Camden National Corporation Reports Second Quarter 2012 Results

Strategic acquisition of 15 branches on track for a fourth quarter closing

31 Jul, 2012, 11:39 ET from Camden National Corporation

CAMDEN, Maine, July 31, 2012 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National" or "Company"), a $2.4 billion bank holding company headquartered in Camden, Maine, reported net income for the second quarter of 2012 of $6.4 million and diluted earnings per share ("EPS") of $0.83. Second quarter 2012 results compare to net income of $6.6 million and EPS of $0.86 for the prior quarter, and net income of $7.1 million and EPS of $0.92 for the second quarter of 2011.  For the second quarter of 2012, the Company achieved a return on assets of 1.10%, a return on tangible equity of 14.33%, a net interest margin of 3.40%, and an efficiency ratio of 56.10%. For the first six months of 2012, the Company achieved a return on assets of 1.12%, a return on tangible equity of 14.71%, a net interest margin of 3.44%, and an efficiency ratio of 55.26%.

Camden National President and Chief Executive Officer Gregory A. Dufour stated, "Camden National continues to report double digit return on equity and solid return on assets despite a challenging economic environment."  Dufour further explained, "The Company's second quarter 2012 results are down slightly from the first quarter of 2012 primarily due to costs incurred with the pending acquisition of 15 branch locations from Bank of America. Other than the $310,000 of acquisition related expenses, net income remained flat between the first and second quarters of 2012. The extended low interest environment continues to negatively impact our net interest margin, which declined to 3.40% during the second quarter of 2012 compared to 3.48% for the prior quarter. Fortunately, our average interest-earning asset growth of $24.8 million during the second quarter of 2012 offset the declining net interest margin, resulting in our net interest income remaining consistent between the two quarters."

"Since our announcement in April of the acquisition of 15 Maine branches from Bank of America, a number of key milestones have been met," reported Dufour. "Regulatory approval has been received and we anticipate closing the transaction during the fourth quarter of 2012. The financial metrics of this transaction continue to be compelling, especially combined with the divestiture of one branch due to antitrust considerations and the sale of a branch building facility. Camden National expects to gain 38,000 customer relationships and approximately $350.0 million in core deposits for an investment of $14.0 million, which is comprised of the deposit premium and real estate and equipment net of the branch divestiture and sale of building. We are excited to embark on expanding our market presence in Maine and we believe this growth is good for our customers, our shareholders, and the people of Maine. Our expanded franchise will offer greater convenience, and the benefits of community banking, to new and existing customers throughout the state."

Second Quarter 2012 Highlights

  • Expansion in Maine market – agreement to acquire 15 branch locations and subsequent divestiture of one branch location expected to result in net new deposits of approximately $350.0 million in the fourth quarter of 2012.
  • Growth in the loan portfolio – increased demand during the second quarter of 2012 resulted in net loan growth of $20.0 million during the period, primarily centered in commercial real estate.
  • Strong core deposit growth – core deposit average balances grew $24.3 million between the second and first quarter of 2012.
  • Declining net interest margin – 8 basis point decline during the second quarter of 2012 compared to the previous quarter.
  • Higher capital levels – total risk-based capital ratio increased to 16.22% at June 30, 2012.
  • Stability of asset quality – non-performing asset levels have been consistent over the last four quarters and total past due loans have trended down since year-end.

Operating Results

Net interest income on a fully-taxable basis totaled $18.6 million for both the second and first quarters of 2012.  Growth in average loans and investments during the second quarter of 2012 of $24.8 million helped offset a decline in the net interest margin of 8 basis points between quarters. The taxable-equivalent net interest income in the second quarter decreased 6% from $19.9 million in the second quarter of 2011, primarily due to $600,000 in non-recurring loan-related fees received during the second quarter of last year, a $9.7 million reduction in average earning assets, and a tightening of our tax equivalent net interest margin of 24 basis points, resulting from the continued low rate environment that has driven asset yields lower.

The provision for credit losses was $835,000 for the second quarter of 2012, down from $1.0 million in the prior quarter and $970,000 for the second quarter of 2011, as a result of lower charge-offs. Net loan charge-offs totaled $574,000 during the second quarter of 2012, compared to $992,000 for the prior quarter and $864,000 for the second quarter of 2011.

Non-interest income for the second quarter of 2012 was $5.8 million, compared to $5.2 million and $5.0 million for the first quarter of 2012 and second quarter of 2011, respectively. The increase in second quarter 2012 non-interest income from the prior quarter was primarily due to an increase in security gains of $630,000. The growth in non-interest income from the second quarter of 2011 was primarily due to increases in security gains of $698,000 and mortgage banking income of $80,000, partially offset by a decline in income from fiduciary services of $150,000 associated with the outsourcing of Acadia Trust's employee benefit plan service business line to a third-party.

Non-interest expense for the second quarter of 2012 was $14.0 million, compared to $12.9 million for the first quarter of 2012 and $13.3 million for the second quarter of 2011. The second quarter of 2012 includes non-recurring expenses of $728,000 for the early extinguishment of borrowings and $308,000 in expenditures related to the Bank of America branch acquisition. Other than these items, non-interest expense totaled $12.9 million for the second quarter, which is flat compared to the previous quarter and a 3% decline from the second quarter of 2011.

Balance Sheet

Total loans (excluding loans held for sale) grew $22.4 million, or 3% on an annualized basis, during the first six months of 2012, to $1.5 billion at June 30, 2012. Commercial real estate loans were up $26.4 million as we experienced an increase in lending demand, and the consumer and home equity portfolios grew $7.1 million as a result of retail promotions. Since year-end, our residential real estate loan portfolio declined $8.6 million, primarily due to sales of thirty-year fixed rate mortgages, and commercial loans declined $2.6 million.

Our investment portfolio totaled $698.3 million at June 30, 2012, an increase of $86.3 million since December 31, 2011. During the second quarter of 2012, we purchased $75.0 million of securities as a pre-investment strategy in anticipation of excess cash resulting from the branch acquisition transaction later in the year.

Total average deposits increased $9.9 million during the second quarter of 2012 compared to the previous quarter.  This increase in average deposits resulted from growth of $24.2 million in demand deposits, interest checking, savings, and money market accounts, partially offset by a decline in retail certificates of deposit average balances of $14.3 million.

Asset Quality

"Our overall credit quality continues to provide us with solid financial footing," said Dufour. "Our total past due loans have declined for three straight quarters and our levels of non-performing assets have remained even over the last four quarters."

Non-performing assets at June 30, 2012, were $29.7 million, or 1.24% of total assets, compared to $29.2 million, or 1.25% of total assets, at March 31, 2012. Annualized net charge-offs for the second quarter of 2012 decreased 11 basis points from the first quarter 2012 to 0.15%.  The allowance for credit losses to total loans increased to 1.52% at June 30, 2012, compared to 1.51% at March 31, 2012.

Dividends and Capital

The board of directors approved a dividend of $0.25 per share, payable on July 31, 2012, to shareholders of record on July 13, 2012. This distribution resulted in an annualized dividend yield of 2.73%, based on the June 29, 2012, closing price of Camden National's common stock of $36.62 per share as reported by NASDAQ.

Camden National's total risk-based capital ratio increased to 16.22% at June 30, 2012, compared to 15.95% at December 31, 2011, as capital levels increased from retained earnings. 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 27, 2011, the board of directors authorized the 2011 Common Stock Repurchase Program ("2011 Plan") for the repurchase of up to 500,000 shares, or approximately 6.5% of the Company's outstanding common stock. Under the 2011 Plan, Camden National has repurchased 78,824 shares of common stock at an average price of $31.53. The 2011 Plan will expire on October 1, 2012.

About Camden National Corporation

Camden National Corporation, recently recognized by Forbes as one of "America's Most Trustworthy Companies," 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 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 including but not limited to, the Dodd-Frank Wall Street Reform & Consumer Protection Act; 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 June 30,

Six Months Ended June 30,

2012

2011

2012

2011

Selected Financial and Per Share Data:

Return on average assets

1.10%

1.22%

1.12%

1.16%

Return on average equity

11.48%

13.29%

11.74%

12.88%

Return on average tangible equity

14.33%

16.90%

14.71%

16.46%

Tangible equity to tangible assets(1)

7.69%

7.56%

7.69%

7.56%

Efficiency ratio(2)

56.10%

53.39%

55.26%

54.31%

Tier 1 leverage capital ratio

9.64%

9.13%

9.64%

9.13%

Tier 1 risk-based capital ratio

14.97%

14.19%

14.97%

14.19%

Total risk-based capital ratio

16.22%

15.45%

16.22%

15.45%

Basic earnings per share

$

0.84

$

0.92

$

1.69

$

1.75

Diluted earnings per share

$

0.83

$

0.92

$

1.69

$

1.75

Cash dividends declared per share

$

0.25

$

0.25

$

0.50

$

0.50

Book value per share

$

29.67

$

28.43

$

29.67

$

28.43

Tangible book value per share (3)

$

23.82

$

22.49

$

23.82

$

22.49

Weighted average number of common shares outstanding

7,675,819

7,677,594

7,673,927

7,668,831

Diluted weighted average number of common shares outstanding

7,687,620

7,687,133

7,686,747

7,679,298

(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 non-interest expense (excluding prepayment penalties) by the sum of net interest income (tax equivalent) and non-interest income (excluding securities gains/losses and OTTI).

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

 

Statement of Condition Data (unaudited)

June 30,

June 30,

December 31,

(In thousands, except number of shares)

2012

2011

2011

Assets

Cash and due from banks

$

40,478

$

29,685

$

39,325

Securities

   Securities available for sale, at fair value

677,262

595,335

590,036

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

21,034

21,962

21,962

      Total securities

698,296

617,297

611,998

Trading account assets

2,184

2,270

2,244

Loans held for sale

-

1,855

6,061

Loans

1,536,464

1,551,456

1,514,028

   Less allowance for loan losses

(23,262)

(22,989)

(23,011)

      Net loans

1,513,202

1,528,467

1,491,017

Goodwill and other intangible assets

44,629

45,533

45,194

Bank-owned life insurance

44,352

43,659

43,672

Premises and equipment, net

23,913

24,294

24,113

Deferred tax asset

8,531

10,496

13,486

Interest receivable

6,530

7,063

6,431

Prepaid FDIC assessment

4,221

5,353

4,796

Other real estate owned

1,697

1,816

1,682

Other assets

15,824

13,226

12,701

      Total assets

$

2,403,857

$

2,331,014

$

2,302,720

Liabilities

Deposits

   Demand

$

271,648

$

238,405

$

256,330

   Interest checking, savings and money market

858,617

774,455

828,977

   Retail certificates of deposit

372,982

428,104

395,431

   Brokered deposits

98,614

104,587

110,628

      Total deposits

1,601,861

1,545,551

1,591,366

Federal Home Loan Bank advances

251,613

157,044

136,860

Other borrowed funds

232,432

341,113

275,656

Junior subordinated debentures

43,768

43,666

43,717

Accrued interest and other liabilities

48,095

25,399

36,245

      Total liabilities

2,177,769

2,112,773

2,083,844

Shareholders' Equity

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

outstanding 7,619,009, 7,677,693, and 7,664,975 shares on June 30, 2012 and

2011 and December 31, 2011, respectively

49,273

51,111

51,438

Retained earnings

174,500

160,297

165,377

Accumulated other comprehensive income

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

12,082

9,787

11,128

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

(8,018)

(1,791)

(7,264)

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

(1,749)

(1,163)

(1,803)

      Total accumulated other comprehensive income

2,315

6,833

2,061

    Total shareholders' equity

226,088

218,241

218,876

    Total liabilities and shareholders' equity

$

2,403,857

$

2,331,014

$

2,302,720

  

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)

2012

2011

2012

2011

Interest income

Interest and fees on loans

$

18,268

$

20,257

$

36,703

$

39,726

Interest on U.S. government and sponsored enterprise obligations

4,118

4,917

8,234

9,802

Interest on state and political subdivision obligations

355

431

720

897

Interest on federal funds sold and other investments

56

40

105

80

     Total interest income

22,797

25,645

45,762

50,505

Interest expense

Interest on deposits

2,390

2,963

4,928

5,978

Interest on borrowings

1,409

2,463

2,827

5,054

Interest on junior subordinated debentures

632

656

1,270

1,351

     Total interest expense

4,431

6,082

9,025

12,383

     Net interest income

18,366

19,563

36,737

38,122

Provision for credit losses

835

970

1,840

2,089

     Net interest income after provision for credit losses

17,531

18,593

34,897

36,033

Non-interest income 

Income from fiduciary services

1,289

1,439

2,728

2,986

Service charges on deposit accounts

1,315

1,352

2,471

2,583

Other service charges and fees

956

943

1,801

1,813

Bank-owned life insurance

342

335

681

874

Brokerage and insurance commissions

410

385

749

743

Mortgage banking income, net

132

52

468

132

Net gain on sale of securities

751

53

901

20

Other income

559

474

1,212

1,000

     Total non-interest income before other-than-temporary 

        impairment of securities

5,754

5,033

11,011

10,151

Other-than-temporary impairment of securities

-

(27)

(29)

(27)

     Total non-interest income 

5,754

5,006

10,982

10,124

Non-interest expenses

Salaries and employee benefits

6,972

7,114

13,880

13,965

Furniture, equipment and data processing

1,295

1,169

2,518

2,369

Net occupancy

1,020

956

2,131

2,016

Consulting and professional fees

608

868

1,098

1,542

Regulatory assessments

432

402

867

1,105

Other real estate owned and collection costs

497

415

1,123

906

Amortization of identifiable intangible assets

145

145

289

289

Other expenses

3,010

2,203

4,992

4,365

     Total non-interest expenses

13,979

13,272

26,898

26,557

     Income before income taxes

9,306

10,327

18,981

19,600

Income taxes

2,894

3,257

5,986

6,191

Net income

$

6,412

$

7,070

$

12,995

$

13,409

  

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

At or for the Three Months Ended

At or for the Three Months Ended

June 30, 2012

June 30, 2011

(In thousands)

Average

Yield/

Average

Yield/

Balance

Interest

Rate

Balance

Interest

Rate

Assets

Interest-earning assets:

   Securities - taxable

$

608,205

$

4,167

2.74%

$

581,221

$

4,951

3.41%

   Securities - nontaxable (1)

38,246

548

5.73%

46,101

663

5.76%

   Trading account assets

2,182

6

1.13%

2,274

6

1.01%

   Loans: (1) (2)

      Residential real estate

571,619

6,906

4.83%

592,803

7,718

5.21%

      Commercial real estate

491,976

6,092

4.90%

465,205

6,731

5.72%

      Commercial

168,476

1,989

4.67%

182,863

2,400

5.19%

      Municipal

14,023

175

5.03%

21,135

242

4.60%

      Consumer

286,594

3,167

4.44%

280,060

3,251

4.66%

   Total loans

1,532,688

18,329

4.77%

1,542,066

20,342

5.25%

Total interest-earning assets

2,181,321

23,050

4.21%

2,171,662

25,962

4.77%

Cash and due from banks

36,332

25,247

Other assets

153,939

155,131

Less allowance for loan losses

(23,298)

(22,941)

Total assets

$

2,348,294

$

2,329,099

Liabilities & Shareholders' Equity

Interest-bearing liabilities:

   Interest checking accounts

$

289,544

81

0.11%

$

247,441

140

0.23%

   Savings accounts

187,551

86

0.18%

166,575

103

0.25%

   Money market accounts

351,181

515

0.59%

332,470

594

0.72%

   Certificates of deposit

377,458

1,257

1.34%

442,879

1,619

1.47%

      Total retail deposits

1,205,734

1,939

0.65%

1,189,365

2,456

0.83%

   Brokered deposits

130,665

451

1.39%

125,811

507

1.62%

   Junior subordinated debentures

43,756

632

5.80%

43,653

656

6.03%

   Borrowings

446,173

1,409

1.27%

503,634

2,463

1.96%

      Total wholesale funding

620,594

2,492

1.62%

673,098

3,626

1.09%

Total interest-bearing liabilities

1,826,328

4,431

0.98%

1,862,463

6,082

1.31%

Demand deposits

264,545

231,630

Other liabilities

32,833

21,614

Shareholders' equity

224,588

213,392

Total liabilities & shareholders' equity

$

2,348,294

$

2,329,099

Net interest income (fully-taxable equivalent)

18,619

19,880

Less: fully-taxable equivalent adjustment

(253)

(317)

   Net interest income

$

18,366

$

19,563

Net interest rate spread (fully-taxable equivalent)

3.23%

3.46%

Net interest margin (fully-taxable equivalent)

3.40%

3.64%

(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)

At or for the Six Months Ended

At or for the Six Months Ended

June 30, 2012

June 30, 2011

(In thousands)

Average

Yield/

Average

Yield/

Balance

Interest

Rate

Balance

Interest

Rate

Assets

Interest-earning assets:

   Securities - taxable

$

588,892

$

8,329

2.83%

$

576,887

$

9,873

3.42%

   Securities - nontaxable (1)

38,863

1,109

5.71%

46,862

1,380

5.89%

   Trading account assets

2,189

10

0.88%

2,260

9

0.82%

   Loans: (1) (2)

      Residential real estate

576,442

14,010

4.86%

595,625

15,356

5.16%

      Commercial real estate

483,639

12,123

4.96%

465,478

12,955

5.54%

      Commercial

168,903

4,028

4.72%

177,412

4,633

5.19%

      Municipal

13,540

347

5.16%

19,202

458

4.81%

      Consumer

284,076

6,316

4.47%

281,229

6,484

4.65%

   Total loans

1,526,600

36,824

4.81%

1,538,946

39,886

5.18%

Total interest-earning assets

2,156,544

46,272

4.28%

2,164,955

51,148

4.72%

Cash and due from banks

36,095

25,580

Other assets

154,375

157,123

Less allowance for loan losses

(23,189)

(22,735)

Total assets

$

2,323,825

$

2,324,923

Liabilities & Shareholders' Equity

Interest-bearing liabilities:

   Interest checking accounts

$

278,144

155

0.11%

$

240,827

278

0.23%

   Savings accounts

184,900

181

0.20%

167,590

206

0.25%

   Money market accounts

353,088

1,056

0.60%

324,516

1,187

0.74%

   Certificates of deposit

384,630

2,598

1.36%

451,345

3,344

1.49%

      Total retail deposits

1,200,762

3,990

0.67%

1,184,278

5,015

0.85%

   Brokered deposits

130,248

938

1.45%

119,043

963

1.63%

   Junior subordinated debentures

43,743

1,270

5.84%

43,641

1,351

6.24%

   Borrowings

433,562

2,827

1.31%

516,427

5,054

1.97%

      Total wholesale funding

607,553

5,035

1.67%

679,111

7,368

2.19%

Total interest-bearing liabilities

1,808,315

9,025

1.00%

1,863,389

12,383

1.34%

Demand deposits

259,360

229,743

Other liabilities

33,638

21,829

Shareholders' equity

222,512

209,962

Total liabilities & shareholders' equity

$

2,323,825

$

2,324,923

Net interest income (fully-taxable equivalent)

37,247

38,765

Less: fully-taxable equivalent adjustment

(510)

(643)

   Net interest income

$

36,737

$

38,122

Net interest rate spread (fully-taxable equivalent)

3.28%

3.38%

Net interest margin (fully-taxable equivalent)

3.44%

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 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, 2012

March 31, 2012

December 31, 2011

September 30, 2011

June 30, 2011

Non-accrual loans:

   Residential real estate

$

10,349

$

9,570

$

9,503

$

9,060

$

8,581

   Commercial real estate

7,362

7,578

7,830

9,596

7,661

   Commercial

4,687

4,253

3,955

4,278

3,809

   Consumer

1,912

2,477

2,822

1,502

1,464

Total non-accrual loans

24,310

23,878

24,110

24,436

21,515

Loans 90 days past due and accruing

562

183

236

-

-

Renegotiated loans not included above

3,177

3,256

3,276

3,310

3,447

Total non-performing loans

28,049

27,317

27,622

27,746

24,962

Other real estate owned:

   Residential real estate

1,045

1,226

791

1,098

989

   Commercial real estate

652

672

891

661

827

Total other real estate owned

1,697

1,898

1,682

1,759

1,816

Total non-performing assets

$

29,746

$

29,215

$

29,304

$

29,505

$

26,778

Loans 30-89 days past due:

   Residential real estate

$

780

$

1,961

$

2,429

$

1,447

$

500

   Commercial real estate

2,122

3,075

2,107

1,149

1,668

   Commercial

762

846

911

1,226

771

   Consumer

310

245

1,793

505

344

Total loans 30-89 days past due

$

3,974

$

6,127

$

7,240

$

4,327

$

3,283

Allowance for loan losses at the beginning of the period

$

23,011

$

23,011

$

22,293

$

22,293

$

22,293

Provision for loan losses

1,817

991

4,741

3,270

2,083

Charge-offs:

   Residential real estate

446

308

1,216

1,036

797

   Commercial real estate

209

179

1,633

946

325

   Commercial

416

191

1,256

1,080

755

   Consumer

879

411

920

355

140

Total charge-offs

1,950

1,089

5,025

3,417

2,017

Total recoveries

384

97

1,002

865

630

Net charge-offs

1,566

992

4,023

2,552

1,387

Allowance for loan losses at the end of the period

$

23,262

$

23,010

$

23,011

$

23,011

$

22,989

Components of allowance for credit losses:

   Allowance for loan losses

$

23,262

$

23,010

$

23,011

$

23,011

$

22,989

   Liability for unfunded credit commitments

43

34

20

26

31

Balance of allowance for credit losses

$

23,305

$

23,044

$

23,031

$

23,037

$

23,020

Ratios:

Non-performing loans to total loans

1.83%

1.79%

1.82%

1.83%

1.61%

Non-performing assets to total assets

1.24%

1.25%

1.27%

1.26%

1.15%

Allowance for credit losses to total loans

1.52%

1.51%

1.52%

1.52%

1.48%

Net charge-offs to average loans (annualized)

   Quarter-to-date

0.15%

0.26%

0.39%

0.30%

0.22%

   Year-to-date

0.21%

0.26%

0.26%

0.22%

0.18%

Allowance for credit losses to non-performing loans

83.09%

84.36%

83.38%

83.03%

92.22%

Loans 30-89 days past due to total loans

0.26%

0.40%

0.48%

0.29%

0.21%

 

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 other-than-temporary impairment charges from non-interest expenses, excludes securities gains and losses from non-interest income, and adds the tax-equivalent adjustment to net interest income. The following table provides a reconciliation of between the GAAP and non-GAAP efficiency ratio:

Reconciliation of non-GAAP to GAAP Financial Measures