Camden National Corporation Reports A 12% Increase In
First Quarter 2015 Core Operating Earnings
CAMDEN, Maine, April 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 first quarter of 2015 of $5.6 million and diluted earnings per share ("EPS") of $0.75.
The Company reported core operating earnings1 and core diluted EPS1 for the first quarter of 2015 of $6.3 million and $0.84 per share, respectively, representing an increase of 12% and $0.10 per share over the first quarter of 2014. The Company's core return on average shareholders' equity1 and average assets1 for the first quarter of 2015 was 10.25% and 0.91%, respectively.
“We're very pleased with our financial results to start 2015," said Gregory A. Dufour, president and chief executive officer of the Company. "Our core operating earnings and core diluted EPS grew 12% and 14%, respectively, over the same period last year, and is the result of strong loan growth seen throughout 2014 and into the first quarter of 2015."
Dufour added, "We have much to be excited about already in 2015. In addition to a strong start financially, we announced on March 30, 2015 that the Company entered into a definitive agreement with SBM Financial, Inc. to merge The Bank of Maine into Camden National Bank. This merger will make Camden National the strongest banking franchise in Northern New England while remaining headquartered in Maine."
The Merger of Camden National and SBM Financial, Inc.
On March 30, 2015, Camden National Corporation, the parent company of Camden National Bank, and SBM Financial, Inc. ("SBM"), the parent company of The Bank of Maine, announced the signing of a definitive agreement under which SBM will merge into Camden National and The Bank of Maine will merge into Camden National Bank, creating Maine’s largest community bank. The combined organization will operate under the Camden National Bank name and brand.
Upon completion of the transaction, Camden National will have a combined network of 68 branches and three specialized lending locations. The transaction complements Camden National’s existing footprint and expands the Company’s presence in the higher growth Southern Maine market.
While this investment is expected to dilute Camden National's tangible book value by 14%, we expect to earn back that dilution in five years and report earnings per share accretion in the mid-teens beginning in 2016. The anticipated closing date for the merger is October 2015, subject to shareholder and regulatory approval.
First Quarter 2015 Financial Highlights
• | Core operating earnings increased $657,000, or 12%, over core earnings for the first quarter of 2014. |
• | Core diluted EPS increased $0.10 per share, or 14%, over core diluted EPS for the first quarter of 2014. |
• | Net interest income on a fully-taxable basis increased $1.2 million, or 6%, over the first quarter of 2014 driven by average loan growth of $189.8 million, or 12%. |
• | Asset quality continues to improve as non-performing assets to total assets of 0.67% at March 31, 2015 hit pre-2008 recessionary level. |
• | The Company announced it entered into a definitive merger agreement with SBM, the parent company of The Bank of Maine, with an anticipated closing date in October 2015. |
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1 The following is a non-GAAP measure. Please refer to the "Reconciliation of non-GAAP to GAAP Financial Measures" for further details.
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Balance Sheet
Total assets at March 31, 2015 were $2.8 billion, representing an increase of $21.4 million, or 1%, since December 31, 2014. The growth in total assets was driven by an increase in our loan portfolio of $19.1 million and investments portfolio of $9.9 million since year-end. At March 31, 2015, loan balances, including loans held for sale, totaled $1.8 billion. Loan growth was primarily driven by commercial real estate growth of $16.8 million in the first quarter. The retail portfolio increased $2.1 million to $876.5 million, including loans held for sale, in the first quarter of 2015.
Total deposits at March 31, 2015 increased $34.1 million to $2.0 billion since December 31, 2014. The increase was primarily attributable to growth in brokered deposits of $44.0 million. Core deposits (demand, interest checking, savings, and money market) decreased $7.3 million since year-end due to the seasonality and cyclical nature of deposit flows within our market.
First Quarter 2015 Operating Results Overview
Reported net income for the first quarter of 2015 of $5.6 million decreased $104,000 compared to the same period for 2014. The decrease in net income for the quarter is due to the costs associated with the announcement of the merger of Camden National and SBM totaling $735,000. Excluding these costs and associated taxes, core operating earnings for the first quarter of 2015 was $6.3 million, representing an increase in core operating earnings over the first quarter of 2014 of $657,000.
Net interest income on a fully-taxable basis for the first quarter of 2015 was $19.8 million, representing a $1.2 million, or 6%, increase compared to the same period last year. Average loans for the quarter-ended March 31, 2015 increased $189.8 million to $1.8 billion compared to the same period last year, while average core deposits increased $39.3 million to $1.4 billion over the same period. The Company's net interest margin on a fully-taxable basis for the first quarter of 2015 of 3.07% decreased 1 basis point compared to the same period last year.
Non-interest income for the first quarter of 2015 was $6.1 million, representing a $459,000, or 8%, increase compared to same period last year. The increase was primarily attributable to:
• | $219,000 of income recognized on loan interest rate swap transactions. These transactions enable our commercial customers to lock into a long-term fixed rate while providing the Company with the flexibility of a variable rate to manage interest rate exposure. |
• | $167,000 increase in mortgage banking income as $4.8 million of residential real estate loans were sold. |
• | $106,000 increase in debit card income, of which $54,000 was a one-time annual incentive fee. |
Non-interest expense for the first quarter of 2015 was $16.8 million, representing a $1.7 million, or 11%, increase compared to the same period last year. The factors driving the increase were:
• | Merger and acquisition costs of $735,000 associated with the announced merger with SBM and The Bank of Maine. These costs are primarily legal, investment banking, and other due diligence fees. |
• | An increase in personnel costs of $395,000 due to normal merit increases and hiring of key loan production personnel made by the Company over the past year. |
• | An increase in systems and data processing costs of $134,000 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. |
• | An increase in heating and snow removal costs totaling $91,000 due to the long winter season. |
Asset Quality
Our asset quality over the past year has steadily improved as the financial condition of our borrowers and the general market has strengthened, while also benefiting from the work-out of non-performing assets. The Company has benefited from its strengthened asset quality over the past year as highlighted by the $47,000 decrease in its provision for credit losses for the first quarter of 2015 compared to the same period last year.
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Dividends and Capital
The board of directors approved a dividend of $0.30 per share, payable on April 30, 2015, to shareholders of record as of April 16, 2015. This distribution represents an annualized dividend yield of 3.01%, based on the March 31, 2015 closing price of Camden National's common stock at $39.84 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 14.79%, 13.65%, 11.35%, and 9.31%, respectively, at March 31, 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 newly implemented Basel III capital requirements.
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: the ability of Camden National to successfully close its merger with SBM in October 2015; the ability of Camden National to obtain the requisite regulatory approval for the SBM merger without having to agree to material divestitures of assets, or the imposition of other adverse regulatory conditions; the ability of Camden National to successfully integrate SBM and The Bank of Maine following closing of the transaction; continued weakness in 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 Camden National’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; competitive pressures resulting from 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 Camden National’s assets, impairment of goodwill, the availability and terms of funding necessary to meet Camden National’s liquidity needs, and could lead to impairment in the value of securities in Camden National’s investment portfolio; 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 Camden National’s Annual Report on Form 10-K, as updated by our Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission ("SEC").
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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 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 will file with the SEC a Registration Statement on Form S-4 that will include 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 stockholders are urged to read the Registration Statement and the Proxy Statement/Prospectus regarding the proposed merger when it becomes available 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 (when they become available) and the filings that will be 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.
Participants in Solicitation
Camden National and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Camden National in connection with the proposed merger. Information about the directors and executive officers of Camden National is set forth in the proxy statement for Camden National’s 2015 annual meeting of stockholders, as filed with the SEC on a Schedule 14A on March 12, 2015. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction and a description of their direct and indirect interests, by security holdings or otherwise, may be obtained by reading the Proxy Statement/Prospectus and other relevant documents regarding the proposed merger to be filed with the SEC (when they become available). Free copies of these documents may be obtained as described in the preceding paragraph.
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Selected Financial Data (unaudited) | ||||||||
At or For The Three Months Ended | ||||||||
March 31, 2015 | March 31, 2014 | |||||||
Selected Financial and Per Share Data: | ||||||||
Return on average assets | 0.82 | % | 0.89 | % | ||||
Core return on average assets (non-GAAP)(1) | 0.91 | % | 0.87 | % | ||||
Return on average shareholders' equity | 9.19 | % | 9.97 | % | ||||
Core return on average shareholders' equity (non-GAAP)(1) | 10.25 | % | 9.78 | % | ||||
Core return on average tangible shareholders' equity (non-GAAP)(1) | 13.10 | % | 12.81 | % | ||||
Tangible equity to tangible assets (non-GAAP)(1) | 7.38 | % | 7.04 | % | ||||
Efficiency ratio (non-GAAP)(1) | 61.97 | % | 62.69 | % | ||||
Net interest margin | 3.07 | % | 3.08 | % | ||||
Non-performing loans to total loans | 0.98 | % | 1.68 | % | ||||
Non-performing assets to total assets | 0.67 | % | 1.13 | % | ||||
Annualized net charge-offs to average loans | 0.07 | % | 0.10 | % | ||||
Tier I leverage capital ratio(2) | 9.31 | % | 9.27 | % | ||||
Common equity Tier I risk-based capital ratio(2) | 11.35 | % | N/A | |||||
Tier I risk-based capital ratio(2) | 13.65 | % | 14.64 | % | ||||
Total risk-based capital ratio(2) | 14.79 | % | 15.89 | % | ||||
Basic earnings per share | $ | 0.75 | $ | 0.76 | ||||
Diluted earnings per share | $ | 0.75 | $ | 0.75 | ||||
Cash dividends declared per share | $ | 0.30 | $ | 0.27 | ||||
Book value per share | $ | 33.85 | $ | 30.93 | ||||
Tangible book value per share (non-GAAP)(1) | $ | 27.41 | $ | 24.38 | ||||
Weighted average number of common shares outstanding | 7,431,065 | 7,528,751 | ||||||
Diluted weighted average number of common shares outstanding | 7,453,875 | 7,551,785 | ||||||
(1) Please see "Reconciliation of non-GAAP to GAAP Financial Measures."
(2) March 31, 2015 reported regulatory capital ratios reflect the Basel III regulatory capital rules and framework.
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Consolidated Statements of Condition Data | ||||||||
(In Thousands, Except Number of Shares) | March 31, 2015 (unaudited) | December 31, 2014 | ||||||
ASSETS | ||||||||
Cash and due from banks | $ | 53,074 | $ | 60,813 | ||||
Securities: | ||||||||
Available-for-sale securities, at fair value | 752,164 | 763,063 | ||||||
Held-to-maturity securities, at amortized cost | 41,010 | 20,179 | ||||||
Federal Home Loan Bank and Federal Reserve Bank stock, at cost | 20,391 | 20,391 | ||||||
Total securities | 813,565 | 803,633 | ||||||
Trading account assets | 2,308 | 2,457 | ||||||
Loans held for sale | 625 | — | ||||||
Loans | 1,791,080 | 1,772,610 | ||||||
Less: allowance for loan losses | (21,265 | ) | (21,116 | ) | ||||
Net loans | 1,769,815 | 1,751,494 | ||||||
Bank-owned life insurance | 58,222 | 57,800 | ||||||
Goodwill and other intangible assets | 47,884 | 48,171 | ||||||
Premises and equipment, net | 23,606 | 23,886 | ||||||
Deferred tax assets | 14,118 | 14,434 | ||||||
Interest receivable | 6,458 | 6,017 | ||||||
Other real estate owned | 1,381 | 1,587 | ||||||
Other assets | 20,148 | 19,561 | ||||||
Total assets | $ | 2,811,204 | $ | 2,789,853 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Liabilities | ||||||||
Deposits: | ||||||||
Demand | $ | 255,574 | $ | 263,013 | ||||
Interest checking | 480,528 | 480,521 | ||||||
Savings and money market | 653,834 | 653,708 | ||||||
Certificates of deposit | 314,532 | 317,123 | ||||||
Brokered deposits | 261,706 | 217,732 | ||||||
Total deposits | 1,966,174 | 1,932,097 | ||||||
Federal Home Loan Bank advances | 56,020 | 56,039 | ||||||
Other borrowed funds | 447,530 | 476,939 | ||||||
Junior subordinated debentures | 44,050 | 44,024 | ||||||
Accrued interest and other liabilities | 45,631 | 35,645 | ||||||
Total liabilities | 2,559,405 | 2,544,744 | ||||||
Shareholders’ Equity | ||||||||
Common stock, no par value; authorized 20,000,000 shares, issued and outstanding 7,438,929 and 7,426,222 shares on March 31, 2015 and December 31, 2014, respectively | 41,889 | 41,555 | ||||||
Retained earnings | 215,361 | 211,979 | ||||||
Accumulated other comprehensive income (loss): | ||||||||
Net unrealized gains (losses) on available-for-sale securities, net of tax | 3,789 | (319 | ) | |||||
Net unrealized losses on derivative instruments, at fair value, net of tax | (7,115 | ) | (5,943 | ) | ||||
Net unrecognized losses on postretirement plans, net of tax | (2,125 | ) | (2,163 | ) | ||||
Total accumulated other comprehensive loss | (5,451 | ) | (8,425 | ) | ||||
Total shareholders’ equity | 251,799 | 245,109 | ||||||
Total liabilities and shareholders’ equity | $ | 2,811,204 | $ | 2,789,853 | ||||
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Consolidated Statements of Income Data (unaudited) | ||||||||
For The Three Months Ended March 31, | ||||||||
(In Thousands, Except Per Share Data) | 2015 | 2014 | ||||||
Interest Income | ||||||||
Interest and fees on loans | $ | 18,084 | $ | 16,780 | ||||
Interest on U.S. government and sponsored enterprise obligations | 3,872 | 4,230 | ||||||
Interest on state and political subdivision obligations | 387 | 294 | ||||||
Interest on federal funds sold and other investments | 108 | 89 | ||||||
Total interest income | 22,451 | 21,393 | ||||||
Interest Expense | ||||||||
Interest on deposits | 1,529 | 1,551 | ||||||
Interest on borrowings | 860 | 807 | ||||||
Interest on junior subordinated debentures | 625 | 625 | ||||||
Total interest expense | 3,014 | 2,983 | ||||||
Net interest income | 19,437 | 18,410 | ||||||
Provision for credit losses | 446 | 493 | ||||||
Net interest income after provision for credit losses | 18,991 | 17,917 | ||||||
Non-Interest Income | ||||||||
Service charges on deposit accounts | 1,487 | 1,469 | ||||||
Other service charges and fees | 1,510 | 1,395 | ||||||
Income from fiduciary services | 1,220 | 1,184 | ||||||
Brokerage and insurance commissions | 449 | 478 | ||||||
Bank-owned life insurance | 422 | 306 | ||||||
Mortgage banking income, net | 239 | 72 | ||||||
Net gain on sale of securities | — | 166 | ||||||
Other income | 817 | 615 | ||||||
Total non-interest income | 6,144 | 5,685 | ||||||
Non-Interest Expense | ||||||||
Salaries and employee benefits | 8,375 | 7,980 | ||||||
Furniture, equipment and data processing | 1,923 | 1,789 | ||||||
Net occupancy | 1,472 | 1,380 | ||||||
Consulting and professional fees | 591 | 518 | ||||||
Other real estate owned and collection costs | 562 | 513 | ||||||
Regulatory assessments | 510 | 481 | ||||||
Amortization of intangible assets | 287 | 287 | ||||||
Merger and acquisition costs | 735 | — | ||||||
Other expenses | 2,346 | 2,177 | ||||||
Total non-interest expense | 16,801 | 15,125 | ||||||
Income before income taxes | 8,334 | 8,477 | ||||||
Income Taxes | 2,723 | 2,762 | ||||||
Net Income | $ | 5,611 | $ | 5,715 | ||||
Per Share Data | ||||||||
Basic earnings per share | $ | 0.75 | $ | 0.76 | ||||
Diluted earnings per share | $ | 0.75 | $ | 0.75 | ||||
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Quarterly Average Balance, Interest and Yield/Rate Analysis (unaudited) | ||||||||||||||||||||||
For The Three Months Ended March 31, | ||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||
(In Thousands) | Average Balance | Interest | Yield/Rate | Average Balance | Interest | Yield/Rate | ||||||||||||||||
Assets | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Securities - taxable | $ | 745,518 | $ | 3,978 | 2.13 | % | $ | 793,696 | $ | 4,318 | 2.18 | % | ||||||||||
Securities - nontaxable(1) | 51,099 | 595 | 4.66 | % | 32,709 | 452 | 5.52 | % | ||||||||||||||
Trading account assets | 2,455 | 3 | 0.44 | % | 2,486 | 2 | 0.26 | % | ||||||||||||||
Loans(2): | ||||||||||||||||||||||
Residential real estate | 585,581 | 6,014 | 4.11 | % | 568,205 | 5,965 | 4.20 | % | ||||||||||||||
Commercial real estate | 652,770 | 6,958 | 4.26 | % | 553,472 | 6,282 | 4.54 | % | ||||||||||||||
Commercial | 243,068 | 2,364 | 3.89 | % | 170,146 | 1,690 | 3.98 | % | ||||||||||||||
Municipal(1) | 10,551 | 100 | 3.85 | % | 10,900 | 114 | 4.23 | % | ||||||||||||||
Consumer | 289,301 | 2,785 | 3.91 | % | 288,725 | 2,768 | 3.89 | % | ||||||||||||||
Total loans | 1,781,271 | 18,221 | 4.10 | % | 1,591,448 | 16,819 | 4.24 | % | ||||||||||||||
Total interest-earning assets | 2,580,343 | 22,797 | 3.54 | % | 2,420,339 | 21,591 | 3.57 | % | ||||||||||||||
Cash and due from banks | 46,974 | 41,502 | ||||||||||||||||||||
Other assets | 178,469 | 165,762 | ||||||||||||||||||||
Less: allowance for loan losses | (21,228 | ) | (21,604 | ) | ||||||||||||||||||
Total assets | $ | 2,784,558 | $ | 2,605,999 | ||||||||||||||||||
Liabilities & Shareholders' Equity | ||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||
Demand | $ | 257,161 | — | — | $ | 227,426 | — | — | ||||||||||||||
Interest checking | 480,580 | 85 | 0.07 | % | 461,544 | 77 | 0.07 | % | ||||||||||||||
Savings | 266,032 | 38 | 0.06 | % | 244,460 | 33 | 0.06 | % | ||||||||||||||
Money market | 390,568 | 289 | 0.30 | % | 421,607 | 306 | 0.29 | % | ||||||||||||||
Certificates of deposit | 313,518 | 721 | 0.93 | % | 338,211 | 803 | 0.96 | % | ||||||||||||||
Total deposits | 1,707,859 | 1,133 | 0.27 | % | 1,693,248 | 1,219 | 0.29 | % | ||||||||||||||
Borrowings: | ||||||||||||||||||||||
Brokered deposits | 225,635 | 396 | 0.71 | % | 103,246 | 332 | 1.30 | % | ||||||||||||||
Junior subordinated debentures | 44,037 | 625 | 5.75 | % | 43,935 | 625 | 5.77 | % | ||||||||||||||
Other borrowings | 522,109 | 860 | 0.67 | % | 504,024 | 807 | 0.65 | % | ||||||||||||||
Total borrowings | 791,781 | 1,881 | 0.96 | % | 651,205 | 1,764 | 1.10 | % | ||||||||||||||
Total funding liabilities | 2,499,640 | 3,014 | 0.49 | % | 2,344,453 | 2,983 | 0.52 | % | ||||||||||||||
Other liabilities | 37,186 | 29,007 | ||||||||||||||||||||
Shareholders' equity | 247,732 | 232,539 | ||||||||||||||||||||
Total liabilities & shareholders' equity | $ | 2,784,558 | $ | 2,605,999 | ||||||||||||||||||
Net interest income (fully-taxable equivalent) | 19,783 | 18,608 | ||||||||||||||||||||
Less: fully-taxable equivalent adjustment | (346 | ) | (198 | ) | ||||||||||||||||||
Net interest income | $ | 19,437 | $ | 18,410 | ||||||||||||||||||
Net interest rate spread (fully-taxable equivalent) | 3.05 | % | 3.05 | % | ||||||||||||||||||
Net interest margin (fully-taxable equivalent) | 3.07 | % | 3.08 | % | ||||||||||||||||||
(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. | ||||||||||||||||||||||
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Asset Quality Data (unaudited) | ||||||||||||||||||||
(In Thousands) | At or For The Three Months Ended March 31, 2015 | At or For The Year Ended December 31, 2014 | At or For The Nine Months Ended September 30, 2014 | At or For The Six Months Ended June 30, 2014 | At or For The Three Months Ended March 31, 2014 | |||||||||||||||
Non-accrual loans: | ||||||||||||||||||||
Residential real estate | $ | 5,630 | $ | 6,056 | $ | 7,098 | $ | 7,887 | $ | 9,125 | ||||||||||
Commercial real estate | 4,083 | 7,043 | 5,707 | 6,282 | 8,278 | |||||||||||||||
Commercial | 1,442 | 1,529 | 3,051 | 3,840 | 1,935 | |||||||||||||||
Consumer | 1,942 | 2,011 | 2,169 | 2,575 | 2,457 | |||||||||||||||
Total non-accrual loans | 13,097 | 16,639 | 18,025 | 20,584 | 21,795 | |||||||||||||||
Loans 90 days past due and accruing | — | — | — | 109 | 50 | |||||||||||||||
Renegotiated loans not included above | 4,433 | 4,539 | 5,198 | 5,379 | 5,413 | |||||||||||||||
Total non-performing loans | 17,530 | 21,178 | 23,223 | 26,072 | 27,258 | |||||||||||||||
Other real estate owned: | ||||||||||||||||||||
Residential real estate | 533 | 575 | 554 | 912 | 1,035 | |||||||||||||||
Commercial real estate | 848 | 1,012 | 1,012 | 1,305 | 1,677 | |||||||||||||||
Total other real estate owned | 1,381 | 1,587 | 1,566 | 2,217 | 2,712 | |||||||||||||||
Total non-performing assets | $ | 18,911 | $ | 22,765 | $ | 24,789 | $ | 28,289 | $ | 29,970 | ||||||||||
Loans 30-89 days past due: | ||||||||||||||||||||
Residential real estate | $ | 798 | $ | 1,303 | $ | 880 | $ | 1,800 | $ | 1,349 | ||||||||||
Commercial real estate | 959 | 381 | 1,675 | 1,151 | 1,716 | |||||||||||||||
Commercial | 144 | 656 | 2,027 | 466 | 1,007 | |||||||||||||||
Consumer | 707 | 891 | 2,015 | 569 | 632 | |||||||||||||||
Total loans 30-89 days past due | $ | 2,608 | $ | 3,231 | $ | 6,597 | $ | 3,986 | $ | 4,704 | ||||||||||
Allowance for loan losses at the beginning of the period | $ | 21,116 | $ | 21,590 | $ | 21,590 | $ | 21,590 | $ | 21,590 | ||||||||||
Provision for loan losses | 440 | 2,224 | 1,675 | 1,141 | 492 | |||||||||||||||
Charge-offs: | ||||||||||||||||||||
Residential real estate | 113 | 785 | 370 | 361 | 183 | |||||||||||||||
Commercial real estate | 55 | 361 | 276 | 176 | 171 | |||||||||||||||
Commercial | 159 | 1,544 | 1,201 | 526 | 219 | |||||||||||||||
Consumer | 97 | 754 | 371 | 146 | 76 | |||||||||||||||
Total charge-offs | 424 | 3,444 | 2,218 | 1,209 | 649 | |||||||||||||||
Total recoveries | 133 | 746 | 538 | 383 | 237 | |||||||||||||||
Net charge-offs | 291 | 2,698 | 1,680 | 826 | 412 | |||||||||||||||
Allowance for loan losses at the end of the period | $ | 21,265 | $ | 21,116 | $ | 21,585 | $ | 21,905 | $ | 21,670 | ||||||||||
Components of allowance for credit losses: | ||||||||||||||||||||
Allowance for loan losses | $ | 21,265 | $ | 21,116 | $ | 21,585 | $ | 21,905 | $ | 21,670 | ||||||||||
Liability for unfunded credit commitments | 23 | 17 | 21 | 16 | 22 | |||||||||||||||
Balance of allowance for credit losses | $ | 21,288 | $ | 21,133 | $ | 21,606 | $ | 21,921 | $ | 21,692 | ||||||||||
Ratios: | ||||||||||||||||||||
Non-performing loans to total loans | 0.98 | % | 1.19 | % | 1.35 | % | 1.54 | % | 1.68 | % | ||||||||||
Non-performing assets to total assets | 0.67 | % | 0.82 | % | 0.90 | % | 1.05 | % | 1.13 | % | ||||||||||
Allowance for credit losses to total loans | 1.19 | % | 1.19 | % | 1.25 | % | 1.29 | % | 1.34 | % | ||||||||||
Net charge-offs to average loans (annualized): | ||||||||||||||||||||
Quarter-to-date | 0.07 | % | 0.23 | % | 0.20 | % | 0.10 | % | 0.10 | % | ||||||||||
Year-to-date | 0.07 | % | 0.16 | % | 0.13 | % | 0.10 | % | 0.10 | % | ||||||||||
Allowance for credit losses to non-performing loans | 121.43 | % | 99.79 | % | 93.04 | % | 84.08 | % | 79.58 | % | ||||||||||
Loans 30-89 days past due to total loans | 0.15 | % | 0.18 | % | 0.38 | % | 0.23 | % | 0.29 | % | ||||||||||
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Reconciliation of non-GAAP to GAAP Financial Measures
Efficiency Ratio: | ||||||||
Three Months Ended March 31, | ||||||||
(In Thousands) | 2015 | 2014 | ||||||
Non-interest expense, as presented | $ | 16,801 | $ | 15,125 | ||||
Less: merger and acquisition costs | 735 | — | ||||||
Adjusted non-interest expense | $ | 16,066 | $ | 15,125 | ||||
Net interest income, as presented | $ | 19,437 | $ | 18,410 | ||||
Add: effect of tax-exempt income1 | 346 | 198 | ||||||
Non-interest income, as presented | 6,144 | 5,685 | ||||||
Less: net gain on sale of securities | — | 166 | ||||||
Adjusted net interest income plus non-interest income | $ | 25,927 | $ | 24,127 | ||||
Non-GAAP efficiency ratio | 61.97 | % | 62.69 | % | ||||
GAAP efficiency ratio | 65.68 | % | 62.77 | % | ||||
(1) Assumed 35.0% tax rate. | ||||||||
Tax-Equivalent Net Interest Income: | ||||||||
Three Months Ended March 31, | ||||||||
(In Thousands) | 2015 | 2014 | ||||||
Net interest income, as presented | $ | 19,437 | $ | 18,410 | ||||
Add: effect of tax-exempt income1 | 346 | 198 | ||||||
Net interest income, tax equivalent | $ | 19,783 | $ | 18,608 | ||||
(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) | March 31, | ||||||||
Tangible Book Value Per Share: | 2015 | 2014 | |||||||
Shareholders' equity, as presented | $ | 251,799 | $ | 231,469 | |||||
Less: goodwill and other intangible assets | 47,884 | 49,032 | |||||||
Tangible shareholders' equity | $ | 203,915 | $ | 182,437 | |||||
Shares outstanding at period end | 7,438,929 | 7,484,560 | |||||||
Tangible book value per share | $ | 27.41 | $ | 24.38 | |||||
Book value per share | $ | 33.85 | $ | 30.93 | |||||
Tangible Equity to Tangible Assets: | |||||||||
Total assets | $ | 2,811,204 | $ | 2,640,666 | |||||
Less: goodwill and other intangibles | 47,884 | 49,032 | |||||||
Tangible assets | $ | 2,763,320 | $ | 2,591,634 | |||||
Tangible shareholders' equity to tangible assets | 7.38 | % | 7.04 | % | |||||
Shareholders' equity to assets | 8.96 | % | 8.77 | % | |||||
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Core Operating Earnings, Core Basic and Diluted EPS, Core Return on Average Assets, and Core Return on Average Shareholders' Equity: The following tables provide a reconciliation of GAAP net income, GAAP basic and diluted EPS, GAAP return on average assets, and GAAP return on average shareholders' equity for the three months ended March 31, 2015 and 2014 to exclude the financial impact of certain transactions for which management does not believe are representative of its core operations. Management utilizes core operating earnings, core basic and diluted EPS, core return on average assets and average tangible assets, and core return on average shareholders' equity to compare and assess financial results period-over-period.
For The Three Months Ended March 31, | ||||||||
(In Thousands, Except Per Share Data) | 2015 | 2014 | ||||||
Core Operating Earnings: | ||||||||
Net income, as presented | $ | 5,611 | $ | 5,715 | ||||
Merger and acquisition costs, net of tax1 | 653 | — | ||||||
Gains on sale of securities, net of tax1 | — | (108 | ) | |||||
Core operating earnings | $ | 6,264 | $ | 5,607 | ||||
Core Basic EPS: | ||||||||
Basic EPS, as presented | $ | 0.75 | $ | 0.76 | ||||
Non-core transactions impact | 0.09 | (0.01 | ) | |||||
Core basic EPS | $ | 0.84 | $ | 0.75 | ||||
Core Diluted EPS: | ||||||||
Diluted EPS, as presented | $ | 0.75 | $ | 0.75 | ||||
Non-core transactions impact | 0.09 | (0.01 | ) | |||||
Core diluted EPS | $ | 0.84 | $ | 0.74 | ||||
Core Return on Average Assets: | ||||||||
Return on average assets, as presented | 0.82 | % | 0.89 | % | ||||
Non-core transactions impact | 0.09 | % | (0.02 | )% | ||||
Core return on average assets | 0.91 | % | 0.87 | % | ||||
Core Return on Average Equity: | ||||||||
Return on average shareholders' equity, as presented | 9.19 | % | 9.97 | % | ||||
Non-core transactions impact | 1.06 | % | (0.19 | )% | ||||
Core return on average shareholders' equity | 10.25 | % | 9.78 | % | ||||
(1) Assumed 35.0% tax rate | ||||||||
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Core Return on Average Tangible Shareholders' Equity: | ||||||||
Three Months Ended March 31, | ||||||||
(In Thousands) | 2015 | 2014 | ||||||
Net income, as presented | $ | 5,611 | $ | 5,715 | ||||
Amortization of intangible assets, net of tax1 | 187 | 187 | ||||||
Merger and acquisition costs, net of tax1 | 653 | — | ||||||
Gains on sale of securities, net of tax1 | — | (108 | ) | |||||
Core tangible operating earnings | $ | 6,451 | $ | 5,794 | ||||
Average shareholders' equity | $ | 247,732 | $ | 232,539 | ||||
Less: average goodwill and other intangible assets | 48,017 | 49,168 | ||||||
Average tangible shareholders' equity | $ | 199,715 | $ | 183,371 | ||||
Core return on average tangible shareholders' equity | 13.10 | % | 12.81 | % | ||||
Return on average shareholders' equity | 9.19 | % | 9.97 | % | ||||
(1) Assumed 35.0% tax rate | ||||||||
CONTACT: Michael R. Archer, Vice President, Corporate Controller, Camden National Corporation, (800) 860-8821, marcher@camdennational.com
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