Camden National Corporation Reports 27% Increase in Earnings for the Second Quarter of 2011

26 Jul, 2011, 11:18 ET from Camden National Corporation

CAMDEN, Maine, July 26, 2011 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National") reported net income of $7.1 million for the second quarter of 2011, an increase of $1.5 million, or 27%, compared to the second quarter of 2010 and an increase of $730,000, or 12%, compared to the first quarter of 2011. Earnings per diluted share were $0.92 for the second quarter of 2011, compared to $0.73 and $0.83 for the second quarter of 2010 and the first quarter of 2011, respectively.

Net income for the six months ended June 30, 2011 was $13.4 million, an increase of 23% compared to $10.9 million for the same period in 2010.  Earnings per diluted share for the six months ended June 30, 2011 and 2010 were $1.75 and $1.42, respectively.

"In light of an uncertain and sluggish economy, I'm pleased to report our focus on community banking fundamentals has resulted in a strong financial performance for the second quarter of 2011," said Gregory A. Dufour, president and chief executive officer of Camden National. "Our return on average assets was 1.22% for the second quarter of 2011, compared to 0.98% for the second quarter of 2010 and our national peer group average of 0.57%, based on the most recent Bank Holding Company Report dated March 31, 2011.  Return on average equity for the second quarter of 2011 and 2010 was 13.29% and 11.36%, respectively, compared to our national peer group average of 6.21% for the first quarter of 2011. We anticipate these financial results will place us in the top level of our national peer group."

Balance Sheet Highlights

Camden National's total assets of $2.3 billion at June 30, 2011 increased $25.0 million compared to December 31, 2010.  Total loans grew to $1.6 billion at June 30, 2011, an increase of $26.7 million, or 2%, for the first six months of 2011. Our loan growth was centered in the commercial loan portfolio, which increased $33.8 million, or 19%, since year end.  Residential real estate loans declined by $6.2 million, or 1%, due to the sale of thirty-year fixed rate mortgages.

Total deposits of $1.5 billion at June 30, 2011 increased $29.7 million compared to December 31, 2010. Since year end, core deposits grew $61.4 million, or 6%, while retail certificate of deposits declined $36.6 million, or 8%.

Asset Quality and the Provision for Credit Losses

"Our loan loss provision for the first half of 2011 decreased $1.9 million from the comparable period in 2010, reflecting continued stabilization of our asset quality," said Dufour. "Despite lower net loan charge-offs, we continue to maintain a cautionary outlook for asset quality as we saw a slight increase in non-performing assets, which is indicative of ongoing weak consumer credit conditions."

Non-performing assets at June 30, 2011 were $26.8 million, up from $25.1 million at March 31, 2011 and $25.9 million at June 30, 2010.  Camden National's non-performing assets compared to total assets increased slightly to 1.15% compared to the same period in 2010, but continued to compare favorably to our national peer group's average of 3.73%, based on the most recent Bank Holding Company Performance Report dated March 31, 2011. When comparing the non-performing asset composition from a year ago, other real estate owned declined $2.2 million, residential real estate non-accrual loans increased $2.0 million and restructured consumer loans increased $2.4 million.

Net loan charge-offs of $1.4 million during the first half of 2011, present a declining trend compared to $1.9 million in the same period a year ago.  These net charge-offs resulted in year-to-date annualized net charge-offs to average loans of 0.18% and 0.25% for those respective periods.

Net Interest Income

Camden National's net interest income of $19.6 million for the second quarter of 2011 increased $1.0 million compared to the first quarter of 2011 and the second quarter of 2010.  The tax equivalent net interest margin increased to 3.64% for the second quarter of 2011, compared to 3.49% and 3.59% for the first quarter of 2011 and second quarter of 2010, respectively. During the second quarter of 2011, Camden National collected approximately $600,000 of loan related non-recurring fees.  

Net interest income for the six months ended June 30, 2011 totaled $38.1 million, an increase of $1.5 million, or 4%, compared to $36.6 million for the same period a year ago.  The increase in net interest income is primarily due to growth in our average earning assets of $90.5 million, partially offset by a slight decline in our net interest margin to 3.57% from 3.59% for the six months ended June 30, 2011 and 2010, respectively.

Non-Interest Income and Non-Interest Expense

Non-interest income of $5.0 million for the second quarter of 2011 increased $581,000, or 13%, compared to the second quarter of 2010. The growth in non-interest income was primarily due to an increase of $267,000 in our loan servicing business, which now services 6,000 Maine Housing loans, and an increase in debit card interchange income of $114,000. On a linked-quarter basis (comparing current quarter results to the previous quarter), second quarter 2011 non-interest income declined $112,000, primarily related to the non-recurring bank-owned life insurance proceeds of $170,000 recorded in the first quarter of 2011.

Non-interest income of $10.1 million for the six months ended June 30, 2011 increased $1.1 million, or 13%, compared to the same period in 2010, with over half of the increase driven by the growth in loan servicing income.  

Non-interest expense of $13.3 million for the second quarter of 2011 increased $415,000, or 3%, compared to the second quarter of 2010, primarily due to increases in salaries and employee benefits of $816,000 and consulting fees of $318,000, partially offset by declines in write-downs of other real estate owned of $772,000.  Salaries and employee benefits reflect an increase in employees' incentive compensation of $425,000, based on our second quarter 2011 financial performance.  During the second quarter, we engaged an outside consultant to facilitate an in-depth review of business processes, which resulted in a $318,000 increase in consulting and professional fees. On a linked-quarter basis, second quarter 2011 non-interest expense declined slightly as we benefited from lower FDIC deposit assessments and lower occupancy costs related to snow removal which was partially offset by increases in salaries and employee benefits and consulting fees.

Non-interest expense of $26.6 million for the six months ended June 30, 2011 increased $778,000 compared to the same period in 2010.  This 3% increase relates to increases in salaries and employee benefit costs and consulting fees, partially offset by a decline in write-downs of other real estate owned.

Camden National's efficiency ratio improved to 53.39% in the second quarter of 2011 from 55.27% and 54.76% for the first quarter of 2011 and the second quarter of 2010, respectively.  Camden National's efficiency ratio was 54.31% and 55.41% for the six months ended June 30, 2011 and 2010, respectively.

Dividends and Capital

The board of directors approved a dividend of $0.25 per share, payable on July 29, 2011, to shareholders of record on July 15, 2011.  This resulted in an annualized dividend yield of 3.05%, based on the June 30, 2011 closing price of Camden National's common stock of $32.81 per share as reported on NASDAQ.

Camden National's total risk-based capital ratio increased to 15.45% at June 30, 2011, compared to 13.99% at June 30, 2010, and 15.05% at December 31, 2010, as capital levels increased from retained earnings. The Company and 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."

About Camden National Corporation

Camden National Corporation, headquartered in Camden, Maine, and ranked 12th in US Banker's list of top-performing mid-tier banks in 2010, is the holding company employing more than 400 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 38 banking offices throughout Maine. Acadia Trust offers investment management and fiduciary services with offices in Portland, Bangor and Ellsworth. Located at Camden National Bank, Camden Financial Consultants, formerly known as Acadia 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. Forward-looking statements can be identified by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "will," "should," 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 the following: general, national, regional or local economic conditions which are less favorable than anticipated; changes in loan default and charge-off rates; declines in the equity and financial markets; reductions in deposit levels; declines in mortgage loan refinancing, equity loan and line of credit activity; changes in the domestic interest rate environment and inflation; changes in the carrying value of investment securities and other assets; further actions by the U.S. government and Treasury Department, including actions similar to the Federal Home Loan Mortgage Corporation conservatorship, which could have a negative impact on Camden National's investment portfolio and earnings; misalignment of Camden National's interest-bearing assets and liabilities; increases in loan repayment rates affecting interest income and the value of mortgage servicing rights; changing business, banking, or regulatory conditions or policies, or new legislation affecting the financial services industry, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act, that could lead to changes in the competitive balance among financial institutions, restrictions on bank activities, changes in costs (including deposit insurance premiums), increased regulatory scrutiny, declines in consumer confidence in depository institutions, or changes in the secondary market for bank loan and other products; and changes in accounting rules, Federal and State laws, Internal Revenue Service regulations, and other regulations and policies governing financial holding companies and their subsidiaries which may impact our ability to take appropriate action to protect our financial interests in certain loan situations. Other factors could also cause these differences. For more information about these factors please see our Annual Report on Form 10-K, as updated by our Quarterly Reports on Form 10-Q and other filings on file 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 to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Statement of Condition Data (unaudited)

June 30,

June 30,

December 31,

(In thousands, except number of shares)

2011

2010

2010

Assets

Cash and due from banks

$

29,685

$

24,236

$

31,009

Securities

    Securities available for sale, at fair value

595,335

533,736

553,579

    Securities held to maturity, at amortized cost

-

37,786

36,102

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

21,962

21,965

21,962

         Total securities

617,297

593,487

611,643

Trading account assets

2,270

2,013

2,304

Loans held for sale

1,855

-

5,528

Loans

1,551,456

1,542,074

1,524,752

  Less allowance for loan losses

(22,989)

(22,266)

(22,293)

         Net loans

1,528,467

1,519,808

1,502,459

Goodwill and other intangible assets

45,533

46,110

45,821

Bank-owned life insurance

43,659

42,395

43,155

Premises and equipment, net

24,294

26,230

25,044

Deferred tax asset

10,496

10,370

12,281

Interest receivable

7,063

7,558

6,875

Prepaid FDIC assessment

5,353

7,187

6,155

Other real estate owned

1,816

3,967

2,387

Other assets

13,226

11,473

11,346

    Total assets

$

2,331,014

$

2,294,834

$

2,306,007

Liabilities

Deposits

  Demand

$

238,405

$

202,448

$

229,547

  Interest checking, savings and money market

774,455

693,644

721,905

  Retail certificates of deposit

428,104

522,894

464,662

  Brokered deposits

104,587

129,690

99,697

    Total deposits

1,545,551

1,548,676

1,515,811

Federal Home Loan Bank advances

157,044

174,503

214,236

Other borrowed funds

341,113

306,186

302,069

Junior subordinated debentures

43,666

43,563

43,614

Accrued interest and other liabilities

25,399

22,191

24,282

    Total liabilities

2,112,773

2,095,119

2,100,012

Shareholders' Equity

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

  outstanding 7,677,693, 7,657,098, and 7,658,496 shares on June 30, 2011

  and 2010 and December 31, 2010, respectively

51,111

50,376

50,936

Retained earnings

160,297

140,656

150,730

Accumulated other comprehensive income

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

9,787

11,066

6,229

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

(1,791)

(1,442)

(709)

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

(1,163)

(941)

(1,191)

         Total accumulated other comprehensive income

6,833

8,683

4,329

    Total shareholders' equity

218,241

199,715

205,995

    Total liabilities and shareholders' equity

$

2,331,014

$

2,294,834

$

2,306,007

Statement of Income Data (unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

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

2011

2010

2011

2010

Interest income

Interest and fees on loans

$

20,257

$

20,593

$

39,726

$

41,040

Interest on U.S. government and sponsored enterprise obligations

4,917

5,166

9,802

10,329

Interest on state and political subdivision obligations

431

534

897

1,073

Interest on federal funds sold and other investments

40

33

80

56

    Total interest income

25,645

26,326

50,505

52,498

Interest expense

Interest on deposits

2,963

3,959

5,978

8,078

Interest on borrowings

2,463

3,110

5,054

6,404

656

702

1,351

1,396

    Total interest expense

6,082

7,771

12,383

15,878

    Net interest income

19,563

18,555

38,122

36,620

Provision for credit losses

970

1,950

2,089

3,946

    Net interest income after provision for credit losses

18,593

16,605

36,033

32,674

Non-interest income

Income from fiduciary services

1,439

1,512

2,986

3,079

Service charges on deposit accounts

1,352

1,285

2,583

2,565

Other service charges and fees

943

872

1,813

1,562

Bank-owned life insurance

335

347

874

718

Brokerage and insurance commissions

385

352

743

646

Mortgage banking income, net

52

83

132

172

Net gain on sale of securities

53

-

20

-

Other income

474

105

1,000

434

    Non-interest income before other-than-temporary

       impairment of securities

5,033

4,556

10,151

9,176

Other-than-temporary impairment of securities

(27)

(131)

(27)

(179)

    Total non-interest income

5,006

4,425

10,124

8,997

Non-interest expenses

Salaries and employee benefits

7,114

6,298

13,965

12,523

Furniture, equipment and data processing

1,169

1,116

2,369

2,246

Net occupancy

956

897

2,016

1,931

Other real estate owned and collection costs

415

1,158

906

2,132

Regulatory assessments

402

602

1,105

1,317

Consulting and professional fees

868

550

1,542

1,338

Amortization of identifiable intangible assets

145

144

289

288

Other expenses

2,203

2,092

4,365

4,004

    Total non-interest expenses

13,272

12,857

26,557

25,779

    Income before income taxes

10,327

8,173

19,600

15,892

Income taxes

3,257

2,587

6,191

4,993

Net income

$

7,070

$

5,586

$

13,409

$

10,899

Selected Financial and Per Share Data:

Return on average equity

13.29%

11.36%

12.88%

11.25%

Return on average tangible equity

16.90%

14.83%

16.46%

14.74%

Return on average assets

1.22%

0.98%

1.16%

0.98%

Efficiency ratio (1)

53.39%

54.76%

54.31%

55.41%

Basic earnings per share

$

0.92

$

0.73

$

1.75

$

1.42

Diluted earnings per share

$

0.92

$

0.73

$

1.75

$

1.42

Cash dividends declared per share

$

0.25

$

0.25

$

0.50

$

0.50

Weighted average number of common shares outstanding

7,677,594

7,656,051

7,668,831

7,654,079

Diluted weighted average number of common shares outstanding

7,687,133

7,664,443

7,679,298

7,661,607

(1) Computed by dividing non-interest expense by the sum of net interest income (tax equivalent) and non-interest income (excluding securities gains/losses).

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

At or for the Six Months Ended

At or for the Six Months Ended

June 30, 2011

June 30, 2010

(In thousands)

Average

Yield/

Average

Yield/

Balance

Interest

Rate

Balance

Interest

Rate

Assets

Interest-earning assets:

    Securities - taxable

$

576,887

$

9,873

3.42%

$

485,636

$

10,375

4.27%

    Securities - nontaxable (1)

46,862

1,380

5.89%

55,322

1,651

5.97%

    Trading account assets

2,260

9

0.82%

1,809

10

1.06%

    Loans: (1) (2)

       Residential real estate

595,625

15,356

5.16%

625,515

16,873

5.39%

       Commercial real estate

465,478

12,955

5.54%

438,198

12,511

5.68%

       Commercial

177,412

4,633

5.19%

177,608

4,851

5.43%

       Municipal

19,202

458

4.81%

15,265

425

5.62%

       Consumer

281,229

6,484

4.65%

275,102

6,529

4.79%

    Total loans

1,538,946

39,886

5.18%

1,531,688

41,189

5.37%

 Total interest-earning assets

2,164,955

51,148

4.72%

2,074,455

53,225

5.13%

 Cash and due from banks

25,580

35,234

 Other assets

157,123

163,488

 Less allowance for loan losses

(22,735)

(21,601)

 Total assets

$

2,324,923

$

2,251,576

Liabilities & Shareholders' Equity

Interest-bearing liabilities:

    Interest checking accounts

$

240,827

277

0.23%

$

244,577

486

0.40%

    Savings accounts

167,590

206

0.25%

151,453

244

0.33%

    Money market accounts

324,516

1,187

0.74%

282,143

1,168

0.83%

    Certificates of deposit

451,345

3,345

1.49%

536,838

5,378

2.02%

        Total retail deposits

1,184,278

5,015

0.85%

1,215,011

7,276

1.21%

    Brokered deposits

119,043

963

1.63%

92,257

802

1.75%

    Junior subordinated debentures

43,641

1,351

6.24%

43,541

1,396

6.47%

    Borrowings

516,427

5,054

1.97%

493,170

6,404

2.62%

       Total wholesale funding

679,111

7,368

2.19%

628,968

8,602

2.76%

 Total interest-bearing liabilities

1,863,389

12,383

1.34%

1,843,979

15,878

1.74%

 Demand deposits

229,743

189,542

 Other liabilities

21,829

22,732

 Shareholders' equity

209,962

195,323

 Total liabilities & shareholders' equity

$

2,324,923

$

2,251,576

Net interest income (fully-taxable equivalent)

38,765

37,347

Less:  fully-taxable equivalent adjustment

(643)

(727)

 Net interest income

$

38,122

$

36,620

Net interest rate spread (fully-taxable equivalent)

3.38%

3.39%

Net interest margin (fully-taxable equivalent)

3.57%

3.59%

(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 Six Months Ended

At or for Three Months Ended

At or for Twelve Months Ended

At or for Nine Months Ended

At or for Six Months Ended

(In thousands)

June 30, 2011

March 31, 2011

December 31, 2010

September 30, 2010

June 30, 2010

Non-accrual loans:

    Residential real estate

$

8,581

$

8,171

$

7,225

$

5,793

$

6,580

    Commercial real estate

7,661

6,442

6,072

6,725

7,130

    Commercial

3,809

3,977

4,421

4,334

5,379

    Consumer

1,464

1,337

1,721

1,155

1,249

Total non-accrual loans

21,515

19,927

19,439

18,007

20,338

Loans 90 days past due and accruing

-

430

711

1,034

545

Renegotiated loans not included above

3,447

2,584

2,295

2,055

1,096

Total non-performing loans

24,962

22,941

22,445

21,096

21,979

Other real estate owned:

    Residential real estate

989

251

284

412

560

    Commercial real estate

827

1,939

2,103

2,218

3,407

Total other real estate owned

1,816

2,190

2,387

2,630

3,967

Total non-performing assets

$

26,778

$

25,131

$

24,832

$

23,726

$

25,946

Loans 30-89 days past due:

    Residential real estate

$

500

$

2,739

$

2,493

$

3,186

$

1,338

    Commercial real estate

1,668

2,786

1,439

1,234

749

    Commercial

771

1,393

928

2,772

1,367

    Consumer

344

358

926

436

537

Total loans 30-89 days past due

$

3,283

$

7,276

$

5,786

$

7,628

$

3,991

Allowance for loan losses at the beginning of the period

$

22,293

$

22,293

$

20,246

$

20,246

$

20,246

Provision for loan losses

2,083

1,117

6,325

5,242

3,950

Charge-offs:

    Residential real estate

797

172

1,262

1,103

579

    Commercial real estate

325

231

1,382

844

752

    Commercial

755

378

1,502

1,098

684

    Consumer

140

66

1,401

760

395

Total charge-offs

2,017

847

5,547

3,805

2,410

Total recoveries

630

324

1,269

653

480

Net charge-offs

1,387

523

4,278

3,152

1,930

Allowance for loan losses at the end of the period

$

22,989

$

22,887

$

22,293

$

22,336

$

22,266

Components of allowance for credit losses:

    Allowance for loan losses

$

22,989

$

22,887

$

22,293

$

22,336

$

22,266

    Liability for unfunded credit commitments

31

28

25

47

47

Balance of allowance for credit losses

$

23,020

$

22,915

$

22,318

$

22,383

$

22,313

Ratios:

Non-performing loans to total loans

1.61%

1.49%

1.47%

1.37%

1.43%

Non-performing assets to total assets

1.15%

1.08%

1.08%

1.03%

1.13%

Allowance for credit losses to total loans

1.48%

1.49%

1.46%

1.45%

1.45%

Net charge-offs to average loans (annualized)

  Quarter-to-date

0.22%

0.14%

0.29%

0.32%

0.28%

  Year-to-date

0.18%

0.14%

0.28%

0.27%

0.25%

Allowance for credit losses to non-performing loans

92.22%

99.89%

99.44%

106.10%

101.52%

Loans 30-89 days past due to total loans

0.21%

0.47%

0.38%

0.50%

0.26%

Selected Financial Data (unaudited)

 June 30, 

December 31,

2011

2010

2010

Tier 1 leverage capital ratio

9.13%

8.41%

8.77%

Tier 1 risk-based capital ratio

14.19%

12.74%

13.80%

Total risk-based capital ratio

15.45%

13.99%

15.05%

Tangible equity to tangible assets (1)

7.56%

6.83%

7.09%

Book value per share

$

28.43

$

26.08

$

26.90

Tangible book value per share (2)

$

22.49

$

20.06

$

20.91

Investment Data (unaudited)

June 30, 2011

Amortized

Unrealized

Unrealized

Fair

(In thousands)

Cost

Gains

Losses

Value

Available for sale

Obligations of U.S. government sponsored enterprises

$

69,898

$

231

$

(355)

$

69,774

Obligations of states and political subdivisions

39,343

2,327

-

41,670

Mortgage-backed securities issued or guaranteed by

    U.S. government sponsored enterprises

445,084

17,368

(1,913)

460,539

Private issue collateralized mortgage obligations (CMO)

20,953

10

(2,027)

18,936

        Total debt securities

575,278

19,936

(4,295)

590,919

Equity securities

5,000

-

(584)

4,416

        Total securities available for sale

$

580,278

$

19,936

$

(4,879)

$

595,335

Other securities

Federal Home Loan Bank Stock

$

21,031

$

-

$

-

$

21,031

Federal Reserve Bank Stock

931

-

-

931

        Total other securities

$

21,962

$

-

$

-

$

21,962

Trading account assets

$

2,270

(1) Computed by dividing total shareholders' equity less goodwill and other intangible assets by total assets less goodwill and other intangible assets.

(2) Computed by dividing total shareholders' equity less goodwill and other intangible assets by the number of common shares outstanding.

(Logo:  http://photos.prnewswire.com/prnh/20110505/NE96304LOGO-b )

SOURCE Camden National Corporation



RELATED LINKS

http://www.camdennational.com