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Camden National Corp

Camden National Corporation Reports Third Quarter 2024 Earnings of $13.1 Million and Diluted EPS of $0.90

Net Interest Margin Expansion and Robust Asset Quality Drive a Strong Quarter

CAMDEN, Maine , Oct. 29, 2024 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National" or the "Company") today reported earnings for the quarter ended September 30, 2024 of $13.1 million and diluted earnings per share ("EPS") of $0.90, an increase of 9% and 11%, respectively, over the second quarter of 2024.

The release of the Company's quarterly financial results follows its September 10, 2024, announcement of the pending merger with Northway Financial, Inc. ("Northway"), the parent company of Northway Bank, which is subject to Northway shareholder and customary regulatory approvals. The merger will create a combined franchise with 74 branches serving attractive markets throughout a contiguous footprint in New Hampshire and Maine, with approximately $7.0 billion in assets, $5.1 billion in loans, $5.5 billion in deposits, and $2.0 billion of Assets Under Administration (AUA) as of June 30, 2024. On a combined basis, the merger is expected to be approximately 19.9% accretive to Camden National's 2025 earnings per share and 32.7% accretive to Camden National's 2026 earnings per share.

Excluding merger and acquisition costs incurred through September 30, 2024, on a non-GAAP basis, net income for the third quarter of 2024 was $13.6 million, and core EPS was $0.94, an increase of 14% and 16%, respectively, over the second quarter of 2024.

"The pending merger we announced just last month marks an important step in our journey to expand in a contiguous market with a bank that shares a similar culture, consistent credit and risk profiles, and a deep commitment to our communities," said Simon Griffiths, president and chief executive officer of Camden National Corporation. 

Regarding the Company's third-quarter financial results, Griffiths commented, "Our outstanding results are driven by strong momentum, complemented by our continued exceptional credit and risk management and robust capital positions. We are confident that our strategic investments in talent, technology, products, and services will continue to benefit us as macroeconomic conditions improve."

For the nine months ended September 30, 2024, the Company reported net income of $38.3 million and diluted EPS of $2.62, compared to $34.9 million and $2.39, respectively, for the nine months ended September 30, 2023. On a non-GAAP basis, core net income for the nine months ended September 30, 2024, was $38.2 million and core EPS was $2.61, compared to $40.6 million and $2.77, respectively, for the same period in 2023.

THIRD QUARTER 2024 HIGHLIGHTS

  • Our net interest margin for the third quarter of 2024 was 2.46%, an increase of 10 basis points over the second quarter of 2024.
  • For the third quarter of 2024, our return on average assets was 0.91%, our return on average equity was 10.04% and, on a non-GAAP basis, our return on average tangible equity was 12.40%. Excluding merger and acquisition costs, on a non-GAAP basis, our core return on average assets was 0.95% and core return on average tangible equity was 12.94%.
  • Our asset quality continues to be very strong, highlighted by loans 30-89 days past due improving since June 30, 2024, by 2 basis points to 0.03% of total loans, and non-performing loans improving by 6 basis points in the third quarter to 0.17% of total loans at September 30, 2024.
  • Our capital position remained strong with regulatory capital ratios well in excess of required regulatory levels. As of September 30, 2024, our common equity ratio was 9.22% and, on a non-GAAP basis, our tangible common equity ratio was 7.69%, an increase of 34 basis points and 35 basis points, respectively, since June 30, 2024.

FINANCIAL CONDITION

As of September 30, 2024 and June 30, 2024, total assets were $5.7 billion.

Investments totaled $1.2 billion on September 30, 2024, an increase of 2% since June 30, 2024. Our strategy throughout the year has been primarily to redeploy investment cash flows to fund loan growth at current market interest rates to maximize our earning-asset yield and support net interest margin expansion. In the third quarter of 2024, the increase in investment balances was driven by the change in the interest rate environment that resulted in a $22.4 million increase in the fair value of our available-for-sale ("AFS") investment portfolio. As of September 30, 2024 and June 30, 2024, the duration of the Company's securities was 5.3 years and 5.5 years, respectively, and specifically, the AFS investment portfolio duration at September 30, 2024 and June 30, 2024 was 4.3 years and 4.5 years, respectively.

Loans totaled $4.1 billion on September 30, 2024, a decrease of $22.6 million since June 30, 2024. The decrease in loan balances for the third quarter of 2024 was driven by a 7% decrease in our commercial loans due to a few larger loan payoffs. In the third quarter of 2024, we sold 64% of our residential mortgage production, an increase from 52% in the second quarter of 2024. Overall, our loan pipelines continue to be solid and see activity within our markets across both retail and commercial customers. As of September 30, 2024, our committed loan pipeline totaled $109.3 million.

Asset quality continues to be a strength of the Company's financial position. We continue to review our loan portfolio for any potential concerns and, to-date, we have not identified any signs of systemic stress or increased risks as of September 30, 2024. On September 30, 2024, loans 30-89 days past due were 0.03% of total loans, a decrease of 2 basis points from June 30, 2024. Annualized net charge-offs for the third quarter of 2024 decreased by 1 basis point from the second quarter of 2024 to 0.03% of average loans. The Company's allowance for credit losses ("ACL") on loans was 0.86% as of September 30, 2024 and June 30, 2024. On September 30, 2024, the ACL was 5.1 times the total non-performing loans, compared to 3.7 times as of June 30, 2024.

Deposits totaled $4.6 billion on September 30, 2024, an increase of 1% since June 30, 2024. During the third quarter of 2024, on a non-GAAP basis, core deposits grew 2% as we benefited from normal seasonal deposit inflows during the summer months within our markets, as well as benefited from 8% savings deposits growth primarily due to the introduction of a high-yield savings product earlier in 2024.

On September 30, 2024, uninsured and uncollateralized1 deposits accounted for 15.3% of total deposits, and available liquidity sources were 2.0 times uninsured and uncollateralized deposits.

In August 2024, we prepaid our remaining Bank Term Funding Program ("BTFP") borrowings of $170.0 million and entered into two interest rate swaps on $150.0 million of borrowings to reduce borrowing costs and extend the term of our borrowings. In doing so, we refinanced borrowings and lowered the rate from 4.76% to 4.09%.

As of September 30, 2024, the Company's regulatory capital ratios were each well in excess of regulatory capital requirements. The Company's common equity ratio was 9.22%, and, on a non-GAAP basis, its tangible common equity ratio was 7.69%, compared to 8.88% and 7.34%, respectively, at June 30, 2024.

The Company announced a cash dividend of $0.42 per share, representing an annualized dividend yield of 4.07%, based on the Company's closing share price of $41.32 as reported by NASDAQ on September 30, 2024, payable on October 31, 2024, to shareholders of record on October 15, 2024.

The Company did not repurchase any shares of its common stock during the third quarter of 2024. Through the nine months ended September 30, 2024, it repurchased 50,000 shares of its common stock at an average price of $32.19 per share.

FINANCIAL OPERATING RESULTS (Q3 2024 vs. Q2 2024)

Net income for the third quarter of 2024 was $13.1 million, an increase of $1.1 million, or 9%, compared to the second quarter of 2024. The increase was driven by the increase in net interest income of 4% between periods. Excluding merger and acquisition costs associated with the announced acquisition of Northway in September 2024, on a non-GAAP basis, core net income for the third quarter of 2024 increased $1.7 million, or 14%, over the second quarter of 2024.

Net interest income for the third quarter of 2024 was $33.6 million, an increase of $1.4 million, or 4%, compared to the second quarter of 2024. The increase was driven by the 10 basis point margin expansion between periods to 2.46% for the third quarter of 2024.

Provision expense of $239,000 was recorded for the third quarter of 2024, consisting of provision for loan losses of $283,000 and a credit for unfunded commitments of $44,000. The Company maintained an ACL to loans coverage ratio of 0.86% for the third quarter of 2024, consistent with the second quarter of 2024.

Non-interest income for the third quarter of 2024 was $11.4 million, an increase of $761,000, or 7%, over the second quarter of 2024. The increase between periods was driven by (1) an increase in mortgage banking income of $457,000 as the Company sold $62.4 million of residential mortgages in the third quarter of 2024, an increase of 17%, and the positive change in fair value on loans held for sale and loan pipelines; (2) an increase in back-to-back loan swap fee income of $133,000; and (3) an increase in debit card income of $100,000.

Non-interest expense for the third quarter of 2024 was $28.9 million, an increase of $1.6 million, or 6%, compared to the second quarter of 2024. The primary drivers for the increase were: (1) an increase in salaries and employee benefits of $944,000, which was driven by an increase in headcount due to seasonal and strategic hires, an increase in incentive accruals, and a one-time increase in employer-related taxes; and (2) merger and acquisition costs associated with the announced acquisition of Northway in September 2024 of $727,000. The increases were partially offset by lower consulting and professional fees of $361,000, driven by the timing of annual director equity grants in the second quarter of each year. Our GAAP efficiency ratio for the third quarter of 2024 was 64.23% and non-GAAP efficiency ratio was 62.39%, compared to 63.77% and 63.53% for the second quarter of 2024, respectively.

1 Uncollateralized deposits are customer deposits for which the Company has not pledged any of its assets, including investment securities, or provided any other type of guarantee

Q3 2024 CONFERENCE CALL

Camden National Corporation will host a conference call and webcast at 3:00 p.m., Eastern Time, on Tuesday, October 29, 2024 to discuss its third quarter 2024 financial results and outlook. Participants should dial into the call 10 - 15 minutes before it begins. Information about the conference call is as follows:

Live dial-in (Domestic):

(833) 470-1428

Live dial-in (All other locations):

(929) 526-1599

Participant access code:

504894

Live webcast:

https://events.q4inc.com/attendee/685424551

A link to the live webcast will be available on Camden National's website under "About — Investor Relations" at CamdenNational.bank prior to the meeting, and a replay of the webcast will be available on Camden National's website following the conference call. The transcript of the conference call will also be available on Camden National's website approximately two days after the conference call.

ABOUT CAMDEN NATIONAL CORPORATION

Camden National Corporation (NASDAQ: CAC) is Northern New England's largest publicly traded bank holding company, with $5.7 billion in assets. Founded in 1875, Camden National Bank has 57 branches in Maine and New Hampshire, is a full-service community bank offering the latest digital banking, complemented by award-winning, personalized service. Additional information is available at CamdenNational.bank. Member FDIC. Equal Housing Lender.

Comprehensive wealth management, investment, and financial planning services are delivered by Camden National Wealth Management.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including certain plans, expectations, goals, projections, and other statements, which are subject to numerous risks, assumptions, and uncertainties. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could," or "may." Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures; inflation; ongoing competition in labor markets and employee turnover; deterioration in the value of Camden National's investment securities; changes in consumer spending and savings habits; changes in the interest rate environment; changes in general economic conditions; operational risks including, but not limited to, cybersecurity, fraud, pandemics and natural disasters; legislative and regulatory changes that adversely affect the business in which Camden National is engaged; turmoil and volatility in the financial services industry, including failures or rumors of failures of other depository institutions which could affect Camden National's ability to attract and retain depositors, and could affect the ability of financial services providers, including the Company, to borrow or raise capital; actions taken by governmental agencies to stabilize the financial system and the effectiveness of such actions; changes to regulatory capital requirements in response to recent developments affecting the banking sector; changes in the securities markets and other risks and uncertainties disclosed from time to time in Camden National's Annual Report on Form 10-K for the year ended December 31, 2023, as updated by other filings with the Securities and Exchange Commission ("SEC"). Further, statements regarding the potential effects of the war in Ukraine, conflict in the Middle East and other notable and global current events on the Company's business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possible materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the Company's control. Camden National does not have any obligation to update forward-looking statements.

USE OF NON-GAAP MEASURES

In addition to evaluating the Company's results of operations in accordance with generally accepted accounting principles in the United States ("GAAP"), management supplements this evaluation with certain non-GAAP financial measures such as: core net income; core diluted earnings per share; core return on average assets; core return on average equity; pre-tax, pre-provision income; return on average tangible equity and core return on average tangible equity; the efficiency and tangible common equity ratios; tangible book value per share; core deposits and average core deposits. Management utilizes these non-GAAP financial measures for purposes of measuring our performance against our peer group and other financial institutions and analyzing our internal performance. We also believe these non-GAAP financial measures help investors better understand the Company's operating performance and trends and allow for better performance comparisons to other financial institutions. In addition, these non-GAAP financial measures remove the impact of unusual items that may obscure trends in the Company's underlying performance. These disclosures should not be viewed as a substitute for GAAP operating results, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other financial institutions. Reconciliations to the comparable GAAP financial measures can be found in this document.

ANNUALIZED DATA

Certain returns, yields and performance ratios are presented on an "annualized" basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full-year or year-over-year amounts. Annualized data may not be indicative of any four-quarter period and is presented for illustrative purposes only.

 

Selected Financial Data

(unaudited)




At or For The

Three Months Ended


At or For The

Nine Months Ended

(In thousands, except number of shares and per share data)


September 30,
2024


June 30,
2024


September 30,
2023


September 30,
2024


September 30,
2023

Financial Condition Data











Loans


$  4,116,729


$   4,139,361


$   4,058,413


$   4,116,729


$   4,058,413

Total assets


5,745,180


5,724,380


5,779,675


5,745,180


5,779,675

Deposits


4,575,226


4,514,020


4,678,406


4,575,226


4,678,406

Shareholders' equity


529,900


508,286


463,298


529,900


463,298

Operating Data and Per Share Data











Net income


$       13,073


$        11,993


$          9,787


$        38,338


$        34,903

Core net income (non-GAAP)(1)


13,647


11,993


14,002


38,193


40,570

Pre-tax, pre-provision income (non-GAAP)(1)


16,093


15,519


11,449


45,845


45,087

Diluted EPS


0.90


0.81


0.67


2.62


2.39

Core diluted EPS (non-GAAP)(1)


0.94


0.81


0.96


2.61


2.77

Profitability Ratios











Return on average assets


0.91 %


0.84 %


0.68 %


0.89 %


0.82 %

Core return on average assets (non-GAAP)(1)


0.95 %


0.84 %


0.97 %


0.89 %


0.95 %

Return on average equity


10.04 %


9.60 %


8.25 %


10.13 %


10.00 %

Core return on average equity (non-GAAP)(1)


10.48 %


9.60 %


11.80 %


10.09 %


11.63 %

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


12.40 %


11.96 %


10.48 %


12.60 %


12.72 %

Core return on average tangible equity (non-GAAP)(1)


12.94 %


11.96 %


14.94 %


12.55 %


14.77 %

GAAP efficiency ratio


64.23 %


63.77 %


69.60 %


64.58 %


63.82 %

Efficiency ratio (non-GAAP)(1)


62.39 %


63.53 %


60.63 %


63.78 %


60.87 %

Net interest margin (fully-taxable equivalent)


2.46 %


2.36 %


2.39 %


2.37 %


2.44 %

Asset Quality Ratios











ACL on loans to total loans


0.86 %


0.86 %


0.90 %


0.86 %


0.90 %

Non-performing loans to total loans


0.17 %


0.23 %


0.16 %


0.17 %


0.16 %

Loans 30-89 days past due to total loans


0.03 %


0.05 %


0.09 %


0.03 %


0.09 %

Annualized net charge-offs to average loans


0.03 %


0.04 %


0.01 %


0.03 %


0.03 %

Capital Ratios











Common equity ratio


9.22 %


8.88 %


8.02 %


9.22 %


8.02 %

Tangible common equity ratio (non-GAAP)(1)


7.69 %


7.34 %


6.47 %


7.69 %


6.47 %

Tier 1 leverage capital ratio


9.84 %


9.64 %


9.35 %


9.84 %


9.35 %

Total risk-based capital ratio


14.85 %


14.46 %


14.19 %


14.85 %


14.19 %


(1)  This is a non-GAAP measure, please see "Reconciliation of non-GAAP to GAAP Financial Measures (unaudited)."

 

Consolidated Statements of Condition Data

(unaudited)


(In thousands)


September 30,
2024


June 30,
2024


September 30,
2023


% Change
Sep 2024
vs. Jun
2024


% Change
Sep 2024
vs. Sep
2023

ASSETS











Cash, cash equivalents and restricted cash


$          139,512


$          105,560


$          211,514


32 %


(34) %

Investments:











Trading securities


5,141


4,959


4,195


4 %


23 %

Available-for-sale securities, at fair value


603,211


579,534


589,003


4 %


2 %

Held-to-maturity securities, at amortized cost


526,251


533,600


549,961


(1) %


(4) %

Other investments


22,513


17,105


14,459


32 %


56 %

Total investments


1,157,116


1,135,198


1,157,618


2 %


— %

Loans held for sale, at fair value


11,706


14,321


11,187


(18) %


5 %

Loans:











Commercial real estate


1,707,923


1,697,979


1,653,288


1 %


3 %

Commercial


382,507


409,682


400,031


(7) %


(4) %

Residential real estate


1,762,395


1,768,357


1,752,401


— %


1 %

Consumer and home equity


263,904


263,343


252,693


— %


4 %

Total loans


4,116,729


4,139,361


4,058,413


(1) %


1 %

      Less: allowance for credit losses on loans


(35,414)


(35,412)


(36,407)


— %


(3) %

       Net loans


4,081,315


4,103,949


4,022,006


(1) %


1 %

Goodwill and core deposit intangible assets


95,251


95,390


95,816


— %


(1) %

Other assets


260,280


269,962


281,534


(4) %


(8) %

Total assets


$       5,745,180


$       5,724,380


$       5,779,675


— %


(1) %

LIABILITIES AND SHAREHOLDERS' EQUITY











Liabilities











Deposits:











Non-interest checking


$          940,702


$          921,605


$       1,023,239


2 %


(8) %

Interest checking


1,445,828


1,465,560


1,579,991


(1) %


(8) %

Savings and money market


1,466,541


1,399,464


1,389,180


5 %


6 %

Certificates of deposit


553,481


576,563


552,111


(4) %


— %

Brokered deposits


168,674


150,828


133,885


12 %


26 %

Total deposits


4,575,226


4,514,020


4,678,406


1 %


(2) %

Short-term borrowings


516,336


552,606


470,140


(7) %


10 %

Junior subordinated debentures


44,331


44,331


44,331


— %


— %

Accrued interest and other liabilities


79,387


105,137


123,500


(24) %


(36) %

Total liabilities


5,215,280


5,216,094


5,316,377


— %


(2) %

Commitments and Contingencies











Shareholders' Equity











Common stock, no par value


116,072


115,543


114,842


— %


1 %

Retained earnings


500,927


493,974


478,664


1 %


5 %

Accumulated other comprehensive loss:











Net unrealized loss on debt securities, net of tax


(91,349)


(110,308)


(139,228)


(17) %


(34) %

Net unrealized gain on cash flow hedging derivative instruments, net of tax


4,506


9,327


9,343


(52) %


(52) %

Net unrecognized loss on postretirement plans, net of tax


(256)


(250)


(323)


2 %


(21) %

 Total accumulated other comprehensive loss


(87,099)


(101,231)


(130,208)


(14) %


(33) %

 Total shareholders' equity


529,900


508,286


463,298


4 %


14 %

 Total liabilities and shareholders' equity


$       5,745,180


$       5,724,380


$       5,779,675


— %


(1) %

 

Consolidated Statements of Income Data

(unaudited)




For The

Three Months Ended





(In thousands, except per share data)


September 30,
2024


June 30,
2024


September 30,
2023


% Change
Sep 2024 vs.
Jun 2024


% Change
Sep 2024 vs.
Sep 2023

Interest Income











Interest and fees on loans


$            55,484


$            53,422


$            50,115


4 %


11 %

Taxable interest on investments


6,622


6,807


5,814


(3) %


14 %

Nontaxable interest on investments


462


461


748


— %


(38) %

Dividend income


389


521


302


(25) %


29 %

Other interest income


764


951


690


(20) %


11 %

Total interest income


63,721


62,162


57,669


3 %


10 %

Interest Expense











Interest on deposits


25,051


24,169


20,969


4 %


19 %

Interest on borrowings


4,549


5,285


3,577


(14) %


27 %

Interest on junior subordinated debentures


534


524


539


2 %


(1) %

Total interest expense


30,134


29,978


25,085


1 %


20 %

Net interest income


33,587


32,184


32,584


4 %


3 %

Provision (credit) for credit losses


239


650


(574)


(63) %


(142) %

Net interest income after provision (credit) for credit losses


33,348


31,534


33,158


6 %


1 %

Non-Interest Income











Debit card income


3,169


3,069


3,130


3 %


1 %

Service charges on deposit accounts


2,168


2,113


2,040


3 %


6 %

Income from fiduciary services


1,817


1,870


1,641


(3) %


11 %

Brokerage and insurance commissions


1,414


1,441


1,217


(2) %


16 %

Mortgage banking income, net


973


516


583


89 %


67 %

Bank-owned life insurance


709


694


644


2 %


10 %

Net loss on sale of securities


—


—


(5,335)


— %


N.M.

Other income


1,156


942


1,152


23 %


— %

Total non-interest income


11,406


10,645


5,072


7 %


125 %

Non-Interest Expense











Salaries and employee benefits


16,545


15,601


14,744


6 %


12 %

Furniture, equipment and data processing


3,578


3,497


3,382


2 %


6 %

Net occupancy costs


1,890


1,981


1,804


(5) %


5 %

Debit card expense


1,368


1,311


1,318


4 %


4 %

Consulting and professional fees


788


1,149


897


(31) %


(12) %

Regulatory assessments


784


813


861


(4) %


(9) %

Merger and acquisition costs


727


—


—


N.M.


N.M.

Amortization of core deposit intangible assets


139


139


148


— %


(6) %

Other real estate owned and collection costs, net


94


47


(34)


100 %


(376) %

Other expenses


2,987


2,772


3,087


8 %


(3) %

Total non-interest expense


28,900


27,310


26,207


6 %


10 %

Income before income tax expense


15,854


14,869


12,023


7 %


32 %

Income Tax Expense


2,781


2,876


2,236


(3) %


24 %

Net Income


$            13,073


$            11,993


$              9,787


9 %


34 %

Per Share Data











Basic earnings per share


$                0.90


$                 0.82


$                 0.67


10 %


34 %

Diluted earnings per share


$                0.90


$                 0.81


$                 0.67


11 %


34 %


N.M. = Not meaningful

 

Consolidated Statements of Income Data

(unaudited)




For the

Nine Months Ended


% Change Sep
2024 vs. Sep
2023

(In thousands, except per share data)


September 30,
2024


September 30,
2023


Interest Income







Interest and fees on loans


$          160,615


$          144,092


11 %

Taxable interest on investments


20,456


17,629


16 %

Nontaxable interest on investments


1,388


2,273


(39) %

Dividend income


1,222


788


55 %

Other interest income


2,385


1,667


43 %

Total interest income


186,066


166,449


12 %

Interest Expense







Interest on deposits


72,398


56,046


29 %

Interest on borrowings


15,032


9,249


63 %

Interest on junior subordinated debentures


1,592


1,600


(1) %

Total interest expense


89,022


66,895


33 %

Net interest income


97,044


99,554


(3) %

(Credit) provision for credit losses


(1,213)


1,531


(179) %

Net interest income after (credit) provision for credit losses


98,257


98,023


— %

Non-Interest Income







Debit card income


9,104


9,147


— %

Service charges on deposit accounts


6,308


5,737


10 %

Income from fiduciary services


5,436


5,016


8 %

Brokerage and insurance commissions


4,094


3,462


18 %

Mortgage banking income, net


2,297


1,889


22 %

Bank-owned life insurance


2,086


1,849


13 %

Net loss on sale of securities


—


(5,335)


N.M.

Other income


3,048


3,283


(7) %

Total non-interest income


32,373


25,048


29 %

Non-Interest Expense







Salaries and employee benefits


48,100


44,605


8 %

Furniture, equipment and data processing


10,704


9,772


10 %

Net occupancy costs


5,941


5,735


4 %

Debit card expense


3,943


3,781


4 %

Consulting and professional fees


2,797


3,327


(16) %

Regulatory assessments


2,454


2,574


(5) %

Merger and acquisition costs


727


—


N.M.

Amortization of core deposit intangible assets


417


444


(6) %

Other real estate owned and collection costs, net


151


(25)


(704) %

Other expenses


8,338


9,302


(10) %

Total non-interest expense


83,572


79,515


5 %

Income before income tax expense


47,058


43,556


8 %

Income Tax Expense


8,720


8,653


1 %

Net Income


$            38,338


$            34,903


10 %

Per Share Data







Basic earnings per share


$                2.63


$                2.39


10 %

Diluted earnings per share


$                2.62


$                2.39


10 %


N.M. = Not meaningful

 

Quarterly Average Balance and Yield/Rate Analysis

(unaudited)




Average Balance


Yield/Rate



For The Three Months Ended


For The Three Months Ended

(Dollars in thousands)


September 30,
2024


June 30,
2024


September 30,
2023


September 30,
2024


June 30,
2024


September 30,
2023

Assets













Interest-earning assets:













Interest-bearing deposits in other banks and other interest-earning assets


$          48,914


$         50,266


$          48,401


4.66 %


6.06 %


4.04 %

Investments - taxable


1,138,979


1,162,941


1,177,367


2.53 %


2.58 %


2.14 %

Investments - nontaxable(1)


61,864


61,794


102,872


3.78 %


3.78 %


3.68 %

Loans(2):













Commercial real estate


1,706,509


1,701,431


1,658,125


5.41 %


5.09 %


4.84 %

Commercial(1)


375,944


387,337


391,491


6.51 %


6.51 %


6.08 %

Municipal(1)


17,186


16,351


18,888


5.17 %


4.84 %


4.41 %

Residential real estate


1,780,665


1,772,707


1,762,860


4.53 %


4.48 %


4.18 %

Consumer and home equity


264,178


260,384


252,357


7.96 %


7.93 %


7.74 %

     Total loans 


4,144,482


4,138,210


4,083,721


5.29 %


5.14 %


4.85 %

Total interest-earning assets


5,394,239


5,413,211


5,412,361


4.69 %


4.58 %


4.23 %

Other assets


317,319


323,065


304,439







Total assets


$     5,711,558


$    5,736,276


$     5,716,800




















Liabilities & Shareholders' Equity













Deposits:













Non-interest checking


$        934,403


$       901,774


$     1,019,450


— %


— %


— %

Interest checking


1,440,374


1,479,201


1,584,314


2.56 %


2.52 %


2.42 %

Savings


679,118


624,034


661,126


0.95 %


0.52 %


0.14 %

Money market


760,977


760,844


721,423


3.46 %


3.41 %


2.85 %

Certificates of deposit


565,063


583,282


497,301


3.85 %


3.90 %


3.05 %

 Total deposits


4,379,935


4,349,135


4,483,614


2.09 %


2.05 %


1.67 %

Borrowings:













Brokered deposits


156,618


150,799


161,623


5.25 %


5.28 %


5.07 %

Customer repurchase agreements


190,936


185,729


193,297


1.92 %


1.81 %


1.69 %

Junior subordinated debentures


44,331


44,331


44,331


4.79 %


4.75 %


4.83 %

Other borrowings


336,899


401,144


263,705


4.28 %


4.46 %


4.14 %

 Total borrowings


728,784


782,003


662,956


3.90 %


4.00 %


3.70 %

Total funding liabilities


5,108,719


5,131,138


5,146,570


2.35 %


2.35 %


1.93 %

Other liabilities


84,617


102,658


99,480







Shareholders' equity


518,222


502,480


470,750







 Total liabilities & shareholders' equity


$     5,711,558


$    5,736,276


$     5,716,800







Net interest rate spread (fully-taxable equivalent)


2.34 %


2.23 %


2.30 %

Net interest margin (fully-taxable equivalent)


2.46 %


2.36 %


2.39 %


(1)  Reported on a tax-equivalent basis calculated using the federal corporate income tax rate of 21%, including certain commercial loans.

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

 

Year-to-Date Average Balance and Yield/Rate Analysis

(unaudited)




Average Balance


Yield/Rate



For The Nine Months Ended


For The Nine Months Ended

(Dollars in thousands)


September 30,
2024


September 30,
2023


September 30,
2024


September 30,
2023

Assets









Interest-earning assets:









Interest-bearing deposits in other banks and other interest-earning assets


$           47,893


$           30,002


5.05 %


4.78 %

Investments - taxable


1,163,118


1,209,000


2.55 %


2.09 %

Investments - nontaxable(1)


62,014


104,518


3.78 %


3.67 %

Loans(2):









 Commercial real estate


1,696,882


1,658,188


5.15 %


4.73 %

 Commercial(1)


384,402


402,331


6.35 %


5.80 %

 Municipal(1)


16,067


17,467


4.82 %


4.01 %

 Residential real estate


1,775,502


1,742,340


4.47 %


4.01 %

 Consumer and home equity


260,635


253,137


7.93 %


7.46 %

     Total loans 


4,133,488


4,073,463


5.15 %


4.69 %

Total interest-earning assets


5,406,513


5,416,983


4.57 %


4.09 %

Other assets


315,387


288,783





Total assets


$      5,721,900


$      5,705,766














Liabilities & Shareholders' Equity









Deposits:









Non-interest checking


$         923,207


$      1,031,700


— %


— %

Interest checking


1,469,812


1,637,231


2.54 %


2.23 %

Savings


634,478


693,468


0.57 %


0.10 %

Money market


762,131


704,360


3.39 %


2.51 %

Certificates of deposit


577,007


409,909


3.84 %


2.54 %

 Total deposits


4,366,635


4,476,668


2.04 %


1.46 %

Borrowings:









Brokered deposits


146,969


206,206


5.28 %


4.64 %

Customer repurchase agreements


186,401


189,532


1.78 %


1.42 %

Junior subordinated debentures


44,331


44,331


4.80 %


4.83 %

Other borrowings


379,751


237,546


4.41 %


4.07 %

 Total borrowings


757,452


677,615


3.96 %


3.55 %

Total funding liabilities


5,124,087


5,154,283


2.32 %


1.74 %

Other liabilities


92,361


84,920





Shareholders' equity


505,452


466,563





Total liabilities & shareholders' equity


$      5,721,900


$      5,705,766





Net interest rate spread (fully-taxable equivalent)


2.25 %


2.35 %

Net interest margin (fully-taxable equivalent)


2.37 %


2.44 %


(1)  Reported on a tax-equivalent basis calculated using the federal corporate income tax rate of 21%, including certain commercial loans.

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

 

Asset Quality Data

(unaudited)


(In thousands)


At or for the

Nine Months
Ended

September 30,

2024


At or for the

Six Months
Ended

June 30,

2024


At or for the

Three Months
Ended

March 31,

2024


At or for the

Year Ended

December 31,

2023


At or for the

Nine Months
Ended

September 30,

2023

Non-accrual loans:











Residential real estate


$              2,497


$              2,497


$              2,473


$              2,539


$              2,775

Commercial real estate


130


79


205


386


92

Commercial


2,057


4,409


1,980


1,725


1,083

Consumer and home equity


666


810


1,000


798


674

Total non-accrual loans


5,350


7,795


5,658


5,448


4,624

Accruing troubled-debt restructured loans prior to adoption of ASU 2022-02


1,645


1,846


1,973


1,990


1,997

Total non-performing loans


6,995


9,641


7,631


7,438


6,621

Other real estate owned


—


—


—


—


—

Total non-performing assets


$              6,995


$              9,641


$              7,631


$              7,438


$              6,621

Loans 30-89 days past due:











Residential real estate


$                 216


$                 400


$                 797


$              1,290


$                 751

Commercial real estate


239


678


92


740


188

Commercial


578


539


537


2,007


2,260

Consumer and home equity


358


628


618


922


603

Total loans 30-89 days past due


$              1,391


$              2,245


$              2,044


$              4,959


$              3,802

ACL on loans at the beginning of the period


$            36,935


$             36,935


$            36,935


$            36,922


$            36,922

(Credit) provision for loan losses


(693)


(976)


(1,164)


1,174


288

Charge-offs:











Residential real estate


—


—


—


18


18

Commercial real estate


—


—


—


58


58

Commercial


1,157


763


309


1,560


1,101

Consumer and home equity


83


55


36


91


63

Total charge-offs 


1,240


818


345


1,727


1,240

Total recoveries 


(412)


(271)


(187)


(566)


(437)

Net charge-offs


828


547


158


1,161


803

ACL on loans at the end of the period


$            35,414


$            35,412


$            35,613


$            36,935


$            36,407

Components of ACL:











ACL on loans


$            35,414


$            35,412


$            35,613


$            36,935


$            36,407

ACL on off-balance sheet credit exposures(1)


2,743


2,787


2,325


2,353


2,670

ACL, end of period


$            38,157


$            38,199


$            37,938


$            39,288


$            39,077

Ratios:











Non-performing loans to total loans


0.17 %


0.23 %


0.19 %


0.18 %


0.16 %

Non-performing assets to total assets


0.12 %


0.17 %


0.13 %


0.13 %


0.11 %

ACL on loans to total loans


0.86 %


0.86 %


0.86 %


0.90 %


0.90 %

Net charge-offs to average loans (annualized):











Quarter-to-date


0.03 %


0.04 %


0.02 %


0.04 %


0.01 %

Year-to-date


0.03 %


0.03 %


0.02 %


0.03 %


0.03 %

ACL on loans to non-performing loans


506.28 %


367.31 %


466.69 %


496.57 %


549.87 %

Loans 30-89 days past due to total loans


0.03 %


0.05 %


0.05 %


0.12 %


0.09 %


(1)  Presented within accrued interest and other liabilities on the consolidated statements of condition.

 

Reconciliation of non-GAAP to GAAP Financial Measures

(unaudited)


Core Net Income; Core Diluted Earnings per Share; Core Return on Average Assets; and Core Return on Average Equity:




For the

Three Months Ended


For the

Nine Months Ended

(In thousands, except number of shares, per share data and ratios)


September 30,
2024


June 30,
2024


September 30,
2023


September 30,
2024


September 30,
2023

Core Net Income:











Net income, as presented


$           13,073


$           11,993


$             9,787


$           38,338


$           34,903

 Adjustment for net loss on sale of securities


—


—


5,335


—


5,335

 Adjustment for Signature Bank bond (recovery) write-off


—


—


—


(910)


1,838

 Adjustment for merger and acquisition costs


727


—


—


727


—

 Tax impact of above adjustments(1)


(153)


—


(1,120)


38


(1,506)

Core net income


$           13,647


$           11,993


$           14,002


$           38,193


$           40,570

Core Diluted Earnings per Share:











Diluted earnings per share, as presented


$               0.90


$               0.81


$               0.67


$               2.62


$               2.39

 Adjustment for net loss on sale of securities


—


—


0.37


—


0.37

 Adjustment for Signature Bank bond (recovery) write-off


—


—


—


(0.06)


0.13

 Adjustment for merger and acquisition costs


0.05


—


—


0.05


—

 Tax impact of above adjustments(1)


(0.01)


—


(0.08)


—


(0.12)

Core diluted earnings per share


$               0.94


$               0.81


$               0.96


$               2.61


$               2.77

Core Return on Average Assets:











Return on average assets, as presented


0.91 %


0.84 %


0.68 %


0.89 %


0.82 %

 Adjustment for net loss on sale of securities


— %


— %


0.37 %


— %


0.13 %

 Adjustment for Signature Bank bond (recovery) write-off


— %


— %


— %


(0.02) %


0.04 %

 Adjustment for merger and acquisition costs


0.05 %


— %


— %


0.02 %


— %

 Tax impact of above adjustments(1)


(0.01) %


— %


(0.08) %


— %


(0.04) %

Core return on average assets


0.95 %


0.84 %


0.97 %


0.89 %


0.95 %

Core Return on Average Equity:











Return on average equity, as presented


10.04 %


9.60 %


8.25 %


10.13 %


10.00 %

 Adjustment for net loss on sale of securities


— %


— %


4.50 %


— %


1.53 %

 Adjustment for Signature Bank bond (recovery) write-off


— %


— %


— %


(0.24) %


0.53 %

 Adjustment for merger and acquisition costs


0.56 %


— %


— %


0.19 %


— %

 Tax impact of above adjustments(1)


(0.12) %


— %


(0.95) %


0.01 %


(0.43) %

Core return on average equity


10.48 %


9.60 %


11.80 %


10.09 %


11.63 %


(1)  Assumed a 21% tax rate.

 

Pre-Tax, Pre-Provision Income:







For the

Three Months Ended


For the

Nine Months Ended

(In thousands)


September 30,
2024


June 30,
2024


September 30,
2023


September 30,
2024


September 30,
2023

Net income, as presented


$              13,073


$              11,993


$                9,787


$              38,338


$              34,903

 Adjustment for provision (credit) for credit losses


239


650


(574)


(1,213)


1,531

 Adjustment for income tax expense


2,781


2,876


2,236


8,720


8,653

 Pre-tax, pre-provision income


$              16,093


$              15,519


$              11,449


$              45,845


$              45,087












Efficiency Ratio:













For the

Three Months Ended


For the

Nine Months Ended

(Dollars in thousands)


September 30,
2024


June 30,
2024


September 30,
2023


September 30,
2024


September 30,
2023

Non-interest expense, as presented


$           28,900


$           27,310


$           26,207


$           83,572


$           79,515

 Adjustment for merger and acquisition costs


727


—


—


727


—

Adjusted non-interest expense


$           28,173


$           27,310


$           26,207


$           82,845


$           79,515

Net interest income, as presented


$           33,587


$           32,184


$           32,584


$           97,044


$           99,554

 Adjustment for the effect of tax-exempt income(1)


165


159


237


475


701

Non-interest income, as presented


11,406


10,645


5,072


32,373


25,048

 Adjustment for net loss on sale of securities


—


—


5,335


—


5,335

Core net interest income plus non-interest income


$           45,158


$           42,988


$           43,228


$         129,892


$         130,638

GAAP efficiency ratio


64.23 %


63.77 %


69.60 %


64.58 %


63.82 %

Non-GAAP efficiency ratio


62.39 %


63.53 %


60.63 %


63.78 %


60.87 %


(1)  Assumed a 21% tax rate.

 

Return on Average Tangible Equity and Core Return on Average Tangible Equity:












For the

Three Months Ended


For the

Nine Months Ended

(Dollars in thousands)


September 30,
2024


June 30,
2024


September 30,
2023


September 30,
2024


September 30,
2023

Return on Average Tangible Equity:











Net income, as presented


$           13,073


$           11,993


$             9,787


$           38,338


$           34,903

 Adjustment for amortization of core deposit intangible assets


139


139


148


417


444

 Tax impact of above adjustment(1)


(29)


(29)


(31)


(88)


(93)

Net income, adjusted for amortization of core deposit intangible assets


$           13,183


$           12,103


$             9,904


$           38,667


$           35,254

Average equity, as presented


$         518,222


$         502,480


$         470,750


$         505,452


$         466,563

 Adjustment for average goodwill and core deposit intangible assets


(95,319)


(95,458)


(95,888)


(95,460)


(96,037)

Average tangible equity


$         422,903


$         407,022


$         374,862


$         409,992


$         370,526

Return on average equity


10.04 %


9.60 %


8.25 %


10.13 %


10.00 %

Return on average tangible equity


12.40 %


11.96 %


10.48 %


12.60 %


12.72 %

Core Return on Average Tangible Equity:











Core net income (see "Core Net Income" table above)


$           13,647


$           11,993


$           14,002


$           38,193


$           40,570

 Adjustment for amortization of core deposit intangible assets


139


139


148


417


444

 Tax impact of above adjustment(1)


(29)


(29)


(31)


(88)


(93)

Core net income, adjusted for amortization of core deposit intangible assets


$           13,757


$           12,103


$           14,119


$           38,522


$           40,921

Core return on average tangible equity


12.94 %


11.96 %


14.94 %


12.55 %


14.77 %


(1)  Assumed a 21% tax rate.

 

Tangible Book Value Per Share and Tangible Common Equity Ratio:


(In thousands, except number of shares, per share data and ratios)


September 30,
2024


June 30,
2024


September 30,
2023

Tangible Book Value Per Share:







Shareholders' equity, as presented


$         529,900


$         508,286


$         463,298

 Adjustment for goodwill and core deposit intangible assets


(95,251)


(95,390)


(95,816)

Tangible shareholders' equity


$         434,649


$         412,896


$         367,482

Shares outstanding at period end


14,577,218


14,569,262


14,558,137

Book value per share


$             36.35


$             34.89


$             31.82

Tangible book value per share


29.82


28.34


25.24

Tangible Common Equity Ratio:

Total assets


$      5,745,180


$      5,724,380


$      5,779,675

 Adjustment for goodwill and core deposit intangible assets


(95,251)


(95,390)


(95,816)

Tangible assets


$      5,649,929


$      5,628,990


$      5,683,859

Common equity ratio


9.22 %


8.88 %


8.02 %

Tangible common equity ratio


7.69 %


7.34 %


6.47 %


Core Deposits:


(In thousands)


September 30,
2024


June 30,
2024


September 30,
2023

Total deposits


$         4,575,226


$         4,514,020


$         4,678,406

 Adjustment for certificates of deposit


(553,481)


(576,563)


(552,111)

 Adjustment for brokered deposits


(168,674)


(150,828)


(133,885)

Core deposits


$         3,853,071


$         3,786,629


$         3,992,410

 

Average Core Deposits:












For the

Three Months Ended


For the

Nine Months Ended

(In thousands)


September 30,
2024


June 30,
2024


September 30,
2023


September 30,
2024


September 30,
2023

Total average deposits, as presented(1)


$         4,379,935


$         4,349,135


$         4,483,614


$         4,366,635


$         4,476,668

 Adjustment for average certificates of deposit


(565,063)


(583,282)


(497,301)


(577,007)


(409,909)

Average core deposits


$         3,814,872


$         3,765,853


$         3,986,313


$         3,789,628


$         4,066,759


(1)  Brokered deposits are excluded from total average deposits, as presented on the Average Balance, Interest and Yield/Rate analysis table.

 

 

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SOURCE Camden National Corporation