CAMDEN, Maine, Jan. 29, 2019 /PRNewswire/ — Camden National Corporation (NASDAQ: CAC; «Camden National» or the «Company»), a $4.3 billion bank holding company headquartered in Camden, Maine, reported net income for 2018 of $53.1 million and diluted earnings per share («EPS») of $3.39, representing an increase of 86% over 2017. Net income and diluted EPS for 2018 each grew 24% over last year, adjusted for a $14.3 million income tax charge recorded in the fourth quarter of 2017 after the Tax Cuts and Jobs Act of 2017 (the «Tax Act») was enacted1. Return on average assets for 2018 was 1.28%, and return on average equity was 12.92% for the same period.

«We are pleased to report that 2018 was a banner year for the Company,» said Gregory A. Dufour, President and Chief Executive Officer of the Company. «We delivered outstanding operating and financial performance driven by the realization of many key investments we’ve made over the past several years and the benefit of a lower federal income tax rate. We experienced strong deposit growth of 15% during the year and loan growth of 9% over the same period. At the same time, asset quality continues to be excellent with non-performing assets comprising just 34 basis points of total assets at year-end.»

Net income for the fourth quarter of 2018 was $14.0 million and diluted EPS was $0.89, representing an increase over the fourth quarter of 2017 of $17.2 million and $1.09 per share, respectively, and a slight decrease compared to the third quarter of 2018 of $80,000 and $0.01 per share, respectively. Fourth quarter 2018 net income and diluted EPS grew $2.9 million and $0.18 per share, respectively, over the fourth quarter of 2017, adjusted for a $14.3 million income tax charge recorded in the fourth quarter of 2017 due to the Tax Act1.

«We had a great fourth quarter as loan balances grew 4% and deposits grew 8%,» said Dufour. «Our loan growth was funded by low-cost deposits2, thus expanding net interest margin to 3.21%, a 7 basis point increase over last quarter. Our loan-to-deposit ratio at December 31, 2018, was 87%, positioning us well as we enter 2019.»

In December 2018, the Company’s Board of Directors announced a dividend of $0.30 per share, reflecting a dividend yield of 3.34% on December 31, 2018. On January 22, 2019, the Company announced the approval of its common share repurchase program for up to 775,000 shares, or approximately 5% of the Company’s outstanding common stock.

Dufour added, «In November 2018, we announced the opening of our new prototype, state-of-the-art banking center located in the Bill & Joan Alfond Main Street Commons in downtown Waterville, Maine, following the sale of the Company’s Waterville property to Colby College earlier this year. The revitalization efforts by the City and Colby College have been nothing short of extraordinary, and we are excited to be part of it.»

Fourth Quarter 2018 Highlights:

Year-to-Date 2018 Highlights:

  • Net income of $14.0 million and diluted EPS of $0.89
  • Net income of $53.1 million and diluted EPS of $3.39
  • Return on average assets was 1.32% and return on average equity was 13.19%
  • Return on average assets was 1.28% and return on average equity was 12.92%
  • Efficiency ratio on a GAAP basis was 57.42% and on a non-GAAP basis was 56.50%1
  • Efficiency ratio on a GAAP basis was 57.98% and on a non-GAAP basis was 57.71%1
  • Loan growth of 4% and deposit growth of 8%
  • Loan growth of 9% and deposit growth of 15%
  • Net recoveries of $1.2 million
  • Net charge-offs of $304,000 and 0.01% of average loans

FINANCIAL CONDITION

Total assets at December 31, 2018, grew 6% over last year to $4.3 billion. The loan portfolio increased $243.8 million, or 9%, in 2018 to $3.0 billion at December 31, 2018, led by residential and commercial real estate growth of $134.5 million and $105.5 million, respectively, while consumer and home equity loan balances grew 2%. Over the same period, commercial loans decreased 1% as the Healthcare Professional Funding Corporation («HPFC») loan portfolio continues to run-off.

Total deposits at December 31, 2018, grew 15% over last year to $3.5 billion. Over this period, low-cost deposits2 increased $337.7 million, or 15%, to $2.7 billion at December 31, 2018, led by an increase in checking account deposits of $185.9 million and savings and money market deposits of $151.8 million. At December 31, 2018, interest checking balances included $75.0 million of temporary funds which we anticipate will be fully withdrawn by March 31, 2019.

For 2018, average low-cost deposits2 balances grew $221.1 million, or 10%, to $2.4 billion for the year-ended December 31, 2018. Over the same period, average total borrowings decreased 10%.

The Company’s capital position at December 31, 2018 was well in excess of regulatory requirements, including a total risk-based capital ratio of 14.36% and a Tier I leverage ratio of 9.53%. At December 31, 2018, the Company’s book value per share was $27.95, representing an 8% increase over December 31, 2017, and its tangible book value per share1 increased 10% over the same period to $21.61 at December 31, 2018.

ASSET QUALITY

Asset quality as of December 31, 2018 was very strong, continuing the trend from the previous quarter. At December 31, 2018, non-performing assets were 0.34% of total assets, and non-performing loans were 0.48% of total loans, representing a decrease of 0.12% and 0.17%, respectively, since September 30, 2018 and 0.16% and 0.25%, respectively, since December 31, 2017. Loans 30-89 days past due were 0.29% of total loans at December 31, 2018.

In the fourth quarter of 2018, a significant commercial credit relationship previously on non-accrual was favorably resolved, which drove a net recovery of $1.2 million for the quarter and net charge-offs of 0.01% of average loans for the year. With this recovery, the provision for credit losses was $7,000 for the fourth quarter of 2018, and $847,000 for the year ended December 31, 2018. At December 31, 2018, the allowance for loan losses was 0.82% of total loans and 171.17% of non-performing loans.

Q4 2018 FINANCIAL OPERATING RESULTS (linked quarter)

The Company reported net income of $14.0 million for the fourth quarter of 2018 and diluted EPS of $0.89, representing a decrease of $80,000 and $0.01 per share, respectively, compared to the third quarter of 2018.

Net interest income of $31.6 million in the fourth quarter of 2018 increased $1.2 million over last quarter. The 4% increase was driven by average deposits growth of $140.9 million, or 5%, between quarters. This enabled the Company to fund its average loan growth of $75.0 million between quarters with lower-cost funding and expand its net interest margin by 7 basis points to 3.21% for the fourth quarter of 2018.

Non-interest income of $9.5 million in the fourth quarter of 2018 decreased $913,000 compared to last quarter. The 9% decrease was driven by (i) net losses from the sale of investment securities of $420,000 recorded in the fourth quarter of 2018 as a result of a portfolio re-balancing effort, compared to net gains from the sale of investment securities of $664,000 the previous quarter, and (ii) a decrease in mortgage banking income of $602,000 as we sold 36% of our residential mortgage originations in the fourth quarter of 2018, compared to 46% last quarter. This was partially offset by an increase in debit card income of $666,000, of which $530,000 was attributable to an annual incentive bonus received in the fourth quarter from VISA©.

The provision for credit losses for the fourth quarter was $7,000, compared to $354,000 last quarter. The decrease was due to $1.2 million in net recoveries in the fourth quarter upon the favorable resolution of a large commercial credit relationship.

Non-interest expense of $23.6 million for the fourth quarter of 2018 increased $414,000 over last quarter. The 2% increase was driven by (i) an increase in donation and marketing-related costs of $194,000, (ii) an increase in occupancy costs of $150,000 due to higher utility, heating and ground maintenance costs during the winter months, and (iii) an increase in collection-related costs of $131,000.

YEAR-TO-DATE FINANCIAL OPERATING RESULTS

The Company reported net income of $53.1 million and diluted EPS of $3.39 for the year ended December 31, 2018, representing an increase of $24.6 million and $1.57 per share, respectively, over the same period last year. In the fourth quarter of 2017 the Tax Act was passed, reducing the federal income tax rate from 35% to 21%, effective January 1, 2018, and a $14.3 million income tax expense charge was recorded. For the year-ended December 31, 2018, it’s estimated that the lower federal income tax rate benefit was $9.2 million.

Net interest income of $120.4 million in 2018 increased $5.1 million over 2017. The 4% increase was driven by:

  • Average deposits growth of $222.4 million, or 8%, over last year.
  • Average loans growth of $155.9 million, or 6%, over last year.
  • Net interest margin on a fully-taxable basis for 2018 was 3.16%, compared to 3.19% last year. The decrease between periods was due to lower accretion income on acquired loans and time deposits of $902,000. Excluding accretion income on acquired loans and time deposits, net interest margin on a fully-taxable basis for 2018 was 3.10% for 2018 and 2017.

Non-interest income of $38.2 million in 2018 decreased 1% compared to 2017. The decrease was driven by (i) a decrease in mortgage banking income of $1.4 million as we sold 44% of our residential mortgage originations in 2018, compared to 53% in 2017, (ii) a decrease in loan swap fee income of $619,000, and (iii) a decrease in net gains from the sale of investment securities of $580,000. This was partially offset by (i) an increase in debit card income of $988,000, of which $506,000 was attributable to an increase in the VISA© incentive bonus, and (ii) an increase in brokerage and insurance commissions of $468,000.

The provision for credit losses for the year ended December 31, 2018, was $847,000, compared to $3.0 million for the same period last year. The decrease was due to a decrease in non-performing loans of 29% since December 31, 2017, and net charge-offs of 0.01% of average loans for the year ended December 31, 2018, compared to 0.07% for the same period last year.

Non-interest expense for the year ended December 31, 2018, was $91.9 million, compared to $88.5 million for the same period last year. The 4% increase was driven by:

  • An increase in compensation and related expenses of 5%, driven by normal merit increases, additional positions added throughout 2018, and an 11% increase in health insurance costs.
  • An increase in other expense of $864,000, of which $734,000 was employee- and business-related travel costs.
  • An increase in consulting and professional fees of $634,000, data processing costs of $608,000, and debit card expense of $425,000.
  • The increase was partially offset by a decrease in intangible amortization expense of $1.1 million.

 

1

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

2

Low-cost deposits includes non-interest checking, interest checking, savings and money market accounts.

ANNUAL MEETING

Camden National has scheduled its annual meeting of shareholders for Tuesday, April 30, 2019, at 3:00 p.m. local time, at Point Lookout Resort and Conference Center, 67 Atlantic Highway, Northport, Maine 04849. The date for determining the Company’s shareholders of record for the annual meeting is February 22, 2019.

CONFERENCE CALL

Camden National will host a conference call and webcast at 3:00 p.m. Eastern Time on January 29, 2019 to discuss our fourth quarter and year-to-date 2018 financial results and outlook. Participants should dial in to the call 10 – 15 minutes before it begins. Information about the conference call is as follows:

Live dial-in (domestic): (888) 349-0139
Live dial-in (international): (412) 542-4154
Live webcast: https://services.choruscall.com/links/cac190129.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), headquartered in Camden, Maine, is the largest publicly traded bank holding company in Northern New England with $4.3 billion in assets and nearly 650 employees. Camden National Bank, its subsidiary, is a full-service community bank founded in 1875 that offers an array of consumer and business financial products and services, accompanied by the latest in digital banking technology to empower customers to bank the way they want. The Bank provides personalized service through a network of 60 banking centers, 71 ATMs, and lending offices in New Hampshire and Massachusetts, all complemented by 24/7 live phone support. Greenwich Associates named Camden National Bank a 2018 Greenwich Customer Experience (CX) Leader in U.S. Retail Banking, a designation that recognizes top U.S. banks in customer experience. In 2018, Camden National Bank received the «Lender at Work for Maine» Award from the Finance Authority of Maine. Comprehensive wealth management, investment, and financial planning services are delivered by Camden National Wealth Management. To learn more, visit CamdenNational.com. Member FDIC.

FORWARD-LOOKING STATEMENTS

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

USE OF NON-GAAP MEASURES

In addition to evaluating the Company’s results of operations in accordance with generally accepted accounting principles in the United States («GAAP»), management supplements this evaluation with certain non-GAAP financial measures, such as adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average equity, and adjusted return on average tangible equity; tangible common equity ratio; tangible book value per share; and the efficiency ratio. Management believes these non-GAAP financial measures help investors in understanding the Company’s operating performance and trends and allow for better performance comparisons to other banks. 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,
 2018

September 30,
 2018

December 31,
 2017

December 31,
 2018

December 31,
 2017

Financial Condition Data

Investments

$

926,678

$

887,835

$

907,642

$

926,678

$

907,642

Loans and loans held for sale

3,030,625

2,919,001

2,790,542

3,030,625

2,790,542

Allowance for loan losses

24,712

23,526

24,171

24,712

24,171

Total assets

4,297,435

4,189,745

4,065,398

4,297,435

4,065,398

Deposits

3,464,474

3,220,755

3,000,491

3,464,474

3,000,491

Borrowings

341,515

479,498

611,498

341,515

611,498

Shareholders’ equity

435,825

415,686

403,413

435,825

403,413

Operating Data

Net interest income

$

31,587

$

30,423

$

29,659

$

120,393

$

115,300

Provision for credit losses

7

354

238

847

3,035

Non-interest income

9,479

10,392

9,840

38,176

38,599

Non-interest expense

23,580

23,166

23,099

91,945

88,510

Income before income tax expense

17,479

17,295

16,162

65,777

62,354

Income tax expense

3,502

3,238

19,335

12,706

33,878

Net income (loss)

$

13,977

$

14,057

$

(3,173)

$

53,071

$

28,476

Key Ratios

Return on average assets

1.32

%

1.34

%

(0.31)%

1.28

%

0.71

%

Return on average equity

13.19

%

13.44

%

(3.02)%

12.92

%

7.00

%

Net interest margin

3.21

%

3.14

%

3.20

%

3.16

%

3.19

%

Non-performing loans to total loans

0.48

%

0.65

%

0.73

%

0.48

%

0.73

%

Non-performing assets to total assets

0.34

%

0.46

%

0.50

%

0.34

%

0.50

%

Annualized net (recoveries) charge-offs to average loans

(0.16)

%

0.07

%

0.07

%

0.01

%

0.07

%

Tier I leverage capital ratio

9.53

%

9.42

%

9.07

%

9.53

%

9.07

%

Total risk-based capital ratio

14.36

%

14.55

%

14.14

%

14.36

%

14.14

%

Per Share Data

Basic earnings per share

$

0.90

$

0.90

$

(0.20)

$

3.40

$

1.83

Diluted earnings per share

$

0.89

$

0.90

$

(0.20)

$

3.39

$

1.82

Cash dividends declared per share

$

0.30

$

0.30

$

0.25

$

1.15

$

0.94

Book value per share

$

27.95

$

26.79

$

25.99

$

27.95

$

25.99

Weighted average number of common shares outstanding

15,589,310

15,580,782

15,521,447

15,571,387

15,509,665

Diluted weighted average number of common shares outstanding

15,646,540

15,638,986

15,521,447

15,626,303

15,588,347

Non-GAAP Measures(1)

Adjusted net income

$

13,977

$

14,057

$

11,090

$

53,071

$          42,739

Adjusted return on average assets

1.32

%

1.34

%

1.09

%

1.28

%

1.07

%

Adjusted return on average equity

13.19

%

13.44

%

10.56

%

12.92

%

10.51

%

Adjusted return on average tangible equity

17.43

%

17.84

%

14.20

%

17.22

%

14.35

%

Tangible common equity ratio

8.02

%

7.74

%

7.66

%

8.02

%

7.66

%

Tangible book value per share

$

21.61

$

20.31

$

19.57

$

21.61

$            19.57

Adjusted diluted earnings per share

$

0.89

$

0.90

$

0.71

$

3.39

$              2.73

Efficiency ratio

56.50

%

57.33

%

57.75

%

57.71

%

57.05

%

(1)

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

 

Consolidated Statements of Condition Data

(unaudited)

(In thousands, except number of shares)

December 31,
 2018

September 30,
 2018

December 31,
 2017

ASSETS

Cash and due from banks

$

52,240

$

48,124

$

44,057

Interest-bearing deposits in other banks

14,759

50,218

58,914

Total cash, cash equivalents and restricted cash

66,999

98,342

102,971

Investments:

Available-for-sale securities, at fair value(1)

910,692

869,626

789,899

Held-to-maturity securities, at amortized cost (fair value of $1,291, $1,267 and $94,913, respectively)(1)

1,307

1,308

94,073

Other investments

14,679

16,901

23,670

Total investments

926,678

887,835

907,642

Loans held for sale, at fair value (book value of $4,315, $10,188 and $8,065, respectively)

4,403

10,158

8,103

Loans:

Commercial real estate

1,269,533

1,215,979

1,164,023

Residential real estate

992,866

941,488

858,369

Commercial(2)

415,436

405,666

418,520

Consumer and home equity

348,387

345,710

341,527

Total loans

3,026,222

2,908,843

2,782,439

      Less: allowance for loan losses

(24,712)

(23,526)

(24,171)

       Net loans

3,001,510

2,885,317

2,758,268

Goodwill

94,697

94,697

94,697

Other intangible assets

4,230

4,411

4,955

Bank-owned life insurance

89,919

89,312

87,489

Premises and equipment, net

42,495

41,277

41,891

Deferred tax assets

23,053

26,241

22,776

Other assets

43,451

52,155

36,606

Total assets

$

4,297,435

$

4,189,745

$

4,065,398

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities

Deposits:

Non-interest checking

$

592,781

$

564,113

$

478,643

Interest checking

927,321

932,972

855,570

Savings and money market

1,137,356

996,790

985,508

Certificates of deposit

443,912

446,414

475,010

Brokered deposits

363,104

280,466

205,760

Total deposits

3,464,474

3,220,755

3,000,491

Short-term borrowings

270,868

409,732

541,796

Long-term borrowings

11,580

10,738

10,791

Subordinated debentures

59,067

59,028

58,911

Accrued interest and other liabilities

55,621

73,806

49,996

Total liabilities

3,861,610

3,774,059

3,661,985

Shareholders’ equity

435,825

415,686

403,413

Total liabilities and shareholders’ equity

$

4,297,435

$

4,189,745

$

4,065,398

(1)

In the fourth quarter of 2018, the Company adopted ASU 2017-12, effective January 1, 2018, and transferred its qualifying held-to maturity debt securities to available-for-sale securities.

(2)

Includes the HPFC loan portfolio.

 

Consolidated Statements of Income Data

(unaudited)

For The

Three Months Ended

(In thousands, except per share data)

December 31,

2018

September 30,

2018

December 31,

2017

Interest Income

Interest and fees on loans

$

34,532

$

32,813

$

29,728

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

4,708

4,408

4,091

Interest on state and political subdivision obligations (nontaxable)

659

659

685

Interest on deposits in other banks and other investments

554

677

536

Total interest income

40,453

38,557

35,040

Interest Expense

Interest on deposits

6,650

5,255

3,243

Interest on borrowings

1,357

2,021

1,283

Interest on subordinated debentures

859

858

855

Total interest expense

8,866

8,134

5,381

Net interest income

31,587

30,423

29,659

Provision for credit losses

7

354

238

Net interest income after provision for credit losses

31,580

30,069

29,421

Non-Interest Income

Debit card income

2,839

2,173

2,192

Service charges on deposit accounts

1,984

1,910

1,897

Mortgage banking income, net

1,156

1,758

1,797

Income from fiduciary services

1,347

1,339

1,277

Brokerage and insurance commissions

665

615

546

Bank-owned life insurance

607

606

620

Other service charges and fees

516

596

471

Net (loss) gain on sale of securities

(420)

664

28

Other income

785

731

1,012

Total non-interest income

9,479

10,392

9,840

Non-Interest Expense

Salaries and employee benefits

13,080

13,143

12,869

Furniture, equipment and data processing

2,649

2,575

2,690

Net occupancy costs

1,764

1,614

1,650

Consulting and professional fees

874

958

706

Debit card expense

841

833

721

Regulatory assessments

490

447

559

Other real estate owned and collection costs, net

370

239

413

Amortization of intangible assets

181

182

392

Other expenses

3,331

3,175

3,099

Total non-interest expense

23,580

23,166

23,099

Income before income tax expense

17,479

17,295

16,162

Income Tax Expense

3,502

3,238

19,335

Net income (loss)

$

13,977

$

14,057

$

(3,173)

Per Share Data:

Basic earnings per share

$

0.90

$

0.90

$

(0.20)

Diluted earnings per share

$

0.89

$

0.90

$

(0.20)

 

Consolidated Statements of Income Data

(unaudited)

Year Ended

 December 31,

(In thousands, except per share data)

2018

2017

Interest Income

Interest and fees on loans

$

128,546

$

114,563

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

17,727

16,879

Interest on state and political subdivision obligations (nontaxable)

2,648

2,764

Interest on deposits in other banks and other investments

2,456

1,898

Total interest income

151,377

136,104

Interest Expense

Interest on deposits

20,113

11,811

Interest on borrowings

7,456

5,585

Interest on subordinated debentures

3,415

3,408

Total interest expense

30,984

20,804

Net interest income

120,393

115,300

Provision for credit losses

847

3,035

Net interest income after provision for credit losses

119,546

112,265

Non-Interest Income

Debit card income

9,067

8,079

Service charges on deposit accounts

7,663

7,529

Mortgage banking income, net

5,914

7,363

Income from fiduciary services

5,376

5,108

Brokerage and insurance commissions

2,615

2,147

Bank-owned life insurance

2,430

2,370

Other service charges and fees

2,080

2,029

Net gain on sale of securities

275

855

Other income

2,756

3,119

Total non-interest income

38,176

38,599

Non-Interest Expense

Salaries and employee benefits

51,513

49,109

Furniture, equipment and data processing

10,359

9,894

Net occupancy costs

6,876

6,884

Consulting and professional fees

3,752

3,118

Debit card expense

3,180

2,755

Regulatory assessments

1,937

2,166

Other real estate owned and collection costs, net

935

971

Amortization of intangible assets

725

1,809

Other expenses

12,668

11,804

Total non-interest expense

91,945

88,510

Income before income tax expense

65,777

62,354

Income Tax Expense

12,706

33,878

Net income

$

53,071

$

28,476

Per Share Data:

Basic earnings per share

$

3.40

$

1.83

Diluted earnings per share

$

3.39

$

1.82

 

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,

2018

September 30,

2018

December 31,

2017

December 31,

2018

September 30,

2018

December 31,

2017

Assets

Interest-earning assets:

Interest-bearing deposits in other banks(1)

$

24,620

$

45,824

$

49,826

1.57

%

1.85

%

1.11

%

Securities – taxable

830,097

826,541

811,006

2.49

%

2.36

%

2.21

%

Securities – nontaxable(2)

97,192

97,775

101,371

3.43

%

3.41

%

4.16

%

Loans(3):

Commercial real estate

1,230,791

1,198,677

1,153,842

4.60

%

4.46

%

4.15

%

Residential real estate

973,124

934,029

861,658

4.29

%

4.16

%

4.15

%

Commercial(2)

364,253

351,980

343,921

4.50

%

4.56

%

4.12

%

Consumer and home equity

346,494

344,740

343,942

5.36

%

5.16

%

4.54

%

HPFC

35,163

38,356

46,565

7.66

%

7.64

%

8.14

%

Municipal(2)

17,520

24,603

18,442

3.28

%

3.06

%

3.73

%

Total loans

2,967,345

2,892,385

2,768,370

4.60

%

4.49

%

4.26

%

Total interest-earning assets(1)

3,919,254

3,862,525

3,730,573

4.11

%

3.97

%

3.77

%

Other assets(1)

294,178

301,489

308,523

Total assets

$

4,213,432

$

4,164,014

$

4,039,096

Liabilities & Shareholders’ Equity

Deposits:

Non-interest checking

$

577,177

$

517,651

$

486,753

%

%

%

Interest checking

941,439

865,012

824,247

0.80

%

0.54

%

0.28

%

Savings

483,651

483,577

497,929

0.06

%

0.06

%

0.06

%

Money market

553,785

512,650

489,426

1.07

%

0.89

%

0.58

%

Certificates of deposit

444,769

481,059

490,779

1.26

%

1.18

%

0.90

%

Total deposits

3,000,821

2,859,949

2,789,134

0.65

%

0.53

%

0.36

%

Borrowings:

Brokered deposits

307,559

272,471

217,328

2.28

%

2.07

%

1.35

%

Customer repurchase agreements

265,675

244,189

254,529

1.22

%

1.08

%

0.50

%

Subordinated debentures

59,048

59,009

58,892

5.77

%

5.77

%

5.76

%

Other borrowings

93,181

249,341

257,420

2.29

%

2.16

%

1.48

%

Total borrowings

725,463

825,010

788,169

2.18

%

2.07

%

1.45

%

Total funding liabilities

3,726,284

3,684,959

3,577,303

0.94

%

0.88

%

0.60

%

Other liabilities

66,805

64,119

44,979

Shareholders’ equity

420,343

414,936

416,814

Total liabilities & shareholders’ equity

$

4,213,432

$

4,164,014

$

4,039,096

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

3.17

%

3.09

%

3.17

%

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

3.21

%

3.14

%

3.20

%

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

3.14

%

3.09

%

3.13

%

(1)

Average balance for the three months ended December 31, 2017, was revised to include average interest-bearing deposits in other banks in total average interest-earning assets.

(2)

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

(3)

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

(4)

Excludes the impact of the fair value mark accretion on loans and certificates of deposit generated in purchase accounting and collection of previously charged-off acquired loans for the three months ended December 31, 2018, September 30, 2018, and December 31, 2017, totaling $686,000, $434,000 and $689,000, 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,

2018

December 31,

2017

December 31,

2018

December 31,

2017

Assets

Interest-earning assets:

Interest-bearing deposits in other banks(1)

$

45,155

$

40,611

1.62

%

1.06

%

Securities – taxable

829,462

$

826,749

2.35

%

2.22

%

Securities – nontaxable(2)

98,128

101,898

3.42

%

4.17

%

Loans(3):

Commercial real estate

1,195,544

1,120,591

4.47

%

4.11

%

Residential real estate

913,593

838,781

4.19

%

4.12

%

Commercial(2)

354,508

336,685

4.50

%

4.21

%

Consumer and home equity

343,292

343,457

5.08

%

4.45

%

HPFC

39,588

52,031

7.89

%

8.53

%

Municipal(2)

20,361

19,428

3.18

%

3.43

%

Total loans

2,866,886

2,710,973

4.49

%

4.25

%

Total interest-earning assets(1)

3,839,631

3,680,231

3.97

%

3.76

%

Other assets(1)

295,837

308,375

Total assets

$

4,135,468

$

3,988,606

Liabilities & Shareholders’ Equity

Deposits:

Non-interest checking

$

503,287

$

430,706

%

%

Interest checking

870,125

750,543

0.55

%

0.21

%

Savings

485,986

492,483

0.06

%

0.06

%

Money market

515,590

480,119

0.87

%

0.52

%

Certificates of deposit

467,631

466,418

1.13

%

0.88

%

Total deposits

2,842,619

2,620,269

0.52

%

0.32

%

Borrowings:

Brokered deposits

264,711

296,261

1.98

%

1.13

%

Customer repurchase agreements

248,743

232,762

1.02

%

0.46

%

Subordinated debentures

58,990

58,834

5.79

%

5.79

%

Other borrowings

249,544

329,988

1.97

%

1.37

%

Total borrowings

821,988

917,845

1.96

%

1.35

%

Total funding liabilities

3,664,607

3,538,114

0.85

%

0.59

%

Other liabilities

60,106

43,864

Shareholders’ equity

410,755

406,628

Total liabilities & shareholders’ equity

$

4,135,468

$

3,988,606

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

3.12

%

3.17

%

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

3.16

%

3.19

%

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

3.10

%

3.10

%

(1)

Average balance for the year ended December 31, 2017, was revised to include average interest-bearing deposits in other banks in total average interest-earning assets.

(2)

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

(3)

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

(4)

Excludes the impact of the fair value mark accretion on loans and certificates of deposit generated in purchase accounting and collection of previously charged-off acquired loans for the years ended December 31, 2018 and 2017, totaling $2.3 million and $3.2 million, respectively.

 

Asset Quality Data

(unaudited)

 

(In thousands)

At or For The

Year Ended

December 31, 2018

At or For The
Nine Months Ended
September 30, 2018

At or For The
Six Months Ended
June 30, 2018

At or For The
Three Months Ended
March 31, 2018

At or For The
Year Ended
December 31, 2017

Non-accrual loans:

Residential real estate

$

5,492

$

4,720

$

5,742

$

6,185

$

4,979

Commercial real estate

1,380

5,517

5,600

4,603

5,642

Commercial

1,279

2,402

1,934

1,991

2,000

Consumer

1,861

1,647

1,700

1,464

1,650

HPFC

518

591

834

655

1,043

Total non-accrual loans

10,530

14,877

15,810

14,898

15,314

Loans 90 days past due and accruing

14

14

   Accruing troubled-debt restructured loans not        included above

3,893

4,039

4,000

4,361

5,012

Total non-performing loans

14,437

18,930

19,810

19,259

20,326

Other real estate owned

130

185

130

130

130

Total non-performing assets

$

14,567

$

19,115

$

19,940

$

19,389

$

20,456

Loans 30-89 days past due:

Residential real estate

$

4,833

$

3,816

$

2,222

$

2,777

$

5,277

Commercial real estate

2,130

574

309

1,121

1,135

Commercial

169

723

1,490

243

518

Consumer

1,467

902

1,258

1,190

1,197

HPFC

183

1,078

455

528

887

Total loans 30-89 days past due

$

8,782

$

7,093

$

5,734

$

5,859

$

9,014

Allowance for loan losses at the beginning of the period

$

24,171

$

24,171

$

24,171

$

24,171

$

23,116

Provision (credit) for loan losses

845

845

490

(500)

3,026

Charge-offs:

Residential real estate

173

231

116

31

482

Commercial real estate

512

512

512

426

124

Commercial

736

448

298

171

1,014

Consumer

572

451

266

175

558

HPFC

255

209

290

Total charge-offs

2,248

1,851

1,192

803

2,468

Total recoveries

(1,944)

(361)

(199)

(122)

(497)

Net charge-offs

304

1,490

993

681

1,971

Allowance for loan losses at the end of the period

$

24,712

$

23,526

$

23,668

$

22,990

$

24,171

Components of allowance for credit losses:

Allowance for loan losses

$

24,712

$

23,526

$

23,668

$

22,990

$

24,171

Liability for unfunded credit commitments

22

15

16

23

20

Allowance for credit losses

$

24,734

$

23,541

$

23,684

$

23,013

$

24,191

Ratios:

Non-performing loans to total loans

0.48

%

0.65

%

0.69

%

0.69

%

0.73

%

Non-performing assets to total assets

0.34

%

0.46

%

0.48

%

0.47

%

0.50

%

Allowance for loan losses to total loans

0.82

%

0.81

%

0.83

%

0.82

%

0.87

%

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

Quarter-to-date

(0.16)%

0.07

%

0.04

%

0.10

%

0.07

%

Year-to-date

0.01

%

0.07

%

0.07

%

0.10

%

0.07

%

Allowance for loan losses to non-performing loans

171.17

%

124.28

%

119.48

%

119.37

%

118.92

%

Loans 30-89 days past due to total loans

0.29

%

0.24

%

0.20

%

0.21

%

0.32

%

 

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

Adjusted Net Income; Adjusted Diluted EPS; and Adjusted Return on Average Assets:

For the
Three Months Ended

For the
Year Ended

(In thousands, except per share data)

December 31,

 2018

September 30,

 2018

December 31,

 2017

December 31,

 2018

December 31,

 2017

Adjusted Net Income:

Net income (loss), as presented

$

13,977

$

14,057

$

(3,173)

$

53,071

$

28,476

Add: impact of the revaluation of deferred tax assets and liabilities due to the Tax Act

14,263

14,263

Adjusted net income

$

13,977

$

14,057

$

11,090

$

53,071

$

42,739

Adjusted Diluted EPS:

Diluted EPS, as presented

$

0.89

$

0.90

$

(0.20)

$

3.39

$

1.82

Add: impact of the revaluation of deferred tax assets and liabilities due to the Tax Act

0.91

0.91

Adjusted diluted EPS

$

0.89

$

0.90

$

0.71

$

3.39

$

2.73

Adjusted Return on Average Assets:

Return on average assets, as presented

1.32

%

1.34

%

(0.31)%

1.28

%

0.71

%

Add: impact of the revaluation of deferred tax assets and liabilities due to the Tax Act

%

%

1.40

%

%

0.36

%

Adjusted return on average assets

1.32

%

1.34

%

1.09

%

1.28

%

1.07

%

 

Adjusted Return on Average Equity and Adjusted Return on Average Tangible Equity:

For the
Three Months Ended

For the
Year Ended

(In thousands)

December 31,

 2018

September 30,

 2018

December 31,

 2017

December 31,

 2018

December 31,

 2017

Net income (loss), as presented

$

13,977

$

14,057

$

(3,173)

$

53,071

$

28,476

Add: impact of the revaluation of deferred tax assets and liabilities due to the Tax Act

14,263

14,263

Adjusted net income

13,977

14,057

11,090

53,071

42,739

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

143

144

255

573

1,176

Adjusted tangible net income

$

14,120

$

14,201

$

11,345

$

53,644

$

43,915

Average equity, as presented

$

420,343

$

414,936

$

416,814

$

410,755

$

406,628

Less: average goodwill and other intangible assets

(99,015)

(99,195)

(99,823)

(99,287)

(100,513)

Average tangible equity

$

321,328

$

315,741

$

316,991

$

311,468

$

306,115

Return on average equity

13.19

%

13.44

%

(3.02)%

12.92

%

7.00

%

Adjusted return on average equity

13.19

%

13.44

%

10.56

%

12.92

%

10.51

%

Adjusted return on average tangible equity

17.43

%

17.84

%

14.20

%

17.22

%

14.35

%

(1)

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

 

Efficiency Ratio:

For the

Three Months Ended

For the
Year Ended

(In thousands)

December 31,
 2018

September 30,
 2018

December 31,
 2017

December 31,
 2018

December 31,
 2017

Non-interest expense, as presented

$

23,580

$

23,166

$

23,099

$

91,945

$

88,510

Net interest income, as presented

$

31,587

$

30,423

$

29,659

$

120,393

$

115,300

Add: effect of tax-exempt income(1)

251

260

525

1,022

2,105

Non-interest income, as presented

9,479

10,392

9,840

38,176

38,599

Add: net loss (gain) on sale of securities

420

(664)

(28)

(275)

(855)

Adjusted net interest income plus non-interest income

$

41,737

$

40,411

$

39,996

$

159,316

$

155,149

GAAP efficiency ratio

57.42

%

56.76

%

58.48

%

57.98

%

57.51

%

Non-GAAP efficiency ratio

56.50

%

57.33

%

57.75

%

57.71

%

57.05

%

(1)

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

 

Tangible Book Value Per Share and Tangible Common Equity Ratio:

December 31,
 2018

September 30,
 2018

December 31,
 2017

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

Tangible Book Value Per Share:

Shareholders’ equity, as presented

$

435,825

$

415,686

$

403,413

Less: goodwill and other intangible assets

(98,927)

(99,108)

(99,652)

Tangible shareholders’ equity

$

336,898

$

316,578

$

303,761

Shares outstanding at period end

15,591,914

15,584,526

15,524,704

Tangible book value per share

$

21.61

$

20.31

$

19.57

Book value per share

$

27.95

$

26.67

$

25.99

Tangible Common Equity Ratio:

Total assets

$

4,297,435

$

4,189,745

$

4,065,398

Less: goodwill and other intangibles

(98,927)

(99,108)

(99,652)

Tangible assets

$

4,198,508

$

4,090,637

$

3,965,746

Common equity ratio

10.14

%

9.92

%

9.92

%

Tangible common equity ratio

8.02

%

7.74

%

7.66

%

 

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

 

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SOURCE Camden National Corporation