Camden National Corporation Reports Fourth Quarter and Annual Earnings for 2019

Company Reports Record Net Income of $57.2 Million and Diluted EPS of $3.69 for 2019

Company Release - 1/28/2020 8:45 AM ET

CAMDEN, Maine, Jan. 28, 2020 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National" or the "Company"), a $4.4 billion bank holding company headquartered in Camden, Maine, reported record net income of $57.2 million and diluted earnings per share ("EPS") of $3.69 for 2019, an increase of 8% and 9% over 2018, respectively. Strong earnings for the year resulted in a return on average assets of 1.30% and return on average equity of 12.44% for 2019, compared to a return on average assets and equity of 1.28% and 12.92%, respectively, for 2018.

"Camden National reported record earnings of $57.2 million for the year," said Gregory A. Dufour, President and Chief Executive Officer of the Company. "Our efforts and focus on our core businesses have translated directly to our bottom line." Dufour added, "Over the year, Camden National received several accolades from various organizations recognizing our financial performance, customer experience and service to our communities. It is certainly rewarding to see our hard work recognized by those we serve in varying capacities, and it is a reminder of our impact on and responsibility to many."

Net income for the fourth quarter of 2019 of $15.2 million increased 9% over the fourth quarter of 2018, while diluted EPS increased 11% to $0.99 over the same period. On a linked-quarter basis, net income and diluted EPS for the fourth quarter of 2019 each increased 5% over last quarter.

"We continue to actively manage our capital through various strategies," said Dufour. "In 2019, we returned nearly $20.8 million of capital to shareholders through the repurchase of 488,052 shares of Camden National common stock, and in December announced an increase in our quarterly dividend rate of 10%. As we balance our capital needs and generation of shareholder value, we believed it was the right time to increase our return of capital to shareholders."

"We continue to review our organization for efficiencies, and after careful consideration we will be closing our Corinth, Hampden and Milo banking centers by the end of April," Dufour reported. "Our decision was based on many factors, including changes in customer behavior, financial considerations, and impact to stakeholders and customers."

2019 FINANCIAL HIGHLIGHTS

  • 2019 net income and diluted EPS grew 8% and 9%, respectively, over 2018; fourth quarter 2019 net income grew 9% over the fourth quarter of 2018 and 5% on a linked-quarter basis.
  • Return on average assets for 2019 was 1.30%, and return on average equity was 12.44%; fourth quarter 2019 return on average assets of 1.35%, and return on average equity of 12.77%.
  • Loans and deposits each grew 2% in 2019; loans and deposits decreased 1% and 2%, respectively, in the fourth quarter of 2019.
  • Average deposits for 2019 grew 14% over 2018, led by average checking account growth of 20% over 2018; fourth quarter 2019 average deposits grew 12% over the fourth quarter of 2018 and 2% on a linked-quarter basis.
  • Average loans for 2019 grew 8% over 2018; fourth quarter 2019 average loans grew 5% over the fourth quarter of 2018 and less than 1% on a linked-quarter basis.

FINANCIAL CONDITION

Assets.  As of December 31, 2019, total assets were $4.4 billion. In 2019, total assets grew 3% driven by loan growth (including loans held for sale) of $76.3 million, or 3%. Loans and loans held for sale, at December 31, 2019, were $3.1 billion. Net loan growth in 2019 was driven by:

  • Residential mortgage growth of $78.0 million, or 8%. During 2019, the Company originated $570.3 million of residential real estate loans and sold 50%, compared to $494.3 million in originations and 44% sold in 2018. Refinancing activity was 37% of residential real estate loan originations in 2019, compared to 24% in 2018.
  • Commercial loan growth of $27.3 million, or 7%. Commercial loan originations for 2019 totaled $212.3 million, driven primarily by small business loans. Syndication loans were 10% of total commercial loan originations in 2019.
  • Commercial real estate ("CRE") loans decreased $26.1 million, or 2%, primarily due to elevated prepayments. CRE loan activity was steady but very competitive within our markets throughout 2019. The Company had record CRE loan production in 2019 of $361.0 million, of which $137.5 million were construction loans yet to fund as of December 31, 2019.

Deposits and Borrowings.  As of December 31, 2019, deposits totaled $3.5 billion. In 2019, deposits grew 2% driven by checking account growth of $185.7 million, or 12%, and certificates of deposit ("CD") growth of $77.8 million, or 18%. The Company's CD growth was primarily attributable to one large depositor shifting $70.0 million of funding from interest checking to CDs earlier in the year.

At December 31, 2019, brokered deposits totaled $191.0 million, a decrease of $172.1 million, or 47%, since December 31, 2018. Brokered deposits represented 5% of total deposits at December 31, 2019, compared to 10% of total deposits at December 31, 2018. The decrease was attributable to strong checking and CD deposit growth in 2019.

The Company's total loan-to-deposit ratio at December 31, 2019 and 2018 was 87%.

Shareholders' Equity.  At December 31, 2019, the Company's capital position was well in excess of regulatory requirements, including a total risk-based capital ratio of 14.44% and a Tier 1 leverage ratio of 9.55%. The Company deployed $20.8 million of capital throughout 2019 through the repurchase of 488,052 shares of its common stock.

The Company's Board of Directors has approved a new share repurchase program for up to 750,000 shares of the Company's common stock, or approximately 5% of shares outstanding at December 31, 2019, as the Company's current share repurchase program expired in January 2020. Repurchases under the new program may be made at the Company's discretion from time to time in the open market, through block trades or otherwise, and in privately negotiated transactions, subject to market conditions and other factors, and in accordance with applicable legal and regulatory requirements. If any share repurchases are made, they will be over a period of not greater than twelve months.

In December 2019, the Company announced a $0.03 per share, or 10%, increase in its quarterly cash dividend to shareholders of record as of January 15, 2020. The cash dividend is payable to shareholders of record on January 31, 2020 at a rate of $0.33 per share. As of December 31, 2019, the Company's annualized dividend yield was 2.87%, based on Camden National's closing share price of $46.06 as reported by NASDAQ.

ASSET QUALITY

As of December 31, 2019, the Company's asset quality metrics reached a new milestone with non-performing assets at a historical low of 0.25% of total assets and non-performing loans at 0.36% of total loans. In comparison, at December 31, 2018, non-performing assets to total assets were 0.34% and non-performing loans to total loans were 0.48%. As of December 31, 2019, loans 30-89 days past due were 0.17% of total loans, compared 0.29% at December 31, 2018.

At December 31, 2019, the allowance for loan losses was 0.81% of total loans and 225.77% of non-performing loans, compared to 0.82% of total loans and 171.17% of non-performing loans at December 31, 2018.

Q4 2019 FINANCIAL OPERATING RESULTS (linked quarter)

The Company reported net income of $15.2 million for the fourth quarter of 2019, an increase of $750,000, or 5%, over the third quarter of 2019. Diluted EPS for the fourth quarter of 2019 increased $0.05 over last quarter to $0.99.

Net Interest Income.  Net interest income for the fourth quarter of 2019 was $32.2 million, an increase of $316,000, or 1%, over the third quarter of 2019.

Net interest margin for the fourth quarter was 3.12%, an increase of 3 basis points between quarters. The Company's cost of funds decreased 14 basis points between quarters to 0.94% for the fourth quarter, while its earning asset yield decreased 9 basis points between quarters to 4.02% for the fourth quarter.

Cost of Funds

  • Cost of deposits decreased 8 basis points between quarters to 0.77% for the fourth quarter. The decrease was driven by average checking account growth of 3% between quarters at an average cost of 0.53% for the fourth quarter, due in part to seasonal deposits within our markets and active management of deposit rates with new and existing customers.
  • Cost of borrowings decreased 20 basis points between quarters to 2.07% for the fourth quarter. The decrease was driven by lower average borrowings of $70.9 million, or 12%, due to average deposit growth and a reduction in average cash balances for the quarter, as well as a 25 basis point Fed Funds interest rate cut in September and October.

Asset Yield

  • Loan yields decreased 11 basis points between quarters to 4.49% due to repricing of existing variable rate loans combined with new loans funded at lower rates than the overall loan portfolio.
  • Our fourth quarter loan yield benefited from an increase in loan prepayment income between quarters of $289,000, which provided a 3 basis point lift in loan yield over the third quarter.

Provision for Credit Losses.  The provision for credit losses for the fourth quarter of 2019 was $214,000, compared to $730,000 last quarter. The decrease in expense between quarters was due to:

  • Annualized net charge-offs for the fourth quarter of 0.09%, compared to 0.16% last quarter.
  • A decrease in loan balances in the fourth quarter of 1%, compared to an increase in loan balances in the third quarter of 3%.

Non-Interest Income.  Non-interest income for the fourth quarter of 2019 was $11.9 million, an increase of $1.2 million, or 11%, over the third quarter of 2019. The increase in non-interest income was driven by:

  • A change in unrealized gain on equity securities of $866,000 in the fourth quarter.
  • An increase in debit card income of $546,000 as annual volume growth hurdles were reached, resulting in a $579,000 incentive bonus from our network provider in the fourth quarter.
  • A decrease in mortgage banking income of $494,000 as we experienced our normal decrease due to seasonality within our markets between quarters.

Non-Interest Expense.  Non-interest expense for the fourth quarter of 2019 was $24.8 million, an increase of $1.1 million, or 4%, compared to the third quarter of 2019. The increase was primarily due to an increase in salaries and benefits costs of $842,000 between quarters as the Company accrued for bonus and incentives based on annual performance to budget. The Company's efficiency ratio for the fourth quarter, calculated as non-interest expense divided by total revenues1, was 56.16%, compared to 55.67% last quarter.

2019 ANNUAL FINANCIAL OPERATING RESULTS

The Company reported net income of $57.2 million for 2019, an increase of $4.1 million, or 8%, over 2018. Diluted EPS for 2019 increased $0.30 over 2018 to $3.69.

Net interest income.  Net interest income for 2019 was $127.6 million, an increase of $7.2 million, or 6%, over 2018. Average loans grew 8% and average deposits grew 14% in 2019. The Company's ability to fund loan growth through deposit growth allowed it to maintain a relatively stable net interest margin year over year, despite the challenging interest rate environment. Net interest margin for 2019 was 3.15%, a decrease of 1 basis point compared to 2018.

Provision for Credit Losses.  The provision for credit losses for 2019 was $2.9 million, compared to $847,000 for 2018. For 2019, net charge-offs to average loans were 0.08%, compared to 0.01% for 2018. Our ratio of net charge-offs to average loans for 2018 was lower primarily due to the favorable resolution of a significant commercial credit relationship that resulted in a large recovery.

Non-Interest Income.  Non-interest income for 2019 was $42.1 million, an increase of $3.9 million, or 10%, over 2018. The increase was primarily attributable to:

  • An increase in mortgage banking income of $1.9 million, or 33%, due to higher mortgage sales of 32%, in part driven by higher refinance activity.
  • A change in unrealized gain on equity securities of $928,000.
  • An increase in debit card income of 7% driven by transaction volume.
  • An increase in fiduciary service of $525,000, or 10%, as Camden National Wealth Management assets under management increased 20% to $1.0 billion as of December 31, 2019. In 2019, Camden National Wealth Management reached a new milestone with $96.1 million of new business.

Non-Interest Expense.  Non-interest expense for 2019 was $95.3 million, an increase of $3.4 million, or 4%, over 2018. The increase was primarily driven by an increase in salaries and benefits costs of $3.0 million, or 6%, due to an increase in: (i) wages and related taxes of 5%; (ii) health insurance costs of 10%; and (iii) bonus and incentives based on annual performance to budget. The Company's efficiency ratio for 2019, calculated as non-interest expense divided by total revenues, was 56.15%, compared to 57.98% for 2018.

CONFERENCE CALL

Camden National will host a conference call and webcast at 3:00 p.m. Eastern Time on January 28, 2020 to discuss fourth quarter and annual 2019 financial results. 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/cac200128.html

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

ABOUT CAMDEN NATIONAL CORPORATION

Camden National Corporation (NASDAQ:CAC) is the largest publicly traded bank holding company in Northern New England with $4.4 billion in assets and nearly 650 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 61 banking centers, 24/7 live phone support, 71 ATMs, and lending offices in New Hampshire and Massachusetts. For the past two years, Camden National Bank was named "Customer Experience Leader in U.S. Retail Banking" by Greenwich Associates, and in 2019, it was the only New England based organization included in Sandler O'Neill's "Bank and Thrift Sm-All Star" list of high-performing financial institutions. The Finance Authority of Maine has awarded Camden National Bank as "Lender at Work for Maine" for ten 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 from time to time in in Camden National's Annual Report on Form 10-K for the year ended December 31, 2018, as updated by other filings with the Securities and Exchange Commission ("SEC"). Camden National does not have any obligation to update forward-looking statements.

USE OF NON-GAAP MEASURES

In addition to evaluating the Company's results of operations in accordance with generally accepted accounting principles in the United States ("GAAP"), management supplements this evaluation with certain non-GAAP financial measures, such as return on average tangible equity; the efficiency and tangible common equity ratios; tangible book value per share; and core deposits. 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.

_________________________________

1    Revenue is the sum of net interest income and non-interest income.

 

 

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,
 2019


September 30,
 2019


December 31,
 2018


December 31,
 2019


December 31,
 2018

Financial Condition Data











Investments


$

933,069



$

926,444



$

926,678



$

933,069



$

926,678


Loans and loans held for sale


3,106,877



3,127,083



3,030,625



3,106,877



3,030,625


Allowance for loan losses


25,171



25,688



24,712



25,171



24,712


Total assets


4,429,521



4,520,315



4,297,435



4,429,521



4,297,435


Deposits


3,537,743



3,617,963



3,464,474



3,537,743



3,464,474


Borrowings


337,889



342,459



341,515



337,889



341,515


Shareholders' equity


473,415



471,672



435,825



473,415



435,825


Operating Data











Net interest income


$

32,239



$

31,923



$

31,587



$

127,630



$

120,393


Provision for credit losses


214



730



7



2,861



847


Non-interest income


11,948



10,739



9,479



42,113



38,176


Non-interest expense


24,814



23,748



23,580



95,303



91,945


Income before income tax expense


19,159



18,184



17,479



71,579



65,777


Income tax expense


3,921



3,696



3,502



14,376



12,706


Net income


$

15,238



$

14,488



$

13,977



$

57,203



$

53,071


Key Ratios











Return on average assets


1.35

%


1.29

%


1.32

%


1.30

%


1.28

%

Return on average equity


12.77

%


12.26

%


13.19

%


12.44

%


12.92

%

GAAP efficiency ratio


56.16

%


55.67

%


57.42

%


56.15

%


57.98

%

Common equity ratio


10.69

%


10.43

%


10.14

%


10.69

%


10.14

%

Net interest margin (fully-taxable equivalent)


3.12

%


3.09

%


3.21

%


3.15

%


3.16

%

Non-performing assets to total assets


0.25

%


0.30

%


0.34

%


0.25

%


0.34

%

Tier 1 leverage capital ratio


9.55

%


9.39

%


9.53

%


9.55

%


9.53

%

Total risk-based capital ratio


14.44

%


13.97

%


14.36

%


14.44

%


14.36

%

Per Share Data











Basic earnings per share


$

1.00



$

0.94



$

0.90



$

3.70



$

3.40


Diluted earnings per share


$

0.99



$

0.94



$

0.89



$

3.69



$

3.39


Cash dividends declared per share


$

0.33



$

0.30



$

0.30



$

1.23



$

1.15


Book value per share


$

31.26



$

30.98



$

27.95



$

31.26



$

27.95


Non-GAAP Measures(1)











Return on average tangible equity


16.26

%


15.67

%


17.43

%


15.99

%


17.22

%

Efficiency ratio


55.64

%


55.32

%


56.50

%


55.77

%


57.71

%

Tangible common equity ratio


8.66

%


8.44

%


8.02

%


8.66

%


8.02

%

Tangible book value per share


$

24.77



$

24.52



$

21.61



$

24.77



$

21.61



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

 

 

Consolidated Statements of Condition Data

(unaudited)










(In thousands)


December 31,
 2019


September 30,
 2019


December 31,
 2018

ASSETS







Cash and due from banks


$

39,586



$

63,620



$

52,240


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


36,050



73,912



14,759


Total cash, cash equivalents and restricted cash


75,636



137,532



66,999


Investments:







Available-for-sale securities, at fair value (book value of $913,978, $903,988 and $933,399,
respectively)


918,118



913,523



910,692


Held-to-maturity securities, at amortized cost (fair value of $1,359, $1,352 and $1,291,
respectively)


1,302



1,303



1,307


Other investments


13,649



11,618



14,679


Total investments


933,069



926,444



926,678


Loans held for sale, at fair value (book value of $11,915, $16,630 and $4,314, respectively)


11,854



16,449



4,403


Loans:







Commercial real estate


1,243,397



1,255,519



1,269,533


Residential real estate


1,070,374



1,061,898



992,866


Commercial(1)


442,701



445,466



415,436


Consumer and home equity


338,551



347,751



348,387


Total loans


3,095,023



3,110,634



3,026,222


      Less: allowance for loan losses


(25,171)



(25,688)



(24,712)


       Net loans


3,069,852



3,084,946



3,001,510


Goodwill


94,697



94,697



94,697


Other intangible assets


3,525



3,701



4,230


Bank-owned life insurance


92,344



91,729



89,919


Premises and equipment, net


41,836



40,930



42,495


Deferred tax assets


16,823



15,656



23,053


Other assets


89,885



108,231



43,451


Total assets


$

4,429,521



$

4,520,315



$

4,297,435


LIABILITIES AND SHAREHOLDERS' EQUITY







Liabilities







Deposits:







Non-interest checking


$

552,590



$

573,621



$

496,729


Interest checking


1,153,203



1,147,627



1,023,373


Savings and money market


1,119,193



1,105,290



1,137,356


Certificates of deposit


521,752



541,199



443,912


Brokered deposits


191,005



250,226



363,104


Total deposits


3,537,743



3,617,963



3,464,474


Short-term borrowings


268,809



273,454



270,868


Long-term borrowings


10,000



10,000



11,580


Subordinated debentures


59,080



59,005



59,067


Accrued interest and other liabilities


80,474



88,221



55,621


Total liabilities


3,956,106



4,048,643



3,861,610


Shareholders' equity


473,415



471,672



435,825


Total liabilities and shareholders' equity


$

4,429,521



$

4,520,315



$

4,297,435



(1) Includes the HPFC loan portfolio.

 

 

Consolidated Statements of Income Data

(unaudited)



For The

Three Months Ended

(In thousands, except per share data)


December 31,

2019


September 30,

2019


December 31,

2018

Interest Income







Interest and fees on loans


$

35,379



$

36,207



$

34,532


Taxable interest on investments


4,780



4,794



4,708


Nontaxable interest on investments


758



675



659


Dividend income


160



158



319


Other interest income


475



686



235


Total interest income


41,552



42,520



40,453


Interest Expense







Interest on deposits


7,459



8,963



6,650


Interest on borrowings


961



801



1,357


Interest on subordinated debentures


893



833



859


Total interest expense


9,313



10,597



8,866


Net interest income


32,239



31,923



31,587


Provision for credit losses


214



730



7


Net interest income after provision for credit losses


32,025



31,193



31,580


Non-Interest Income







Debit card income


2,978



2,432



2,839


Service charges on deposit accounts


2,191



1,970



2,145


Mortgage banking income, net


2,175



2,668



1,156


Income from fiduciary services


1,520



1,444



1,347


Brokerage and insurance commissions


683



625



665


Bank-owned life insurance


615



613



607


Customer loan swap fees


247



109



401


Net (loss) gain on sale of securities


(133)



1



(420)


Other income


1,672



877



739


Total non-interest income


11,948



10,739



9,479


Non-Interest Expense







Salaries and employee benefits


14,446



13,604



13,080


Furniture, equipment and data processing


2,770



2,708



2,649


Net occupancy costs


1,784



1,710



1,764


Consulting and professional fees


1,027



892



874


Debit card expense


947



960



841


Regulatory assessments


170



182



490


Amortization of intangible assets


176



177



181


Other real estate owned and collection costs, net


127



251



370


Other expenses


3,367



3,264



3,331


Total non-interest expense


24,814



23,748



23,580


Income before income tax expense


19,159



18,184



17,479


Income tax expense


3,921



3,696



3,502


Net income


$

15,238



$

14,488



$

13,977


Per Share Data







Basic earnings per share


$

1.00



$

0.94



$

0.90


Diluted earnings per share


$

0.99



$

0.94



$

0.89


 

 

Consolidated Statements of Income Data

(unaudited)




Year Ended

 December 31,

(In thousands, except per share data)


2019


2018

Interest Income





Interest and fees on loans


$

143,399



$

128,546


Taxable interest on investments


19,509



17,727


Nontaxable interest on investments


2,701



2,648


Dividend income


722



1,316


Other interest income


2,187



1,140


Total interest income


168,518



151,377


Interest Expense





Interest on deposits


34,001



20,113


Interest on borrowings


3,621



7,456


Interest on subordinated debentures


3,266



3,415


Total interest expense


40,888



30,984


Net interest income


127,630



120,393


Provision for credit losses


2,861



847


Net interest income after provision for credit losses


124,769



119,546


Non-Interest Income





Debit card income


9,701



9,067


Service charges on deposit accounts


8,393



8,253


Mortgage banking income, net


7,837



5,914


Income from fiduciary services


5,901



5,376


Brokerage and insurance commissions


2,625



2,615


Bank-owned life insurance


2,425



2,430


Customer loan swap fees


1,166



956


Net (loss) gain on sale of securities


(105)



275


Other income


4,170



3,290


Total non-interest income


42,113



38,176


Non-Interest Expense





Salaries and employee benefits


54,489



51,513


Furniture, equipment and data processing


10,881



10,359


Net occupancy costs


7,047



6,876


Consulting and professional fees


3,706



3,752


Debit card expense


3,613



3,180


Regulatory assessments


1,261



1,937


Amortization of intangible assets


705



725


Other real estate owned and collection costs, net


480



935


Other expenses


13,121



12,668


Total non-interest expense


95,303



91,945


Income before income tax expense


71,579



65,777


Income tax expense


14,376



12,706


Net income


$

57,203



$

53,071


Per Share Data





Basic earnings per share


$

3.70



$

3.40


Diluted earnings per share


$

3.69



$

3.39


 

 

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,

2019


September 30,

2019


December 31,

2018


December 31,

2019


September 30,

2019


December 31,

2018

Assets













Interest-earning assets:













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


$

79,578



$

92,352



$

24,620



1.74

%


2.24

%


1.57

%

Investments - taxable


804,587



807,591



830,097



2.52

%


2.53

%


2.49

%

Investments - nontaxable(1)


112,730



98,378



97,192



3.40

%


3.47

%


3.43

%

Loans(2):













Commercial real estate


1,249,961



1,255,417



1,230,791



4.40

%


4.56

%


4.60

%

Residential real estate


1,078,485



1,062,728



973,124



4.38

%


4.31

%


4.29

%

Commercial(1)


403,601



399,689



364,253



4.41

%


4.65

%


4.50

%

Consumer and home equity


345,487



347,405



346,494



5.11

%


5.38

%


5.36

%

HPFC


22,516



25,973



35,163



7.56

%


8.40

%


7.66

%

Municipal(1)


18,469



22,730



17,520



3.66

%


3.60

%


3.28

%

Total loans


3,118,519



3,113,942



2,967,345



4.49

%


4.60

%


4.60

%

Total interest-earning assets


4,115,414



4,112,263



3,919,254



4.02

%


4.11

%


4.11

%

Other assets


349,786



345,618



294,178








Total assets


$

4,465,200



$

4,457,881



$

4,213,432





















Liabilities & Shareholders' Equity













Deposits:













Non-interest checking


$

558,677



$

540,542



$

523,283



%


%


%

Interest checking


1,165,610



1,130,632



995,333



0.79

%


0.96

%


0.76

%

Savings


471,777



474,096



483,651



0.08

%


0.08

%


0.06

%

Money market


642,174



622,219



553,785



1.16

%


1.32

%


1.07

%

Certificates of deposit


533,416



533,110



444,769



1.66

%


1.64

%


1.26

%

Total deposits


3,371,654



3,300,599



3,000,821



0.77

%


0.85

%


0.65

%

Borrowings:













Brokered deposits


187,125



305,019



307,559



2.02

%


2.42

%


2.28

%

Customer repurchase agreements


247,780



234,362



265,675



1.20

%


1.26

%


1.22

%

Subordinated debentures


59,037



58,998



59,048



6.01

%


5.60

%


5.77

%

Other borrowings


44,816



11,273



93,181



1.88

%


1.96

%


2.29

%

Total borrowings


538,758



609,652



725,463



2.07

%


2.27

%


2.18

%

Total funding liabilities


3,910,412



3,910,251



3,726,284



0.94

%


1.08

%


0.94

%

Other liabilities


81,261



78,710



66,805








Shareholders' equity


473,527



468,920



420,343








Total liabilities & shareholders' equity


$

4,465,200



$

4,457,881



$

4,213,432








Net interest rate spread (fully-taxable equivalent)


3.08

%


3.03

%


3.17

%

Net interest margin (fully-taxable equivalent)


3.12

%


3.09

%


3.21

%

Net interest margin (fully-taxable equivalent), excluding fair value mark accretion and collection of
previously charged-off acquired loans(3)


3.09

%


3.05

%


3.14

%



(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, 2019, September 30, 2019, and December 31, 2018, totaling $326,000, $409,000 and $686,000, 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,

2019


December 31,

2018


December 31,

2019


December 31,

2018

Assets









Interest-earning assets:









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


$

67,288



$

45,155



2.13

%


1.62

%

Investments - taxable


825,674



829,462



2.54

%


2.35

%

Investments - nontaxable(1)


99,024



98,128



3.45

%


3.42

%

Loans(2):









Commercial real estate


1,260,412



1,195,544



4.66

%


4.47

%

Residential real estate


1,045,668



913,593



4.33

%


4.19

%

Commercial(1)


390,689



354,508



4.68

%


4.50

%

Consumer and home equity


346,769



343,292



5.35

%


5.08

%

HPFC


27,502



39,588



8.05

%


7.89

%

Municipal(1)


19,181



20,361



3.59

%


3.18

%

Total loans


3,090,221



2,866,886



4.65

%


4.49

%

Total interest-earning assets


4,082,207



3,839,631



4.15

%


3.97

%

Other assets


328,301



295,837






Total assets


$

4,410,508



$

4,135,468















Liabilities & Shareholders' Equity









Deposits:









Non-interest checking


$

519,078



$

488,702



%


%

Interest checking


1,123,268



884,710



0.93

%


0.55

%

Savings


476,860



485,986



0.08

%


0.06

%

Money market


607,383



515,590



1.24

%


0.87

%

Certificates of deposit


506,971



467,631



1.57

%


1.13

%

Total deposits


3,233,560



2,842,619



0.81

%


0.52

%

Borrowings:









Brokered deposits


316,475



264,711



2.42

%


1.98

%

Customer repurchase agreements


241,899



248,743



1.25

%


1.02

%

Subordinated debentures


59,007



58,990



5.54

%


5.79

%

Other borrowings


29,132



249,544



2.05

%


1.97

%

Total borrowings


646,513



821,988



2.25

%


1.96

%

Total funding liabilities


3,880,073



3,664,607



1.05

%


0.85

%

Other liabilities


70,570



60,106






Shareholders' equity


459,865



410,755






Total liabilities & shareholders' equity


$

4,410,508



$

4,135,468






Net interest rate spread (fully-taxable equivalent)


3.10

%


3.12

%

Net interest margin (fully-taxable equivalent)


3.15

%


3.16

%

Net interest margin (fully-taxable equivalent), excluding fair value mark accretion and collection of previously charged-off acquired loans(3)


3.11

%


3.10

%



(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, 2019 and 2018, totaling $1.6 million and $2.3 million, respectively.

 

 

 

Asset Quality Data

(unaudited)


(In thousands)


At or For The

Year Ended

December 31, 2019


At or For The
Nine Months Ended
September 30, 2019


At or For The
Six Months Ended
June 30, 2019


At or For The
Three Months Ended
March 31, 2019


At or For The
Year Ended
December 31, 2018

Non-accrual loans:











Residential real estate


$

4,096



$

5,152



$

5,566



$

5,415



$

5,492


Commercial real estate


1,122



1,156



1,590



975



1,380


Commercial


420



751



785



802



1,279


Consumer and home equity


2,154



2,616



3,039



2,476



1,861


HPFC


364



450



465



485



518


Total non-accrual loans


8,156



10,125



11,445



10,153



10,530


Loans 90 days past due and accruing






14



14



14


   Accruing troubled-debt restructured loans not
      included above


2,993



3,259



3,511



3,771



3,893


Total non-performing loans


11,149



13,384



14,970



13,938



14,437


Other real estate owned


94



94



130



673



130


Total non-performing assets


$

11,243



$

13,478



$

15,100



$

14,611



$

14,567


Loans 30-89 days past due:











Residential real estate


$

2,227



$

1,447



$

2,536



$

2,265



$

4,833


Commercial real estate


1,582



2,242



3,378



2,947



2,130


Commercial


548



1,135



1,400



1,205



169


Consumer and home equity


750



822



907



1,430



1,467


HPFC


243



193



171



187



183


Total loans 30-89 days past due


$

5,350



$

5,839



$

8,392



$

8,034



$

8,782


Allowance for loan losses at the beginning of 
   the period


$

24,712



$

24,712



$

24,712



$

24,712



$

24,171


Provision for loan losses


2,862



2,658



1,925



750



845


Charge-offs:











Residential real estate


462



436



25



11



173


Commercial real estate


300



157



65



65



512


Commercial


1,167



636



453



236



736


Consumer and home equity


713



670



64



24



572


HPFC


71



11







255


Total charge-offs


2,713



1,910



607



336



2,248


Total recoveries


(310)



(228)



(133)



(75)



(1,944)


Net charge-offs


2,403



1,682



474



261



304


Allowance for loan losses at the end of the 
  period


$

25,171



$

25,688



$

26,163



$

25,201



$

24,712


Components of allowance for credit losses:











Allowance for loan losses


$

25,171



$

25,688



$

26,163



$

25,201



$

24,712


Liability for unfunded credit commitments


21



11



14



16



22


Allowance for credit losses


$

25,192



$

25,699



$

26,177



$

25,217



$

24,734


Ratios:











Non-performing loans to total loans


0.36

%


0.43

%


0.48

%


0.46

%


0.48

%

Non-performing assets to total assets


0.25

%


0.30

%


0.34

%


0.33

%


0.34

%

Allowance for loan losses to total loans


0.81

%


0.83

%


0.84

%


0.83

%


0.82

%

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











Quarter-to-date


0.09

%


0.16

%


0.03

%


0.03

%


(0.16)

%

Year-to-date


0.08

%


0.07

%


0.03

%


0.03

%


0.01

%

Allowance for loan losses to non-performing
  loans


225.77

%


191.93

%


174.77

%


180.81

%


171.17

%

Loans 30-89 days past due to total loans


0.17

%


0.19

%


0.27

%


0.26

%


0.29

%

 

 

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,

 2019


September 30,

 2019


December 31,

 2018


December 31,

 2019


December 31,

 2018

Net income, as presented


$

15,238



$

14,488



$

13,977



$

57,203



$

53,071


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


139



140



143



557



573


Net income, adjusted for amortization of
  intangible assets


$

15,377



$

14,628



$

14,120



$

57,760



$

53,644


Average equity, as presented


$

473,527



$

468,920



$

420,343



$

459,865



$

410,755


Less: average goodwill and other intangible
  assets


(98,307)



(98,484)



(99,015)



(98,570)



(99,287)


Average tangible equity


$

375,220



$

370,436



$

321,328



$

361,295



$

311,468


Return on average equity


12.77

%


12.26

%


13.19

%


12.44

%


12.92

%

Return on average tangible equity


16.26

%


15.67

%


17.43

%


15.99

%


17.22

%

















(1) Assumed a 21% tax rate.



















Efficiency Ratio:



For the

Three Months Ended


For the
Year Ended

(In thousands)


December 31,
 2019


September 30,
 2019


December 31,
 2018


December 31,
 2019


December 31,
 2018

Non-interest expense, as presented


$

24,814



$

23,748



$

23,580



$

95,303



$

91,945


Net interest income, as presented


$

32,239



$

31,923



$

31,587



$

127,630



$

120,393


Add: effect of tax-exempt income(1)


277



264



251



1,029



1,022


Non-interest income, as presented


11,948



10,739



9,479



42,113



38,176


Add: net loss (gain) on sale of securities


133



(1)



420



105



(275)


Adjusted net interest income plus non-
   interest income


$

44,597



$

42,925



$

41,737



$

170,877



$

159,316


GAAP efficiency ratio


56.16

%


55.67

%


57.42

%


56.15

%


57.98

%

Non-GAAP efficiency ratio


55.64

%


55.32

%


56.50

%


55.77

%


57.71

%

















(1) Assumed a 21% tax rate.
















 

 

Tangible Book Value Per Share and Tangible Common Equity Ratio:



















December 31,
 2019


September 30,
 2019


December 31,
 2018

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










Tangible Book Value Per Share:















Shareholders' equity, as presented










$

473,415



$

471,672



$

435,825


Less: goodwill and other intangible assets










(98,222)



(98,398)



(98,927)


Tangible shareholders' equity










$

375,193



$

373,274



$

336,898


Shares outstanding at period end










15,144,719



15,224,903



15,591,914


Book value per share










$

31.26



$

30.98



$

27.95


Tangible book value per share










$

24.77



$

24.52



$

21.61


Tangible Common Equity Ratio:









Total assets










$

4,429,521



$

4,520,315



$

4,297,435


Less: goodwill and other intangibles










(98,222)



(98,398)



(98,927)


Tangible assets










$

4,331,299



$

4,421,917



$

4,198,508


Common equity ratio










10.69

%


10.43

%


10.14

%

Tangible common equity ratio










8.66

%


8.44

%


8.02

%




























Core Deposits:









(In thousands)










December 31,

2019


September 30,

 2019


December 31,

2018

Total deposits










$

3,537,743



$

3,617,963



$

3,464,474


Less: certificates of deposit










(521,752)



(541,199)



(443,912)


Less: brokered deposits










(191,005)



(250,266)



(363,104)


Core deposits










$

2,824,986



$

2,826,498



$

2,657,458





Average Core Deposits:



For the

Three Months Ended


For the

Year Ended

(In thousands)


December 31,

2019


September 30,

2019


December 31,

2018


December 31,

2019


December 31,

2018

Total average deposits


$

3,371,654



$

3,300,599



$

3,000,821



$

3,233,560



$

2,842,619


Less: certificates of deposit


(533,416)



(533,110)



(444,769)



(506,971)



(467,631)


Average core deposits


$

2,838,238



$

2,767,489



$

2,556,052



$

2,726,589



$

2,374,988


 

 

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SOURCE Camden National Corporation