Camden National Corporation Reports A 14% Increase In Second Quarter 2015 Net Income

Jul 28, 2015, 16:05 ET from Camden National Corporation

CAMDEN, Maine, July 28, 2015 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National" or the "Company"), a $2.8 billion bank holding company headquartered in Camden, Maine, reported net income for the second quarter of 2015 of $7.2 million and diluted earnings per share ("EPS") of $0.96, representing an increase of 14% and $0.11 per share compared to the same period of 2014 and an increase of 28% and $0.21 per share compared to prior quarter. Net income and diluted EPS for the six months ended June 30, 2015 were $12.8 million and $1.71 per share, respectively, representing an increase of 6% and $0.11 per share compared to the same period of 2014.

The Company reported core operating earnings1 and core diluted EPS1, which excludes the impact of one-time merger and acquisition costs and investment security gains, for the second quarter of 2015 of $7.3 million and $0.97 per share, respectively, representing an increase of 19% and $0.14 per share over the second quarter of 2014 and an increase of 17% and $0.13 per share over prior quarter.

"The strength of Camden National's earnings capacity has been highlighted this year as we've demonstrated our ability to generate significant core earnings while at the same time absorbing the work and costs associated with a merger," said Gregory A. Dufour, president and chief executive officer of the Company. "We've seen strong growth and continued positive momentum across our key financial metrics, including year-to-date core operating earnings of $13.6 million and core diluted EPS of $1.81 per share — up 16% compared to the same period a year ago — an improving efficiency ratio reaching 60.24%, and a higher core return on average equity1 and average assets1 reaching 10.90% and 0.98%, respectively."

Dufour added, "On July 22, 2015, the shareholders of both Camden National and SBM Financial, Inc. approved the merger of Camden National Bank and SBM Financial, Inc.'s wholly-owned subsidiary, The Bank of Maine. I am also pleased to highlight that we recently received regulatory approval of the merger. The companies will operate under the Camden National name and brand, and combined will create Maine's largest community bank, providing customers with distinctive products, services and people across Maine at one of our 64 branches, over 85 ATMs, and through our online and mobile platforms. We will also have three specialized lending locations, as well as brokerage and wealth management services."

1 This is a non-GAAP measure. Please refer to the "Reconciliation of non-GAAP to GAAP Financial Measures" for further details.

Second Quarter 2015 Financial Highlights

  • Core operating earnings increased $1.2 million, or 19%, over the second quarter of 2014 and $1.0 million, or 17%, over the first quarter of 2015.
  • Core diluted EPS increased $0.14 per share, or 17%, over the second quarter of 2014 and $0.13 per share, or 15%, over the first quarter of 2015.
  • Net interest income on a fully-taxable basis increased $1.6 million, or 8%, over the second quarter of 2014 and $1.3 million, or 6%, over the first quarter of 2015.
  • Asset quality continues to improve as non-performing assets to total assets fell 8 basis points since prior quarter and 23 basis points since year-end to 0.59%.
  • Regulatory and shareholder approval received for the merger of SBM Financial, Inc. ("SBM") into Camden National and The Bank of Maine into Camden National Bank.

Balance Sheet

Total assets at June 30, 2015 were $2.8 billion, representing an increase of $48.1 million, or 2%, since year-end. The growth in total assets was driven by an increase in our loan portfolio of $35.8 million and investments portfolio of $19.4 million. At June 30, 2015, loan balances, including loans held for sale, totaled $1.8 billion. The commercial portfolio has increased $24.1 million since year-end, primarily driven by growth in commercial real estate of $19.5 million. The retail portfolio has grown $11.7 million since year-end with home equity loans accounting for $9.3 million of this growth, which was primarily due to a recent marketing promotion.

Total deposits at June 30, 2015 were $2.0 billion, representing an increase of $49.0 million, or 3%, since year-end. Core deposits (demand, interest checking, savings, and money market) have increased $27.5 million since year-end due to the seasonality of deposit flows within our markets during the summer months — highlighted by core deposit growth of $34.8 million in the second quarter of 2015. Brokered deposits increased $28.3 million since year-end.

Second Quarter 2015 Core Operating Results

Core operating earnings for the second quarter of 2015 totaled $7.3 million, representing an increase of $1.2 million, or 19%, compared to the same period of 2014 and an increase of $1.0 million, or 17%, compared to prior quarter. The primary factors driving the increase in core operating earnings were:

  • Net interest income on a fully-taxable basis increased $1.6 million to $21.0 million compared to the second quarter of 2014 and $1.3 million compared to the first quarter of 2015. For each respective period, average interest-earning assets increased $119.6 million and $32.6 million contributing to the increase in net interest income on a fully-taxable basis. Additionally, in the second quarter of 2015, the Company received a full pay-off for one significant commercial real estate loan that was on non-accrual status. The Company recognized $734,000 of interest income in the second quarter of 2015 related to this loan, increasing the second quarter 2015 yield on average interest-earnings assets and net interest margin 11 basis points.
  • Provision for credit losses of $254,000 for the second quarter of 2015 was $389,000 lower than second quarter of 2014 and $192,000 lower than prior quarter. The decrease in the provision is reflective of the resolution of problem loans over recent years with non-accrual loans down 48% compared to a year ago. Net charge-offs to average loans (annualized) for the second quarter of 2015 was 0.07%, representing a 3 basis point improvement over the same period of 2014 and remained flat compared to prior quarter. Loans 30-89 days past due to total loans at June 30, 2015 was 0.19%. This is a decrease of 4 basis points compared to a year ago and a 4 basis points increase compared to prior quarter.
  • Non-interest income, excluding gains on the sale of investment securities, increased $86,000 to $6.3 million compared to the second quarter of 2014 and $163,000 compared to prior quarter. The primary factors attributable to the increases include (i) higher mortgage banking income from the increase in sales of residential mortgages to the secondary market, and (ii) higher life insurance earnings due to the additional $10 million investment made in the third quarter of 2014. Partially offsetting these increases were gains on the sale of loan swaps of $196,000 and $219,000 in the second quarter of 2014 and the first quarter of 2015, respectively, which did not occur in the second quarter of 2015.
  • Non-interest expense, excluding non-recurring costs associated with the merger, increased 2% to $16.0 million compared to the second quarter of 2014 and decreased $37,000 compared to prior quarter. The increase compared to the same quarter of 2014 is primarily the result of (i) an increase in salaries and employee benefits of 2% due to normal merit increases and (ii) an increase in systems and data processing costs of $159,000 driven by internal systems and software upgrades to enhance the functionality and experience for our customers and employees, as well as ATM upgrades at certain locations. The increase was partially offset by lower consulting costs of $109,000.

Dividends and Capital

The board of directors approved a dividend of $0.30 per share, payable on July 31, 2015, to shareholders of record as of July 15, 2015. This distribution represents an annualized dividend yield of 3.10%, based on the June 30, 2015 closing price of Camden National's common stock at $38.70 per share as reported by NASDAQ.

The Company's total risk-based capital ratio, Tier I risk-based capital ratio, common equity Tier I risk-based capital ratio, and Tier I leverage capital ratio was 14.78%, 13.66%, 11.40%, and 9.39%, respectively, at June 30, 2015. Camden National and Camden National Bank exceeded the minimum total, Tier I, and common equity Tier I risk-based capital ratios of 10%, 8%, and 6.5%, respectively, and the minimum Tier I leverage capital ratio of 5% required by the Federal Reserve for an institution to be considered "well capitalized" under Basel III capital requirements.

The Merger of Camden National and SBM Financial, Inc.

As previously announced, on July 22, 2015, Camden National and SBM each held a special shareholder meeting to vote on the planned merger of SBM into Camden National and The Bank of Maine, SBM's wholly-owned subsidiary, into Camden National Bank. The shareholders of both Camden National and SBM approved the merger at the special shareholder meeting. Also, Camden National, Camden National Bank, SBM, and The Bank of Maine all received regulatory approval of the merger. The anticipated closing date for the merger is October 16, 2015.

About Camden National Corporation

Camden National Corporation is the holding company employing more than 480 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 44 banking offices throughout Maine and a commercial loan office in Manchester, New Hampshire. Acadia Trust offers investment management and fiduciary services with offices in Portland, Bangor and Ellsworth. Located at Camden National Bank, Camden Financial Consultants offers full-service brokerage and insurance services. Learn more at www.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, 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 delays in completing the proposed merger, difficulties in achieving cost savings from the proposed merger or in achieving such cost savings within the expected time frame, difficulties in integrating Camden National and SBM, increased competitive pressures, changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the business in which Camden National and SBM are 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, 2014, 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 Financial Measures

In addition to evaluating the Company's results of operations in accordance with accounting principles generally accepted in the United States ("GAAP"), management supplements this evaluation with certain non-GAAP financial measures, such as the efficiency, tangible assets and equity, and core return ratios, core operating earnings, core basic and diluted EPS, tangible book value per share, and tax-equivalent net interest income. 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 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.

Additional Information and Where to Find It

In connection with the proposed merger, Camden National has filed with the SEC a Registration Statement on Form S-4 that includes a Proxy Statement of SBM and Camden National and a Prospectus of Camden National, as well as other relevant documents concerning the proposed merger. Investors and shareholders are urged to read the Registration Statement and the Proxy Statement/Prospectus regarding the proposed merger and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. A free copy of the Registration Statement and Proxy Statement/Prospectus, as well as other filings containing information about Camden National and The Bank of Maine, when they become available, may be obtained at the SEC's Internet site (www.sec.gov). Copies of the Registration Statement and Proxy Statement/Prospectus and the filings incorporated by reference therein may also be obtained, free of charge, from Camden National's website at www.CamdenNational.com or by contacting Camden National Investor Relations at (207) 236-8821 or by contacting SBM Investor Relations at (207) 518-5607.

Selected Financial Data (unaudited)

At or For The

Three Months Ended

At or For The Six Months Ended

In thousands, except number of shares and per share data

June 30,  2015

March 31,  2015

June 30,  2014

June 30,  2015

June 30,  2014

Financial Condition Data

Investments

$

822,991

$

813,565

$

802,644

$

822,991

$

802,644

Loans and loans held for sale

1,808,433

1,791,705

1,696,765

1,808,433

1,696,765

Allowance for loan losses

(21,194)

(21,265)

(21,905)

(21,194)

(21,905)

Total assets

2,837,921

2,811,204

2,691,706

2,837,921

2,691,706

Deposits

1,981,131

1,966,174

1,857,462

1,981,131

1,857,462

Borrowings

564,097

547,600

564,900

564,097

564,900

Shareholders' equity

254,540

251,799

237,720

254,540

237,720

Operating Data

Net interest income

$

20,635

$

19,434

$

19,243

$

40,069

$

37,651

Provision for credit losses

254

446

643

700

1,136

Non-interest income

6,310

6,147

6,509

12,457

12,196

Non-interest expense

16,157

16,801

15,792

32,958

30,917

Income before income taxes

10,534

8,334

9,317

18,868

17,794

Income tax expense

3,341

2,723

3,001

6,064

5,763

Net income

$

7,193

$

5,611

$

6,316

$

12,804

$

12,031

Core operating earnings(1)

$

7,308

$

6,264

$

6,131

$

13,572

$

11,738

Key Ratios

Return on average assets

1.02

%

0.82

%

0.95

%

0.92

%

0.92

%

Core return on average assets(1)

1.04

%

0.91

%

0.92

%

0.98

%

0.90

%

Return on average equity

11.35

%

9.19

%

10.92

%

10.29

%

10.45

%

Core return on average equity(1)

11.53

%

10.25

%

10.60

%

10.90

%

10.19

%

Core return on average tangible equity (non-GAAP)(1)

14.56

%

13.10

%

13.84

%

13.84

%

13.33

%

Tangible equity to tangible assets (non-GAAP)(1)

7.42

%

7.38

%

7.15

%

7.42

%

7.15

%

Efficiency ratio (non-GAAP)(1)

58.60

%

61.97

%

61.49

%

60.24

%

62.07

%

Yield on average interest-earning assets

3.67

%

3.54

%

3.60

%

3.61

%

3.59

%

Average cost of funds

0.48

%

0.49

%

0.50

%

0.48

%

0.51

%

Net interest margin

3.21

%

3.07

%

3.11

%

3.14

%

3.09

%

Non-performing loans to total loans

0.89

%

0.98

%

1.54

%

0.89

%

1.54

%

Non-performing assets to total assets

0.59

%

0.67

%

1.05

%

0.59

%

1.05

%

Annualized charge-offs to average loans

0.07

%

0.07

%

0.10

%

0.07

%

0.10

%

Tier I leverage capital ratio(2)

9.39

%

9.30

%

9.09

%

9.39

%

9.09

%

Common Equity Tier I risk-based capital ratio(2)

11.40

%

11.35

%

11.40

%

Tier I risk-based capital ratio(2)

13.66

%

13.65

%

14.07

%

13.66

%

14.07

%

Total risk-based capital ratio(2)

14.78

%

14.79

%

15.31

%

14.78

%

15.31

%

Per Share Data

Basic earnings per share

$

0.97

$

0.75

$

0.85

$

1.72

$

1.60

Core basic earnings per share(1)

$

0.98

$

0.84

$

0.83

$

1.82

$

1.56

Diluted earnings per share

$

0.96

$

0.75

$

0.85

$

1.71

$

1.60

Core diluted earnings per share(1)

$

0.97

$

0.84

$

0.83

$

1.81

$

1.56

Cash dividends declared per share(1)

$

0.30

$

0.30

$

0.27

$

0.60

$

0.54

Book value per share

$

34.17

$

33.85

$

32.03

$

34.17

$

32.03

Tangible book value per share(1)

$

27.78

$

27.41

$

25.46

$

27.78

$

25.46

Weighted average number of common shares outstanding

7,446,156

7,431,065

7,430,709

7,438,626

7,479,461

Diluted weighted average number of common shares outstanding

7,467,365

7,453,875

7,450,639

7,459,464

7,500,318

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

(2) Starting March 31, 2015 reported regulatory capital ratios reflect Basel III regulatory capital rule and framework.

 

Consolidated Statements of Condition Data

(In thousands, except number of shares)

June 30,

 2015

(unaudited)

December 31,  2014

ASSETS

Cash and due from banks

$

55,495

$

60,813

Securities:

Available-for-sale securities, at fair value

742,356

763,063

Held-to-maturity securities, at amortized cost

60,234

20,179

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

20,401

20,391

Total securities

822,991

803,633

Loans held for sale

1,426

Loans

1,807,007

1,772,610

Less: allowance for loan losses

(21,194)

(21,116)

Net loans

1,785,813

1,751,494

Bank-owned life insurance

58,624

57,800

Goodwill and other intangible assets

47,596

48,171

Premises and equipment, net

23,615

23,886

Deferred tax assets

13,682

14,434

Interest receivable

6,752

6,017

Other real estate owned

651

1,587

Other assets

21,276

22,018

Total assets

$

2,837,921

$

2,789,853

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities

Deposits:

Demand

$

279,146

$

263,013

Interest checking

501,980

480,521

Savings and money market

643,658

653,708

Certificates of deposit

310,301

317,123

Brokered deposits

246,046

217,732

Total deposits

1,981,131

1,932,097

Federal Home Loan Bank advances

56,001

56,039

Other borrowed funds

464,021

476,939

Junior subordinated debentures

44,075

44,024

Accrued interest and other liabilities

38,153

35,645

Total liabilities

2,583,381

2,544,744

Shareholders' Equity

Common stock, no par value; authorized 20,000,000 shares, issued and outstanding 7,449,645 and 7,426,222 shares as of June 30, 2015 and December 31, 2014, respectively

41,919

41,555

Retained earnings

220,309

211,979

Accumulated other comprehensive loss:

Net unrealized losses on available-for-sale securities, net of tax

(181)

(319)

Net unrealized losses on derivative instruments, net of tax

(5,421)

(5,943)

Net unrecognized losses on postretirement plans, net of tax

(2,086)

(2,163)

Total accumulated other comprehensive loss

(7,688)

(8,425)

Total shareholders' equity

254,540

245,109

Total liabilities and shareholders' equity

$

2,837,921

$

2,789,853

 

Consolidated Statements of Income Data (unaudited)

For The

Three Months Ended

June 30,

(In thousands, except per share data)

2015

2014

Interest Income

Interest and fees on loans

$

19,342

$

17,757

Interest on U.S. government and sponsored enterprise obligations

3,717

4,124

Interest on state and political subdivision obligations

493

314

Interest on federal funds sold and other investments

105

89

Total interest income

23,657

22,284

Interest Expense

Interest on deposits

1,544

1,565

Interest on borrowings

847

845

Interest on junior subordinated debentures

631

631

Total interest expense

3,022

3,041

Net interest income

20,635

19,243

Provision for credit losses

254

643

Net interest income after provision for credit losses

20,381

18,600

Non-Interest Income

Service charges on deposit accounts

1,593

1,620

Other service charges and fees

1,584

1,543

Income from fiduciary services

1,328

1,349

Brokerage and insurance commissions

502

459

Bank-owned life insurance

402

292

Mortgage banking income, net

346

70

Net gain on sale of securities

285

Other income

555

891

Total non-interest income

6,310

6,509

Non-Interest Expense

Salaries and employee benefits

8,484

8,301

Furniture, equipment and data processing

1,902

1,743

Net occupancy costs

1,239

1,270

Consulting and professional fees

673

782

Regulatory assessments

511

485

Other real estate owned and collection costs

449

515

Amortization of intangible assets

287

287

Merger and acquisition costs

128

Other expenses

2,484

2,409

Total non-interest expense

16,157

15,792

Income before income taxes

10,534

9,317

Income Taxes

3,341

3,001

Net Income

$

7,193

$

6,316

Per Share Data

Basic earnings per share

$

0.97

$

0.85

Diluted earnings per share

$

0.96

$

0.85

 

Consolidated Statements of Income Data (unaudited)

For The

Six Months Ended June 30,

(In thousands, except per share data)

2015

2014

Interest Income

Interest and fees on loans

$

37,426

$

34,537

Interest on U.S. government and sponsored enterprise obligations

7,589

8,354

Interest on state and political subdivision obligations

880

608

Interest on federal funds sold and other investments

210

176

Total interest income

46,105

43,675

Interest Expense

Interest on deposits

3,073

3,116

Interest on borrowings

1,707

1,652

Interest on junior subordinated debentures

1,256

1,256

Total interest expense

6,036

6,024

Net interest income

40,069

37,651

Provision for credit losses

700

1,136

Net interest income after provision for credit losses

39,369

36,515

Non-Interest Income

Service charges on deposit accounts

3,080

3,089

Other service charges and fees

3,094

2,938

Income from fiduciary services

2,548

2,533

Brokerage and insurance commissions

951

937

Bank-owned life insurance

824

598

Mortgage banking income, net

585

142

Net gain on sale of securities

451

Other income

1,375

1,508

Total non-interest income

12,457

12,196

Non-Interest Expense

Salaries and employee benefits

16,859

16,281

Furniture, equipment and data processing

3,825

3,532

Net occupancy costs

2,711

2,650

Consulting and professional fees

1,264

1,300

Regulatory assessments

1,021

966

Other real estate owned and collection costs

1,011

1,028

Amortization of intangible assets

574

574

Merger and acquisition costs

863

Other expenses

4,830

4,586

Total non-interest expense

32,958

30,917

Income before income taxes

18,868

17,794

Income Taxes

6,064

5,763

Net Income

$

12,804

$

12,031

Per Share Data

Basic earnings per share

$

1.72

$

1.60

Diluted earnings per share

$

1.71

$

1.60

 

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, 2015

June 30, 2014

(In thousands)

Average Balance

Interest

Yield/Rate

Average Balance

Interest

Yield/Rate

Assets

Interest-earning assets:

Securities - taxable

$

739,404

$

3,821

2.07

%

$

777,935

$

4,212

2.17

%

Securities - nontaxable(1)

68,699

759

4.42

%

37,386

484

5.17

%

Loans(2):

Residential real estate

584,740

6,057

4.14

%

566,070

6,017

4.25

%

Commercial real estate(3)

658,727

8,034

4.82

%

591,276

6,816

4.56

%

Commercial

249,807

2,408

3.82

%

214,559

2,045

3.77

%

Municipal(1)

13,929

118

3.41

%

14,724

127

3.45

%

Consumer

295,150

2,870

3.90

%

288,897

2,797

3.88

%

Total loans

1,802,353

19,487

4.30

%

1,675,526

17,802

4.23

%

Total interest-earning assets

2,610,456

24,067

3.67

%

2,490,847

22,498

3.60

%

Cash and due from banks

46,691

42,360

Other assets

179,212

167,883

Less: allowance for loan losses

(21,403)

(21,892)

Total assets

$

2,814,956

$

2,679,198

Liabilities & Shareholders' Equity

Deposits:

Demand

$

257,862

$

$

227,599

$

Interest checking

496,254

102

0.08

%

465,565

80

0.07

%

Savings

270,559

40

0.06

%

245,034

35

0.06

%

Money market

375,194

295

0.32

%

423,687

315

0.30

%

Certificates of deposit

312,186

716

0.92

%

332,686

774

0.93

%

Total deposits

1,712,055

1,153

0.27

%

1,694,571

1,204

0.28

%

Borrowings:

Brokered deposits

250,484

391

0.63

%

144,792

361

1.00

%

Junior subordinated debentures

44,063

631

5.75

%

43,960

631

5.76

%

Other borrowings

517,563

847

0.66

%

535,834

845

0.63

%

Total borrowings

812,110

1,869

0.92

%

724,586

1,837

1.02

%

Total funding liabilities

2,524,165

3,022

0.48

%

2,419,157

3,041

0.50

%

Other liabilities

36,536

28,092

Shareholders' equity

254,255

231,949

Total liabilities & shareholders' equity

$

2,814,956

$

2,679,198

Net interest income (fully-taxable equivalent)

21,045

19,457

Less: fully-taxable equivalent adjustment

(410)

(214)

Net interest income

$

20,635

$

19,243

Net interest rate spread (fully-taxable equivalent)

3.19

%

3.10

%

Net interest margin (fully-taxable equivalent)

3.21

%

3.11

%

(1) Reported on tax-equivalent basis calculated using a tax rate of 35.0%, including certain commercial loans.

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

(3) Includes $734,000 of income recognized in the second quarter of 2015 upon payoff of one loan that was on non-accrual status.

 

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, 2015

June 30, 2014

(In thousands)

Average Balance

Interest

Yield/Rate

Average Balance

Interest

Yield/Rate

Assets

Interest-earning assets:

Securities - taxable

$

742,444

$

7,799

2.10

%

$

785,772

$

8,530

2.17

%

Securities - nontaxable(1)

59,947

1,354

4.52

%

35,060

935

5.33

%

Loans(2):

Residential real estate

585,158

12,068

4.12

%

567,132

11,981

4.23

%

Commercial real estate(3)

655,765

14,992

4.55

%

572,478

13,098

4.55

%

Commercial

246,456

4,773

3.85

%

192,475

3,736

3.86

%

Municipal(1)

12,250

219

3.60

%

12,822

240

3.78

%

Consumer

292,241

5,656

3.90

%

288,812

5,566

3.89

%

Total loans

1,791,870

37,708

4.20

%

1,633,719

34,621

4.23

%

Total interest-earning assets

2,594,261

46,861

3.61

%

2,454,551

44,086

3.59

%

Cash and due from banks

46,832

41,933

Other assets

180,062

168,065

Less: allowance for loan losses

(21,316)

(21,749)

Total assets

$

2,799,839

$

2,642,800

Liabilities & Shareholders' Equity

Deposits:

Demand

$

257,513

$

$

227,513

$

Interest checking

488,460

187

0.08

%

463,566

158

0.07

%

Savings

268,308

78

0.06

%

244,749

68

0.06

%

Money market

382,839

586

0.31

%

422,652

621

0.30

%

Certificates of deposit

312,848

1,437

0.93

%

335,433

1,576

0.95

%

Total deposits

1,709,968

2,288

0.27

%

1,693,913

2,423

0.29

%

Borrowings:

Brokered deposits

238,128

785

0.66

%

124,134

693

1.13

%

Junior subordinated debentures

44,050

1,256

5.75

%

43,948

1,256

5.76

%

Other borrowings

519,823

1,707

0.66

%

520,016

1,652

0.64

%

Total borrowings

802,001

3,748

0.94

%

688,098

3,601

1.06

%

Total funding liabilities

2,511,969

6,036

0.48

%

2,382,011

6,024

0.51

%

Other liabilities

36,859

28,546

Shareholders' equity

251,011

232,243

Total liabilities & shareholders' equity

$

2,799,839

$

2,642,800

Net interest income (fully-taxable equivalent)

40,825

38,062

Less: fully-taxable equivalent adjustment

(756)

(411)

Net interest income

$

40,069

$

37,651

Net interest rate spread (fully-taxable equivalent)

3.13

%

3.08

%

Net interest margin (fully-taxable equivalent)

3.14

%

3.09

%

(1) Reported on tax-equivalent basis calculated using a tax rate of 35.0%, including certain commercial loans.

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

(3) Includes $734,000 of income recognized in the second quarter of 2015 upon payoff of one loan that was on non-accrual status.

 

Asset Quality Data (unaudited)

 

(In thousands)

At or For The Six Months Ended June 30, 2015

At or For The Three Months Ended March 31, 2015

At or For The Twelve Months Ended December 31, 2014

At or For The Nine Months Ended September 30, 2014

At or For The Six Months Ended June 30, 2014

Non-accrual loans:

Residential real estate

$

4,498

$

5,630

$

6,056

$

7,098

$

7,887

Commercial real estate

2,813

4,083

7,043

5,707

6,282

Commercial

1,425

1,442

1,529

3,051

3,840

Consumer

1,957

1,942

2,011

2,169

2,575

Total non-accrual loans

10,693

13,097

16,639

18,025

20,584

Loans 90 days past due and accruing

109

Renegotiated loans not included above

5,313

4,433

4,539

5,198

5,379

Total non-performing loans

16,006

17,530

21,178

23,223

26,072

Other real estate owned:

Residential real estate

300

533

575

554

912

Commercial real estate

351

848

1,012

1,012

1,305

Total other real estate owned

651

1,381

1,587

1,566

2,217

Total non-performing assets

$

16,657

$

18,911

$

22,765

$

24,789

$

28,289

Loans 30-89 days past due:

Residential real estate

$

1,287

$

798

$

1,303

$

880

$

1,800

Commercial real estate

586

959

381

1,675

1,151

Commercial

718

144

656

2,027

466

Consumer

897

707

891

2,015

569

Total loans 30-89 days past due

$

3,488

$

2,608

$

3,231

$

6,597

$

3,986

Allowance for loan losses at the beginning of the period

$

21,116

$

21,116

$

21,590

$

21,590

$

21,590

Provision for loan losses

691

440

2,224

1,675

1,141

Charge-offs:

Residential real estate

292

113

785

370

361

Commercial real estate

103

55

361

276

176

Commercial

243

159

1,544

1,201

526

Consumer

260

97

754

371

146

Total charge-offs

898

424

3,444

2,218

1,209

Total recoveries

285

133

746

538

383

Net charge-offs

613

291

2,698

1,680

826

Allowance for loan losses at the end of the period

$

21,194

$

21,265

$

21,116

$

21,585

$

21,905

Components of allowance for credit losses:

Allowance for loan losses

$

21,194

$

21,265

$

21,116

$

21,585

$

21,905

Liability for unfunded credit commitments

26

23

17

21

16

Balance of allowance for credit losses

$

21,220

$

21,288

$

21,133

$

21,606

$

21,921

Ratios:

Non-performing loans to total loans

0.89

%

0.98

%

1.19

%

1.35

%

1.54

%

Non-performing assets to total assets

0.59

%

0.67

%

0.82

%

0.90

%

1.05

%

Allowance for loan losses to total loans

1.17

%

1.19

%

1.19

%

1.25

%

1.29

%

Net charge-offs to average loans (annualized):

Quarter-to-date

0.07

%

0.07

%

0.23

%

0.20

%

0.10

%

Year-to-date

0.07

%

0.07

%

0.16

%

0.13

%

0.10

%

Allowance for loan losses to non-performing loans

132.41

%

121.30

%

99.70

%

92.95

%

84.02

%

Loans 30-89 days past due to total loans

0.19

%

0.15

%

0.18

%

0.38

%

0.23

%

 

Reconciliation of non-GAAP to GAAP Financial Measures

Efficiency Ratio:

For the

Three Months Ended

For the

Six Months Ended

(In thousands)

June 30,  2015

March 31,  2015

June 30,  2014

June 30,  2015

June 30,  2014

Non-interest expense, as presented

$

16,157

$

16,801

$

15,792

$

32,958

$

30,917

Less: merger and acquisition costs

128

735

863

Adjusted non-interest expense

$

16,029

$

16,066

$

15,792

$

32,095

$

30,917

Net interest income, as presented

$

20,635

$

19,434

$

19,243

$

40,069

$

37,651

Add: effect of tax-exempt income(1)

410

346

214

756

411

Non-interest income, as presented

6,310

6,147

6,509

12,457

12,196

Less: net gain on sale of securities

285

451

Adjusted net interest income plus non-interest income

$

27,355

$

25,927

$

25,681

$

53,282

$

49,807

Non-GAAP efficiency ratio

58.60

%

61.97

%

61.49

%

60.24

%

62.07

%

GAAP efficiency ratio

59.96

%

65.68

%

61.32

%

62.75

%

62.02

%

(1) Assumed 35.0% tax rate.

 

Tax-Equivalent Net Interest Income:

For the

Three Months Ended

For the

Six Months Ended

(In thousands)

June 30,  2015

March 31,  2015

June 30,  2014

June 30,  2015

June 30,  2014

Net interest income, as presented

$

20,635

$

19,434

$

19,243

$

40,069

$

37,651

Add: effect of tax-exempt income(1)

410

346

214

756

411

Net interest income, tax equivalent

$

21,045

$

19,780

$

19,457

$

40,825

$

38,062

(1) Assumed 35.0% tax rate.

 

Tangible Book Value Per Share and Tangible Equity to Tangible Assets:

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

Tangible Book Value Per Share:

June 30, 2015

March 31, 2015

June 30, 2014

Shareholders' equity, as presented

$

254,540

$

251,799

$

237,720

Less: goodwill and other intangible assets

47,596

47,884

48,745

Tangible equity

$

206,944

$

203,915

$

188,975

Shares outstanding at period end

7,449,645

7,438,929

7,421,445

Tangible book value per share

$

27.78

$

27.41

$

25.46

Book value per share

$

34.17

$

33.85

$

32.03

Tangible Equity to Tangible Assets:

Total assets

$

2,837,921

$

2,811,204

$

2,691,706

Less: goodwill and other intangibles

47,596

47,884

48,745

Tangible assets

$

2,790,325

$

2,763,320

$

2,642,961

Tangible equity to tangible assets

7.42

%

7.38

%

7.15

%

Shareholders' equity to total assets

8.97

%

8.96

%

8.83

%

 

Core Operating Earnings, Core Basic and Diluted EPS, Core Return on Average Assets, and Core Return on Average Equity:

For the

Three Months Ended

For the

Six Months Ended

(In thousands, except per share data)

June 30, 2015

March 31, 2015

June 30, 2014

June 30, 2015

June 30, 2014

Core Operating Earnings:

Net income, as presented

$

7,193

$

5,611

$

6,316

$

12,804

$

12,031

Merger and acquisition costs, net of tax(1)

115

653

768

Gains on sale of securities, net of tax(2)

(185)

(293)

Core operating earnings

$

7,308

$

6,264

$

6,131

$

13,572

$

11,738

Core Basic EPS:

Basic EPS, as presented

$

0.97

$

0.75

$

0.85

$

1.72

$

1.60

Non-core transactions impact

0.01

0.09

(0.02)

0.10

(0.04)

Core basic EPS

$

0.98

$

0.84

$

0.83

$

1.82

$

1.56

Core Diluted EPS:

Diluted EPS, as presented

$

0.96

$

0.75

$

0.85

$

1.71

$

1.60

Non-core transactions impact

0.01

0.09

(0.02)

0.10

(0.04)

Core diluted EPS

$

0.97

$

0.84

$

0.83

$

1.81

$

1.56

Core Return on Average Assets:

Return on average assets, as presented

1.02

%

0.82

%

0.95

%

0.92

%

0.92

%

Non-core transactions impact

0.02

%

0.09

%

(0.03)

%

0.06

%

(0.02)

%

Core return on average assets

1.04

%

0.91

%

0.92

%

0.98

%

0.90

%

Core Return on Average Equity:

Return on average equity, as presented

11.35

%

9.19

%

10.92

%

10.29

%

10.45

%

Non-core transactions impact

0.18

%

1.06

%

(0.32)

%

0.61

%

(0.26)

%

Core return on average equity

11.53

%

10.25

%

10.60

%

10.90

%

10.19

%

(1) Assumed 35.0% tax rate for deductible expenses.

(2) Assumed 35.0% tax rate.

 

Core Return on Average Tangible Equity:

For the

Three Months Ended

For the

Six Months Ended

(In thousands)

June 30,  2015

March 31,  2015

June 30,  2014

June 30,  2015

June 30,  2014

Net income, as presented

$

7,193

$

5,611

$

6,316

$

12,804

$

12,031

Amortization of intangible assets, net of tax(1)

187

187

187

373

373

Merger and acquisition costs, net of tax(2)

115

653

768

Gains on sale of securities, net of tax(1)

(185)

(293)

Core tangible operating earnings

$

7,495

$

6,451

$

6,318

$

13,945

$

12,111

Average equity

$

254,255

$

247,732

$

231,949

$

251,011

$

232,243

Less: average goodwill and other intangible assets

47,733

48,017

48,880

47,875

49,023

Average tangible equity

$

206,522

$

199,715

$

183,069

$

203,136

$

183,220

Core return on average tangible equity

14.56

%

13.10

%

13.84

%

13.84

%

13.33

%

Return on average equity

11.35

%

9.19

%

10.92

%

10.29

%

10.45

%

(1) Assumed 35.0% tax rate.

(2) Assumed 35.0% tax rate for deductible expenses.

 

 

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SOURCE Camden National Corporation



RELATED LINKS

http://www.camdennational.com