Camden National Corporation Reports An Increase In Second Quarter 2014 Earnings Per Share Of 13% Over First Quarter 2014

PR Newswire

CAMDEN, Maine, July 29, 2014 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National" or the "Company"), a $2.7 billion bank holding company headquartered in Camden, Maine, reported net income for the second quarter of 2014 of $6.3 million and diluted earnings per share ("EPS") of $0.85, representing a 10% increase in earnings and a $0.10 increase in EPS compared to the first quarter of 2014.  Camden National's return on equity and return on assets for the second quarter of 2014 was 10.92% and 0.95%, respectively, compared to 9.97% and 0.89% last quarter.

"We have implemented several significant strategies over the past several quarters and are pleased to see the positive impact of those investments," said Gregory A. Dufour, president and chief executive officer.  "Our annualized loan growth of 15% for the first half of 2014 and a 13% increase in earnings per share over the first quarter of 2014 reflects our efforts to increase market share and enhance our products to better serve our customers, while balancing the needs of our shareholders through our repurchase and dividend programs."

Second Quarter 2014 Highlights

  • Earnings Growth Second quarter 2014 EPS grew 13% or $0.10 per share over prior quarter.
  • Loan Growth Year-to-date annualized loan growth of 15%.
  • Net Interest Margin — Net interest margin increased 3 basis points over prior quarter.
  • Asset Quality — Year-to-date asset quality metrics trend favorably.

Balance Sheet

Total assets at June 30, 2014 were $2.7 billion, representing an $87.9 million, or 3%, increase since year-end.  The growth in total assets was fueled by loan growth of $116.4 million, representing a 15% annualized growth rate.  Loan growth continues to be centered within our commercial real estate and commercial portfolios, evidenced by total growth in those portfolios of $117.7 million since year-end, while our retail portfolio decreased by $1.3 million.  The Company saw signs of positive momentum within our home equity and consumer portfolio in the second quarter of 2014 primarily due to recent promotions offered; however, the effects of higher mortgage rates continue to hamper refinance activity.

Total liabilities at June 30, 2014 were $2.5 billion, representing an $81.3 million, or 3%, increase since year-end.  The increase is reflective of additional borrowings and brokered deposits totaling $119.8 million necessary to fund strong loan growth.  Core deposits (demand, interest checking, savings, and money market) decreased $28.9 million since year-end due to the seasonal outflows of deposits within our market.

Second Quarter 2014 Operating Results Compared to First Quarter 2014

Second quarter 2014 net income was $6.3 million, representing a $600,000, or 10%, increase compared to the first quarter of 2014.  EPS for the second quarter 2014 increased $0.10 per share to $0.85 compared to the first quarter of 2014.  Strong earnings and EPS growth for the second quarter of 2014 compared to prior quarter is primarily reflective of:

  • An increase in average loan balances of $84.1 million, or 5%, accompanied by an increase in net interest margin on a fully-taxable basis of 3 basis points to 3.11%.  Net interest margin increased as our interest-earning assets mix shifted slightly to a higher concentration of loans providing a more favorable yield, while our cost of funds decreased 2 basis points to 0.50%.
  • An increase in non-interest income of $819,000, or 14%, driven by: (i) an increase in deposit and other service-related fees of $299,000; (ii) $196,000 of derivative income; (iii) an increase in fiduciary income of $165,000; and (iv) additional gains of $119,000 realized upon sale of investment securities.
  • An increase in non-interest expense of $667,000, or 4%, primarily due to (i) an increase in incentive-related costs of $321,000 due to strong year-to-date financial results exceeding performance metrics and (ii) $106,000 of cost recognized upon issuance of common stock to the Company's directors.
  • A decrease of 101,146 dilutive weighted-average shares outstanding as the Company continued to actively repurchase shares of its common stock under the 2013 Repurchase Program.

Six months ended June 30, 2014 Operating Results Compared to Six Months Ended June 30, 2013

Net income and EPS for the six months ended June 30, 2014 was $12.0 million and $1.60 per share, respectively, reflecting an increase in net income of $38,000 and EPS of $0.04 per share over the six months ended June 30, 2013.  Excluded from Camden National's six months ended June 30, 2014 operating results are the five Franklin County branches it divested of in 2013.  For the six months ended June 30, 2013, the five Franklin County branches contributed $342,000 to net income, or $0.04 per share.  Other significant factors impacting Camden National's year-to-date operating results year-over-year include:

  • A decrease in non-interest expense of $1.2 million.  This decrease is largely due to expenses incurred in the first half of 2013 that did not recur in the first half of 2014 – primarily costs associated with (i) the five Franklin County branches totaling $686,000; (ii) a receivable write-down of $348,000; (iii) branch acquisition costs of $232,000; and (iv) $198,000 of costs associated with the conversion of Acadia Trust, N.A.'s core operating system – partially offset by (a) an increase in foreclosure-related expenses of $162,000; and (b) $106,000 of cost recognized upon issuance of common stock to the Company's directors.
  • A decrease in net interest income of $760,000.  This decrease is attributable to two factors: (i) the divestiture of five Franklin County branches, which contributed $813,000 to net interest income in the first half of 2013; and (ii) net interest margin compression of 16 basis points.  Average interest-earning assets for the first half of 2014 increased $70.8 million, or 3%, over the same period in 2013.  The increase was largely a combination of average loan and investments growth of $53.5 million and $17.1 million, respectively, even after the sale of $46.0 million of loans as part of the Franklin County branch divestiture.  Net interest margin on a fully-taxable basis for the six months ended June 30, 2014 was 3.09%.
  • A decrease in non-interest income of $523,000.  The decrease is largely due to a $1.0 million reduction in mortgage banking income due to a reduction in loan sales compared to the same period in 2013 and the divestiture of five Franklin County branches, which contributed $376,000 to non-interest income in the first half of 2013.  Partially offsetting the decrease were additional gains of $313,000 realized upon sale of investment securities; an increase in fiduciary and brokerage revenues totaling $231,000; and $196,000 of derivative income.

Asset Quality

Our asset quality metrics as of and for the six months ended June 30, 2014 continue to trend favorably, which has led to a decrease in provision for credit losses for the six months ended June 30, 2014 of $233,000 compared to the same period last year.  The following asset quality ratios highlight our current metrics compared to prior periods:

  • Loans 30-89 days past due to total loans at June 30, 2014 were 0.23%, representing a decrease of 6 basis points and 4 basis points compared to March 31, 2014 and June 30, 2013, respectively.
  • Year-to-date net-charge offs (annualized) to average loans as of June 30, 2014 were 0.10%, compared to 0.10% and 0.14% for year-to-date March 31, 2014 and June 30, 2013, respectively.
  • Non-performing loans to total loans at June 30, 2014 were 1.54%, representing a decrease of 14 basis points and 9 basis points compared March 31, 2014 and June 30, 2013, respectively.
  • Non-performing assets to total assets at June 30, 2014 were 1.05%, representing a decrease of 8 basis points and 4 basis points compared March 31, 2014 and June 30, 2013, respectively.

Dividends and Capital

The board of directors approved a dividend of $0.27 per share, payable on July 31, 2014, to shareholders of record as of July 17, 2014.  This distribution represents an annualized dividend yield of 2.79%, based on the June 30, 2014 closing price of Camden National's common stock at $38.76 per share as reported by NASDAQ.

The Company's total risk-based capital ratio, Tier I risk-based capital ratio, and Tier I leverage capital ratio was 15.32%, 14.07%, and 9.09%, respectively, at June 30, 2014. Camden National Corporation and its wholly-owned subsidiary, Camden National Bank, continue to exceed the minimum total and Tier I risk-based capital ratios of 10% and 6%, respectively, and the minimum Tier I leverage capital ratio of 5% required by the Federal Reserve for an institution to be considered "well capitalized".

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

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, an increase in the allowance for loan losses, or a reduced demand for the Company's credit or fee-based products and services; 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; competitive pressures, including continued industry consolidation and the increased financial services provided by non-banks; 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 could lead to impairment in the value of securities in the Company's investment portfolio; changes in information technology that require increased capital spending; changes in consumer spending and savings habits; changes in tax, banking, securities and insurance laws and regulations including laws and regulations; and changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as 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 the Company's 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 generally accepted accounting principles in the United States ("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. 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.

Selected Financial Data (unaudited)



At or For The

Three Months Ended


At or For The
Six Months Ended



June 30,
 2014


March 31,
2014


June 30,
 2013


June 30,
 2014


June 30,
 2013

Selected Financial and Per Share Data:
















Return on average assets


0.95

%


0.89

%


0.98

%


0.92

%


0.94

%

Return on average equity


10.92

%


9.97

%


10.71

%


10.45

%


10.26

%

Return on average tangible equity (non-GAAP)(1)


14.25

%


13.05

%


14.18

%


13.65

%


13.65

%

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


7.15

%


7.04

%


6.94

%


7.15

%


6.94

%

Efficiency ratio (non-GAAP)(1)


61.49

%


62.69

%


60.30

%


62.07

%


62.08

%

Yield on average interest-earnings assets


3.60

%


3.57

%


3.77

%


3.59

%


3.80

%

Average cost of funds


0.50

%


0.52

%


0.56

%


0.51

%


0.57

%

Net interest margin


3.11

%


3.08

%


3.23

%


3.09

%


3.25

%

Tier I leverage capital ratio


9.09

%


9.27

%


9.05

%


9.09

%


9.05

%

Tier I risk-based capital ratio


14.07

%


14.64

%


14.57

%


14.07

%


14.57

%

Total risk-based capital ratio


15.32

%


15.89

%


15.82

%


15.32

%


15.82

%

Basic earnings per share


$

0.85



$

0.76



$

0.83



$

1.60



$

1.57


Diluted earnings per share


$

0.85



$

0.75



$

0.82



$

1.60



$

1.56


Cash dividends declared per share


$

0.27



$

0.27



$

0.27



$

0.54



$

0.54


Book value per share


$

32.03



$

30.93



$

30.05



$

32.03



$

30.05


Tangible book value per share (non-GAAP)(1)


$

25.46



$

24.38



$

23.15



$

25.46



$

23.15


Weighted average number of common shares outstanding


7,430,709



7,528,751



7,637,433



7,479,461



7,632,586


Diluted weighted average number of common shares outstanding

7,450,639



7,551,785



7,652,199



7,500,318



7,646,742


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











 

 


Consolidated Statements of Condition Data

(In Thousands, Except Number of Shares)


June 30, 2014
(unaudited)

December 31,
 2013

ASSETS





Cash and due from banks


$

51,465


$

51,355

Securities:





Available-for-sale securities, at fair value


772,467


808,477

Held-to-maturity securities, at amortized cost


9,798


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


20,379


19,724

Total securities


802,644


828,201

Trading account assets


2,406


2,488

Loans


1,696,765


1,580,402

Less: allowance for loan losses


(21,905)


(21,590)

Net loans


1,674,860


1,558,812

Goodwill and other intangible assets


48,745


49,319

Bank-owned life insurance


46,961


46,363

Premises and equipment, net


24,696


25,727

Deferred tax assets


13,261


16,047

Interest receivable


5,953


5,808

Other real estate owned


2,217


2,195

Other assets


18,498


17,514

Total assets


$

2,691,706


$

2,603,829

LIABILITIES AND SHAREHOLDERS' EQUITY





Liabilities





Deposits:





Demand


$

242,422


$

241,866

Interest checking


440,443


453,909

Savings and money market


659,718


675,679

Certificates of deposit


330,575


343,034

Brokered deposits


184,304


99,336

Total deposits


1,857,462


1,813,824

Federal Home Loan Bank advances


56,076


56,112

Other borrowed funds


464,851


430,058

Junior subordinated debentures


43,973


43,922

Accrued interest and other liabilities


31,624


28,817

Total liabilities


2,453,986


2,372,733

Shareholders' Equity





Common stock, no par value; authorized 20,000,000 shares, issued and outstanding 7,421,445
and 7,579,913 shares on June 30, 2014 and December 31, 2013, respectively

41,211


47,783

Retained earnings


203,683


195,660

Accumulated other comprehensive loss:





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


(943)


(7,964)

Net unrealized losses on derivative instruments, net of tax


(4,437)


(2,542)

Net unrecognized losses on postretirement plans, net of tax


(1,794)


(1,841)

Total accumulated other comprehensive loss


(7,174)


(12,347)

Total shareholders' equity


237,720


231,096

Total liabilities and shareholders' equity


$

2,691,706


$

2,603,829

 

Consolidated Statements of Income Data (unaudited)



Three Months Ended

(In Thousands, Except Number of Shares and Per Share Data)

June 30,

2014


March 31,

2014


June 30,

2013

Interest Income







Interest and fees on loans


$

17,757


$

16,780


$

18,059

Interest on U.S. government and sponsored enterprise obligations

4,124


4,230


4,074

Interest on state and political subdivision obligations


314


294


292

Interest on federal funds sold and other investments


94


89


56

Total interest income


22,289


21,393


22,481

Interest Expense







Interest on deposits


1,565


1,551


1,828

Interest on borrowings


845


807


767

Interest on junior subordinated debentures


631


625


636

Total interest expense


3,041


2,983


3,231

Net interest income


19,248


18,410


19,250

Provision for credit losses


643


493


695

Net interest income after provision for credit losses

18,605


17,917


18,555

Non-Interest Income







Service charges on deposit accounts


1,620


1,469


1,755

Other service charges and fees


1,543


1,395


1,513

Income from fiduciary services


1,349


1,184


1,275

Brokerage and insurance commissions


459


478


409

Bank-owned life insurance


292


306


314

Net gain on sale of securities


285


166


Mortgage banking income, net


70


72


584

Other income


886


615


526

Total non-interest income


6,504


5,685


6,376

Non-Interest Expense







Salaries and employee benefits


8,301


7,980


7,961

Furniture, equipment and data processing


1,743


1,789


1,931

Net occupancy costs


1,270


1,380


1,407

Consulting and professional fees


782


518


585

Other real estate owned and collection costs (recoveries)

515


513


(22)

Regulatory assessments


485


481


500

Amortization of intangible assets


287


287


287

Branch acquisition costs




71

Other expenses


2,409


2,177


2,928

Total non-interest expense


15,792


15,125


15,648

Income before income taxes


9,317


8,477


9,283

Income Taxes


3,001


2,762


2,952

Net Income


$

6,316


$

5,715


$

6,331

Per Share Data







Basic earnings per share


$

0.85


$

0.76


$

0.83

Diluted earnings per share


$

0.85


$

0.75


$

0.82

Consolidated Statements of Income Data (unaudited)



Six Months Ended

June 30,

(In Thousands, Except Number of Shares and Per Share Data)


2014



2013

Interest Income






Interest and fees on loans


$

34,537



$

35,854

Interest on U.S. government and sponsored enterprise obligations


8,354



8,350

Interest on state and political subdivision obligations


608



597

Interest on federal funds sold and other investments


183



106

Total interest income


43,682



44,907

Interest Expense






Interest on deposits


3,116



3,647

Interest on borrowings


1,652



1,585

Interest on junior subordinated debentures


1,256



1,257

Total interest expense


6,024



6,489

Net interest income


37,658



38,418

Provision for credit losses


1,136



1,369

Net interest income after provision for credit losses


36,522



37,049

Non-Interest Income






Service charges on deposit accounts


3,089



3,439

Other service charges and fees


2,938



2,942

Income from fiduciary services


2,533



2,418

Brokerage and insurance commissions


937



821

Bank-owned life insurance


598



652

Net gain on sale of securities


451



138

Mortgage banking income, net


142



1,158

Other income


1,501



1,144

Total non-interest income


12,189



12,712

Non-Interest Expense






Salaries and employee benefits


16,281



16,322

Furniture, equipment and data processing


3,532



3,535

Net occupancy costs


2,650



2,959

Consulting and professional fees


1,300



1,132

Other real estate owned and collection costs


1,028



866

Regulatory assessments


966



999

Amortization of intangible assets


574



574

Branch acquisition costs




232

Other expenses


4,586



5,529

Total non-interest expense


30,917



32,148

Income before income taxes


17,794



17,613

Income Taxes


5,763



5,620

Net Income


$

12,031



$

11,993

Per Share Data






Basic earnings per share


$

1.60



$

1.57

Diluted earnings per share


$

1.60



$

1.56

 

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, 2014


June 30, 2013

(In Thousands)


Average
Balance


Interest


Yield/Rate


Average
Balance


Interest


Yield/Rate

Assets



















Interest-earning assets:



















Securities - taxable


$

777,935



$

4,212



2.17

%


$

774,916



$

4,130



2.13

%

Securities - nontaxable(1)


37,386



484



5.17

%


30,800



449



5.83

%

Trading account assets


2,309



5



0.95

%


2,245





%

Loans(2):



















Residential real estate


566,070



6,017



4.25

%


572,920



6,596



4.61

%

Commercial real estate


591,276



6,816



4.56

%


511,115



6,227



4.82

%

Commercial


214,559



2,045



3.77

%


178,887



1,964



4.34

%

Municipal(1)


14,724



127



3.45

%


12,949



136



4.21

%

Consumer


288,897



2,797



3.88

%


315,197



3,184



4.05

%

Total loans


1,675,526



17,802



4.23

%


1,591,068



18,107



4.53

%

Total interest-earning assets


2,493,156



22,503



3.60

%


2,399,029



22,686



3.77

%

Cash and due from banks


42,360









43,758








Other assets


165,574









166,333








Less: allowance for loan losses


(21,892)









(23,395)








Total assets


$

2,679,198









$

2,585,725



























Liabilities & Shareholders' Equity


















Deposits:



















Demand


$

227,599



$





$

224,351



$




Interest checking


465,565



80



0.07

%


475,621



90



0.08

%

Savings


245,034



35



0.06

%


236,277



33



0.06

%

Money market


423,687



315



0.30

%


445,585



337



0.30

%

Certificates of deposit


332,686



774



0.93

%


399,864



1,013



1.02

%

Total deposits


1,694,571



1,204



0.28

%


1,781,698



1,473



0.33

%

Borrowings:



















Brokered deposits


144,792



361



1.00

%


123,151



355



1.16

%

Junior subordinated debentures


43,960



631



5.76

%


43,858



636



5.82

%

Other borrowings


535,834



845



0.63

%


368,183



767



0.84

%

Total borrowings


724,586



1,837



1.02

%


535,192



1,758



1.32

%

Total funding liabilities


2,419,157



3,041



0.50

%


2,316,890



3,231



0.56

%

Other liabilities


28,092









31,669








Shareholders' equity


231,949









237,166








Total liabilities & shareholders' equity

$

2,679,198









$

2,585,725



























Net interest income (fully-taxable equivalent)




19,462









19,455





Less: fully-taxable equivalent adjustment




(214)









(205)





Net interest income





$

19,248









$

19,250
























Net interest rate spread (fully-taxable equivalent)


3.10

%








3.21

%

Net interest margin (fully-taxable equivalent)


3.11

%








3.23

%




















(1)  Reported on tax-equivalent basis calculated using a tax rate of 35.0%.










(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, 2014


June 30, 2013

(In Thousands)


Average
Balance


Interest


Yield/Rate


Average
Balance


Interest


Yield/Rate

Assets



















Interest-earning assets:



















Securities - taxable


$

785,772



$

8,530



2.17

%


$

772,469



$

8,445



2.19

%

Securities - nontaxable(1)


35,060



935



5.33

%


31,238



919



5.88

%

Trading account assets


2,397



7



0.59

%


2,241



12



1.05

%

Loans(2):



















Residential real estate


567,132



11,981



4.23

%


574,031



13,171



4.59

%

Commercial real estate


572,478



13,098



4.55

%


507,478



12,301



4.82

%

Commercial


192,475



3,736



3.86

%


177,718



3,935



4.40

%

Municipal(1)


12,822



240



3.78

%


12,267



267



4.39

%

Consumer


288,812



5,566



3.89

%


308,700



6,272



4.10

%

Total loans


1,633,719



34,621



4.23

%


1,580,194



35,946



4.55

%

Total interest-earning assets

2,456,948



44,093



3.59

%


2,386,142



45,322



3.80

%

Cash and due from banks


41,933









44,249








Other assets


165,668









166,517








Less: allowance for loan losses

(21,749)









(23,331)








Total assets


$

2,642,800









$

2,573,577



























Liabilities & Shareholders' Equity


















Deposits:



















Demand


$

227,513



$





$

223,081



$




Interest checking


463,566



158



0.07

%


477,274



157



0.07

%

Savings


244,749



68



0.06

%


233,219



65



0.06

%

Money market


422,652



621



0.30

%


450,929



710



0.32

%

Certificates of deposit


335,433



1,576



0.95

%


407,407



2,000



0.99

%

Total deposits


1,693,913



2,423



0.29

%


1,791,910



2,932



0.33

%

Borrowings:



















Brokered deposits


124,134



693



1.13

%


124,607



715



1.16

%

Junior subordinated debentures

43,948



1,256



5.76

%


43,845



1,257



5.78

%

Other borrowings


520,016



1,652



0.64

%


343,328



1,585



0.93

%

Total borrowings


688,098



3,601



1.06

%


511,780



3,557



1.40

%

Total funding liabilities


2,382,011



6,024



0.51

%


2,303,690



6,489



0.57

%

Other liabilities


28,546









34,208








Shareholders' equity


232,243









235,679








Total liabilities & shareholders' equity

$

2,642,800









$

2,573,577



























Net interest income (fully-taxable equivalent)




38,069









38,833





Less: fully-taxable equivalent adjustment




(411)









(415)





Net interest income





$

37,658









$

38,418
























Net interest rate spread (fully-taxable equivalent)


3.08

%








3.23

%

Net interest margin (fully-taxable equivalent)


3.09

%








3.25

%




















(1)  Reported on tax-equivalent basis calculated using a tax rate of 35.0%.










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







 

Asset Quality Data (unaudited)

(In Thousands)


At or For The
Six Months
Ended
June 30, 2014


At or For The

Three Months
Ended

March 31, 2014


At or For The

Twelve Months
Ended

December 31, 2013


At or For The

Nine Months
Ended

September 30, 2013


At or For The

Six Months
Ended

June 30, 2013

Non-accrual loans:
















Residential real estate


$

7,887



$

9,125



$

10,520



$

10,224



$

8,624


Commercial real estate


6,282



8,278



7,799



9,847



6,634


Commercial


3,840



1,935



2,146



2,994



3,233


Consumer


2,575



2,457



2,012



2,018



1,945


Total non-accrual loans


20,584



21,795



22,477



25,083



20,436


Loans 90 days past due and accruing


109



50



455



24




Renegotiated loans not included above


5,379



5,413



5,468



5,379



5,701


Total non-performing loans


26,072



27,258



28,400



30,486



26,137


Other real estate owned:
















Residential real estate


912



1,035



1,044



1,126



1,038


Commercial real estate


1,305



1,677



1,151



676



1,117


Total other real estate owned


2,217



2,712



2,195



1,802



2,155


Total non-performing assets


$

28,289



$

29,970



$

30,595



$

32,288



$

28,292


Loans 30-89 days past due:
















Residential real estate


$

1,800



$

1,349



$

1,551



$

1,419



$

1,827


Commercial real estate


1,151



1,716



2,595



833



1,591


Commercial


466



1,007



313



529



202


Consumer


569



632



1,571



1,207



716


Total loans 30-89 days past due


$

3,986



$

4,704



$

6,030



$

3,988



$

4,336


Allowance for loan losses at the beginning of the period

$

21,590



$

21,590



$

23,044



$

23,044



$

23,044


Provision for loan losses


1,141



492



2,052



2,051



1,384


Charge-offs:
















Residential real estate


361



183



1,059



687



347


Commercial real estate


176



171



952



762



171


Commercial


526



219



1,426



823



444


Consumer


146



76



837



598



470


Total charge-offs


1,209



649



4,274



2,870



1,432


Total recoveries


383



237



768



436



325


Net charge-offs


826



412



3,506



2,434



1,107


Allowance for loan losses at the end of the period

$

21,905



$

21,670



$

21,590



$

22,661



$

23,321


Components of allowance for credit losses:















Allowance for loan losses


$

21,905



$

21,670



$

21,590



$

22,661



$

23,321


Liability for unfunded credit commitments


16



22



21



28



30


Balance of allowance for credit losses


$

21,921



$

21,692



$

21,611



$

22,689



$

23,351


Ratios:
















Non-performing loans to total loans


1.54

%


1.68

%


1.80

%


1.92

%


1.63

%

Non-performing assets to total assets


1.05

%


1.13

%


1.18

%


1.24

%


1.09

%

Allowance for credit losses to total loans


1.29

%


1.34

%


1.37

%


1.43

%


1.45

%

Net charge-offs to average loans (annualized):
















Quarter-to-date


0.10

%


0.10

%


0.27

%


0.33

%


0.20

%

Year-to-date


0.10

%


0.10

%


0.22

%


0.20

%


0.14

%

Allowance for credit losses to non-performing loans

84.08

%


79.58

%


76.09

%


74.42

%


89.34

%

Loans 30-89 days past due to total loans


0.23

%


0.29

%


0.38

%


0.25

%


0.27

%

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 expense divided by net interest income plus non-interest income from the consolidated statements of income.  The non-GAAP efficiency ratio excludes branch acquisition costs from non-interest expense, excludes net gain on sale of securities from non-interest income, and adds the tax-equivalent adjustment (assumed 35.0% tax rate) to net interest income.  The following table provides a reconciliation between the GAAP and non-GAAP efficiency ratio:



Three Months Ended


Six Months Ended

(In Thousands)


June 30,
 2014


March 31,

2014


June 30,
 2013


June 30,
 2014


June 30,
 2013

Non-interest expense, as presented


$

15,792



$

15,125



$

15,648



$

30,917



$

32,148


Less: branch acquisition costs






71





232


Adjusted non-interest expense


$

15,792



$

15,125



$

15,577



$

30,917



$

31,916


Net interest income, as presented


$

19,248



$

18,410



$

19,250



$

37,658



$

38,418


Add: effect of tax-exempt income


214



198



205



411



415


Non-interest income, as presented


6,504



5,685



6,376



12,189



12,712


Less: net gain on sale of securities


285



166





451



138


Adjusted net interest income plus non-interest income

$

25,681



$

24,127



$

25,831



$

49,807



$

51,407


Non-GAAP efficiency ratio


61.49

%


62.69

%


60.30

%


62.07

%


62.08

%

GAAP efficiency ratio


61.32

%


62.77

%


61.06

%


62.02

%


62.88

%

The following table provides a reconciliation between tax-equivalent net interest income to GAAP net interest income using a 35.0% tax rate: 



Three Months Ended


Six Months Ended

(In Thousands)


June 30,
 2014


March 31,
 2014


June 30,
 2013


June 30,
 2014


June 30,
 2013

Net interest income, as presented


$

19,248



$

18,410



$

19,250



$

37,658



$

38,418


Add: effect of tax-exempt income


214



198



205



411



415


Net interest income, tax equivalent


$

19,462



$

18,608



$

19,455



$

38,069



$

38,833


Return on average tangible equity is the ratio of (i) net income, adjusted for tax-effected amortization of intangible assets to (ii) average equity, adjusted for goodwill and other intangible assets.  The following table reconciles the return on average tangible equity to GAAP return on average equity:



Three Months Ended


Six Months Ended

(In Thousands)


June 30,
 2014


March 31,
 2014


June 30,
 2013


June 30,
 2014


June 30,
 2013

Net income, as presented


$

6,316



$

5,715



$

6,331



$

12,031



$

11,993


Add: tax-effected amortization of intangible assets

187



187



187



373



373


Net income, adjusted


$

6,503



$

5,902



$

6,518



$

12,404



$

12,366


Average equity


$

231,949



$

232,539



$

237,166



$

232,243



$

235,679


Less: average goodwill and other intangible assets

48,880



49,168



52,860



49,023



53,007


Average tangible equity


$

183,069



$

183,371



$

184,306



$

183,220



$

182,672


Return on average tangible equity


14.25

%


13.05

%


14.18

%


13.65

%


13.65

%

Return on average equity


10.92

%


9.97

%


10.71

%


10.45

%


10.26

%

The following table provides a reconciliation between tangible book value per share and GAAP book value per share:

(In Thousands, Except Number of Shares and Per Share Data)

June 30,

2014



March 31,

 2014


June 30

2013

Shareholders' equity, as presented


$

237,720



$

231,469



$

229,620

Less: goodwill and other intangible assets


48,745



49,032



52,725

Tangible equity


$

188,975



$

182,437



$

176,895

Shares outstanding at period end


7,421,445



7,484,560



7,640,712

Tangible book value per share


$

25.46



$

24.38



$

23.15

Book value per share


$

32.03



$

30.93



$

30.05

The following table provides a reconciliation between tangible equity to tangible assets and GAAP equity to assets:

(In Thousands)


June 30,

2014


March 31,

 2014


June 30,

2013

Shareholders' equity, as presented


$

237,720



$

231,469



$

229,620


Less: goodwill and other intangibles


48,745



49,032



52,725


Tangible equity


$

188,975



$

182,437



$

176,895


Total assets


$

2,691,706



$

2,640,666



$

2,601,778


Less: goodwill and other intangibles


48,745



49,032



52,725


Tangible assets


$

2,642,961



$

2,591,634



$

2,549,053


Tangible equity to tangible assets


7.15

%


7.04

%


6.94

%

Equity to assets


8.83

%


8.77

%


8.83

%

 

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