000, or 3%, over the third quarter of 2020. The increase was driven by PPP loan income earned during the fourth quarter of $3.7 million, an increase of $1.3 million over the prior quarter.

Net interest margin for the fourth quarter of 2020 was 3.06%, an increase of 6 basis points over the third quarter of 2020. The increase between periods was driven by higher PPP loan contribution of 14 basis points and a decrease in costs of funds of 5 basis points, partially offset by an increase in excess liquidity of 4 basis points and a decrease in interest-earning asset yields given the low interest rate environment.

Our net interest margin, excluding PPP loans and excess liquidity (non-GAAP), for the fourth quarter of 2020 was 2.99%, compared to 3.03% for the third quarter of 2020.

Provision for Credit Losses.  The provision for credit losses for the fourth quarter of 2020 was reported using the CECL loss methodology, whereas the third quarter 2020 provision for credit losses was reported using the incurred loss methodology.

The change in provision for credit losses between periods is highlighted in the table below:





CECL



Incurred



Change

($ in thousands)



Q4 2020



Q3 2020



Increase / (Decrease)

Provision for credit losses - loans



$

1,043





$

1,000





$

43



Credit for credit losses - off-balance sheet credit

  exposures



(785)





(13)





(772)



Provision for credit losses



$

258





$

987





$

(729)



Non-Interest Income.  Non-interest income for the fourth quarter of 2020 was $14.3 million, an increase of $1.6 million, or 13%, over the third quarter of 2020. The increase between periods was driven by an increase in mortgage banking income of $934,000 and recognition of our annual debit card income bonus of $555,000 in the fourth quarter of 2020.

Non-Interest Expense.  Non-interest expense for the fourth quarter of 2020 was $26.7 million, an increase of $1.5 million, or 6%, compared to the third quarter of 2020. Compensation-related expenses increased $2.5 million between periods primarily due to incentive compensation due to strong Company performance for the year ended 2020. This was partially offset by a decrease in other expenses of $1.2 million between periods as the Company accrued $1.2 million for a legal matter settlement in the third quarter of 2020. The Company's efficiency ratio calculated in accordance with generally accepted accounting principles in the United States ("GAAP") was 53.61% for the fourth quarter of 2020 and 53.30% for the fourth quarter of 2020 on a non-GAAP basis.

FINANCIAL OPERATING RESULTS (Q4 2020 vs. Q4 2019)

Net income for the fourth quarter 2020 increased $3.0 million, or 20%, over the fourth quarter of 2019. Diluted EPS increased $0.23, or 23%, over the same period.

Net Interest Income.  Net interest income for the fourth quarter of 2020 increased $3.2 million, or 10%, over the fourth quarter 2019. The increase was led by PPP loan income of $3.7 million in the fourth quarter of 2020.

Net interest margin for the fourth quarter of 2020 decreased 6 basis points compared to the fourth quarter of 2019. Net interest margin compression between periods was driven by the change in the interest rate environment and the build of cash balances both pressuring our yield on interest-earning assets. Our yield on interest-earning assets for the fourth quarter of 2020 was 3.38%, which included a 19 basis point contribution from PPP loans and a 15 basis point drag from excess liquidity, compared to 4.02%, which included a 1 basis point drag from excess liquidity, for the fourth quarter of 2019. Over this same period, our cost of funds decreased 61 basis points to 0.33% for the fourth quarter of 2020.

Our net interest margin, excluding PPP loans and excess liquidity (non-GAAP), for the fourth quarter of 2020 was 2.99%, compared to 3.13% for the fourth quarter of 2019.

Provision for Credit Losses.  The provision for credit losses for the fourth quarter of 2020 was reported using the CECL loss methodology, whereas the fourth quarter 2019 provision for credit losses was reported using the incurred loss methodology.

The change in provision for credit losses between periods is highlighted in the table below:





CECL



Incurred



Change

($ in thousands)



Q4 2020



Q4 2019



Increase / (Decrease)

Provision for credit losses - loans



$

1,043





$

204





$

839



(Credit) provision for credit losses - off-balance

  sheet credit exposures



(785)





10





(795)



Provision for credit losses



$

258





$

214





$

44



Non-Interest Income.  Non-interest income for the fourth quarter 2020 increased $2.4 million, or 20%, over the fourth quarter of 2019. The increase between periods was led by an increase in mortgage banking income of $3.4 million driven by an increase in residential mortgage sales of 64%, and was partially offset by a one-time unrealized gain of $866,000 recognized in the fourth quarter of 2019, lower service charge income of $449,000 and lower customer loan swap fees of $247,000.

Non-Interest Expense.  Non-interest expense for the fourth quarter of 2020 increased $1.9 million, or 8%, over the fourth quarter of 2019. The net increase was driven by: (1) an increase in compensation-related expenses of $1.8 million driven by normal merit increases and higher incentive accruals based on performance, (2) an increase in furniture, equipment, and data processing costs of $410,000 driven by new systems and technologies, (3) an increase in regulatory assessment costs of $309,000 as the assessment credits received in 2019 were fully utilized prior to the fourth quarter of 2020, and (4) lower employment and travel-related costs of $432,000 driven by changes due to COVID-19.

CONFERENCE CALL

Camden National will host a conference call and webcast at 3:00 p.m., Eastern Time, on Tuesday, January 26, 2021 to discuss its fourth quarter and fiscal year 2020 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/cac210126.html

A link to the live webcast will be available on Camden National's website under "Investor Relations" at 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 is the largest publicly traded bank holding company in Northern New England with approximately $4.9 billion in assets and approximately 610 employees. Camden National Bank, its subsidiary, is a full-service community bank founded in 1875 in Camden, Maine. Dedicated to customers at every stage of their financial journey, the bank offers the latest in digital banking, complemented by personalized service with 58 banking centers, 24/7 live phone support, 68 ATMs, and additional lending offices in New Hampshire and Massachusetts. For the past three years, Camden National Bank was named a Customer Experience (CX) Leader by a leading independent research firm, Greenwich Associates. In 2020, it received awards in two CX categories: U.S. Retail Banking and U.S. Commercial Small Business. The Finance Authority of Maine has awarded Camden National Bank as "Lender at Work for Maine" for eleven years. Comprehensive wealth management, investment and financial planning services are delivered by Camden National Wealth Management. To learn more, visit 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 in Camden National's Annual Report on Form 10-K for the year ended December 31, 2019, as updated by other filings with the Securities and Exchange Commission ("SEC"). Further, statements about the potential effects of the COVID-19 pandemic on our business, results of operations and financial condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, action taken by government authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, service providers and on economies and markets more generally. 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 GAAP, management supplements this evaluation with certain non-GAAP financial measures, such as pre-tax, pre-provision earnings; return on average tangible equity; the efficiency and tangible common equity ratios; tangible book value per share; core deposits and average core deposits; adjusted yield on interest-earning assets and adjusted net interest margin (fully-taxable equivalent); and allowance for loan losses to total loans, excluding SBA PPP loans. 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 measure 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

Year Ended

(In thousands, except number of shares and per share

   data)



December 31,

2020



September 30,

2020



December 31,

2019



December 31,

2020



December 31,

2019

Financial Condition Data





















Investments



$

1,128,651





$

1,121,712





$

933,069





$

1,128,651





$

933,069



Loans and loans held for sale



3,261,379





3,312,777





3,106,877





3,261,379





3,106,877



Allowance for loan losses



37,865





36,414





25,171





37,865





25,171



Total assets



4,898,745





5,153,793





4,429,521





4,898,745





4,429,521



Deposits



4,005,244





4,224,044





3,537,743





4,005,244





3,537,743



Borrowings



246,770





294,361





337,889





246,770





337,889



Shareholders' equity



529,314





517,522





473,415





529,314





473,415



Operating Data





















Net interest income



$

35,461





$

34,481





$

32,239





$

136,307





$

127,630



Provision for credit losses



258





987





214





12,418





2,861



Non-interest income



14,331





12,696





11,948





50,490





42,113



Non-interest expense



26,692





25,221





24,814





99,983





95,303



Income before income tax expense



22,842





20,969





19,159





74,396





71,579



Income tax expense



4,564





4,194





3,921





14,910





14,376



Net income



$

18,278





$

16,775





$

15,238





$

59,486





$

57,203



Key Ratios





















Return on average assets



1.45

%



1.34

%



1.35

%



1.23

%



1.30

%

Return on average equity



13.94

%



13.01

%



12.77

%



11.81

%



12.44

%

GAAP efficiency ratio



53.61

%



53.46

%



56.16

%



53.52

%



56.15

%

Net interest margin (fully-taxable equivalent)



3.06

%



3.00

%



3.12

%



3.09

%



3.15

%

Non-performing assets to total assets



0.22

%



0.22

%



0.25

%



0.22

%



0.25

%

Common equity ratio



10.81

%



10.04

%



10.69

%



10.81

%



10.69

%

Tier 1 leverage capital ratio



9.13

%



8.96

%



9.55

%



9.13

%



9.55

%

Common equity tier 1 risk-based capital ratio



12.45

%



12.21

%



11.80

%



12.45

%



11.80

%

Tier 1 risk-based capital ratio



13.78

%



13.55

%



13.16

%



13.78

%



13.16

%

Total risk-based capital ratio



15.40

%



15.15

%



14.44

%



15.40

%



14.44

%

Per Share Data





















Basic earnings per share



$

1.22





$

1.12





$

1.00





$

3.96





$

3.70



Diluted earnings per share



$

1.22





$

1.11





$

0.99





$

3.95





$

3.69



Cash dividends declared per share



$

0.33





$

0.33





$

0.33





$

1.32





$

1.23



Book value per share



$

35.50





$

34.69





$

31.26





$

35.50





$

31.26



Non-GAAP Measures(1)





















Return on average tangible equity



17.27

%



16.21

%



16.26

%



14.79

%



15.99

%

Efficiency ratio



53.30

%



50.60

%



55.64

%



52.56

%



55.77

%

Pre-tax, pre-provision earnings



$

23,100





$

21,956





$

19,373





$

86,814





$

74,440



Allowance for loan losses to total loans, excluding SBA PPP

   loans



1.23

%



1.19

%



0.81

%



1.23

%



0.81

%

Tangible common equity ratio



8.99

%



8.30

%



8.66

%



8.99

%



8.66

%

Tangible book value per share



$

28.96





$

28.14





$

24.77





$

28.96





$

24.77





(1)

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

 

Consolidated Statements of Condition Data

(unaudited)



(In thousands)



December 31,

2020



September 30,

2020



December 31,

2019

ASSETS













Cash and due from banks



$

49,524





$

42,119





$

39,586



Interest-bearing deposits in other banks (including restricted cash)



96,250





304,270





36,050



Total cash, cash equivalents and restricted cash



145,774





346,389





75,636



Investments:













Available-for-sale securities, at fair value (book value of $1,078,474, $1,070,479 and $913,978,

  respectively)



1,115,813





1,107,069





918,118



Held-to-maturity securities, at amortized cost (fair value of $1,411, $1,403 and $1,359, respectively)



1,297





1,298





1,302



Other investments



11,541





13,345





13,649



Total investments



1,128,651





1,121,712





933,069



Loans held for sale, at fair value (book value of $40,499, $37,301 and $11,915, respectively)



41,557





37,935





11,854



Loans:













Commercial real estate



1,369,470





1,333,733





1,243,397



Commercial(1)



381,494





375,548





442,701



SBA PPP



135,095





223,838







Residential real estate



1,054,798





1,044,103





1,070,374



Consumer and home equity



278,965





297,620





338,551



Total loans



3,219,822





3,274,842





3,095,023



      Less: allowance for loan losses(2)



(37,865)





(36,414)





(25,171)



       Net loans



3,181,957





3,238,428





3,069,852



Goodwill



94,697





94,697





94,697



Core deposit intangible assets



2,843





3,014





3,525



Bank-owned life insurance



94,877





94,262





92,344



Premises and equipment, net



39,884





40,517





41,836



Deferred tax assets



11,956





11,195





16,823



Other assets



156,549





165,644





89,885



Total assets



$

4,898,745





$

5,153,793





$

4,429,521



LIABILITIES AND SHAREHOLDERS' EQUITY













Liabilities













Deposits:













Non-interest checking



$

792,550





$

800,582





$

552,590



Interest checking



1,288,575





1,419,544





1,153,203



Savings and money market



1,282,886





1,306,868





1,119,193



Certificates of deposit



357,666





405,434





521,752



Brokered deposits



283,567





291,616





191,005



 Total deposits



4,005,244





4,224,044





3,537,743



Short-term borrowings



162,439





210,055





268,809



Long-term borrowings



25,000





25,000





10,000



Subordinated debentures



59,331





59,306





59,080



Accrued interest and other liabilities(2)



117,417





117,866





80,474



Total liabilities



4,369,431





4,636,271





3,956,106



Shareholders' equity



529,314





517,522





473,415



Total liabilities and shareholders' equity



$

4,898,745





$

5,153,793





$

4,429,521





(1)

Includes the Healthcare Professional Funding Corporation ("HPFC") loan portfolio.

(2)

At December 31, 2020, the reported balance has been accounted for under the CECL model. Periods reported prior to December 31, 2020, have been accounted for under the incurred loss model.

 

Consolidated Statements of Income Data

(unaudited)







For The

Three Months Ended



For the

Year Ended

(In thousands, except per share data)



December 31,

2020



September 30,

2020



December 31,

2019



December 31,

2020



December 31,

2019

Interest Income





















Interest and fees on loans



$

33,810





$

33,025





$

35,379





$

134,000





$

143,399



Taxable interest on investments



4,158





4,480





4,780





18,399





19,509



Nontaxable interest on investments



815





823





758





3,253





2,701



Dividend income



157





163





160





655





722



Other interest income



202





176





475





893





2,187



Total interest income



39,142





38,667





41,552





157,200





168,518



Interest Expense





















Interest on deposits



2,591





2,899





7,459





15,544





34,001



Interest on borrowings



246





394





961





1,837





3,621



Interest on subordinated debentures



844





893





893





3,512





3,266



Total interest expense



3,681





4,186





9,313





20,893





40,888



Net interest income



35,461





34,481





32,239





136,307





127,630



Provision for credit losses(1)



258





987





214





12,418





2,861



Net interest income after provision for credit losses



35,203





33,494





32,025





123,889





124,769



Non-Interest Income





















Mortgage banking income, net



5,598





4,664





2,175





18,487





7,837



Debit card income



3,261





2,627





2,978





10,420





9,701



Service charges on deposit accounts



1,742





1,606





2,191





6,697





8,393



Income from fiduciary services



1,506





1,504





1,520





6,115





5,901



Brokerage and insurance commissions



798





755





683





2,832





2,625



Bank-owned life insurance



615





615





615





2,533





2,425



Customer loan swap fees







51





247





222





1,166



Net loss on sale of securities











(133)









(105)



Other income



811





874





1,672





3,184





4,170



Total non-interest income



14,331





12,696





11,948





50,490





42,113



Non-Interest Expense





















Salaries and employee benefits



16,245





13,739





14,446





57,938





54,489



Furniture, equipment and data processing



3,180





3,076





2,770





11,756





10,881



Net occupancy costs



1,800





1,785





1,784





7,585





7,047



Consulting and professional fees



956





913





1,027





3,833





3,706



Debit card expense



969





972





947





3,753





3,613



Regulatory assessments



479





510





170





1,450





1,261



Amortization of core deposit intangible assets



171





170





176





682





705



Other real estate owned and collection costs, net



112





71





127





382





480



Other expenses



2,780





3,985





3,367





12,604





13,121



Total non-interest expense



26,692





25,221





24,814





99,983





95,303



Income before income tax expense



22,842





20,969





19,159





74,396





71,579



Income Tax Expense



4,564





4,194





3,921





14,910





14,376



Net Income



$

18,278





$

16,775





$

15,238





$

59,486





$

57,203



Per Share Data





















Basic earnings per share



$

1.22





$

1.12





$

1.00





$

3.96





$

3.70



Diluted earnings per share



$

1.22





$

1.11





$

0.99





$

3.95





$

3.69





(1)

Reported balances for the three and 12 months ended December 31, 2020, have been accounted for under the CECL model. Reported balances for the three months ended September 30, 2020 and December 31, 2019, and 12 months ended December 31, 2019, have been accounted for under the incurred loss method.

 

Quarterly Average Balance and Yield/Rate Analysis

(unaudited)







Average Balance



Yield/Rate





For the Three Months Ended



For the Three Months Ended

(In thousands)



December 31,

2020



September 30,

2020



December 31,

2019



December 31,

2020



September 30,

2020



December 31,

2019

Assets

























Interest-earning assets:

























Interest-bearing deposits in other banks and

other interest-earning assets



$

267,083





$

216,027





$

79,578





0.09

%



0.09

%



1.74

%

Investments - taxable



945,866





906,374





804,587





1.88

%



2.11

%



2.52

%

Investments - nontaxable(1)



121,354





122,204





112,730





3.40

%



3.41

%



3.40

%

Loans(2):

























  Commercial real estate



1,348,269





1,315,958





1,249,961





3.65

%



3.74

%



4.40

%

  Commercial(1)



331,707





372,416





403,601





3.89

%



3.73

%



4.41

%

  SBA PPP



186,416





221,672









7.74

%



4.16

%



%

  Municipal(1)



20,645





19,072





18,469





3.46

%



3.52

%



3.66

%

  HPFC



13,947





16,104





22,516





6.98

%



8.09

%



7.56

%

  Residential real estate



1,093,367





1,083,052





1,078,485





3.96

%



4.00

%



4.38

%

  Consumer and home equity



287,665





305,194





345,487





4.25

%



4.31

%



5.11

%

Total loans 



3,282,016





3,333,468





3,118,519





4.07

%



3.92

%



4.49

%

Total interest-earning assets



4,616,319





4,578,073





4,115,414





3.38

%



3.37

%



4.02

%

Other assets



405,976





417,956





349,786















Total assets



$

5,022,295





$

4,996,029





$

4,465,200









































Liabilities & Shareholders' Equity

























Deposits:

























Non-interest checking



$

800,391





$

741,757





$

558,677





%



%



%

Interest checking



1,371,910





1,339,389





1,165,610





0.23

%



0.26

%



0.79

%

Savings



589,856





557,718





471,777





0.04

%



0.06

%



0.08

%

Money market



700,949





737,782





642,174





0.33

%



0.35

%



1.16

%

Certificates of deposit



373,364





417,788





533,416





0.89

%



1.07

%



1.66

%

 Total deposits



3,836,470





3,794,434





3,371,654





0.23

%



0.29

%



0.77

%

Borrowings:

























Brokered deposits



286,038





242,390





187,125





0.46

%



0.26

%



2.02

%

Customer repurchase agreements



183,337





194,937





247,780





0.40

%



0.42

%



1.20

%

Subordinated debentures



59,327





59,269





59,037





5.66

%



6.00

%



6.01

%

Other borrowings



25,000





73,370





44,816





1.00

%



1.02

%



1.88

%

 Total borrowings



553,702





569,966





538,758





1.02

%



1.01

%



2.07

%

Total funding liabilities



4,390,172





4,364,400





3,910,412





0.33

%



0.38

%



0.94

%

Other liabilities



110,452





118,727





81,261















Shareholders' equity



521,671





512,902





473,527















Total liabilities & shareholders' equity



$

5,022,295





$

4,996,029





$

4,465,200















Net interest rate spread (fully-taxable equivalent)



3.05

%



2.99

%



3.08

%

Net interest margin (fully-taxable equivalent)



3.06

%



3.00

%



3.12

%

Net interest margin (fully-taxable equivalent), excluding fair value mark accretion and collection of 

  previously charged-off acquired loans(3)



3.03

%



2.96

%



3.09

%



(1)

Reported on tax-equivalent basis calculated using the federal corporate income tax rate of 21%, including certain commercial loans.

(2)

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

(3)

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 December 31, 2020, September 30, 2020, and December 31, 2019, totaling $339,000, $453,000 and $326,000, respectively.

  

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

(unaudited)







Average Balance



Yield/Rate





For the Year Ended



For the Year Ended

(In thousands)



December 31,

2020



December 31,

2019



December 31,

2020



December 31,

2019

Assets

















Interest-earning assets:

















Interest-bearing deposits in other banks and other interest-earning assets



$

179,718





$

67,288





0.19

%



2.13

%

Investments - taxable



874,823





825,674





2.24

%



2.54

%

Investments - nontaxable(1)



121,302





99,024





3.39

%



3.45

%

Loans(2):

















  Commercial real estate



1,310,160





1,260,412





3.92

%



4.66

%

  Commercial(1)



381,087





390,689





3.97

%



4.68

%

  SBA PPP



146,918









5.28

%



%

  Municipal(1)



19,073





19,181





3.56

%



3.59

%

  HPFC



17,000





27,502





8.23

%



8.05

%

  Residential real estate



1,085,064





1,045,668





4.05

%



4.33

%

  Consumer and home equity



312,076





346,769





4.48

%



5.35

%

 Total loans 



3,271,378





3,090,221





4.11

%



4.65

%

Total interest-earning assets



4,447,221





4,082,207





3.56

%



4.15

%

Other assets



398,224





328,301











Total assets



$

4,845,445





$

4,410,508





























Liabilities & Shareholders' Equity

















Deposits:

















Non-interest checking



$

684,539





$

519,078





%



%

Interest checking



1,289,501





1,123,268





0.35

%



0.93

%

Savings



536,014





476,860





0.06

%



0.08

%

Money market



701,640





607,383





0.50

%



1.24

%

Certificates of deposit



454,750





506,971





1.27

%



1.57

%

 Total deposits



3,666,444





3,233,560





0.38

%



0.81

%

Borrowings:

















Brokered deposits



242,951





316,475





0.60

%



2.42

%

Customer repurchase agreements



205,890





241,899





0.64

%



1.25

%

Subordinated debentures



59,228





59,007





5.93

%



5.54

%

Other borrowings



58,601





29,132





0.89

%



2.05

%

 Total borrowings



566,670





646,513





1.20

%



2.25

%

Total funding liabilities



4,233,114





3,880,073





0.49

%



1.05

%

Other liabilities



108,707





70,570











Shareholders' equity



503,624





459,865











Total liabilities & shareholders' equity



$

4,845,445





$

4,410,508











Net interest rate spread (fully-taxable equivalent)



3.07

%



3.10

%

Net interest margin (fully-taxable equivalent)



3.09

%



3.15

%

Net interest margin (fully-taxable equivalent), excluding fair value mark accretion and collection of previously

  charged-off acquired loans(3)



3.06

%



3.11

%



(1)

Reported on tax-equivalent basis calculated using the federal corporate income tax rate of 21%, including certain commercial loans.

(2)

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

(3)

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 years ended December 31, 2020 and 2019, totaling $1.5 million and $1.6 million, respectively.

 

Asset Quality Data

(unaudited)



(In thousands)



At or For The

Year Ended

December 31, 2020



At or For The

Nine Months Ended

September 30, 2020



At or For The

Six Months Ended

June 30, 2020



At or For The

Three Months Ended

March 31, 2020



At or For The

Year Ended

December 31, 2019

Non-accrual loans:





















Residential real estate



$

3,531





$

4,017





$

4,664





$

3,499





$

4,096



Commercial real estate



518





565





432





646





1,122



Commercial(1)



1,607





1,114





1,091





1,070





784



Consumer and home equity



1,996





2,503





2,371





2,102





2,154



Total non-accrual loans



7,652





8,199





8,558





7,317





8,156



   Accruing troubled-debt restructured loans not

      included above



2,818





2,952





2,874





3,008





2,993



Total non-performing loans



10,470





11,151





11,432





10,325





11,149



Other real estate owned



236









118





94





94



Total non-performing assets



$

10,706





$

11,151





$

11,550





$

10,419





$

11,243



Loans 30-89 days past due:





















Residential real estate



$

2,297





$

1,784





$

4,016





$

1,781





$

2,227



Commercial real estate



50





2,056





1,625





2,641





1,582



Commercial(1)



430





1,638





223





1,725





791



Consumer and home equity



440





434





388





1,379





750



Total loans 30-89 days past due



$

3,217





$

5,912





$

6,252





$

7,526





$

5,350



Allowance for loan losses at the beginning of the

  period



$

25,171





$

25,171





$

25,171





$

25,171





$

24,712



Impact of adopting CECL



233



















Provision for loan losses



13,215





12,172





11,172





1,772





2,862



Charge-offs:





















Residential real estate



121





121





96





96





462



Commercial real estate



103





104





71





50





300



Commercial(1)



1,130





857





673





253





1,238



Consumer and home equity



484





199





134





91





713



Total charge-offs 



1,838





1,281





974





490





2,713



Total recoveries 



(1,084)





(352)





(170)





(68)





(310)



Net charge-offs



754





929





804





422





2,403



Allowance for loan losses at the end of the period



37,865





36,414





35,539





26,521





25,171



Allowance for off-balance sheet credit

   exposures(2)(3)



2,568





9





22





24





21



Allowance for credit losses 



$

40,433





$

36,423





$

35,561





$

26,545





$

25,192



Ratios:





















Non-performing loans to total loans



0.33

%



0.34

%



0.34

%



0.33

%



0.36

%

Non-performing assets to total assets



0.22

%



0.22

%



0.23

%



0.23

%



0.25

%

Allowance for loan losses to total loans



1.18

%



1.11

%



1.07

%



0.84

%



0.81

%

Allowance for loan losses to total loans, excluding 

   SBA PPP loans(4)



1.23

%



1.19

%



1.14

%



0.84

%



0.81

%

Net (recoveries) charge-offs to average loans (annualized)





















Quarter-to-date



(0.02)

%



0.01

%



0.05

%



0.05

%



0.09

%

Year-to-date



0.02

%



0.04

%



0.05

%



0.05

%



0.08

%

Allowance for loan losses to non-performing loans



361.65

%



326.55

%



310.87

%



256.86

%



225.77

%

Loans 30-89 days past due to total loans



0.10

%



0.18

%



0.19

%



0.24

%



0.17

%



(1)

Includes the HPFC loan portfolio.

(2)

Period ended December 31, 2020, includes a $3.3 million increase upon adoption of CECL. Prior periods were not restated for CECL.

(3)

Presented within accrued interest and other liabilities on the consolidated statements of condition.

(4)

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

 

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



Return on Average Tangible Equity:





For the

Three Months Ended



For the

Year Ended

(In thousands)



December 31,

 2020



September 30,

2020



December 31,

2019



December 31,

2020



December 31,

2019

Net income, as presented



$

18,278





$

16,775





$

15,238





$

59,486





$

57,203



Add: amortization of core deposit

  intangible assets, net of tax(1)



135





134





139





539





557



Net income, adjusted for amortization of

  core deposit intangible assets



$

18,413





$

16,909





$

15,377





$

60,025





$

57,760



Average equity, as presented



$

521,671





$

512,902





$

473,527





$

503,624





$

459,865



Less: average goodwill and core deposit

  intangible assets



(97,622)





(97,794)





(98,307)





(97,880)





(98,570)



Average tangible equity



$

424,049





$

415,108





$

375,220





$

405,744





$

361,295



Return on average equity



13.94

%



13.01

%



12.77

%



11.81

%



12.44

%

Return on average tangible equity



17.27

%



16.21

%



16.26

%



14.79

%



15.99

%

































 (1)   Assumed a 21% tax rate.

































Efficiency Ratio:





For the

Three Months Ended



For the

Year Ended

(In thousands)



December 31,

2020



September 30,

2020



December 31,

2019



December 31,

2020



December 31,

2019

Non-interest expense, as presented



$

26,692





$

25,221





$

24,814





$

99,983





$

95,303



Less: legal settlement







(1,200)









(1,200)







Adjusted non-interest expense



$

26,692





$

24,021





$

24,814





$

98,783





$

95,303



Net interest income, as presented



$

35,461





$

34,481





$

32,239





$

136,307





$

127,630



Add: effect of tax-exempt income(1)



290





292





277





1,155





1,029



Non-interest income, as presented



14,331





12,696





11,948





50,490





42,113



Add: net loss on sale of securities











133









105



Adjusted net interest income plus non-

   interest income



$

50,082





$

47,469





$

44,597





$

187,952





$

170,877



GAAP efficiency ratio



53.61

%



53.46

%



56.16

%



53.52

%



56.15

%

Non-GAAP efficiency ratio



53.30

%



50.60

%



55.64

%



52.56

%



55.77

%

































 (1)   Assumed a 21% tax rate.





















































Pre-tax, Pre-provision Earnings:

























For the

Three Months Ended



For the

Year Ended

(In thousands)



December 31,

2020



September 30,

2020



December 31,

2019



December 31,

2020



December 31,

2019

Net income, as presented



$

18,278





$

16,775





$

15,238





$

59,486





$

57,203



Add: provision for credit losses



258





987





214





12,418





2,861



Add: income tax expense



4,564





4,194





3,921





14,910





14,376



Pre-tax, pre-provision earnings



$

23,100





$

21,956





$

19,373





$

86,814





$

74,440



 

Adjusted Yield on Interest-Earning Assets:





For the

Three Months Ended



For the

Year Ended





December 31,

2020



September 30,

2020



December 31,

2019



December 31,

2020



December 31,

2019

Yield on interest-earning assets, as presented



3.38

%



3.37

%



4.02

%



3.56

%



4.15

%

Add: effect of excess liquidity on yield 

  on interest-earning assets



0.15

%



0.11

%



0.01

%



0.09

%



0.01

%

Less: effect of SBA PPP loans on yield

  on interest-earning assets



(0.19)

%



(0.04)

%



%



(0.06)

%



%

Adjusted yield on interest-earning assets



3.34

%



3.44

%



4.03

%



3.59

%



4.16

%



Adjusted Net Interest Margin (Fully-Taxable Equivalent):





For the

Three Months Ended



For the

Year Ended





December 31,

2020



September 30,

2020



December 31,

2019



December 31,

2020



December 31,

2019

Net interest margin (fully-taxable

equivalent), as presented



3.06

%



3.00

%



3.12

%



3.09

%



3.15

%

Add: effect of excess liquidity on net

  interest margin (fully-taxable

  equivalent)



0.13

%



0.09

%



0.01

%



0.08

%



0.01

%

Less: effect of SBA PPP loans on net

  interest margin (fully-taxable

  equivalent)



(0.20)

%



(0.06)

%



%



(0.07)

%



%

Adjusted net interest margin (fully-taxable

  equivalent)



2.99

%



3.03

%



3.13

%



3.10

%



3.16

%

 

Allowance for Loan Losses to Total Loans, excluding SBA PPP Loans:













(In thousands)



December 31,

2020



September 30,

2020



December 31,

2019

Allowance for loan losses, as presented



$

37,865





$

36,414





$

25,171



Less: allowance for loan losses on SBA PPP loans



(69)





(115)







Adjusted allowance for loan losses



$

37,796





$

36,299





$

25,171



Total loans, as presented



$

3,219,822





$

3,274,842





$

3,095,023



Less: SBA PPP loans



(135,095)





(223,838)







Adjusted total loans



$

3,084,727





$

3,051,004





$

3,095,023



Allowance for loan losses to total loans



1.18

%



1.11

%



0.81

%

Allowance for loan losses to total loans, excluding SBA PPP loans



1.23

%



1.19

%



0.81

%



Tangible Book Value Per Share and Tangible Common Equity Ratio:





December 31,

2020



September 30,

2020



December 31,

2019

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



Tangible Book Value Per Share:













Shareholders' equity, as presented



$

529,314





$

517,522





$

473,415



Less: goodwill and core deposit intangible assets



(97,540)





(97,711)





(98,222)



Tangible shareholders' equity



$

431,774





$

419,811





$

375,193



Shares outstanding at period end



14,909,097





14,917,344





15,144,719



Book value per share



$

35.50





$

34.69





$

31.26



Tangible book value per share



$

28.96





$

28.14





$

24.77





Tangible Common Equity Ratio:

Total assets



$

4,898,745





$

5,153,793





$

4,429,521



Less: goodwill and core deposit intangible assets



(97,540)





(97,711)





(98,222)



Tangible assets



$

4,801,205





$

5,056,082





$

4,331,299



Common equity ratio



10.81

%



10.04

%



10.69

%

Tangible common equity ratio



8.99

%



8.30

%



8.66

%



Core Deposits:

(In thousands)



December 31,

2020



September 30,

2020



December 31,

2019

Total deposits



$

4,005,244





$

4,224,044





$

3,537,743



Less: certificates of deposit



(357,666)





(405,434)





(521,752)



Less: brokered deposits



(283,567)





(291,616)





(191,005)



Core deposits



$

3,364,011





$

3,526,994





$

2,824,986



 

Average Core Deposits:





For the

Three Months Ended



For the

Year Ended

(In thousands)



December 31,

2020



September 30,

2020



December 31,

2019



December 31,

2020



December 31,

2019

Total average deposits



$

3,836,470





$

3,794,434





$

3,371,654





$

3,666,444





$

3,233,560



Less: average certificates of deposit



(373,364)





(417,788)





(533,416)





(454,750)





(506,971)



Average core deposits



$

3,463,106





$

3,376,646





$

2,838,238





$

3,211,694





$

2,726,589



 

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-fourth-quarter-and-year-end-2020-financial-results-301214897.html

SOURCE Camden National Corporation

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