2014

Camden National Corporation Completes Branch Integration and Reports Full Year 2012 Results

CAMDEN, Maine, Jan. 29, 2013 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National" or the "Company"), a $2.6 billion bank holding company headquartered in Camden, Maine, reported net income of $23.4 million and diluted earnings per share ("EPS") of $3.05 for the full year 2012 compared to net income and EPS of $26.2 million and $3.40, respectively, for the full year 2011.  Return on average assets and return on average equity for 2012 were 0.98% and 10.31%, respectively, comparing favorably to the Company's annualized national peer group averages of 0.82% and 7.93%, respectively, for the nine months ended September 30, 2012.

On April 23, 2012, the Company announced a definitive agreement to acquire 15 branches and associated deposits from Bank of America.  The acquisition was finalized on October 26, 2012, and the branches were successfully converted over that weekend. As part of the transaction, Camden National also divested one branch as required by the Department of Justice and sold its former Bangor, Maine branch location. Camden National acquired $288.9 million in deposits and $6.1 million in small business loans in addition to the 14 branch locations. 

"Our 2012 results were impacted by expenses associated with the branch acquisition and other costs to ramp up the branches, as well as continued pressure on net interest income and increased compliance costs," said Gregory A. Dufour, president and chief executive officer of Camden National Corporation. "We continue to manage the organization over the long-term by making strategic investments, such as the branch acquisition and remaining cautious in this challenging interest rate environment," Dufour added.

Total assets grew 11% to $2.6 billion at December 31, 2012, with loans growing 3% and deposits increasing over 21% as a result of the branch transaction and organic growth. Net income for 2012 declined $2.7 million, or 11%, compared to the record earnings level of $26.2 million in 2011. The financial results for 2012 include one-time conversion and integration-related costs associated with the branch acquisition, a decline in core net interest income as a result of the interest rate environment and an increase in operating costs primarily due to recurring operating expenses of the newly acquired branches. 

Fourth Quarter 2012 Highlights

  • Completion of acquisition of 14 branches on October 26, 2012, resulting in a $288.9 million increase in deposit balances.
  • Net income of $4.2 million for the fourth quarter of 2012, a decrease of $1.7 million compared to the same period in 2011, primarily due to a combination of acquisition expenses and recurring operating expenses of the newly acquired branches.
  • Net interest margin compression of 10 basis points in the fourth quarter 2012 compared to the third quarter of 2012, reflecting the impact of low interest rates and the increase in the investment portfolio as the result of liquidity provided by the branch acquisition.
  • Favorable decline in annualized net loan charge-offs with fourth quarter 2012 at 0.24%, compared to 0.33% in the third quarter of 2012 and 0.39% for the fourth quarter of 2011.

Year-End Operating Results

Net interest income on a fully-taxable basis totaled $74.7 million for 2012, decreasing $1.7 million, or 2%, compared to 2011. This decline is a result of lower net interest margins partially offset by growth in average investments and loans of $80.0 million during the year. The net interest margin for 2012 of 3.36% declined 21 basis points from 2011, reflecting the impact of the reinvestment of cash flow of both investment securities and loans at lower interest rates as a direct result of the prolonged low interest rate environment.

"Even though we experienced a decline in our net interest margin due to the reinvestment of cash flows in this low yield environment, we have been cautious not to chase yield by taking on significant investment duration risk or lessening the quality of our investment and loan portfolios," said Dufour.

Non-interest income of $23.4 million for the year ended December 31, 2012, increased $359,000 when compared to the same period in 2011.  The increase was due to growth in deposit-related service fees of $907,000, increases in other income of $823,000 primarily due to gain on sale of a branch facility and an increase in net gains on securities of $422,000.  The increase was partially offset by a reduction in fiduciary income of $989,000 as a result of the outsourcing of the Company's employee benefits business line, and a decline in bank-owned life insurance of $791,000 related to life insurance proceeds of $740,000 recorded in 2011.

Non-interest expense for the year ended December 31, 2012, totaled $59.0 million, compared to $55.6 million for the same period in 2011. The 6% increase was primarily due to one-time conversion and integration costs of $2.3 million and the additional operating costs of $2.6 million associated with the new branch facilities and staffing. Consulting and professional fees decreased $811,000 during the year primarily due to the outsourcing of the employee benefits business line.

Balance Sheet

Total loans (excluding loans held for sale) of $1.6 billion at December 31, 2012, grew by $49.8 million, or 3%, since year-end 2011. This increase was driven by solid growth in the commercial real estate loan portfolio, which expanded by $36.2 million, or 8%. The consumer and home equity portfolios also grew $14.3 million, or 5%, largely due to a ten-year fixed-rate home equity promotion and a car loan campaign. Commercial loan balances increased $5.4 million, primarily due to loans acquired in connection with the branch acquisition.  Residential real estate loan balances declined $6.0 million since year-end 2011, partially due to a shift to the home equity product and mortgage loan sales of $18.8 million in 2012, which helped manage the Company's interest rate risk profile.

The investment portfolio totaled $812.1 million at December 31, 2012, which represented an increase of $200.1 million since December 31, 2011. The growth was due to the purchase of investment securities resulting from excess cash generated from the branch acquisition.

Total deposits at December 31, 2012, increased $338.1 million, or 21%, since year-end 2011 due to the branch acquisition that resulted in $288.9 million in deposits as well as our continued organic growth in core deposits.  The Company reduced Federal Home Loan Bank term borrowings by $80.5 million during 2012. Furthermore, the branch transaction generated an increase in core deposit funding at lower interest rate costs.  The Company's average cost of funds declined 31 basis points to 0.81% for 2012 compared to 2011 and was reduced further to 0.71% for the fourth quarter of 2012.

Asset Quality

"Overall, our asset quality metrics were stable throughout the year and we experienced lower net charge-offs in 2012 compared to a year ago," said Dufour. "Total non-performing assets of $29.1 million at December 31, 2012, are slightly lower compared to a year ago and we have seen a favorable shift in the composition with a decline in non-accrual loans and other real estate owned and an increase in restructured loans. As a community bank, we are committed to working with borrowers during challenging economic times,"  Dufour commented.

The loan loss provision totaled $3.8 million in 2012, a decrease of $950,000 from 2011, and the allowance for credit losses to total loans decreased slightly to 1.48% at December 31, 2012, compared to 1.52% at December 31, 2011.

Dividends and Capital

The board of directors approved a dividend of $0.25 per share, payable on January 31, 2013, to shareholders of record as of January 15, 2013. This distribution resulted in an annualized dividend yield of 2.94%, based on the December 31, 2012, closing price of Camden National's common stock at $33.97 per share as reported by NASDAQ. The Company's tangible book value per share of $23.68 at December 31, 2012, grew 4% from a year ago.

Camden National's total risk-based capital ratio was 15.56% at December 31, 2012, compared to 15.95% at December 31, 2011.  Capital levels decreased due to the recognition of goodwill and other intangible assets of $8.8 million resulting from the branch acquisition. Camden National and its wholly-owned subsidiary, Camden National Bank, exceeded the minimum total risk-based, Tier 1, and Tier 1 leverage ratios of 10.0%, 6.0%, and 5.0%, respectively, required by the Federal Reserve for an institution to be considered "well capitalized."

On September 25, 2012, the board of directors authorized the 2012 Common Stock Repurchase Program ("Repurchase Program"). The Repurchase Program will allow for the repurchase of up to 500,000 shares, or approximately 6.5% of the Company's outstanding common stock, during its term. No shares have been repurchased yet under the Repurchase Program, which expires on October 1, 2013.

Annual Meeting

Camden National Corporation has scheduled its annual meeting of shareholders for Tuesday, April 30, 2013, at 3:00 p.m. local time, at Point Lookout Resort and Conference Center, 67 Atlantic Highway, Lincolnville, Maine. The date for determining the Company's shareholders of record for the annual meeting is March 4, 2013.

About Camden National Corporation

Camden National Corporation, recognized by Forbes as one of "America's Most Trustworthy Companies" in 2012, is the holding company employing more than 500 Maine residents for two financial services companies including Camden National Bank and the wealth management company, Acadia Trust, N.A. Camden National Bank is a full-service community bank with a network of 50 banking offices throughout Maine. Acadia Trust offers investment management and fiduciary services with offices in Portland and Ellsworth. Located at Camden National Bank, Camden Financial Consultants offers full-service brokerage and insurance services.

Forward-Looking Statements

This press release and the documents incorporated by reference herein contain certain statements that may be considered forward-looking statements under the Private Securities Litigation Reform Act of 1995, including certain plans, expectations, goals, projections, and statements, which are subject to numerous risks, assumptions, and uncertainties. Forward-looking statements can be identified by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "plan," "target," or "goal," or future or conditional verbs such as "will," "may", "might", "should," "would", "could" and other expressions which predict or indicate future events or trends and which do not relate to historical matters. Forward-looking statements should not be relied on, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of Camden National. These risks, uncertainties and other factors may cause the actual results, performance or achievements of Camden National to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

Some of the factors that might cause these differences include, but are not limited to, the following: continued weakness in the United States economy in general and the regional and local economies within the New England region and Maine, which could result in a deterioration of credit quality, a change in the allowance for loan losses, or a reduced demand for the Company's credit or fee-based products and services; adverse changes in the local real estate market could result in a deterioration of credit quality and an increase in the allowance for loan loss, as most of the Company's loans are concentrated in Maine, and a substantial portion of these loans have real estate as collateral; changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; adverse changes in asset; competitive pressures, including continued industry consolidation, the increased financial services provided by non-banks and banking reform; continued volatility in the securities markets that could adversely affect the value or credit quality of the Company's assets, impairment of goodwill, the availability and terms of funding necessary to meet the Company's liquidity needs, and the Company's ability to originate loans and could lead to impairment in the value of securities in the Company's investment portfolios; changes in information technology that require increased capital spending; changes in consumer spending and savings habits; new laws and regulations regarding the financial services industry; changes in laws and regulations including laws and regulations concerning taxes, banking, securities and insurance; and changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters.  Additional factors that could also cause results to differ materially from those described above can be found in our Annual Report on Form 10-K, as updated by our Quarterly Reports on Form 10-Q and other filings with the SEC. All of these factors should be carefully reviewed, and readers should not place undue reliance on these forward-looking statements.

These forward-looking statements were based on information, plans and estimates at the date of this press release, and Camden National does not promise and assumes no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Use of Non-GAAP Financial Measures

In addition to evaluating the Company's results of operations in accordance with GAAP, management supplements this evaluation with certain non-GAAP financial measures, such as the efficiency and tangible equity ratios, tangible book value per share, and tax-equivalent net interest income. We believe 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.  The reconciliation to the comparable GAAP financial measure can be found in this document or the Form 8-K related to this document, all of which can be found on Camden National's website at www.camdennational.com.

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.

 

Selected Financial Data (unaudited)















Three Months Ended

December 31,


Twelve Months Ended

December 31,




2012


2011


2012


2011

Selected Financial and Per Share Data:













Return on average assets



0.66%



1.02%



0.98%



1.13%

Return on average equity



7.07%



10.52%



10.31%



12.16%

Return on average tangible equity



9.02%



13.24%



12.95%



15.42%

Tangible equity to tangible assets



7.19%



7.69%



7.19%



7.69%

Efficiency ratio



65.29%



56.16%



57.45%



54.68%

Net interest margin



3.20%



3.54%



3.36%



3.57%

Tier 1 leverage capital ratio



8.94%



9.59%



8.94%



9.59%

Tier 1 risk-based capital ratio



14.31%



14.69%



14.31%



14.69%

Total risk-based capital ratio



15.56%



15.95%



15.56%



15.95%

Basic earnings per share


$

0.55


$

0.76


$

3.06


$

3.41

Diluted earnings per share


$

0.55


$

0.76


$

3.05


$

3.40

Cash dividends declared per share


$

0.25


$

0.75


$

1.00


$

1.50

Book value per share


$

30.67


$

28.56


$

30.67


$

28.56

Tangible book value per share


$

23.68


$

22.66


$

23.68


$

22.66

Weighted average number of common shares outstanding



7,620,753



7,672,769



7,646,861



7,672,126

Diluted weighted average number of common shares outstanding



7,638,609



7,679,932



7,661,273



7,679,895


 

Statement of Condition Data (unaudited)









 December 31, 

 December 31, 

(In thousands, except number of shares)


2012



2011









Assets







Cash and due from banks

$

58,290


$

39,325


Securities







     Securities available for sale, at fair value


781,050



590,036


     Federal Home Loan Bank and Federal Reserve Bank stock, at cost


21,034



21,962


          Total securities


802,084



611,998


Trading account assets


2,300



2,244


Loans held for sale


-



6,061


Loans


1,563,866



1,514,028


   Less allowance for loan losses


(23,044)



(23,011)


          Net loans


1,540,822



1,491,017


Goodwill and other intangible assets


53,299



45,194


Bank-owned life insurance


45,053



43,672


Premises and equipment, net


28,059



24,113


Deferred tax asset


7,663



13,486


Interest receivable


6,215



6,431


Prepaid FDIC assessment


3,606



4,796


Other real estate owned


1,313



1,682


Other assets


16,053



12,701


     Total assets

$

2,564,757


$

2,302,720









Liabilities







Deposits







   Demand

$

240,749


$

256,330


   Interest checking, savings and money market


1,169,148



828,977


   Retail certificates of deposit


418,442



395,431


   Brokered deposits


101,130



110,628


     Total deposits


1,929,469



1,591,366


Federal Home Loan Bank advances


56,404



136,860


Other borrowed funds


259,940



275,656


Junior subordinated debentures


43,819



43,717


Accrued interest and other liabilities


41,310



36,245


     Total liabilities


2,330,942



2,083,844









Shareholders' Equity







Common stock, no par value; authorized 20,000,000 shares, issued and







outstanding 7,622,750 and 7,664,975 shares on December 31, 2012 and 2011, respectively








49,667



51,438


Retained earnings


181,151



165,377


Accumulated other comprehensive income (loss)







    Net unrealized gains on securities available for sale, net of tax 


12,943



11,128


    Net unrealized losses on derivative instruments, at fair value, net of tax 


(7,205)



(7,264)


    Net unrecognized losses on post-retirement plans, net of tax


(2,741)



(1,803)


          Total accumulated other comprehensive income 


2,997



2,061


     Total shareholders' equity


233,815



218,876


     Total liabilities and shareholders' equity

$

2,564,757


$

2,302,720


 


Statement of Income Data (unaudited)



Three Months Ended December 31,


Twelve Months Ended December 31,

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


2012



2011



2012



2011













Interest income












Interest and fees on loans

$

18,072


$

18,933


$

72,859


$

78,174

Interest on U.S. government and sponsored enterprise obligations


4,065



4,101



16,452



18,342

Interest on state and political subdivision obligations


321



378



1,385



1,662

Interest on federal funds sold and other investments


91



69



251



194

     Total interest income


22,549



23,481



90,947



98,372

Interest expense












Interest on deposits


2,147



2,771



9,293



11,591

Interest on borrowings


1,199



1,629



5,363



8,948

Interest on junior subordinated debentures


642



631



2,546



2,614

     Total interest expense


3,988



5,031



17,202



23,153

     Net interest income


18,561



18,450



73,745



75,219

Provision for credit losses


1,108



1,464



3,816



4,735

     Net interest income after provision for credit losses


17,453



16,986



69,929



70,484

Non-interest income 












Service charges on deposit accounts


1,700



1,255



5,557



5,134

Net gain on sale of securities and other-than-temporary impairment


1,439



1,967



2,498



2,076

Other service charges and fees


1,257



886



4,061



3,577

Income from fiduciary services


1,155



1,524



5,038



6,027

Brokerage and insurance commissions


382



313



1,491



1,363

Bank-owned life insurance


348



389



1,382



2,173

Mortgage banking income, net


112



228



588



729

Other income


999



542



2,797



1,974

     Total non-interest income 


7,392



7,104



23,412



23,053

Non-interest expenses












Salaries and employee benefits


8,539



7,225



29,689



28,627

Furniture, equipment and data processing


1,524



1,255



5,079



4,773

Net occupancy


1,304



989



4,365



3,949

Acquisition costs (1)


1,620



-



2,324



-

Other real estate owned and collection costs


590



681



2,284



2,104

Consulting and professional fees


467



486



1,818



2,629

Regulatory assessments


476



440



1,793



1,955

Amortization of identifiable intangible assets


224



144



657



577

Other expenses


4,019



4,495



11,022



10,965

     Total non-interest expenses


18,763



15,715



59,031



55,579

     Income before income taxes


6,082



8,375



34,310



37,958

Income taxes


1,904



2,536



10,882



11,781

Net income

$

4,178


$

5,839


$

23,428


$

26,177


Basic earnings per share

$

0.55


$

0.76


$

3.06


$

3.41

Diluted earnings per share

$

0.55


$

0.76


$

3.05


$

3.40













(1) Includes non-recurring costs associated with the acquisition and integration of fifteen branches and the divestiture of one branch.

 

 


Quarterly Average Balance, Interest and Yield/Rate Analysis (unaudited)




















At or for the Three Months Ended


At or for the Three Months Ended




December 31, 2012



December 31, 2011

(In thousands)



Average





Yield/



Average





Yield/




Balance



Interest


Rate



Balance



Interest


Rate

Assets

















Interest-earning assets:

















     Securities - taxable


$

716,862


$

4,118


2.30%


$

552,376


$

4,150


3.01%

     Securities - nontaxable (1)



34,354



493


5.75%



40,825



581


5.69%

     Trading account assets



2,271



25


4.38%



2,212



20


3.59%

     Federal funds sold



22,283



14


0.25%



-



-


-

     Loans: (1) (2)

















        Residential real estate



570,525



6,516


4.57%



581,828



7,385


5.08%

        Commercial real estate



502,421



6,309


4.91%



456,438



6,079


5.21%

        Commercial



173,101



1,976


4.47%



169,257



2,103


4.86%

        Municipal



14,314



160


4.45%



15,007



192


5.08%

        Consumer



292,089



3,167


4.31%



281,560



3,242


4.57%

     Total loans 



1,552,450



18,128


4.62%



1,504,090



19,001


5.00%

  Total interest-earning assets



2,328,220



22,778


3.88%



2,099,503



23,752


4.49%

  Cash and due from banks



55,394








46,932






  Other assets



158,404








152,905






  Less allowance for loan losses



(22,763)








(22,934)






  Total assets


$

2,519,255







$

2,276,406























Liabilities & Shareholders' Equity

















Retail deposits:

















     Non-interest bearing demand deposits


$

232,966



-


-


$

263,361



-


-

     Interest checking accounts



445,847



85


0.08%



275,191



98


0.14%

     Savings accounts



216,657



42


0.08%



178,526



112


0.25%

     Money market accounts



454,754



452


0.40%



381,264



592


0.62%

     Certificates of deposit



404,874



1,212


1.19%



403,530



1,446


1.42%

         Total retail deposits



1,755,098



1,791


0.41%



1,501,872



2,248


0.59%

Borrowings:

















     Brokered deposits



99,518



356


1.42%



112,294



523


1.85%

     Junior subordinated debentures



43,807



642


5.83%



43,705



631


5.73%

     Other borrowings



341,933



1,199


1.40%



365,233



1,629


1.77%

        Total borrowings



485,258



2,197


1.80%



521,232



2,783


2.12%

  Total funding liabilities



2,240,356



3,988


0.71%



2,023,104



5,031


0.99%

  Other liabilities



43,879








33,044






  Shareholders' equity



235,020








220,258






  Total liabilities & shareholders' equity


$

2,519,255







$

2,276,406























Net interest income (fully-taxable equivalent)





18,790








18,721



Less:  fully-taxable equivalent adjustment






(229)








(271)



  Net interest income





$

18,561







$

18,450




















Net interest rate spread (fully-taxable equivalent)





3.17%








3.50%

Net interest margin (fully-taxable equivalent)





3.20%








3.54%




















































 (1)  Reported on tax-equivalent basis calculated using a tax rate of 35%.

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

 


Year-to-date Average Balance, Interest and Yield/Rate Analysis (unaudited)





















December 31, 2012



December 31, 2011

(In thousands)



Average





Yield/



Average





Yield/




Balance



Interest


Rate



Balance



Interest


Rate

Assets

















Interest-earning assets:

















     Securities - taxable


$

640,779


$

16,646


2.60%


$

564,418


$

18,496


3.28%

     Securities - nontaxable (1)



37,163



2,130


5.73%



44,112



2,556


5.79%

     Trading account assets



2,214



43


1.94%



2,245



39


1.74%

     Federal funds sold



5,601



14


0.25%



-



-


-

     Loans: (1) (2)

















        Residential real estate



573,227



27,210


4.75%



590,238



30,184


5.11%

        Commercial real estate



491,732



24,572


5.00%



463,581



25,381


5.47%

        Commercial



169,043



7,961


4.71%



175,760



9,007


5.12%

        Municipal



14,473



694


4.80%



19,465



910


4.68%

        Consumer



287,173



12,665


4.41%



281,596



13,010


4.62%

     Total loans 



1,535,648



73,102


4.76%



1,530,640



78,492


5.13%

  Total interest-earning assets



2,221,405



91,935


4.14%



2,141,415



99,583


4.65%

  Cash and due from banks



42,165








36,168






  Other assets



154,970








154,550






  Less allowance for loan losses



(23,050)








(22,850)






  Total assets


$

2,395,490







$

2,309,283























Liabilities & Shareholders' Equity

















Retail deposits:

















     Non-interest bearing demand deposits


$

240,369



-


-


$

246,995



-


-

     Interest checking accounts



351,232



336


0.10%



258,322



509


0.20%

     Savings accounts



195,800



285


0.15%



171,840



426


0.25%

     Money market accounts



382,274



2,019


0.53%



344,369



2,369


0.69%

     Certificates of deposit



385,666



4,998


1.30%



431,850



6,322


1.46%

         Total retail deposits



1,555,341



7,638


0.49%



1,453,376



9,626


0.66%

Borrowings:

















     Brokered deposits



117,815



1,655


1.40%



120,143



1,965


1.64%

     Junior subordinated debentures



43,769



2,546


5.82%



43,666



2,614


5.99%

     Other borrowings



414,566



5,363


1.29%



451,034



8,947


1.98%

        Total borrowings



576,150



9,564


1.66%



614,843



13,526


2.20%

  Total funding liabilities



2,131,491



17,202


0.81%



2,068,219



23,152


1.12%

  Other liabilities



36,870








25,753






  Shareholders' equity



227,129








215,311






  Total liabilities & shareholders' equity


$

2,395,490







$

2,309,283























Net interest income (fully-taxable equivalent)





74,733








76,431



Less:  fully-taxable equivalent adjustment






(988)








(1,212)



  Net interest income





$

73,745







$

75,219




















Net interest rate spread (fully-taxable equivalent)





3.33%








3.53%

Net interest margin (fully-taxable equivalent)





3.36%








3.57%




















































 (1)  Reported on tax-equivalent basis calculated using a tax rate of 35%.

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

 

Asset Quality Data (unaudited)




At or for Twelve

Months Ended 



At or for Nine Months Ended 



At or for Six Months Ended 


At or for Three Months Ended 

At or for Twelve Months Ended 

(In thousands)



December 31, 2012



September 30, 2012



June 30, 2012


March 31, 2012

December 31, 2011

















Non-accrual loans:
















     Residential real estate


$

10,584


$

9,459


$

10,349


$

9,570


$

9,503

     Commercial real estate



6,719



7,121



7,362



7,578



7,830

     Commercial 



3,409



3,765



4,687



4,253



3,955

     Consumer



1,771



1,929



1,912



2,477



2,822

Total non-accrual loans



22,483



22,274



24,310



23,878



24,110

Loans 90 days past due and accruing



611



246



562



183



236

Renegotiated loans not included above



4,674



3,162



3,177



3,256



3,276

Total non-performing loans



27,768



25,682



28,049



27,317



27,622

Other real estate owned:
















     Residential real estate



669



421



1,045



1,226



791

     Commercial real estate



644



175



652



672



891

Total other real estate owned



1,313



596



1,697



1,898



1,682

Total non-performing assets


$

29,081


$

26,278


$

29,746


$

29,215


$

29,304

















Loans 30-89 days past due:
















     Residential real estate


$

1,658


$

1,256


$

780


$

1,961


$

2,429

     Commercial real estate



2,618



1,938



2,122



3,075



2,107

     Commercial 



1,043



1,135



762



846



911

     Consumer



2,721



452



310



245



1,793

Total loans 30-89 days past due


$

8,040


$

4,781


$

3,974


$

6,127


$

7,240

































Allowance for loan losses at the beginning of the period


$

23,011


$

23,011


$

23,011


$

23,011


$

22,293

Provision for loan losses



3,791



2,676



1,817



991



4,741

Charge-offs:
















     Residential real estate



1,197



1,024



446



308



1,216

     Commercial real estate



593



209



209



179



1,633

     Commercial 



1,393



1,146



416



191



1,256

     Consumer 



1,319



987



879



411



920

Total charge-offs 



4,502



3,366



1,950



1,089



5,025

Total recoveries 



744



530



384



97



1,002

Net charge-offs



3,758



2,836



1,566



992



4,023

Allowance for loan losses at the end of the period


$

23,044


$

22,851


$

23,262


$

23,010


$

23,011

















Components of allowance for credit losses:
















     Allowance for loan losses


$

23,044


$

22,851


$

23,262


$

23,010


$

23,011

     Liability for unfunded credit commitments



45



51



43



34



20

Balance of allowance for credit losses 


$

23,089


$

22,902


$

23,305


$

23,044


$

23,031

































Ratios:
















Non-performing loans to total loans



1.78%



1.67%



1.83%



1.79%



1.82%

Non-performing assets to total assets



1.13%



1.06%



1.24%



1.25%



1.27%

Allowance for credit losses to total loans



1.48%



1.49%



1.52%



1.51%



1.52%

Net charge-offs to average loans (annualized)
















   Quarter-to-date



0.24%



0.33%



0.15%



0.26%



0.39%

   Year-to-date



0.24%



0.25%



0.21%



0.26%



0.26%

Allowance for credit losses to non-performing loans



83.15%



89.18%



83.09%



84.36%



83.38%

Loans 30-89 days past due to total loans



0.51%



0.31%



0.26%



0.40%



0.48%

 

Reconciliation of non-GAAP to GAAP Financial Measures

Camden National presents its efficiency ratio using non-GAAP information. The GAAP-based efficiency ratio is non-interest expenses divided by net interest income plus non-interest income from the Consolidated Statements of Income. The non-GAAP efficiency ratio excludes acquisition costs and prepayment penalties on borrowings from non-interest expenses, excludes net gains on sale of securities from non-interest income, and adds the tax-equivalent adjustment to net interest income. The following table provides a reconciliation between the GAAP and non-GAAP efficiency ratio:

 

Reconciliation of non-GAAP to GAAP Financial Measures
















Three Months Ended

December 31,


Twelve Months Ended

December 31,

(In Thousands)


2012


2011


2012


2011

Non-interest expense, as presented


$

18,763


$

15,715


$

59,031


$

55,579

Less acquisition costs



1,620



-



2,324



-

Less prepayment fees on borrowings



1,302



2,318



2,030



2,318

Adjusted non-interest expense


$

15,841


$

13,397


$

54,677


 ` 

53,261














Net interest income, as presented


$

18,561


$

18,450


$

73,745


$

75,219

Effect of tax-exempt income



229



271



988



1,212

Non-interest income, as presented



7,392



7,104



23,412



23,053

Less gains on sale of securities, net of OTTI



1,439



1,967



2,498



2,076

Less other non-recurring gains



479



-



479



-

Adjusted net interest income plus non-interest income


$

24,264


$

23,858


$

95,168


$

97,408

Non-GAAP efficiency ratio



65.29%



56.16%



57.45%



54.68%

GAAP efficiency ratio



72.30%