Camden National Corporation Reports First Quarter 2021 Financial Results

CAMDEN, Maine, April 27, 2021 /PRNewswire/ -- Camden National Corporation CAC ", Camden National", or the ", Company", ))), a $5.1 billion bank holding company headquartered in Camden, Maine, reported net income of $19.7 million and diluted earnings per share ("EPS") of $1.31 for the first quarter of 2021, increases of 46% and 47% over the first quarter of 2020, respectively. On a linked-quarter basis, the Company's first quarter 2021 net income and diluted EPS increased 8% and 7% over the fourth quarter of 2020, respectively. These strong financial results led to a return on average equity of 15.00% and a return on average tangible equity (non-GAAP) of 18.47% for the first quarter of 2021.

"I'm very pleased with our strong start to the year reporting record quarterly earnings of $19.7 million for the quarter," said Gregory A. Dufour, President and Chief Executive Officer of the Company. "Mortgage banking income for the first quarter doubled that reported for the same period a year ago, while we also recognized $1.9 million of income from Small Business Administration Paycheck Protection Program ('SBA PPP') loans. The actions we took last year in response to the COVID-19 pandemic, which included increasing reserve levels, positioned us well during the early stages of the pandemic, providing flexibility to offer short-term loan deferral arrangements to qualified borrowers and originate SBA PPP loans. As we continue to monitor economic factors closely, our asset quality continues to be favorable, with non-performing assets at 0.20% of total assets and only $2.4 million of loans remaining on short-term deferral arrangement at March 31, 2021. Given the strength of our asset quality and improving market conditions, we released provision of $2.0 million for the quarter. At quarter-end, our loan loss reserves of 1.11% of total loans continued to be well above reserve levels at the onset of the pandemic of 0.84% of total loans at March 31, 2020."

Dufour added, "In addition to great financial results for the first quarter, we were excited to learn Camden National was named to S&P Global's top 50 performing publicly-traded community banks of 2020 with $3 - $10 billion in assets and was named a Raymond James Community Bankers Cup recipient, which recognizes the top 10% of community banks. These are major accomplishments and a testament to our whole team's hard work over the past year."

In March 2021, the Company announced a 9% increase in its quarterly cash dividend to $0.36, payable on April 30, 2021 to shareholders of record on April 15, 2021. The Company's book value per share grew 8% year-over-year to $35.64 at March 31, 2021, and its tangible book value per share (non-GAAP) grew 10% over the same period to $29.12 at March 31, 2021.

FIRST QUARTER 2021 HIGHLIGHTS

  • Net income increased by $6.2 million, or 46%, over the first quarter of 2020 and by $1.5 million, or 8%, over the fourth quarter of 2020.
  • Pre-tax, pre-provision earnings (non-GAAP) increased $4.0 million, or 21%, over the first quarter of 2020 and decreased $420,000, or 2%, from the fourth quarter of 2020.
  • Net interest margin on a fully-taxable equivalent basis ("net interest margin") for the first quarter of 2021 was 2.88%, compared to 3.08% for the first quarter of 2020 and 3.06% for the fourth quarter of 2020.
  • Adjusted net interest margin (non-GAAP), which excludes SBA PPP average loans and related income, and average excess liquidity and related income, for the first quarter of 2021 was 2.91%, compared to 3.09% for the first quarter of 2020 and 2.99% for the fourth quarter of 2020.
  • Loans grew 1% during the first quarter of 2021 to $3.2 billion at March 31, 2021.
  • Non-performing assets were 0.20% of total assets and loans 30-89 days past due were 0.05% of total loans at March 31, 2021.
  • Allowance for loan losses was 1.11% of total loans at March 31, 2021, down from 1.18% at December 31, 2020.
  • Announced an increase in the quarterly cash dividend to shareholders of 9% to $0.36, payable on April 30, 2021 to shareholders of record on April 15, 2021.

FINANCIAL CONDITION

As of March 31, 2021, total assets were $5.1 billion, an increase of $190.5 million, or 4%, since December 31, 2020. Asset growth for the first quarter of 2021 was driven by an increase in cash balances as additional federal stimulus was provided in response to the COVID-19 pandemic, which included another round of SBA PPP loans for qualifying small businesses. Loan growth for the first quarter of $17.2 million, or 1%, was driven by SBA PPP loan growth of $34.3 million and commercial real estate loan growth of $20.9 million, and was partially offset by lower consumer and home equity loan balances of $19.6 million, lower commercial loan balances of $15.3 million and lower residential real estate balances of $3.0 million. Residential real estate originations continued to be strong throughout the first quarter of 2021 as interest rates remained low. For the first quarter of 2021, the Company originated $289.8 million of residential real estate loans, of which 63% was refinancing activity, and 34% of those originated during the quarter were held in its loan portfolio and the remaining were sold to secondary market investors.

As of March 31, 2021, total deposits were $4.2 billion, an increase of $206.4 million, or 5%, since December 31, 2020. Deposit growth for the first quarter was driven by core deposit (non-GAAP) growth of $212.8 million, or 6%, which was fueled by another round of government stimulus programs in response to the COVID-19 pandemic. Over the same period, certificates of deposits decreased 3% and total borrowings decreased $1.0 million. During the first quarter of 2021, in light of its liquidity position, the Company terminated a $25.0 million long-term borrowing contract with the Federal Home Loan Bank of Boston ("FHLBB") under which advances had an interest rate of 0.98%, and incurred a one-time prepayment penalty of $514,000. On April 16, 2021, the Company redeemed in full $15.0 million of subordinated notes that had a 5.50% interest rate, at a redemption price equal to the principal amount of the notes plus accrued and unpaid interest.

The Company's loan-to-deposit ratio was 77% at March 31, 2021, compared to 80% at December 31, 2020.

At March 31, 2021, the Company's capital position remained well in excess of regulatory requirements, including a total risk-based capital ratio of 16.00% and a tier 1 leverage ratio of 9.61%. As of March 31, 2021, the Company's $15.0 million of subordinated debt provided 38 basis points of tier 2 capital for its total risk-based capital ratio.

In March 2021, the Company announced a $0.03, or 9%, increase in its quarterly cash dividend to shareholders to $0.36 per share, payable on April 30, 2021 to shareholders of record as of April 15, 2021. As of March 31, 2021, the Company's annualized dividend yield was 3.01% based on Camden National's closing share price of $47.86, as reported by NASDAQ.

In the first quarter of 2021, the Company initiated a new share repurchase program for up to 750,000 shares of its common stock, or approximately 5% of the Company's shares outstanding. This share repurchase program replaces the program that terminated in January 2021, and the new program will terminate upon the earlier of: (1) reaching the authorized share repurchase amount, (2) a vote by the Board of Directors to terminate the program, or (3) one year. The Company did not repurchase any shares during the first quarter of 2021.

ASSET QUALITY AND COVID-19 SHORT TERM LOAN DEFERMENTS

As of March 31, 2021, the Company's asset quality metrics remained very strong, with non-performing assets of 0.20% of total assets and loans 30-89 days past due of 0.05% of total loans. In comparison, at December 31, 2020 and March 31, 2020, non-performing assets were 0.22% and 0.23% of total assets, respectively, and loans 30-89 days past due were 0.10% and 0.24% of total loans, respectively.

In response to the COVID-19 pandemic, the Company offered temporary debt relief to its business and retail customers impacted by COVID-19 in 2020 in accordance with the terms of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and bank regulator guidance. The Company provided short-term debt payment relief to commercial and retail customers for periods up to 180 days, including full and partial principal and/or interest payment relief, and these loans were not individually assessed, designated or accounted for as troubled-debt restructurings. At March 31, 2021, loans operating under a short-term deferral arrangement totaled $2.4 million, compared to $26.5 million at December 31, 2020.

In late December 2020, another stimulus package was signed into law to provide additional COVID-19 relief for businesses and consumers. This stimulus package permits the Company the opportunity to again provide temporary debt relief to borrowers impacted by COVID-19. As of March 31, 2021, the Company had not provided any additional temporary debt relief to borrowers; however, such relief may be made in the future on a case-by-case basis.

ALLOWANCE FOR CREDIT LOSSES ("ACL")

In the fourth quarter of 2020, the Company adopted the current expected credit loss methodology, commonly referred to as "CECL," to account for the ACL on loans and certain off-balance credit exposures, effective as of January 1, 2020. Interim periods prior to the fourth quarter of 2020 continue to be presented under the incurred loss methodology.

At March 31, 2021, the ACL on loans was $35.8 million, or 1.11% of total loans, compared to $37.9 million, or 1.18% of total loans, at December 31, 2020. The decrease in the allowance reflects the Company's strong asset quality and overall improvement in the current and forecasted market conditions over its four-quarter forecast period. There have been no significant changes in the Company's CECL methodology since year-end.

FINANCIAL OPERATING RESULTS (Q1 2021 vs. Q1 2020)

Net income for the first quarter of 2021 was $19.7 million, an increase of $6.2 million, or 46%, over the first quarter of 2020. Diluted EPS for the first quarter of 2021 was $1.31, an increase of $0.42, or 47%, over the first quarter of 2020.

Net Interest Income and Net Interest Margin.  Net interest income for the first quarter of 2021 was $32.4 million, an increase of 2% over the first quarter of 2020. Interest expense decreased $5.4 million, or 64%, between periods, while interest income decreased $4.8 million, or 12%. The decrease in interest expense and interest income was primarily driven by the change in the interest rate environment between periods in response to the COVID-19 pandemic. The decrease in interest income was partially offset by $1.9 million of income generated from SBA PPP loans in the first quarter of 2021 that were not yet offered in the first quarter of 2020.

Net interest margin for the first quarter of 2021 was 2.88%, a decrease of 20 basis points compared to the first quarter of 2020. Adjusted net interest margin, which excludes SBA PPP loans and excess liquidity (non-GAAP), for the first quarter of 2021 was 2.91%, compared to 3.09% for the first quarter of 2020.

Provision for Credit Losses.  The provision for credit losses for the first quarter of 2021 was reported using the CECL methodology, whereas the provision for credit losses for the first quarter of 2020 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)



Q1 2021



Q1 2020



Increase /

(Decrease)

(Credit) provision for credit losses - loans



$

(1,854)





$

1,772





$

(3,626)



(Credit) provision for credit losses - off-balance sheet credit exposures



(102)





3





(105)



(Credit) provision for credit losses



$

(1,956)





$

1,775





$

(3,731)



Non-Interest Income.  Non-interest income for the first quarter of 2021 was $15.2 million, an increase of $3.8 million, or 33%, over the first quarter of 2020. The increase between periods was driven by: (1) an increase in mortgage banking income of $3.6 million driven by an increase in mortgage sales as mortgage rates decreased and housing demand increased within our markets as a result of the COVID-19 pandemic, (2) an increase in debit card income of $595,000, or 28%, as customer spending increased in large part due to federal stimulus as a result of the COVID-19 pandemic, and (3) an increase in brokerage and insurance commissions of $296,000, net of a decrease in service charges on deposit accounts of $473,000, primarily due to lower overdraft fees as businesses and consumers benefited from federal stimulus in the first quarter of 2021.

Non-Interest Expense.  Non-interest expense for the first quarter of 2021 was $24.9 million, an increase of $338,000, or 1%, compared to the first quarter of 2020. The modest increase in non-interest expense between periods was driven by: (1) a one-time prepayment penalty of $514,000 upon the termination of a long-term borrowing  and (2) an increase in regulatory assessment costs of $341,000 as the Company received an assessment credit in the first quarter of 2020. This increase was partially offset by (1) a decrease in other real estate owned ("OREO") and collection costs of $292,000 driven by collection of previously incurred costs and a gain upon sale of an OREO property and (2) a decrease in marketing-, hiring- and travel-related costs of $573,000.

FINANCIAL OPERATING RESULTS (Q1 2021 vs. Q4 2020)

Net income for the first quarter of 2021 increased $1.5 million, or 8%, over the fourth quarter of 2020. Diluted EPS over this same period increased $0.09, or 7%.

Net Interest Income and Net Interest Margin.  Net interest income for the first quarter of 2021 decreased $3.1 million, or 9%, compared to the fourth quarter of 2020. Interest income decreased $3.8 million, or 10%, between periods, while interest expense decreased $657,000, or 18%. The decrease in interest income was driven by: (1) compressed yields on interest-earning assets, (2) lower SBA PPP income of $1.8 million and (3) a decrease in average interest-earning assets of 2%. The decrease in interest expense was driven by a 4 basis point decrease in cost of funds and a decrease in average funding liabilities of 2% between periods.

Net interest margin for the first quarter of 2021 decreased 18 basis points compared to the fourth quarter of 2020. Adjusted net interest margin, which excludes SBA PPP loans and excess liquidity (non-GAAP), for the first quarter of 2021 was 2.91%, compared to 2.99% for the fourth quarter of 2020.

Provision for Credit Losses.  The change in provision for credit losses between periods is highlighted in the table below:





CECL



CECL



Change

($ in thousands)



Q1 2021



Q4 2020



Increase /

(Decrease)

(Credit) provision for credit losses - loans



$

(1,854)





$

1,043





$

(2,897)



Credit for credit losses - off-balance sheet credit exposures



(102)





(785)





683



(Credit) provision for credit losses



$

(1,956)





$

258





$

(2,214)



Non-Interest Income.  Non-interest income for the first quarter of 2021 increased $884,000, or 6%, over the fourth quarter of 2020. The increase between periods was driven by an increase in mortgage banking income of $1.5 million, partially offset by decreases in: (1) debit card income of $525,000 as the Company recognized its annual debit card income bonus of $555,000 in the fourth quarter of 2020, and (2) service charges on deposit accounts of $203,000, primarily due to lower overdraft fees as businesses and consumers benefited from federal stimulus in the first quarter of 2021.

Non-Interest Expense.  Non-interest expense for the first quarter of 2021 decreased $1.8 million, or 7%, compared to the fourth quarter of 2020. The decrease in non-interest expense between periods was driven by: (1) a decrease in compensation and related costs of $1.7 million that was primarily due to an increase in performance-based incentive accruals in the fourth quarter of 2020, and (2) a decrease in OREO and collection costs of $303,000, driven by collection of previously incurred costs and a gain upon sale of an OREO property. This decrease was partially offset by a one-time prepayment penalty of $514,000 upon the termination of the Company's $25.0 million long-term FHLBB borrowing contract.

2021 ANNUAL MEETING OF SHAREHOLDERS

Camden National has scheduled its annual meeting of shareholders for Tuesday, April 27, 2021, at 3:00 p.m. Eastern time. Due to the ongoing concerns regarding the public health impact of COVID-19, the Company will hold its annual meeting both in person and virtually via live audio webcast. Shareholders will be permitted to attend the annual meeting in person at Camden National's Hanley Center, Fox Ridge Office Park, 245 Commercial Street, Rockport, Maine 04856, only to the extent consistent with, or permitted by, applicable law and directives of public health authorities. We strongly urge shareholders to attend the annual meeting virtually by visiting www.virtualshareholdermeeting.com/CAC2021.

Camden National's proxy materials for its annual meeting of shareholders and additional information can be found at www.cacannualmeeting.com.

Q1 2021 CONFERENCE CALL

Camden National will host a conference call and webcast at 1:00 p.m., Eastern Time, on Tuesday, April 27, 2021 to discuss its first quarter 2021 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/cac210427.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 is the largest publicly traded bank holding company in Northern New England with $5.1 billion in assets and approximately 600 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 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, and Camden National Corporation received a 2020 Raymond James Community Bankers Cup award, placing it in the top 10% of community banks. 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 from time to time in Camden National's Annual Report on Form 10-K for the year ended December 31, 2020, 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 generally accepted accounting principles in the United States ("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). 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

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



March 31,

2021



December 31,

2020



March 31,

2020

Financial Condition Data













Investments



$

1,131,178





1,132,812





$

979,674



Loans and loans held for sale



3,259,275





3,261,379





3,185,492



Allowance for credit losses on loans



35,775





37,865





26,521



Total assets



5,089,279





4,898,745





4,594,539



Deposits



4,211,630





4,005,244





3,563,705



Borrowings



245,739





246,770





420,877



Shareholders' equity



532,120





529,314





492,680



Operating Data













Net interest income



$

32,364





$

35,461





$

31,826



(Credit) provision for credit losses



(1,956)





258





1,775



Non-interest income



15,215





14,331





11,403



Non-interest expense



24,899





26,692





24,561



Income before income tax expense



24,636





22,842





16,893



Income tax expense



4,896





4,564





3,400



Net income



$

19,740





$

18,278





$

13,493



Key Ratios













Return on average assets



1.62

%



1.45

%



1.21

%

Return on average equity



15.00

%



13.94

%



11.30

%

GAAP efficiency ratio



52.33

%



53.61

%



56.82

%

Net interest margin (fully-taxable equivalent)



2.88

%



3.06

%



3.08

%

Non-performing assets to total assets



0.20

%



0.22

%



0.23

%

Common equity ratio



10.46

%



10.81

%



10.72

%

Tier 1 leverage capital ratio



9.61

%



9.13

%



9.53

%

Total risk-based capital ratio



16.00

%



15.40

%



13.81

%

Per Share Data













Basic earnings per share



$

1.32





$

1.22





$

0.89



Diluted earnings per share



$

1.31





$

1.22





$

0.89



Cash dividends declared per share



$

0.36





$

0.33





$

0.33



Book value per share



$

35.64





$

35.50





$

32.95



Non-GAAP Measures(1)













Return on average tangible equity



18.47

%



17.27

%



14.35

%

Efficiency ratio



50.96

%



53.30

%



56.45

%

Adjusted net interest margin (fully-taxable equivalent)



2.91

%



2.99

%



3.09

%

Pre-tax, pre-provision earnings



$

22,680





$

23,100





$

18,668



Tangible common equity ratio



8.71

%



8.99

%



8.78

%

Tangible book value per share



$

29.12





$

28.96





$

26.39







(1)

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

 

Consolidated Statements of Condition Data

(unaudited)



(In thousands)



March 31,

2021



December 31,

2020



March 31,

2020

ASSETS













Cash, cash equivalents and restricted cash



$

368,247





$

145,774





$

54,209



Investments:













Trading securities



4,123





4,161





3,187



Available-for-sale securities, at fair value (book value of $1,100,514, $1,078,474 and

$931,876, respectively)



1,115,548





1,115,813





960,131



Held-to-maturity securities, at amortized cost (fair value of $1,396, $1,411 and $1,358,

respectively)



1,295





1,297





1,300



Other investments



10,212





11,541





15,056



Total investments



1,131,178





1,132,812





979,674



Loans held for sale, at fair value (book value of $22,243, $40,499 and $28,356,

respectively)



22,229





41,557





27,730



Loans:













Commercial real estate



1,390,327





1,369,470





1,299,860



Commercial(1)



366,159





381,494





463,087



SBA PPP



169,407





135,095







Residential real estate



1,051,765





1,054,798





1,064,212



Consumer and home equity



259,388





278,965





330,603



Total loans



3,237,046





3,219,822





3,157,762



      Less: allowance for credit losses on loans



(35,775)





(37,865)





(26,521)



       Net loans



3,201,271





3,181,957





3,131,241



Goodwill and core deposit intangible assets



97,377





97,540





98,052



Other assets



268,977





299,105





303,633



Total assets



$

5,089,279





$

4,898,745





$

4,594,539



LIABILITIES AND SHAREHOLDERS' EQUITY













Liabilities













Deposits:













Non-interest checking



$

860,024





$

792,550





$

536,243



Interest checking



1,349,528





1,288,575





1,147,653



Savings and money market



1,367,274





1,282,886





1,146,038



Certificates of deposit



346,046





357,666





545,013



Brokered deposits



288,758





283,567





188,758



Total deposits



4,211,630





4,005,244





3,563,705



Short-term borrowings



186,408





162,439





326,722



Long-term borrowings







25,000





35,000



Subordinated debentures



59,331





59,331





59,155



Accrued interest and other liabilities



99,790





117,417





117,277



Total liabilities



4,557,159





4,369,431





4,101,859



Shareholders' equity



532,120





529,314





492,680



Total liabilities and shareholders' equity



$

5,089,279





$

4,898,745





$

4,594,539







(1)

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

 

Consolidated Statements of Income Data

(unaudited)







For The

Three Months Ended

(In thousands, except per share data)



March 31,

2021



December 31,

2020



March 31,

2020

Interest Income













Interest and fees on loans



$

30,560





$

33,810





$

34,045



Taxable interest on investments



3,829





4,158





4,878



Nontaxable interest on investments



728





815





787



Dividend income



105





157





168



Other interest income



166





202





335



Total interest income



35,388





39,142





40,213



Interest Expense













Interest on deposits



2,063





2,591





6,662



Interest on borrowings



156





246





838



Interest on subordinated debentures



805





844





887



Total interest expense



3,024





3,681





8,387



Net interest income



32,364





35,461





31,826



(Credit) provision for credit losses(1)



(1,956)





258





1,775



Net interest income after (credit) provision for credit losses



34,320





35,203





30,051



Non-Interest Income













Mortgage banking income, net



7,109





5,598





3,534



Debit card income



2,736





3,261





2,141



Service charges on deposit accounts



1,539





1,742





2,012



Income from fiduciary services



1,526





1,506





1,502



Brokerage and insurance commissions



953





798





657



Bank-owned life insurance



594





615





689



Customer loan swap fees











114



Other income



758





811





754



Total non-interest income



15,215





14,331





11,403



Non-Interest Expense













Salaries and employee benefits



14,522





16,245





14,327



Furniture, equipment and data processing



3,027





3,180





2,790



Net occupancy costs



1,951





1,800





2,003



Debit card expense



986





969





934



Consulting and professional fees



863





956





783



Regulatory assessments



503





479





162



Amortization of core deposit intangible assets



164





171





170



Other real estate owned and collection (recoveries) costs, net



(191)





112





101



Other expenses



3,074





2,780





3,291



Total non-interest expense



24,899





26,692





24,561



Income before income tax expense



24,636





22,842





16,893



Income Tax Expense



4,896





4,564





3,400



Net Income



$

19,740





$

18,278





$

13,493



Per Share Data













Basic earnings per share



$

1.32





$

1.22





$

0.89



Diluted earnings per share



$

1.31





$

1.22





$

0.89







(1)

Reported balances for the three months ended March 31, 2021 and December 31, 2020 have been accounted for under the CECL model. Reported balances for the three months ended March 31, 2020 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

(Dollars in thousands)



March 31,

2021



December 31,

2020



March 31,

2020



March 31,

2021



December 31,

2020



March 31,

2020

Assets

























Interest-earning assets:

























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



$

210,844





$

267,083





$

66,180





0.09

%



0.09

%



1.24

%

Investments - taxable



946,456





945,866





809,041





1.71

%



1.88

%



2.56

%

Investments - nontaxable(1)



118,469





121,354





117,537





3.11

%



3.40

%



3.39

%

Loans(2):

























Commercial real estate



1,382,795





1,348,269





1,273,538





3.58

%



3.65

%



4.24

%

Commercial(1)



333,458





331,707





416,527





3.74

%



3.89

%



4.21

%

SBA PPP



154,900





186,416









4.85

%



7.74

%



%

Municipal(1)



24,133





20,645





16,990





3.33

%



3.46

%



3.67

%

HPFC



12,549





13,947





20,336





7.18

%



6.98

%



7.83

%

Residential real estate



1,083,101





1,093,367





1,078,836





3.72

%



3.96

%



4.19

%

Consumer and home equity



268,711





287,665





334,771





4.17

%



4.25

%



5.03

%

     Total loans 



3,259,647





3,282,016





3,140,998





3.76

%



4.07

%



4.32

%

Total interest-earning assets



4,535,416





4,616,319





4,133,756





3.15

%



3.38

%



3.90

%

Other assets



401,973





405,976





354,436















Total assets



$

4,937,389





$

5,022,295





$

4,488,192









































Liabilities & Shareholders' Equity

























Deposits:

























Non-interest checking



$

817,631





$

800,391





$

529,501





%



%



%

Interest checking



1,289,511





1,371,910





1,146,783





0.19

%



0.23

%



0.70

%

Savings



626,591





589,856





476,849





0.04

%



0.04

%



0.07

%

Money market



685,026





700,949





650,383





0.31

%



0.33

%



0.98

%

Certificates of deposit



351,555





373,364





552,079





0.63

%



0.89

%



1.61

%

Total deposits



3,770,314





3,836,470





3,355,595





0.19

%



0.23

%



0.70

%

Borrowings:

























Brokered deposits



284,620





286,038





208,084





0.45

%



0.46

%



1.54

%

Customer repurchase agreements



165,721





183,337





236,351





0.29

%



0.40

%



1.08

%

Subordinated debentures



59,331





59,327





59,119





5.50

%



5.66

%



6.04

%

Other borrowings



14,444





25,000





59,257





0.99

%



1.00

%



1.39

%

Total borrowings



524,116





553,702





562,811





0.99

%



1.02

%



1.80

%

Total funding liabilities



4,294,430





4,390,172





3,918,406





0.29

%



0.33

%



0.86

%

Other liabilities



109,314





110,452





89,612















Shareholders' equity



533,645





521,671





480,174















Total liabilities & shareholders' equity



$

4,937,389





$

5,022,295





$

4,488,192















Net interest rate spread (fully-taxable equivalent)



2.86

%



3.05

%



3.04

%

Net interest margin (fully-taxable equivalent)



2.88

%



3.06

%



3.08

%

Adjusted net interest margin (fully-taxable equivalent) (non-GAAP)



2.91

%



2.99

%



3.09

%





(1)

Reported on a 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.

 



Asset Quality Data

(unaudited)

(In thousands)



At or For The

Three Months Ended

March 31, 2021



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

Non-accrual loans:





















Residential real estate



$

3,637





$

3,531





$

4,017





$

4,664





$

3,499



Commercial real estate



309





518





565





432





646



Commercial(1)



1,737





1,607





1,114





1,091





1,070



Consumer and home equity



1,897





1,996





2,503





2,371





2,102



Total non-accrual loans



7,580





7,652





8,199





8,558





7,317



Accruing troubled-debt restructured loans not included above



2,579





2,818





2,952





2,874





3,008



Total non-performing loans



10,159





10,470





11,151





11,432





10,325



Other real estate owned



204





236









118





94



Total non-performing assets



$

10,363





$

10,706





$

11,151





$

11,550





$

10,419



Loans 30-89 days past due:





















Residential real estate



$

772





$

2,297





$

1,784





$

4,016





$

1,781



Commercial real estate



177





50





2,056





1,625





2,641



Commercial(1)



425





430





1,638





223





1,725



Consumer and home equity



264





440





434





388





1,379



Total loans 30-89 days past due



$

1,638





$

3,217





$

5,912





$

6,252





$

7,526



ACL on loans at the beginning of the period



$

37,865





$

25,171





$

25,171





$

25,171





$

25,171



Impact of CECL adoption







233















(Credit) provision for loan losses



(1,854)





13,215





12,172





11,172





1,772



Charge-offs:





















Residential real estate



53





121





121





96





96



Commercial real estate







103





104





71





50



Commercial(1)



147





1,130





857





673





253



Consumer and home equity



87





484





199





134





91



Total charge-offs 



287





1,838





1,281





974





490



Total recoveries 



(51)





(1,084)





(352)





(170)





(68)



Net charge-offs



236





754





929





804





422



ACL on loans at the end of the period



$

35,775





$

37,865





$

36,414





$

35,539





$

26,521



Components of ACL:





















ACL on loans



$

35,775





$

37,865





$

36,414





$

35,539





$

26,521



ACL on off-balance sheet credit exposures(2)(3)



2,466





2,568





9





22





24



ACL, end of period



$

38,241





$

40,433





$

36,423





$

35,561





$

26,545



Ratios:





















Non-performing loans to total loans



0.31

%



0.33

%



0.34

%



0.34

%



0.33

%

Non-performing assets to total assets



0.20

%



0.22

%



0.22

%



0.23

%



0.23

%

ACL on loans to total loans



1.11

%



1.18

%



1.11

%



1.07

%



0.84

%

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





















Quarter-to-date



0.03

%



(0.02)

%



0.01

%



0.05

%



0.05

%

Year-to-date



0.03

%



0.02

%



0.04

%



0.05

%



0.05

%

ACL on loans to non-performing loans



352.15

%



361.65

%



326.55

%



310.87

%



256.86

%

Loans 30-89 days past due to total loans



0.05

%



0.10

%



0.18

%



0.19

%



0.24

%





(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.

 

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



Return on Average Tangible Equity:





For the

Three Months Ended

(Dollars in thousands)



March 31,

2021



December 31,

2020



March 31,

2020

Net income, as presented



$

19,740





$

18,278





$

13,493



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



130





135





134



Net income, adjusted for amortization of core deposit intangible assets



$

19,870





$

18,413





$

13,627



Average equity, as presented



$

533,645





$

521,671





$

480,174



Less: average goodwill and core deposit intangible assets



(97,463)





(97,622)





(98,143)



Average tangible equity



$

436,182





$

424,049





$

382,031



Return on average equity



15.00

%



13.94

%



11.30

%

Return on average tangible equity



18.47

%



17.27

%



14.35

%



(1)   Assumed a 21% tax rate.



Efficiency Ratio:

















For the

Three Months Ended

(Dollars in thousands)



March 31,

2021



December 31,

2020



March 31,

2020

Non-interest expense, as presented



$

24,899





$

26,692





$

24,561



Less: prepayment penalty on borrowings



(514)











Adjusted non-interest expense



$

24,385





$

26,692





$

24,561



Net interest income, as presented



$

32,364





$

35,461





$

31,826



Add: effect of tax-exempt income(1)



271





290





280



Non-interest income, as presented



15,215





14,331





11,403



Adjusted net interest income plus non-interest income



$

47,850





$

50,082





$

43,509



GAAP efficiency ratio



52.33

%



53.61

%



56.82

%

Non-GAAP efficiency ratio



50.96

%



53.30

%



56.45

%



(1)   Assumed a 21% tax rate.



Pre-tax, Pre-provision Earnings:

















For the

Three Months Ended

(In thousands)



March 31,

2021



December 31,

2020



March 31,

2020

Net income, as presented



$

19,740





$

18,278





$

13,493



Add: (credit) provision for credit losses



(1,956)





258





1,775



Add: income tax expense



4,896





4,564





3,400



Pre-tax, pre-provision earnings



$

22,680





$

23,100





$

18,668







 

Adjusted Yield on Interest-Earning Assets:





For the

Three Months Ended





March 31,

2021



December 31,

2020



March 31,

2020

Yield on interest-earning assets, as presented



3.15

%



3.38

%



3.90

%

Add: effect of excess liquidity on yield on interest-earning assets



0.10

%



0.15

%



%

Less: effect of SBA PPP loans on yield on interest-earning assets



(0.06)

%



(0.19)

%



%

Adjusted yield on interest-earning assets



3.19

%



3.34

%



3.90

%





Adjusted Net Interest Margin (Fully-Taxable Equivalent):





For the

Three Months Ended





March 31,

2021



December 31,

2020



March 31,

2020

Net interest margin (fully-taxable equivalent), as presented



2.88

%



3.06

%



3.08

%

Add: effect of excess liquidity on net interest margin (fully-taxable equivalent)



0.10

%



0.13

%



0.01

%

Less: effect of SBA PPP loans on net interest margin (fully-taxable equivalent)



(0.07)

%



(0.20)

%



%

Adjusted net interest margin (fully-taxable equivalent)



2.91

%



2.99

%



3.09

%







Tangible Book Value Per Share and Tangible Common Equity Ratio:





March 31,

2021



December 31,

2020



March 31,

2020

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



Tangible Book Value Per Share:













Shareholders' equity, as presented



$

532,120





$

529,314





$

492,680



Less: goodwill and other intangible assets



(97,377)





(97,540)





(98,052)



Tangible shareholders' equity



$

434,743





$

431,774





$

394,628



Shares outstanding at period end



14,928,434





14,909,097





14,951,597



Book value per share



$

35.64





$

35.50





$

32.95



Tangible book value per share



$

29.12





$

28.96





$

26.39



Tangible Common Equity Ratio:

Total assets



$

5,089,279





$

4,898,745





$

4,594,539



Less: goodwill and other intangible assets



(97,377)





(97,540)





(98,052)



Tangible assets



$

4,991,902





$

4,801,205





$

4,496,487



Common equity ratio



10.46

%



10.81

%



10.72

%

Tangible common equity ratio



8.71

%



8.99

%



8.78

%









































Core Deposits:

(In thousands)



March 31,

2021



December 31,

 2020



March 31,

2020

Total deposits



$

4,211,630





$

4,005,244





$

3,563,705



Less: certificates of deposit



(346,046)





(357,666)





(545,013)



Less: brokered deposits



(288,758)





(283,567)





(188,758)



Core deposits



$

3,576,826





$

3,364,011





$

2,829,934







Average Core Deposits:





For the

Three Months Ended

(In thousands)



March 31,

2021



December 31,

 2020



March 31,

2020

Total average deposits



$

3,770,314





$

3,836,470





$

3,355,595



Less: average certificates of deposit



(351,555)





(373,364)





(552,079)



Average core deposits



$

3,418,759





$

3,463,106





$

2,803,516



 

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-first-quarter-2021-financial-results-301277935.html

SOURCE Camden National Corporation

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