Camden National Corporation Reports an 8% Increase in Second Quarter 2019 Earnings
Second Quarter 2019 Net Income of $13.2 Million and Diluted Earnings Per Share of $0.85
CAMDEN, Maine, July 30, 2019 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National" or the "Company"), a $4.4 billion bank holding company headquartered in Camden, Maine, reported net income for the second quarter of 2019 of $13.2 million, an increase of 8% over the second quarter of 2018, and diluted earnings per share ("EPS") of $0.85, an increase of 9% over the same period. For the second quarter of 2019, the Company's return on average assets was 1.21% and return on average equity was 11.63%.
"We continue to deliver very strong financial performance, highlighted by 10% growth in net income and diluted EPS for the first half of 2019 over the same period last year," said Gregory A. Dufour, President and Chief Executive Officer of the Company. "Over the past 12 months, loans grew 8% and core deposits1 increased 14%, while our net interest margin for the first half of 2019 expanded 4 basis points to 3.14%, compared to the first six months last year."
For the second quarter of 2019, Camden National declared a $0.30 dividend per share, representing an annualized dividend yield of 2.62% as of June 28, 2019 (the last business day of the second quarter).
During the first half of 2019, the Company repurchased 166,778 shares of its common stock at a weighted-average price per share of $42.62.
SECOND QUARTER 2019 FINANCIAL HIGHLIGHTS
- Net income increased 8% over the second quarter of 2018 and diluted EPS increased 9% over the same period, while net income and diluted EPS both decreased 7% compared to the previous quarter
- Average loans grew 9% over the second quarter of 2018 and 1% over the previous quarter
- Average deposits grew 15% over the second quarter of 2018 and 3% over the previous quarter
- Net interest margin on a fully-taxable basis of 3.11% increased 1 basis point over the second quarter of 2018 and decreased 7 basis points compared to the previous quarter
- Repurchased 111,221 shares of Camden National common stock in the second quarter of 2019 at a weighted-average price per share of $43.18
FINANCIAL CONDITION
Total assets increased 3% since December 31, 2018 to $4.4 billion at June 30, 2019, which includes loan growth of $74.1 million, or 2%, during the first half of 2019.
- The residential real estate loan portfolio grew $42.9 million, or 4%, with 57% of mortgage originations held in the portfolio, and the commercial loan portfolio grew $41.3 million, or 10%, over this same period.
- The commercial real estate loan portfolio decreased 1% during the first half of 2019, despite very strong commercial real estate loan production, due to elevated loan prepayments. Consumer and home equity loans decreased less than 1% over this same period.
Total deposits increased 4% since December 31, 2018 to $3.6 billion at June 30, 2019. Strong deposit growth in the first half of 2019 drove a 9% decrease in total borrowings and improved the Company's loan-to-deposit ratio to 86% at June 30, 2019, compared to 87% at December 31, 2018.
- In the first half of 2019, core deposits grew 1% and certificates of deposits ("CDs") grew 23%. In the second quarter of 2019, one large depositor shifted $70.0 million of funding from interest checking to CDs. Adjusted for this shift of funding between deposit accounts, core deposits grew 4% and CDs grew 8% over the first half of 2019.
The Company's capital position at June 30, 2019 was well in excess of regulatory requirements, including a total risk-based capital ratio of 14.12% and a Tier I leverage ratio of 9.51%. At June 30, 2019, the Company's common equity ratio was 10.52% and tangible common equity ratio2 was 8.49%.
ASSET QUALITY
At June 30, 2019, the Company's strong asset quality trend continued from prior periods.
- At June 30, 2019, the allowance for loan losses was 0.84% of total loans, compared to 0.83% at March 31, 2019 and June 30, 2018.
- Non-performing assets to total assets at June 30, 2019, was 0.34%, compared to 0.33% at March 31, 2019 and 0.48% at June 30, 2018.
- Loans past due 30-89 days to total loans at June 30, 2019, were 0.27%, compared to 0.26% at March 31, 2019 and 0.20% at June 30, 2018.
- Annualized net charge-offs to average loans for the three and six months ended June 30, 2019 were 0.03%, compared to 0.04% and 0.07% for three and six months ended June 30, 2018.
OPERATING RESULTS (Second Quarter 2019 vs. Second Quarter 2018)
Net income for the second quarter of 2019 was $13.2 million, representing an increase of $987,000, or 8%, over the second quarter of 2018. The increase was driven by revenue3 growth of $2.6 million, or 7%, net of an increase in non-interest expense of $1.1 million, or 5%.
Net interest income for the second quarter of 2019 was $31.6 million, an increase of $2.1 million, or 7%, over the same period last year.
- Average loans for the second quarter of 2019 grew $252.2 million, or 9%, and average core deposits grew $359.6 million, or 16%, over the second quarter of 2018.
- Net interest margin on a fully-taxable basis increased 1 basis point to 3.11% for the second quarter of 2019 compared to the second quarter of 2018.
Non-interest income increased $536,000, or 6%, to $10.0 million for the second quarter of 2019 over the second quarter of 2018. Most fee income categories increased between categories, including debit card income, services charges on deposit accounts, mortgage banking income, income from fiduciary services and customer loan swap fees.
Non-interest expense increased 5% to $24.0 million for the second quarter of 2019 over the second quarter of 2018.
- Compensation-related costs increased 6%, data processing costs increased 7% and other real estate and collection costs increased $158,000 between periods.
- The Company's efficiency ratio calculated in accordance with generally accepted accounting principles ("GAAP") for the second quarter of 2019 was 57.58%, compared to 58.73% for the second quarter of 2018. The Company's non-GAAP efficiency ratio2 for the second quarter of 2019 was 57.27%, compared to 58.39% for the same period last year.
The provision for credit losses for the second quarter of 2019 was $1.2 million, or 15 basis points of average loans on an annualized basis, an increase of $190,000 over the second quarter of 2018.
OPERATING RESULTS (Linked Quarter)
Net income for the second quarter of 2019 decreased $1.1 million, or 7%, compared to the first quarter of 2019. The decrease in net income between periods was primarily driven by the increase in non-interest expense of $1.2 million, or 5%.
- Other real estate and collection costs increased $716,000 between periods driven by one matter that resulted in additional expense of $360,000 in the second quarter of 2019 and the favorable resolution of a matter in the first quarter of 2019 that led to a $378,000 reimbursement of costs.
- Compensation-related costs increased 4% between periods primarily driven by a full quarter of merit increases that are granted annually in the first quarter.
The provision for credit losses for the second quarter of 2019 increased $429,000 over the last quarter, primarily due to loan growth during the second quarter of 2019 of $57.9 million.
Net interest income for the second quarter of 2019 decreased $322,000, or 1%, compared to last quarter. Average loan and deposit growth for the second quarter of 2019 of 1% and 3%, respectively, over last quarter was offset by an increase in funding costs of 6 basis points and a lower asset yield of 2 basis points over the same period. Net interest margin on a fully-taxable equivalent basis between periods decreased 7 basis points to 3.11% for the second quarter of 2019.
Non-interest income for the second quarter of 2019 increased $648,000, or 7%, over the last quarter. Most fee income categories increased over last quarter, reflective of the seasonality within our markets.
CONFERENCE CALL
Camden National will host a conference call and webcast at 3:00 p.m., Eastern Time, on Tuesday, July 30, 2019 to discuss its second quarter 2019 financial results and outlook. Participants should dial in to the call 10 - 15 minutes before it begins. Information about the conference call is as follows:
Live dial-in (domestic): (888) 349-0139
Live dial-in (international): (412) 542-4154
Live webcast: https://services.choruscall.com/links/cac190730.html
A link to the live webcast will be available on Camden National's website under "Investor Relations" at www.CamdenNational.com prior to the meeting, and a replay of the webcast will be available on Camden National's website following the conference call. The transcript of the conference call will also be available on Camden National's website approximately two days after the conference call.
ABOUT CAMDEN NATIONAL CORPORATION
Camden National Corporation (NASDAQ:CAC), headquartered in Camden, Maine, is the largest publicly traded bank holding company in Northern New England with $4.4 billion in assets and nearly 650 employees. Camden National Bank, its subsidiary, is a full-service community bank founded in 1875 that offers an array of consumer and business financial products and services, accompanied by the latest in digital banking technology to empower customers to bank the way they want. The Bank provides personalized service through a network of 60 banking centers, 71 ATMs, and lending offices in New Hampshire and Massachusetts, all complemented by 24/7 live phone support. Camden National Bank has received nine "Lender at Work for Maine" Awards from the Finance Authority of Maine and Greenwich Associates named the bank a Customer Experience Leader in U.S. Retail Banking. Comprehensive wealth management, investment, and financial planning services are delivered by Camden National Wealth Management. To learn more, visit 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, as amended, including certain plans, expectations, goals, projections and other statements, which are subject to numerous risks, assumptions and uncertainties. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures; changes in the interest rate environment; changes in general economic conditions; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; legislative and regulatory changes that adversely affect the business in which Camden National is engaged; changes in the securities markets and other risks and uncertainties disclosed from time to time in in Camden National's Annual Report on Form 10-K for the year ended December 31, 2018, as updated by other filings with the Securities and Exchange Commission ("SEC"). Camden National does not have any obligation to update forward-looking statements.
USE OF NON-GAAP MEASURES
In addition to evaluating the Company's results of operations in accordance with generally accepted accounting principles in the United States ("GAAP"), management supplements this evaluation with certain non-GAAP financial measures, such as return on average tangible equity; the efficiency and tangible common equity ratios; and tangible book value per share. Management utilizes these non-GAAP financial measures for purposes of measuring our performance against our peer group and other financial institutions and analyzing our internal performance. We also believe these non-GAAP financial measures help investors better understand the Company's operating performance and trends and allow for better performance comparisons to other financial institutions. In addition, these non-GAAP financial measures remove the impact of unusual items that may obscure trends in the Company's underlying performance. These disclosures should not be viewed as a substitute for GAAP operating results, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other financial institutions. Reconciliation to the comparable GAAP financial measure can be found in this document.
ANNUALIZED DATA
Certain returns, yields and performance ratios are presented on an "annualized" basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full-year or year-over-year amounts. Annualized data may not be indicative of any four-quarter period, and are presented for illustrative purposes only.
_______________________________________________________________
1 | Core deposits include non-interest checking, interest checking, savings and money market deposits. |
2 | This is a non-GAAP measure. Please refer to "Reconciliation of non-GAAP to GAAP Financial Measures" for |
3 | Revenue is the sum of net interest income and non-interest income. |
Selected Financial Data (unaudited) | ||||||||||||||||||||
At or For The Three Months Ended | At or For The | |||||||||||||||||||
(In thousands, except number of shares and per share | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
Financial Condition Data | ||||||||||||||||||||
Investments | $ | 933,100 | $ | 936,859 | $ | 916,977 | $ | 933,100 | $ | 916,977 | ||||||||||
Loans and loans held for sale | 3,113,437 | 3,051,237 | 2,880,185 | 3,113,437 | 2,880,185 | |||||||||||||||
Allowance for loan losses | 26,163 | 25,201 | 23,668 | 26,163 | 23,668 | |||||||||||||||
Total assets | 4,447,038 | 4,421,189 | 4,192,662 | 4,447,038 | 4,192,662 | |||||||||||||||
Deposits | 3,591,610 | 3,578,197 | 3,056,119 | 3,591,610 | 3,056,119 | |||||||||||||||
Borrowings | 310,638 | 325,159 | 661,393 | 310,638 | 661,393 | |||||||||||||||
Shareholders' equity | 467,759 | 453,718 | 408,819 | 467,759 | 408,819 | |||||||||||||||
Operating Data | ||||||||||||||||||||
Net interest income | $ | 31,573 | $ | 31,895 | $ | 29,481 | $ | 63,468 | $ | 58,383 | ||||||||||
Provision for credit losses | 1,173 | 744 | 983 | 1,917 | 486 | |||||||||||||||
Non-interest income | 10,037 | 9,389 | 9,501 | 19,426 | 18,305 | |||||||||||||||
Non-interest expense | 23,958 | 22,783 | 22,895 | 46,741 | 45,199 | |||||||||||||||
Income before income tax expense | 16,479 | 17,757 | 15,104 | 34,236 | 31,003 | |||||||||||||||
Income tax expense | 3,275 | 3,484 | 2,887 | 6,759 | 5,966 | |||||||||||||||
Net income | $ | 13,204 | $ | 14,273 | $ | 12,217 | $ | 27,477 | $ | 25,037 | ||||||||||
Key Ratios | ||||||||||||||||||||
Return on average assets | 1.21 | % | 1.33 | % | 1.19 | % | 1.27 | % | 1.24 | % | ||||||||||
Return on average equity | 11.63 | % | 13.13 | % | 12.10 | % | 12.36 | % | 12.50 | % | ||||||||||
GAAP efficiency ratio | 57.58 | % | 55.19 | % | 58.73 | % | 56.39 | % | 58.94 | % | ||||||||||
Common equity ratio | 10.52 | % | 10.26 | % | 9.75 | % | 10.52 | % | 9.75 | % | ||||||||||
Net interest margin (fully-taxable equivalent) | 3.11 | % | 3.18 | % | 3.10 | % | 3.14 | % | 3.10 | % | ||||||||||
Non-performing assets to total assets | 0.34 | % | 0.33 | % | 0.48 | % | 0.34 | % | 0.48 | % | ||||||||||
Tier I leverage capital ratio | 9.51 | % | 9.47 | % | 9.30 | % | 9.51 | % | 9.30 | % | ||||||||||
Total risk-based capital ratio | 14.12 | % | 14.46 | % | 14.33 | % | 14.12 | % | 14.33 | % | ||||||||||
Per Share Data | ||||||||||||||||||||
Basic earnings per share | $ | 0.85 | $ | 0.91 | $ | 0.78 | $ | 1.76 | $ | 1.60 | ||||||||||
Diluted earnings per share | $ | 0.85 | $ | 0.91 | $ | 0.78 | $ | 1.76 | $ | 1.60 | ||||||||||
Cash dividends declared per share | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.60 | $ | 0.55 | ||||||||||
Book value per share | $ | 30.26 | $ | 29.16 | $ | 26.25 | $ | 30.26 | $ | 26.25 | ||||||||||
Non-GAAP Measures(1) | ||||||||||||||||||||
Return on average tangible equity | 15.00 | % | 17.08 | % | 16.23 | % | 16.01 | % | 16.78 | % | ||||||||||
Efficiency ratio | 57.27 | % | 54.86 | % | 58.39 | % | 56.07 | % | 58.57 | % | ||||||||||
Tangible common equity ratio | 8.49 | % | 8.21 | % | 7.56 | % | 8.49 | % | 7.56 | % | ||||||||||
Tangible book value per share | $ | 23.88 | $ | 22.81 | $ | 19.87 | $ | 23.88 | $ | 19.87 | ||||||||||
(1) Please see "Reconciliation of non-GAAP to GAAP Financial Measures (unaudited)." | ||||||||||||||||||||
Consolidated Statements of Condition Data (unaudited) | ||||||||||||
(In thousands, except number of shares) | June 30, | December 31, | June 30, | |||||||||
ASSETS | ||||||||||||
Cash and due from banks | $ | 48,153 | $ | 52,240 | $ | 49,542 | ||||||
Interest-bearing deposits in other banks (including restricted cash) | 38,083 | 14,759 | 67,604 | |||||||||
Total cash, cash equivalents and restricted cash | 86,236 | 66,999 | 117,146 | |||||||||
Investments: | ||||||||||||
Available-for-sale securities, at fair value (book value of $915,099, $933,399 and | 920,083 | 910,692 | 889,325 | |||||||||
Held-to-maturity securities, at amortized cost (fair value of $1,335, $1,291 and $1,276, | 1,304 | 1,307 | 1,310 | |||||||||
Other investments | 11,713 | 14,679 | 26,342 | |||||||||
Total investments | 933,100 | 926,678 | 916,977 | |||||||||
Loans held for sale, at fair value (book value of $13,088, $4,314 and $12,587, | 13,113 | 4,403 | 12,656 | |||||||||
Loans: | ||||||||||||
Commercial real estate | 1,260,639 | 1,269,533 | 1,190,052 | |||||||||
Residential real estate | 1,035,792 | 992,866 | 907,910 | |||||||||
Commercial(1) | 456,692 | 415,436 | 426,390 | |||||||||
Consumer and home equity | 347,201 | 348,387 | 343,177 | |||||||||
Total loans | 3,100,324 | 3,026,222 | 2,867,529 | |||||||||
Less: allowance for loan losses | (26,163) | (24,712) | (23,668) | |||||||||
Net loans | 3,074,161 | 3,001,510 | 2,843,861 | |||||||||
Goodwill | 94,697 | 94,697 | 94,697 | |||||||||
Other intangible assets | 3,877 | 4,230 | 4,592 | |||||||||
Bank-owned life insurance | 91,116 | 89,919 | 88,706 | |||||||||
Premises and equipment, net | 41,402 | 42,495 | 41,017 | |||||||||
Deferred tax assets | 16,836 | 23,053 | 25,813 | |||||||||
Other assets | 92,500 | 43,451 | 47,197 | |||||||||
Total assets | $ | 4,447,038 | $ | 4,297,435 | $ | 4,192,662 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
Liabilities | ||||||||||||
Deposits: | ||||||||||||
Non-interest checking | $ | 505,355 | $ | 496,729 | $ | 496,368 | ||||||
Interest checking | 1,111,424 | 1,023,373 | 879,668 | |||||||||
Savings and money market | 1,074,094 | 1,137,356 | 990,408 | |||||||||
Certificates of deposit | 547,786 | 443,912 | 472,215 | |||||||||
Brokered deposits | 352,951 | 363,104 | 217,460 | |||||||||
Total deposits | 3,591,610 | 3,464,474 | 3,056,119 | |||||||||
Short-term borrowings | 241,647 | 270,868 | 591,648 | |||||||||
Long-term borrowings | 10,000 | 11,580 | 10,756 | |||||||||
Subordinated debentures | 58,991 | 59,067 | 58,989 | |||||||||
Accrued interest and other liabilities | 77,031 | 55,621 | 66,331 | |||||||||
Total liabilities | 3,979,279 | 3,861,610 | 3,783,843 | |||||||||
Shareholders' equity | 467,759 | 435,825 | 408,819 | |||||||||
Total liabilities and shareholders' equity | $ | 4,447,038 | $ | 4,297,435 | $ | 4,192,662 | ||||||
(1) Includes the HPFC loan portfolio. |
Consolidated Statements of Income Data (unaudited) | ||||||||||||
For The Three Months Ended | ||||||||||||
(In thousands, except per share data) | June 30, | March 31, 2019 | June 30, 2018 | |||||||||
Interest Income | ||||||||||||
Interest and fees on loans | $ | 36,092 | $ | 35,721 | $ | 31,367 | ||||||
Taxable interest on investments | 4,941 | 4,994 | 4,386 | |||||||||
Nontaxable interest on investments | 624 | 644 | 658 | |||||||||
Dividend income | 174 | 230 | 343 | |||||||||
Other interest income | 606 | 420 | 335 | |||||||||
Total interest income | 42,437 | 42,009 | 37,089 | |||||||||
Interest Expense | ||||||||||||
Interest on deposits | 9,156 | 8,423 | 4,459 | |||||||||
Interest on borrowings | 885 | 974 | 2,298 | |||||||||
Interest on subordinated debentures | 823 | 717 | 851 | |||||||||
Total interest expense | 10,864 | 10,114 | 7,608 | |||||||||
Net interest income | 31,573 | 31,895 | 29,481 | |||||||||
Provision for credit losses | 1,173 | 744 | 983 | |||||||||
Net interest income after provision for credit losses | 30,400 | 31,151 | 28,498 | |||||||||
Non-Interest Income | ||||||||||||
Debit card income | 2,281 | 2,010 | 2,126 | |||||||||
Service charges on deposit accounts | 2,209 | 2,023 | 2,069 | |||||||||
Mortgage banking income, net | 1,742 | 1,252 | 1,609 | |||||||||
Income from fiduciary services | 1,545 | 1,392 | 1,407 | |||||||||
Brokerage and insurance commissions | 732 | 585 | 685 | |||||||||
Bank-owned life insurance | 603 | 594 | 609 | |||||||||
Customer loan swap fees | 285 | 525 | 180 | |||||||||
Net gain on sale of securities | 27 | — | 31 | |||||||||
Other income | 613 | 1,008 | 785 | |||||||||
Total non-interest income | 10,037 | 9,389 | 9,501 | |||||||||
Non-Interest Expense | ||||||||||||
Salaries and employee benefits | 13,461 | 12,978 | 12,728 | |||||||||
Furniture, equipment and data processing | 2,723 | 2,680 | 2,549 | |||||||||
Net occupancy costs | 1,639 | 1,914 | 1,625 | |||||||||
Consulting and professional fees | 974 | 813 | 1,116 | |||||||||
Debit card expense | 883 | 823 | 776 | |||||||||
Regulatory assessments | 437 | 472 | 501 | |||||||||
Amortization of intangible assets | 176 | 176 | 181 | |||||||||
Other real estate owned and collection costs (recoveries), net | 409 | (307) | 251 | |||||||||
Other expenses | 3,256 | 3,234 | 3,168 | |||||||||
Total non-interest expense | 23,958 | 22,783 | 22,895 | |||||||||
Income before income tax expense | 16,479 | 17,757 | 15,104 | |||||||||
Income tax expense | 3,275 | 3,484 | 2,887 | |||||||||
Net Income | $ | 13,204 | $ | 14,273 | $ | 12,217 | ||||||
Per Share Data | ||||||||||||
Basic earnings per share | $ | 0.85 | $ | 0.91 | $ | 0.78 | ||||||
Diluted earnings per share | $ | 0.85 | $ | 0.91 | $ | 0.78 | ||||||
|
Consolidated Statements of Income Data (unaudited) | ||||||||
For The Six Months Ended | ||||||||
(In thousands, except per share data) | 2019 | 2018 | ||||||
Interest Income | ||||||||
Interest and fees on loans | $ | 71,813 | $ | 61,201 | ||||
Taxable interest on investments | 9,935 | 8,611 | ||||||
Nontaxable interest on investments | 1,268 | 1,330 | ||||||
Dividend income | 404 | 629 | ||||||
Other interest income | 1,026 | 596 | ||||||
Total interest income | 84,446 | 72,367 | ||||||
Interest Expense | ||||||||
Interest on deposits | 17,579 | 8,208 | ||||||
Interest on borrowings | 1,859 | 4,078 | ||||||
Interest on subordinated debentures | 1,540 | 1,698 | ||||||
Total interest expense | 20,978 | 13,984 | ||||||
Net interest income | 63,468 | 58,383 | ||||||
Provision for credit losses | 1,917 | 486 | ||||||
Net interest income after provision for credit losses | 61,551 | 57,897 | ||||||
Non-Interest Income | ||||||||
Debit card income | 4,291 | 4,055 | ||||||
Service charges on deposit accounts | 4,232 | 4,036 | ||||||
Mortgage banking income, net | 2,994 | 3,000 | ||||||
Income from fiduciary services | 2,937 | 2,690 | ||||||
Brokerage and insurance commissions | 1,317 | 1,335 | ||||||
Bank-owned life insurance | 1,197 | 1,217 | ||||||
Customer loan swap fees | 810 | 267 | ||||||
Net gain on sale of securities | 27 | 31 | ||||||
Other income | 1,621 | 1,674 | ||||||
Total non-interest income | 19,426 | 18,305 | ||||||
Non-Interest Expense | ||||||||
Salaries and employee benefits | 26,439 | 25,290 | ||||||
Furniture, equipment and data processing | 5,403 | 5,135 | ||||||
Net occupancy costs | 3,553 | 3,498 | ||||||
Consulting and professional fees | 1,787 | 1,920 | ||||||
Debit card expense | 1,706 | 1,506 | ||||||
Regulatory assessments | 909 | 1,000 | ||||||
Amortization of intangible assets | 352 | 362 | ||||||
Other real estate owned and collection costs, net | 102 | 326 | ||||||
Other expenses | 6,490 | 6,162 | ||||||
Total non-interest expense | 46,741 | 45,199 | ||||||
Income before income tax expense | 34,236 | 31,003 | ||||||
Income tax expense | 6,759 | 5,966 | ||||||
Net Income | $ | 27,477 | $ | 25,037 | ||||
Per Share Data | ||||||||
Basic earnings per share | $ | 1.76 | $ | 1.60 | ||||
Diluted earnings per share | $ | 1.76 | $ | 1.60 | ||||
Quarterly Average Balance and Yield/Rate Analysis (unaudited) | |||||||||||||||||||||
Average Balance | Yield/Rate | ||||||||||||||||||||
For The Three Months Ended | For The Three Months Ended | ||||||||||||||||||||
(In thousands) | June 30, | March 31, 2019 | June 30, 2018 | June 30, | March 31, 2019 | June 30, 2018 | |||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Interest-bearing deposits in other banks | $ | 59,901 | $ | 29,985 | $ | 58,500 | 2.34 | % | 2.63 | % | 1.57 | % | |||||||||
Investments - taxable | 839,714 | 851,516 | 834,675 | 2.56 | % | 2.56 | % | 2.32 | % | ||||||||||||
Investments - nontaxable(1) | 90,087 | 94,710 | 98,015 | 3.51 | % | 3.44 | % | 3.40 | % | ||||||||||||
Loans(2): | |||||||||||||||||||||
Commercial real estate | 1,255,172 | 1,281,501 | 1,180,421 | 4.68 | % | 4.73 | % | 4.35 | % | ||||||||||||
Residential real estate | 1,032,215 | 1,008,285 | 884,977 | 4.34 | % | 4.30 | % | 4.20 | % | ||||||||||||
Commercial(1) | 389,166 | 369,832 | 351,711 | 4.72 | % | 4.70 | % | 4.42 | % | ||||||||||||
Consumer and home equity | 347,141 | 347,052 | 340,782 | 5.47 | % | 5.46 | % | 5.01 | % | ||||||||||||
HPFC | 29,472 | 32,171 | 41,182 | 7.83 | % | 7.91 | % | 7.80 | % | ||||||||||||
Municipal(1) | 20,117 | 15,333 | 21,993 | 3.56 | % | 3.60 | % | 3.13 | % | ||||||||||||
Total loans | 3,073,283 | 3,054,174 | 2,821,066 | 4.68 | % | 4.70 | % | 4.43 | % | ||||||||||||
Total interest-earning assets | 4,062,985 | 4,030,385 | 3,812,256 | 4.18 | % | 4.20 | % | 3.90 | % | ||||||||||||
Other assets | 315,604 | 308,064 | 294,752 | ||||||||||||||||||
Total assets | $ | 4,378,589 | $ | 4,338,449 | $ | 4,107,008 | |||||||||||||||
Liabilities & Shareholders' Equity | |||||||||||||||||||||
Deposits: | |||||||||||||||||||||
Non-interest checking | $ | 485,724 | $ | 490,382 | $ | 464,164 | — | % | — | % | — | % | |||||||||
Interest checking | 1,110,567 | 1,085,301 | 839,510 | 1.01 | % | 0.98 | % | 0.47 | % | ||||||||||||
Savings | 476,104 | 485,646 | 483,192 | 0.09 | % | 0.08 | % | 0.06 | % | ||||||||||||
Money market | 581,638 | 582,685 | 507,545 | 1.28 | % | 1.21 | % | 0.82 | % | ||||||||||||
Certificates of deposit | 516,972 | 443,107 | 472,637 | 1.60 | % | 1.34 | % | 1.06 | % | ||||||||||||
Total deposits | 3,171,005 | 3,087,121 | 2,767,048 | 0.86 | % | 0.78 | % | 0.48 | % | ||||||||||||
Borrowings: | |||||||||||||||||||||
Brokered deposits | 370,448 | 405,837 | 239,105 | 2.53 | % | 2.50 | % | 1.89 | % | ||||||||||||
Customer repurchase agreements | 246,935 | 238,499 | 247,789 | 1.30 | % | 1.24 | % | 1.03 | % | ||||||||||||
Subordinated debentures | 58,985 | 59,007 | 58,970 | 5.60 | % | 4.93 | % | 5.79 | % | ||||||||||||
Other borrowings | 15,940 | 44,711 | 330,096 | 2.17 | % | 2.22 | % | 2.02 | % | ||||||||||||
Total borrowings | 692,308 | 748,054 | 875,960 | 2.34 | % | 2.27 | % | 1.96 | % | ||||||||||||
Total funding liabilities | 3,863,313 | 3,835,175 | 3,643,008 | 1.13 | % | 1.07 | % | 0.84 | % | ||||||||||||
Other liabilities | 59,747 | 62,247 | 59,126 | ||||||||||||||||||
Shareholders' equity | 455,529 | 441,027 | 404,874 | ||||||||||||||||||
Total liabilities & shareholders' equity | $ | 4,378,589 | $ | 4,338,449 | $ | 4,107,008 | |||||||||||||||
Net interest rate spread (fully-taxable equivalent) | 3.05 | % | 3.13 | % | 3.06 | % | |||||||||||||||
Net interest margin (fully-taxable equivalent) | 3.11 | % | 3.18 | % | 3.10 | % | |||||||||||||||
Net interest margin (fully-taxable equivalent), excluding fair value mark accretion and collection of previously charged-off acquired loans(3) | 3.07 | % | 3.14 | % | 3.04 | % | |||||||||||||||
(1) Reported on a tax-equivalent basis calculated using the federal corporate income tax rate of 21%, including certain commercial loans. | |||||||||||||||||||||
(2) Non-accrual loans and loans held for sale are included in total average loans. | |||||||||||||||||||||
(3) Excludes the impact of the fair value mark accretion on loans and certificates of deposit generated in purchase accounting and collection of previously | |||||||||||||||||||||
Year-to-Date Average Balance and Yield/Rate Analysis (unaudited) | ||||||||||||||
Average Balance | Yield/Rate | |||||||||||||
For The Six Months Ended | For The Six Months Ended | |||||||||||||
(In thousands) | June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | ||||||||||
Assets | ||||||||||||||
Interest-earning assets: | ||||||||||||||
Interest-bearing deposits in other banks and other interest-earning assets | $ | 48,301 | $ | 55,254 | 2.27 | % | 1.50 | % | ||||||
Investments - taxable | 845,583 | 830,624 | 2.56 | % | 2.27 | % | ||||||||
Investments - nontaxable(1) | 92,386 | 98,783 | 3.48 | % | 3.41 | % | ||||||||
Loans(2): | ||||||||||||||
Commercial real estate | 1,268,264 | 1,176,034 | 4.71 | % | 4.28 | % | ||||||||
Residential real estate | 1,020,316 | 872,947 | 4.32 | % | 4.16 | % | ||||||||
Commercial(1) | 379,552 | 350,842 | 4.71 | % | 4.35 | % | ||||||||
Consumer and home equity | 347,097 | 340,929 | 5.46 | % | 4.88 | % | ||||||||
HPFC | 30,814 | 42,462 | 7.87 | % | 7.89 | % | ||||||||
Municipal(1) | 17,738 | 19,648 | 3.58 | % | 3.22 | % | ||||||||
Total loans | 3,063,781 | 2,802,862 | 4.69 | % | 4.37 | % | ||||||||
Total interest-earning assets | 4,050,051 | 3,787,523 | 4.19 | % | 3.84 | % | ||||||||
Other assets | 308,579 | 293,807 | ||||||||||||
Total assets | $ | 4,358,630 | $ | 4,081,330 | ||||||||||
Liabilities & Shareholders' Equity | ||||||||||||||
Deposits: | ||||||||||||||
Non-interest checking | $ | 488,040 | $ | 458,428 | — | % | — | % | ||||||
Interest checking | 1,098,003 | 836,477 | 0.99 | % | 0.42 | % | ||||||||
Savings | 480,849 | 488,397 | 0.08 | % | 0.06 | % | ||||||||
Money market | 582,158 | 497,670 | 1.25 | % | 0.74 | % | ||||||||
Certificates of deposit | 480,244 | 472,426 | 1.48 | % | 1.03 | % | ||||||||
Total deposits | 3,129,294 | 2,753,398 | 0.82 | % | 0.45 | % | ||||||||
Borrowings: | ||||||||||||||
Brokered deposits | 388,045 | 238,988 | 2.51 | % | 1.74 | % | ||||||||
Customer repurchase agreements | 242,740 | 242,452 | 1.27 | % | 0.88 | % | ||||||||
Subordinated debentures | 58,996 | 58,950 | 5.26 | % | 5.81 | % | ||||||||
Other borrowings | 30,237 | 329,124 | 2.21 | % | 1.85 | % | ||||||||
Total borrowings | 720,018 | 869,514 | 2.31 | % | 1.82 | % | ||||||||
Total funding liabilities | 3,849,312 | 3,622,912 | 1.10 | % | 0.78 | % | ||||||||
Other liabilities | 61,000 | 54,662 | ||||||||||||
Shareholders' equity | 448,318 | 403,756 | ||||||||||||
Total liabilities & shareholders' equity | $ | 4,358,630 | $ | 4,081,330 | ||||||||||
Net interest rate spread (fully-taxable equivalent) | 3.09 | % | 3.06 | % | ||||||||||
Net interest margin (fully-taxable equivalent) | 3.14 | % | 3.10 | % | ||||||||||
Net interest margin (fully-taxable equivalent), excluding fair value mark accretion and collection of previously charged-off acquired loans(3) | 3.10 | % | 3.04 | % | ||||||||||
(1) Reported on a tax-equivalent basis calculated using the federal corporate income tax rate of 21%, including certain commercial loans. | ||||||||||||||
(2) Non-accrual loans and loans held for sale are included in total average loans. | ||||||||||||||
(3) Excludes the impact of the fair value mark accretion on loans and certificates of deposit generated in purchase accounting and collection of | ||||||||||||||
Asset Quality Data | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
(In thousands) | At or For The | At or For The | At or For The | At or For The | At or For The | |||||||||||||||
Non-accrual loans: | ||||||||||||||||||||
Residential real estate | $ | 5,566 | $ | 5,415 | $ | 5,492 | $ | 4,720 | $ | 5,742 | ||||||||||
Commercial real estate | 1,590 | 975 | 1,380 | 5,517 | 5,600 | |||||||||||||||
Commercial | 785 | 802 | 1,279 | 2,402 | 1,934 | |||||||||||||||
Consumer and home equity | 3,039 | 2,476 | 1,861 | 1,647 | 1,700 | |||||||||||||||
HPFC | 465 | 485 | 518 | 591 | 834 | |||||||||||||||
Total non-accrual loans | 11,445 | 10,153 | 10,530 | 14,877 | 15,810 | |||||||||||||||
Loans 90 days past due and accruing | 14 | 14 | 14 | 14 | — | |||||||||||||||
Accruing troubled-debt restructured loans not | 3,511 | 3,771 | 3,893 | 4,039 | 4,000 | |||||||||||||||
Total non-performing loans | 14,970 | 13,938 | 14,437 | 18,930 | 19,810 | |||||||||||||||
Other real estate owned | 130 | 673 | 130 | 185 | 130 | |||||||||||||||
Total non-performing assets | $ | 15,100 | $ | 14,611 | $ | 14,567 | $ | 19,115 | $ | 19,940 | ||||||||||
Loans 30-89 days past due: | ||||||||||||||||||||
Residential real estate | $ | 2,536 | $ | 2,265 | $ | 4,833 | $ | 3,816 | $ | 2,222 | ||||||||||
Commercial real estate | 3,378 | 2,947 | 2,130 | 574 | 309 | |||||||||||||||
Commercial | 1,400 | 1,205 | 169 | 723 | 1,490 | |||||||||||||||
Consumer and home equity | 907 | 1,430 | 1,467 | 902 | 1,258 | |||||||||||||||
HPFC | 171 | 187 | 183 | 1,078 | 455 | |||||||||||||||
Total loans 30-89 days past due | $ | 8,392 | $ | 8,034 | $ | 8,782 | $ | 7,093 | $ | 5,734 | ||||||||||
Allowance for loan losses at the beginning of the | $ | 24,712 | $ | 24,712 | $ | 24,171 | $ | 24,171 | $ | 24,171 | ||||||||||
Provision for loan losses | 1,925 | 750 | 845 | 845 | 490 | |||||||||||||||
Charge-offs: | ||||||||||||||||||||
Residential real estate | 25 | 11 | 173 | 231 | 116 | |||||||||||||||
Commercial real estate | 65 | 65 | 512 | 512 | 512 | |||||||||||||||
Commercial | 453 | 236 | 736 | 448 | 298 | |||||||||||||||
Consumer and home equity | 64 | 24 | 572 | 451 | 266 | |||||||||||||||
HPFC | — | — | 255 | 209 | — | |||||||||||||||
Total charge-offs | 607 | 336 | 2,248 | 1,851 | 1,192 | |||||||||||||||
Total recoveries | (133) | (75) | (1,944) | (361) | (199) | |||||||||||||||
Net charge-offs | 474 | 261 | 304 | 1,490 | 993 | |||||||||||||||
Allowance for loan losses at the end of the period | $ | 26,163 | $ | 25,201 | $ | 24,712 | $ | 23,526 | $ | 23,668 | ||||||||||
Components of allowance for credit losses: | ||||||||||||||||||||
Allowance for loan losses | $ | 26,163 | $ | 25,201 | $ | 24,712 | $ | 23,526 | $ | 23,668 | ||||||||||
Liability for unfunded credit commitments | 14 | 16 | 22 | 15 | 16 | |||||||||||||||
Allowance for credit losses | $ | 26,177 | $ | 25,217 | $ | 24,734 | $ | 23,541 | $ | 23,684 | ||||||||||
Ratios: | ||||||||||||||||||||
Non-performing loans to total loans | 0.48 | % | 0.46 | % | 0.48 | % | 0.65 | % | 0.69 | % | ||||||||||
Non-performing assets to total assets | 0.34 | % | 0.33 | % | 0.34 | % | 0.46 | % | 0.48 | % | ||||||||||
Allowance for loan losses to total loans | 0.84 | % | 0.83 | % | 0.82 | % | 0.81 | % | 0.83 | % | ||||||||||
Net charge-offs (recoveries) to average loans | ||||||||||||||||||||
Quarter-to-date | 0.03 | % | 0.03 | % | (0.16) | % | 0.07 | % | 0.04 | % | ||||||||||
Year-to-date | 0.03 | % | 0.03 | % | 0.01 | % | 0.07 | % | 0.07 | % | ||||||||||
Allowance for loan losses to non-performing loans | 174.77 | % | 180.81 | % | 171.17 | % | 124.28 | % | 119.48 | % | ||||||||||
Loans 30-89 days past due to total loans | 0.27 | % | 0.26 | % | 0.29 | % | 0.24 | % | 0.20 | % | ||||||||||
Reconciliation of non-GAAP to GAAP Financial Measures (unaudited) | ||||||||||||||||||||
Return on Average Tangible Equity: | ||||||||||||||||||||
For the | For the | |||||||||||||||||||
(In thousands) | June 30, 2019 | March 31, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||||||||
Net income, as presented | $ | 13,204 | $ | 14,273 | $ | 12,217 | $ | 27,477 | $ | 25,037 | ||||||||||
Add: amortization of intangible assets, net | 139 | 139 | 143 | 278 | 286 | |||||||||||||||
Net income, adjusted for amortization of | $ | 13,343 | $ | 14,412 | $ | 12,360 | $ | 27,755 | $ | 25,323 | ||||||||||
Average equity, as presented | $ | 455,529 | $ | 441,027 | $ | 404,874 | $ | 448,318 | $ | 403,756 | ||||||||||
Less: average goodwill and other | (98,660) | (98,838) | (99,377) | (98,749) | (99,472) | |||||||||||||||
Average tangible equity | $ | 356,869 | $ | 342,189 | $ | 305,497 | $ | 349,569 | $ | 304,284 | ||||||||||
Return on average tangible equity | 15.00 | % | 17.08 | % | 16.23 | % | 16.01 | % | 16.78 | % | ||||||||||
Return on average equity | 11.63 | % | 13.13 | % | 12.10 | % | 12.36 | % | 12.50 | % | ||||||||||
(1) Assumed a 21% tax rate. | ||||||||||||||||||||
Efficiency Ratio: | ||||||||||||||||||||
For the Three Months Ended | For the | |||||||||||||||||||
(In thousands) | June 30, | March 31, 2019 | June 30, 2018 | June 30, | June 30, | |||||||||||||||
Non-interest expense, as presented | $ | 23,958 | $ | 22,783 | $ | 22,895 | $ | 46,741 | $ | 45,199 | ||||||||||
Net interest income, as presented | $ | 31,573 | $ | 31,895 | $ | 29,481 | $ | 63,468 | $ | 58,383 | ||||||||||
Add: effect of tax-exempt income(1) | 248 | 244 | 257 | 491 | 511 | |||||||||||||||
Non-interest income, as presented | 10,037 | 9,389 | 9,501 | 19,426 | 18,305 | |||||||||||||||
Less: net gain on sale of securities | (27) | — | (31) | (27) | (31) | |||||||||||||||
Adjusted net interest income plus non- | $ | 41,831 | $ | 41,528 | $ | 39,208 | $ | 83,358 | $ | 77,168 | ||||||||||
GAAP efficiency ratio | 57.58 | % | 55.19 | % | 58.73 | % | 56.39 | % | 58.94 | % | ||||||||||
Non-GAAP efficiency ratio | 57.27 | % | 54.86 | % | 58.39 | % | 56.07 | % | 58.57 | % | ||||||||||
(1) Assumed a 21% tax rate. | ||||||||||||||||||||
Tangible Book Value Per Share and Tangible Common Equity Ratio: | ||||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | ||||||||||
(In thousands, except number of shares and per share data) | ||||||||||||
Tangible Book Value Per Share: | ||||||||||||
Shareholders' equity, as presented | $ | 467,759 | $ | 453,718 | $ | 408,819 | ||||||
Less: goodwill and other intangible assets | (98,574) | (98,751) | (99,289) | |||||||||
Tangible shareholders' equity | $ | 369,185 | $ | 354,967 | $ | 309,530 | ||||||
Shares outstanding at period end | 15,457,480 | 15,560,565 | 15,576,249 | |||||||||
Book value per share | $ | 30.26 | $ | 29.16 | $ | 26.25 | ||||||
Tangible book value per share | $ | 23.88 | $ | 22.81 | $ | 19.87 | ||||||
Tangible Common Equity Ratio: | ||||||||||||
Total assets | $ | 4,447,038 | $ | 4,421,189 | $ | 4,192,662 | ||||||
Less: goodwill and other intangibles | (98,574) | (98,751) | (99,289) | |||||||||
Tangible assets | $ | 4,348,464 | $ | 4,322,438 | $ | 4,093,373 | ||||||
Common equity ratio | 10.52 | % | 10.26 | % | 9.75 | % | ||||||
Tangible common equity ratio | 8.49 | % | 8.21 | % | 7.56 | % | ||||||
SOURCE Camden National Corporation
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