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 | |||||||||||||||||||
In thousands, except number of shares and per share data | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
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, | ||||||
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 | ||||||||
(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 | At or For The | At or For The | At or For The | At or For The | |||||||||||||||
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, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
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, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
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, | March 31, | June 30, | |||||||||
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, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
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, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
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
