EX-99.1 2 a6016184-ex991.htm EXHIBIT 99.1

Exhibit 99.1

Camden National Corporation Reports Second Quarter 2009 Results

CAMDEN, Maine--(BUSINESS WIRE)--July 28, 2009--Gregory A. Dufour, president and chief executive officer of Camden National Corporation (NASDAQ: CAC; the "Company"), reported net income for the second quarter 2009 of $5.0 million, a decrease of $2.1 million, as compared to $7.1 million earned during the second quarter of 2008. Net income for the six months ended June 30, 2009 was $11.2 million, a decrease of $2.1 million from the $13.3 million earned during the same period in 2008. Diluted earnings per share for the second quarter of 2009 were $0.65 compared to $0.92 for the same period in 2008. Year-to-date diluted earnings per share were $1.47 in 2009 compared to $1.73 in 2008.

Earnings for the second quarter of 2009, when compared to the second quarter of 2008, were negatively impacted by an increase in loan loss provision and higher FDIC insurance premiums which resulted in an additional $3.9 million in pre-tax expense or $0.33 per diluted common share after tax. The Company’s core results were solid with improvements in net interest margin, growth in fee income, and a reduction in operating expenses other than the FDIC cost.

“While the banking industry continues to face significant challenges, I am pleased that our solid earnings base is allowing us to absorb the increased FDIC assessments while continuing to strengthen our balance sheet reserves,” commented Dufour. “Our capital levels continue to exceed the minimum standards to be considered “well capitalized” and we are providing support to our local economies through lending without the assistance of bailout funds from the U.S. Treasury’s Troubled Asset Relief Program.”

Operating Highlights

Net interest income for the second quarter of 2009 increased 3% to $18.3 million compared to $17.8 million for the second quarter of 2008. The net interest margin was 3.55% in the quarter just ended compared to 3.43% in the second quarter of 2008, an increase of 12 basis points. The Company’s ability to improve pricing on deposits and borrowings and minimize the decline of interest rates on loans allowed improvement in the net interest margin.

Non-interest income for the second quarter of 2009 was $5.0 million compared to $4.7 million for the second quarter of 2008, an increase of $339,000 or 7%. The increase was primarily due to additional mortgage banking income of $501,000 related to service-retained loan sales during the quarter. Income from fiduciary services at Acadia Trust, N.A. decreased 11% primarily due to market value declines in assets under administration.

Non-interest expense for the second quarter of 2009 was $13.4 million compared to $11.9 million for the second quarter of 2008, an increase of $1.5 million or 13%. As noted above, FDIC and regulatory assessment fees increased, while other non-interest expense items for the second quarter of 2009 decreased by $139,000, or 1%, when compared to the second quarter of 2008.

For the second quarter of 2009, the returns on average equity and average assets were 11.54% and 0.88%, compared to 16.69% and 1.24%, respectively, for the second quarter of 2008.

Financial Condition

The Company’s total assets at June 30, 2009 were $2.3 billion, a decrease of $7.2 million compared to total assets at June 30, 2008. Total loans (including residential loans held for sale) at June 30, 2009 were $1.5 billion, a decrease of $11.8 million over the same period one year ago. This decrease was due to a decline in commercial loans of $28.0 million partially offset by a $13.8 million increase in the consumer loan portfolio driven by increased home equity loan demand. Historically low mortgage rates have resulted in strong residential real estate loan activity. During the first half of 2009, the Company sold $44.0 million of the mortgage production for interest-rate risk management purposes. Investments decreased $7.2 million primarily due to increased cash flows that were not reinvested into the investment portfolio due to the current low interest-rate environment.

Total deposits of $1.5 billion at June 30, 2009 increased $67.6 million over the same period one year ago, reflecting growth of $59.1 million in retail certificates of deposit related to specific marketing campaigns and an increase in interest checking, savings and money market deposits of $23.8 million. Growth in core deposits was partially offset by decreases in brokered funds of $10.4 million and demand deposits of $4.9 million. Due in part to the increase in deposit balances, the Company’s Federal Home Loan Bank borrowings decreased $120.1 million at June 30, 2009 compared to June 30, 2008.

Asset Quality

“Asset quality continues to be monitored closely at Camden National,” said Dufour. “In the current economic environment, we need to be vigilant and when necessary respond quickly to take appropriate action to mitigate risks on our balance sheet. We feel our risk management processes as well as our reserve levels provide us the flexibility to take the appropriate steps when required.”

Non-performing assets totaled $22.3 million, or 0.97%, of total assets at June 30, 2009 compared to $14.0 million, or 0.61%, of total assets at June 30, 2008 and $20.4 million, or 0.89%, of total assets at March 31, 2009. The allowance for loan losses was 1.23% of total loans at June 30, 2009 compared to 1.13% of total loans at June 30, 2008 and 1.20% of total loans at March 31, 2009.

The provision for loan losses was $2.8 million for the three months ended June 30, 2009 and $450,000 for the three months ended June 30, 2008. The Company’s loan loss reserve analysis called for an increase in loan loss provision in the second quarter due to increased charge-offs resulting from a general weakening of the economy. Net charge-offs were $1.8 million for the three months ended June 30, 2009 and $163,000 for the three months ended June 30, 2008.

Dividends and Capital

The Board of Directors approved a dividend of $0.25 per share, payable on July 31, 2009 for shareholders of record on July 15, 2009, which is equal to the dividend declared in the same period last year.

At June 30, 2009, the Company had a total risk-based capital ratio of 12.78%, a tier 1 capital ratio of 11.53%, and a tier 1 leverage capital ratio of 7.64%. At June 30, 2009, the Bank reported a total risk-based capital ratio of 11.88%, a tier 1 capital ratio of 10.63%, and a tier 1 leverage capital ratio of 6.97%. The Company and the Bank exceeded the minimum ratios of 10.0%, 6.0%, and 5.0%, respectively, required by the Federal Reserve for an institution to be considered “well capitalized.”

In closing, Dufour noted, “Camden National and all of its employees understand the important role we have as community bankers. While we are addressing issues caused by the economic downturn, we are simultaneously providing loans and savings vehicles to our Bank customers as well as providing superior investment advice to our wealth management clients.”

Camden National Corporation, headquartered in Camden, Maine, and listed on the NASDAQ® Global Select Market under the symbol CAC, is the holding company employing more than 400 Maine residents for two financial services companies, including Camden National Bank (CNB), a full-service community bank with a network of 37 banking offices serving coastal, western, central, and eastern Maine, and Acadia Trust, N.A., offering investment management and fiduciary services with offices in Portland, Bangor, and Ellsworth. Located at Camden National Bank, Acadia Financial Consultants offers full-service brokerage and insurance services.

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. Forward-looking statements can be identified by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "will," "should," 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 the Company. These risks, uncertainties and other factors may cause the actual results, performance or achievements of the Company 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 the following: changes in general, national or regional economic conditions; changes in loan default and charge-off rates; reductions in deposit levels necessitating increased borrowing to fund loans and investments; changes in interest rates; changes in the value of investments securities or other assets; changes in laws and regulations, including changes in tax treatment; changes in the size and nature of the Company's competition; and changes in the assumptions used in making such forward-looking statements. Other factors could also cause these differences. For more information about these factors please see our Annual Report on Form 10-K, as updated by our Quarterly Reports on Form 10-Q and other filings on file 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 the Company does not promise to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Statement of Income Data (unaudited)
         
Three Months Ended Six Months Ended
      June 30,     June 30,
(In thousands, except number of shares and per share data)     2009       2008       2009       2008  
 
Interest income
Interest and fees on loans $ 21,270 $ 24,409 $ 42,891 $ 49,723
Interest on securities and other   7,424     7,668     15,345     15,269  
Total interest income 28,694 32,077 58,236 64,992
Interest expense
Interest on deposits 5,936 7,559 12,330 16,501
Interest on borrowings   4,414     6,673     9,061     13,477  
Total interest expense   10,350     14,232     21,391     29,978  
Net interest income 18,344 17,845 36,845 35,014
Provision for loan losses   2,784     450     4,514     950  
Net interest income after provision for loan losses 15,560 17,395 32,331 34,064
Non-interest income
Service charges on deposit accounts 1,350 1,466 2,582 2,692
Other service charges and fees 810 696 1,424 1,335
Income from fiduciary services 1,508 1,699 2,861 3,378
Mortgage banking income (loss), net 416 (85 ) 871 (215 )
Bank-owned life insurance 345 285 740 578
Other income   615     644     1,120     1,154  
Total non-interest income before net investment securities gains 5,044 4,705 9,598 8,922
Net investment securities gains   -     -     -     180  
Total non-interest income 5,044 4,705 9,598 9,102
Non-interest expenses
Salaries and employee benefits 6,446 6,400 12,124 13,051
Net occupancy 969 1,010 2,092 2,081
Furniture and equipment 879 982 1,716 1,834
Consulting and service fees 750 729 1,442 1,443
OREO and collection costs 282 172 1,162 399
Regulatory assessments 1,740 98 2,611 259
Donations and marketing 329 472 582 820
Communication costs 407 404 824 798
Other expenses   1,614     1,646     3,154     3,489  
Total non-interest expenses   13,416     11,913     25,707     24,174  
Income before income taxes 7,188 10,187 16,222 18,992
Income taxes   2,184     3,080     5,004     5,691  
Net income $ 5,004   $ 7,107   $ 11,218   $ 13,301  
 
 
Selected Financial and Per Share Data:
Return on average equity 11.54 % 16.69 % 13.24 % 15.77 %
Return on average tangible equity 15.79 % 23.21 % 18.24 % 22.21 %
Return on average assets 0.88 % 1.24 % 0.99 % 1.17 %
Efficiency ratio (1) 57.36 % 52.83 % 55.35 % 55.02 %
Basic earnings per share $ 0.66 $ 0.92 $ 1.47 $ 1.73
Diluted earnings per share $ 0.65 $ 0.92 $ 1.47 $ 1.73
Cash dividends paid per share $ 0.25 $ 0.25 $ 0.50 $ 0.49
Weighted average number of shares outstanding 7,641,083 7,695,798 7,640,119 7,694,326
 
(1) Computed by dividing non-interest expense by the sum of net interest income and non-interest income (excluding net investment securities gains).
Statement of Condition Data (unaudited)
     
    June 30,   June 30,   December 31,
(In thousands, except number of shares)     2009       2008       2008  
 
Assets
Cash and due from banks $ 38,657 $ 36,373 $ 35,195
Securities:
Securities available for sale, at fair value 554,335 554,516 606,031
Securities held to maturity, at amortized cost 40,951 42,132 42,040
Federal Home Loan and Federal Reserve Bank stock, at cost   21,965     27,786     21,969  
Total securities 617,251 624,434 670,040
Trading account assets 1,495 1,636 1,304
Loans held for sale 17,364 - -
Loans:
Residential real estate 614,072 628,285 621,048
Commercial real estate 410,625 411,373 400,312
Commercial 208,115 236,139 213,683
Consumer   264,959     251,161     265,865  
Total loans 1,497,771 1,526,958 1,500,908
Less allowance for loan losses   (18,654 )   (17,266 )   (17,691 )
Net loans 1,479,117 1,509,692 1,483,217
Goodwill 41,780 42,383 41,857
Bank-owned life insurance 41,199 35,301 40,459
Premises and equipment, net 25,174 27,068 25,872
Other real estate owned 5,856 296 4,024
Other assets   38,457     36,412     39,528  
Total assets $ 2,306,350   $ 2,313,595   $ 2,341,496  
 
Liabilities
Deposits:
Demand $ 179,522 $ 184,409 $ 180,407
Interest checking, savings and money market 643,179 619,394 632,664
Retail certificates of deposit 583,942 524,887 593,013
Brokered deposits   70,155     80,540     83,433  
Total deposits 1,476,798 1,409,230 1,489,517
Federal Home Loan Bank advances 217,750 337,806 258,925
Other borrowed funds 355,476 322,373 359,470
Junior subordinated debentures 43,461 43,342 43,410
Accrued interest and other liabilities   35,636     28,699     23,774  
Total liabilities   2,129,121     2,141,450     2,175,096  
 
Shareholders' Equity

Common stock, no par value; authorized 20,000,000 shares, issued and
 outstanding 7,644,829, 7,686,441, and 7,638,713 on June 30, 2009
 and 2008 and December 31, 2008, respectively

3,150 2,814 2,851
Surplus 46,083 46,051 46,133
Retained earnings 125,900 123,831 118,564
Accumulated other comprehensive income (loss)
Net unrealized gains (losses) on securities available for sale, net of tax 2,742 (197 ) (89 )
Net unrealized gains on derivative instruments, at fair value, net of tax 382 - -
Net unrecognized losses on post-retirement plans, net of tax   (1,028 )   (354 )   (1,059 )
Total accumulated other comprehensive income (loss)   2,096     (551 )   (1,148 )
Total shareholders' equity   177,229     172,145     166,400  
Total liabilities and shareholders' equity $ 2,306,350   $ 2,313,595   $ 2,341,496  
Average Balance, Interest and Yield/Rate Analysis (unaudited)
           
At or for the Six Months Ended At or for the Six Months Ended
June 30, 2009 June 30, 2008
(In thousands) Average
Balance 		Interest Yield/
Rate 		Average
Balance 		Interest

Yield/
Rate

Assets
Interest-earning assets:
Securities - taxable $ 572,278 $ 14,082 4.92 % $ 543,792 $ 13,882 5.11 %
Securities - nontaxable (1) 65,978 1,929 5.85 % 70,871 2,039 5.78 %
Trading account assets 1,338 10 1.49 % 1,552 35 4.51 %
Federal funds sold - - 0.00 % 679 10 2.95 %
Loans: (1) (2)
Residential real estate 618,773 18,346 5.93 % 629,180 19,035 6.05 %
Commercial real estate 401,886 12,449 6.25 % 419,126 14,951 7.17 %
Commercial 185,582 5,160 5.61 % 213,229 7,731 7.29 %
Municipal 23,111 568 4.96 % 19,642 530 5.43 %
Consumer   264,087     6,557   5.01 %   236,345     7,650   6.51 %
Total Loans   1,493,439     43,080   5.80 %   1,517,522     49,897   6.61 %
Total interest-earning assets   2,133,033     59,101   5.56 %   2,134,416     65,863   6.20 %
 
Cash and due from banks 26,989 36,079
Other assets 153,569 139,643
Less allowance for loan losses   (18,091 )   (17,450 )
Total assets $ 2,295,500   $ 2,292,688  
 
Liabilities & Shareholders' Equity
Interest-bearing liabilities:
NOW accounts $ 193,199 454 0.47 % $ 185,235 863 0.94 %
Savings accounts 135,180 241 0.36 % 132,862 420 0.64 %
Money market accounts 296,110 1,723 1.17 % 346,954 4,233 2.48 %
Certificates of deposit   588,837     8,927   3.06 %   500,163     9,478   3.81 %
Total retail deposits   1,213,326     11,345   1.89 %   1,165,214     14,994   2.59 %
Broker deposits 77,275 985 2.57 % 67,142 1,506 4.51 %
Junior subordinated debentures 43,436 1,424 6.61 % 43,331 1,443 6.70 %
Borrowings   596,455     7,637   2.58 %   644,728     12,035   3.75 %
Total wholesale funding   717,166     10,046   2.82 %   755,201     14,984   3.99 %
Total Interest-bearing liabilities   1,930,492     21,391   2.23 %   1,920,415     29,978   3.14 %
 
Demand deposits 172,766 176,916
Other liabilities 21,347 25,699
Shareholders' equity   170,895     169,658  
Total liabilities & shareholders' equity $ 2,295,500   $ 2,292,688  
 
 
Net Interest Income (fully-taxable equivalent) 37,710 35,885
Less: fully-taxable equivalent adjustment   (865 )   (871 )
$ 36,845   $ 35,014  
 
Net interest rate spread (fully-taxable equivalent) 3.33 % 3.06 %
Net interest margin (fully-taxable equivalent) 3.57 % 3.37 %
 
     
 
(1) Reported on tax-equivalent basis calculated using a rate of 35%.
(2) Non-accrual loans and loans held for sale are included in total average loans.
Asset Quality Data (unaudited)
       
    At or for the Six Months Ended
June 30, 		   

At or for
the Year Ended
December 31,

(In thousands)   2009     2008       2008
 
Non-accrual loans:
Residential real estate $ 5,454 $ 2,969 $ 4,048
Commercial real estate 5,831 7,255 4,957
Commercial 3,822 2,471 2,384
Consumer   1,181     891     1,112  
Total non-accrual loans 16,288 13,586 12,501
Accruing loans past due 90 days   121     158     206  
Total non-performing loans 16,409 13,744 12,707
Other real estate owned:
Residential real estate 2,244 34 187
Commercial real estate 3,612 262 3,575
Commercial   -     -     262  
Total other real estate owned   5,856     296     4,024  
Total non-performing assets $ 22,265   $ 14,040   $ 16,731  
 
Loans 30-89 days past due:
Residential real estate $ 1,026 $ 488 $ 2,880
Commercial real estate 1,761 1,083 2,314
Commercial 1,612 932 3,601
Consumer   377     414     829  
Total loans 30-89 days past due $ 4,776   $ 2,917   $ 9,624  
 
 
Allowance at the beginning of the period $ 17,691 $ 13,653 $ 13,653
Acquired from Union Trust - 4,369 4,369
Provision for loan losses 4,514 950 4,397
Charge-offs:
Residential real estate 259 40 221
Commercial real estate 1,514 734 3,236
Commercial 1,654 937 1,286
Consumer   571     360     810  
Total charge-offs: 3,998 2,071 5,553
Total recoveries:   447     365     825  
Net charge-offs   3,551     1,706     4,728  
Allowance at the end of the period $ 18,654   $ 17,266   $ 17,691  
 
Asset Quality Ratios:
Non-performing loans to total loans 1.08 % 0.90 % 0.85 %
Non-performing assets to total assets 0.97 % 0.61 % 0.71 %
Allowance for loan losses to total loans 1.23 % 1.13 % 1.18 %
Net charge-offs to average loans (annualized)
Quarter-to-date 0.49 % 0.04 %
Year-to-date 0.48 % 0.22 % 0.31 %
Allowance for loan losses to non-performing loans 113.68 % 125.62 % 139.22 %
Loans 30-89 days past due to total loans 0.32 % 0.19 % 0.64 %
Selected Financial Data (unaudited)    
       
    At or for the Six Months Ended
June 30, 		  At or for
the Year Ended
December 31, 		   
    2009       2008     2008        
 
Tier 1 leverage capital ratio 7.64 % 7.30 % 7.19 %
Tier 1 risk-based capital ratio 11.53 % 11.40 % 11.11 %
Total risk-based capital ratio 12.78 % 12.58 % 12.32 %
Tangible equity to total assets 5.66 % 5.37 % 5.10 %
Book value per share $ 23.18 $ 22.40 $ 21.78
Tangible book value per share (1) $ 17.08 $ 16.16 $ 15.62
 
 
 
 
Investment Data (unaudited)  
 
    June 30, 2009
(In thousands)     Amortized
Cost 		    Unrealized
Gains 		    Unrealized
Losses 		    Fair
Value
 
Available for sale
Obligations of U.S. government sponsored enterprises $ 4,515 $ 40 $ - $ 4,555
Obligations of states and political subdivisions (2) 22,637 204 (129 ) 22,712
Mortgage-backed securities issued or guaranteed by
U.S. government sponsored enterprises 468,757 15,688 (203 ) 484,242
Private issue collateralized mortgage obligations (CMO) (3)   49,208     2     (10,442 )   38,768
Total debt securities   545,117     15,934     (10,774 )   550,277
 
Equity securities (4)   5,000     -     (942 )   4,058
Total equity securities   5,000     -     (942 )   4,058
Total securities available for sale $ 550,117   $ 15,934   $ (11,716 ) $ 554,335
 
Held to maturity
Obligations of states and political subdivisions $ 40,951   $ 400   $ (214 ) $ 41,137
Total securities held to maturity $ 40,951   $ 400   $ (214 ) $ 41,137
 
Other securities
Federal Home Loan Bank Stock (5) $ 21,031 $ - $ - $ 21,031
Federal Reserve Bank Stock   934     -     -     934
Total other securities $ 21,965   $ -   $ -   $ 21,965
 
Trading account assets (6) $ 1,495
 
 
(1) Computed by dividing total shareholders’ equity less goodwill and other intangible assets by the number of common shares outstanding.
 

(2) Over 98% of the portfolio is rated by at least one of the three major rating agencies (Moody's, Standard & Poor's or Fitch) and all of these ratings are investment grade.

 

(3) $30.5 million of the CMO's are rated Triple-A by two of the three rating agencies, while two CMO's currently carry ratings below investment grade; one CMO with a fair value of $5.6 million is rated B3 by Moody's and BB by Fitch while another CMO with a fair value of $2.7 million is rated B3 by Moody's and CCC by Standard & Poor's.

 

(4) The Duff & Phelps (DNP) Select Income Fund Auction Preferred Stock continues to fail at auction. We are currently collecting all amounts due according to contractual terms and have the ability and intent to hold the security until it clears auction, is called or matures on December 22, 2021; therefore, the security is not considered other-than-temporarily impaired. The DNP Auction Preferred Stock is rated Triple-A by Moody’s and Standard & Poor's.

 
(5) The Federal Home Loan Bank of Boston has suspended its quarterly dividend payment.
 
(6) Investments held in mutual funds that represent deferred director and executive compensation investments.

CONTACT:
Camden National Corporation
Suzanne Brightbill, 207-230-2120
Public Relations Officer
sbrightbill@camdennational.com