Camden National Corporation Reports An Increase In Second Quarter 2014 Earnings Per Share Of 13% Over First Quarter 2014
CAMDEN, Maine, July 29, 2014 /PRNewswire/ -- Camden National Corporation , a $2.7 billion bank holding company headquartered in Camden, Maine, reported net income for the second quarter of 2014 of $6.3 million and diluted earnings per share ("EPS") o
CAMDEN, Maine, July 29, 2014 /PRNewswire/ -- Camden National Corporation , a $2.7 billion bank holding company headquartered in Camden, Maine, reported net income for the second quarter of 2014 of $6.3 million and diluted earnings per share ("EPS") of $0.85, representing a 10% increase in earnings and a $0.10 increase in EPS compared to the first quarter of 2014. Camden National's return on equity and return on assets for the second quarter of 2014 was 10.92% and 0.95%, respectively, compared to 9.97% and 0.89% last quarter.
"We have implemented several significant strategies over the past several quarters and are pleased to see the positive impact of those investments," said Gregory A. Dufour, president and chief executive officer. "Our annualized loan growth of 15% for the first half of 2014 and a 13% increase in earnings per share over the first quarter of 2014 reflects our efforts to increase market share and enhance our products to better serve our customers, while balancing the needs of our shareholders through our repurchase and dividend programs."
Second Quarter 2014 Highlights
-- Earnings Growth -- Second quarter 2014 EPS grew 13% or $0.10 per share
over prior quarter.
-- Loan Growth -- Year-to-date annualized loan growth of 15%.
-- Net Interest Margin -- Net interest margin increased 3 basis points over
prior quarter.
-- Asset Quality -- Year-to-date asset quality metrics trend favorably.
Total assets at June 30, 2014 were $2.7 billion, representing an $87.9 million, or 3%, increase since year-end. The growth in total assets was fueled by loan growth of $116.4 million, representing a 15% annualized growth rate. Loan growth continues to be centered within our commercial real estate and commercial portfolios, evidenced by total growth in those portfolios of $117.7 million since year-end, while our retail portfolio decreased by $1.3 million. The Company saw signs of positive momentum within our home equity and consumer portfolio in the second quarter of 2014 primarily due to recent promotions offered; however, the effects of higher mortgage rates continue to hamper refinance activity.
Total liabilities at June 30, 2014 were $2.5 billion, representing an $81.3 million, or 3%, increase since year-end. The increase is reflective of additional borrowings and brokered deposits totaling $119.8 million necessary to fund strong loan growth. Core deposits (demand, interest checking, savings, and money market) decreased $28.9 million since year-end due to the seasonal outflows of deposits within our market.
Second Quarter 2014 Operating Results Compared to First Quarter 2014
Second quarter 2014 net income was $6.3 million, representing a $600,000, or 10%, increase compared to the first quarter of 2014. EPS for the second quarter 2014 increased $0.10 per share to $0.85 compared to the first quarter of 2014. Strong earnings and EPS growth for the second quarter of 2014 compared to prior quarter is primarily reflective of:
-- An increase in average loan balances of $84.1 million, or 5%,
accompanied by an increase in net interest margin on a fully-taxable
basis of 3 basis points to 3.11%. Net interest margin increased as our
interest-earning assets mix shifted slightly to a higher concentration
of loans providing a more favorable yield, while our cost of funds
decreased 2 basis points to 0.50%.
-- An increase in non-interest income of $819,000, or 14%, driven by: (i)
an increase in deposit and other service-related fees of $299,000; (ii)
$196,000 of derivative income; (iii) an increase in fiduciary income of
$165,000; and (iv) additional gains of $119,000 realized upon sale of
investment securities.
-- An increase in non-interest expense of $667,000, or 4%, primarily due to
(i) an increase in incentive-related costs of $321,000 due to strong
year-to-date financial results exceeding performance metrics and (ii)
$106,000 of cost recognized upon issuance of common stock to the
Company's directors.
-- A decrease of 101,146 dilutive weighted-average shares outstanding as
the Company continued to actively repurchase shares of its common stock
under the 2013 Repurchase Program.
Six months ended June 30, 2014 Operating Results Compared to Six Months Ended June 30, 2013
Net income and EPS for the six months ended June 30, 2014 was $12.0 million and $1.60 per share, respectively, reflecting an increase in net income of $38,000 and EPS of $0.04 per share over the six months ended June 30, 2013. Excluded from Camden National's six months ended June 30, 2014 operating results are the five Franklin County branches it divested of in 2013. For the six months ended June 30, 2013, the five Franklin County branches contributed $342,000 to net income, or $0.04 per share. Other significant factors impacting Camden National's year-to-date operating results year-over-year include:
-- A decrease in non-interest expense of $1.2 million. This decrease is
largely due to expenses incurred in the first half of 2013 that did not
recur in the first half of 2014 - primarily costs associated with (i)
the five Franklin County branches totaling $686,000; (ii) a receivable
write-down of $348,000; (iii) branch acquisition costs of $232,000; and
(iv) $198,000 of costs associated with the conversion of Acadia Trust,
N.A.'s core operating system - partially offset by (a) an increase in
foreclosure-related expenses of $162,000; and (b) $106,000 of cost
recognized upon issuance of common stock to the Company's directors.
-- A decrease in net interest income of $760,000. This decrease is
attributable to two factors: (i) the divestiture of five Franklin County
branches, which contributed $813,000 to net interest income in the first
half of 2013; and (ii) net interest margin compression of 16 basis
points. Average interest-earning assets for the first half of 2014
increased $70.8 million, or 3%, over the same period in 2013. The
increase was largely a combination of average loan and investments
growth of $53.5 million and $17.1 million, respectively, even after the
sale of $46.0 million of loans as part of the Franklin County branch
divestiture. Net interest margin on a fully-taxable basis for the six
months ended June 30, 2014 was 3.09%.
-- A decrease in non-interest income of $523,000. The decrease is largely
due to a $1.0 million reduction in mortgage banking income due to a
reduction in loan sales compared to the same period in 2013 and the
divestiture of five Franklin County branches, which contributed $376,000
to non-interest income in the first half of 2013. Partially offsetting
the decrease were additional gains of $313,000 realized upon sale of
investment securities; an increase in fiduciary and brokerage revenues
totaling $231,000; and $196,000 of derivative income.
Asset Quality
Our asset quality metrics as of and for the six months ended June 30, 2014 continue to trend favorably, which has led to a decrease in provision for credit losses for the six months ended June 30, 2014 of $233,000 compared to the same period last year. The following asset quality ratios highlight our current metrics compared to prior periods:
-- Loans 30-89 days past due to total loans at June 30, 2014 were 0.23%,
representing a decrease of 6 basis points and 4 basis points compared to
March 31, 2014 and June 30, 2013, respectively.
-- Year-to-date net-charge offs (annualized) to average loans as of June
30, 2014 were 0.10%, compared to 0.10% and 0.14% for year-to-date March
31, 2014 and June 30, 2013, respectively.
-- Non-performing loans to total loans at June 30, 2014 were 1.54%,
representing a decrease of 14 basis points and 9 basis points compared
-- Non-performing assets to total assets at June 30, 2014 were 1.05%,
representing a decrease of 8 basis points and 4 basis points compared
Dividends and Capital
The board of directors approved a dividend of $0.27 per share, payable on July 31, 2014, to shareholders of record as of July 17, 2014. This distribution represents an annualized dividend yield of 2.79%, based on the June 30, 2014 closing price of Camden National's common stock at $38.76 per share as reported by NASDAQ.
The Company's total risk-based capital ratio, Tier I risk-based capital ratio, and Tier I leverage capital ratio was 15.32%, 14.07%, and 9.09%, respectively, at June 30, 2014. Camden National Corporation and its wholly-owned subsidiary, Camden National Bank, continue to exceed the minimum total and Tier I risk-based capital ratios of 10% and 6%, respectively, and the minimum Tier I leverage capital ratio of 5% required by the Federal Reserve for an institution to be considered "well capitalized".
About Camden National Corporation
Camden National Corporation is the holding company employing more than 480 Maine residents for two financial services companies including Camden National Bank and the wealth management company, Acadia Trust, N.A. Camden National Bank is a full-service community bank with a network of 44 banking offices throughout Maine and a commercial loan office in Manchester, New Hampshire. Acadia Trust offers investment management and fiduciary services with offices in Portland, Bangor and Ellsworth. Located at Camden National Bank, Camden Financial Consultants offers full-service brokerage and insurance services. Learn more at www.CamdenNational.com. Member FDIC.
This press release and the documents incorporated by reference herein contain certain statements that may be considered forward-looking statements under the Private Securities Litigation Reform Act of 1995, including certain plans, expectations, goals, projections, and statements, which are subject to numerous risks, assumptions, and uncertainties. Forward-looking statements can be identified by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "plan," "target," or "goal," or future or conditional verbs such as "will," "may," "might," "should," "would," "could" and other expressions which predict or indicate future events or trends and which do not relate to historical matters. Forward-looking statements should not be relied on, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of Camden National. These risks, uncertainties and other factors may cause the actual results, performance or achievements of Camden National to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.
Some of the factors that might cause these differences include, but are not limited to, the following: continued weakness in the United States economy in general and the regional and local economies within the New England region and Maine, which could result in a deterioration of credit quality, an increase in the allowance for loan losses, or a reduced demand for the Company's credit or fee-based products and services; changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation, interest rate, market and monetary fluctuations; competitive pressures, including continued industry consolidation and the increased financial services provided by non-banks; volatility in the securities markets that could adversely affect the value or credit quality of the Company's assets, impairment of goodwill, the availability and terms of funding necessary to meet the Company's liquidity needs, and could lead to impairment in the value of securities in the Company's investment portfolio; changes in information technology that require increased capital spending; changes in consumer spending and savings habits; changes in tax, banking, securities and insurance laws and regulations including laws and regulations; and changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as Financial Accounting Standards Board, and other accounting standard setters. Additional factors that could also cause results to differ materially from those described above can be found in the Company's Annual Report on Form 10-K, as updated by our Quarterly Reports on Form 10-Q and other filings with the SEC. All of these factors should be carefully reviewed, and readers should not place undue reliance on these forward-looking statements.
These forward-looking statements were based on information, plans and estimates at the date of this press release, and Camden National does not promise and assumes no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.
Use of Non-GAAP Financial Measures
In addition to evaluating the Company's results of operations in accordance with generally accepted accounting principles in the United States ("GAAP"), management supplements this evaluation with certain non-GAAP financial measures, such as the efficiency and tangible equity ratios, tangible book value per share, and tax-equivalent net interest income. Management believes these non-GAAP financial measures help investors in understanding the Company's operating performance and trends and allow for better performance comparisons to other banks. In addition, these non-GAAP financial measures remove the impact of unusual items that may obscure trends in the Company's underlying performance. These disclosures should not be viewed as a substitute for GAAP operating results, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other financial institutions. Reconciliation to the comparable GAAP financial measure can be found in this document or the Form 8-K related to this document, all of which can be found on Camden National's website at www.CamdenNational.com.
Annualized Data
Certain returns, yields, and performance ratios, are presented on an "annualized" basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full year or year-over-year amounts.
Selected Financial Data (unaudited)
At or For The At or For The
June 30, March 31, June 30, June 30, June 30,
---- ---- ---- ---- ----
Selected Financial and
Per Share Data:
Return on average
assets 0.95% 0.89% 0.98% 0.92% 0.94%
equity 10.92% 9.97% 10.71% 10.45% 10.26%
tangible equity (non-
GAAP)(1) 14.25% 13.05% 14.18% 13.65% 13.65%
Tangible equity to
tangible assets (non-
GAAP)(1) 7.15% 7.04% 6.94% 7.15% 6.94%
Efficiency ratio (non-
Yield on average
interest-earnings
Average cost of funds 0.50% 0.52% 0.56% 0.51% 0.57%
Net interest margin 3.11% 3.08% 3.23% 3.09% 3.25%
Tier I leverage
capital ratio 9.09% 9.27% 9.05% 9.09% 9.05%
Tier I risk-based
capital ratio 14.07% 14.64% 14.57% 14.07% 14.57%
Total risk-based
Basic earnings per
share $0.85 $0.76 $0.83 $1.60 $1.57
Diluted earnings per
Cash dividends
declared per share $0.27 $0.27 $0.27 $0.54 $0.54
Book value per share $32.03 $30.93 $30.05 $32.03 $30.05
Tangible book value
per share (non-
GAAP)(1) $25.46 $24.38 $23.15 $25.46 $23.15
Weighted average
number of common
shares outstanding 7,430,709 7,528,751 7,637,433 7,479,461 7,632,586
Diluted weighted
average number of
common shares
outstanding 7,450,639 7,551,785 7,652,199 7,500,318 7,646,742
(1) Please see "Reconciliation of non-GAAP to GAAP Financial Measures".
Consolidated Statements of Condition Data
(In Thousands, Except Number of Shares) June 30, 2014 December 31,
(unaudited) 2013
--- ---------- ----
Cash and due from banks $51,465 $51,355
Securities:
Available-for-sale securities, at fair value 772,467 808,477
Held-to-maturity securities, at amortized cost 9,798 -
Federal Home Loan Bank and Federal Reserve Bank stock, at cost 20,379 19,724
------ ------
Total securities 802,644 828,201
Trading account assets 2,406 2,488
Loans 1,696,765 1,580,402
Less: allowance for loan losses (21,905) (21,590)
------- -------
Net loans 1,674,860 1,558,812
Goodwill and other intangible assets 48,745 49,319
Bank-owned life insurance 46,961 46,363
Premises and equipment, net 24,696 25,727
Deferred tax assets 13,261 16,047
Interest receivable 5,953 5,808
Other real estate owned 2,217 2,195
Other assets 18,498 17,514
Total assets $2,691,706 $2,603,829
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand $242,422 $241,866
Interest checking 440,443 453,909
Savings and money market 659,718 675,679
Certificates of deposit 330,575 343,034
Brokered deposits 184,304 99,336
------- ------
Total deposits 1,857,462 1,813,824
Federal Home Loan Bank advances 56,076 56,112
Other borrowed funds 464,851 430,058
Junior subordinated debentures 43,973 43,922
Accrued interest and other liabilities 31,624 28,817
Total liabilities 2,453,986 2,372,733
--------- ---------
Shareholders' Equity
Common stock, no par value; authorized 20,000,000 shares, issued and outstanding
7,421,445 41,211 47,783
and 7,579,913 shares on June 30, 2014 and December 31, 2013, respectively
Accumulated other comprehensive loss:
Net unrealized losses on available-for-sale securities, net of tax (943) (7,964)
Net unrealized losses on derivative instruments, net of tax (4,437) (2,542)
Net unrecognized losses on postretirement plans, net of tax (1,794) (1,841)
Total accumulated other comprehensive loss (7,174) (12,347)
------ -------
Total shareholders' equity 237,720 231,096
Total liabilities and shareholders' equity $2,691,706 $2,603,829
Consolidated Statements of Income Data (unaudited)
(In Thousands, Except Number of Shares and Per Share Data) June 30, March 31, June 30,
--- ---- ---- ----
Interest and fees on loans $17,757 $16,780 $18,059
Interest on U.S. government and sponsored enterprise obligations 4,124 4,230 4,074
Interest on state and political subdivision obligations 314 294 292
Interest on federal funds sold and other investments 94 89 56
Total interest income 22,289 21,393 22,481
------ ------ ------
Interest on deposits 1,565 1,551 1,828
Interest on borrowings 845 807 767
Interest on junior subordinated debentures 631 625 636
Total interest expense 3,041 2,983 3,231
----- ----- -----
Net interest income 19,248 18,410 19,250
Provision for credit losses 643 493 695
Net interest income after provision for credit losses 18,605 17,917 18,555
Non-Interest Income
Service charges on deposit accounts 1,620 1,469 1,755
Other service charges and fees 1,543 1,395 1,513
Income from fiduciary services 1,349 1,184 1,275
Brokerage and insurance commissions 459 478 409
Bank-owned life insurance 292 306 314
Net gain on sale of securities 285 166 -
Mortgage banking income, net 70 72 584
Other income 886 615 526
Total non-interest income 6,504 5,685 6,376
Non-Interest Expense
Salaries and employee benefits 8,301 7,980 7,961
Furniture, equipment and data processing 1,743 1,789 1,931
Net occupancy costs 1,270 1,380 1,407
Consulting and professional fees 782 518 585
Other real estate owned and collection costs (recoveries) 515 513 (22)
Regulatory assessments 485 481 500
Amortization of intangible assets 287 287 287
Branch acquisition costs - - 71
Other expenses 2,409 2,177 2,928
Total non-interest expense 15,792 15,125 15,648
Income before income taxes 9,317 8,477 9,283
Income Taxes 3,001 2,762 2,952
Net Income $6,316 $5,715 $6,331
====== ====== ======
Per Share Data
Basic earnings per share $0.85 $0.76 $0.83
Diluted earnings per share $0.85 $0.75 $0.82
(In Thousands, Except Number of Shares and Per Share Data) 2014 2013
--------------------------------------------------------- ---- ----
Interest and fees on loans $34,537 $35,854
Interest on U.S. government and sponsored enterprise obligations 8,354 8,350
Interest on state and political subdivision obligations 608 597
Interest on federal funds sold and other investments 183 106
Total interest income 43,682 44,907
Interest on deposits 3,116 3,647
Interest on borrowings 1,652 1,585
Interest on junior subordinated debentures 1,256 1,257
Total interest expense 6,024 6,489
Net interest income 37,658 38,418
Provision for credit losses 1,136 1,369
Net interest income after provision for credit losses 36,522 37,049
Service charges on deposit accounts 3,089 3,439
Other service charges and fees 2,938 2,942
Income from fiduciary services 2,533 2,418
Brokerage and insurance commissions 937 821
Bank-owned life insurance 598 652
Net gain on sale of securities 451 138
Mortgage banking income, net 142 1,158
Other income 1,501 1,144
Total non-interest income 12,189 12,712
Salaries and employee benefits 16,281 16,322
Furniture, equipment and data processing 3,532 3,535
Net occupancy costs 2,650 2,959
Consulting and professional fees 1,300 1,132
Other real estate owned and collection costs 1,028 866
Regulatory assessments 966 999
Amortization of intangible assets 574 574
Branch acquisition costs - 232
Other expenses 4,586 5,529
Total non-interest expense 30,917 32,148
Income before income taxes 17,794 17,613
Income Taxes 5,763 5,620
Net Income $12,031 $11,993
======= =======
Basic earnings per share $1.60 $1.57
Diluted earnings per share $1.60 $1.56
Quarterly Average Balance, Interest and Yield/Rate Analysis (unaudited)
At or for the Three Months Ended At or for the Three Months Ended
(In Thousands) Average Interest Yield/Rate Average Interest Yield/Rate
Balance Balance
--- ------- -------
Interest-earning assets:
Securities - taxable $777,935 $4,212 2.17% $774,916 $4,130 2.13%
Securities - nontaxable(1) 37,386 484 5.17% 30,800 449 5.83%
Trading account assets 2,309 5 0.95% 2,245 - - %
Loans(2):
Residential real estate 566,070 6,017 4.25% 572,920 6,596 4.61%
Commercial real estate 591,276 6,816 4.56% 511,115 6,227 4.82%
Commercial 214,559 2,045 3.77% 178,887 1,964 4.34%
Municipal(1) 14,724 127 3.45% 12,949 136 4.21%
Consumer 288,897 2,797 3.88% 315,197 3,184 4.05%
------- ----- ---- ------- ----- ----
Total loans 1,675,526 17,802 4.23% 1,591,068 18,107 4.53%
--------- ------ ---- --------- ------ ----
Total interest-earning assets 2,493,156 22,503 3.60% 2,399,029 22,686 3.77%
Cash and due from banks 42,360 43,758
Other assets 165,574 166,333
Less: allowance for loan
losses (21,892) (23,395)
Liabilities & Shareholders' Equity
Demand $227,599 $ - - $224,351 $ - -
Interest checking 465,565 80 0.07% 475,621 90 0.08%
Savings 245,034 35 0.06% 236,277 33 0.06%
Money market 423,687 315 0.30% 445,585 337 0.30%
Certificates of deposit 332,686 774 0.93% 399,864 1,013 1.02%
------- --- ---- ------- ----- ----
Total deposits 1,694,571 1,204 0.28% 1,781,698 1,473 0.33%
--------- ----- ---- --------- ----- ----
Borrowings:
Brokered deposits 144,792 361 1.00% 123,151 355 1.16%
Junior subordinated
debentures 43,960 631 5.76% 43,858 636 5.82%
Other borrowings 535,834 845 0.63% 368,183 767 0.84%
------- --- ---- ------- --- ----
Total borrowings 724,586 1,837 1.02% 535,192 1,758 1.32%
Total funding liabilities 2,419,157 3,041 0.50% 2,316,890 3,231 0.56%
Other liabilities 28,092 31,669
Shareholders' equity 231,949 237,166
Total liabilities &
shareholders' equity $2,679,198 $2,585,725
Net interest income (fully-taxable
equivalent) 19,462 19,455
Less: fully-taxable equivalent adjustment (214) (205)
Net interest income $19,248 $19,250
Net interest rate spread (fully-taxable equivalent) 3.10% 3.21%
Net interest margin (fully-taxable equivalent) 3.11% 3.23%
(1) Reported on tax-equivalent basis calculated using a tax rate of 35.0%.
(2) Non-accrual loans and loans held for sale are included in total average loans.
Year-to-date Average Balance, Interest and Yield/Rate Analysis (unaudited)
At or for the Six Months Ended At or for the Six Months Ended
Trading account assets 2,397 7 0.59% 2,241 12 1.05%
Residential real estate 567,132 11,981 4.23% 574,031 13,171 4.59%
Commercial real estate 572,478 13,098 4.55% 507,478 12,301 4.82%
Interest checking 463,566 158 0.07% 477,274 157 0.07%
Certificates of deposit 335,433 1,576 0.95% 407,407 2,000 0.99%
debentures 43,948 1,256 5.76% 43,845 1,257 5.78%
Other borrowings 520,016 1,652 0.64% 343,328 1,585 0.93%
Asset Quality Data (unaudited)
(In Thousands) At or For The At or For The At or For The At or For The At or For The
Ended Three Months Twelve Months Nine Months Six Months
June 30, 2014 Ended Ended Ended Ended
March 31, 2014 December 31, 2013 September 30,
2013 June 30, 2013
--- -------------- ----------------- -------------- -------------
Non-accrual loans:
Residential real estate $7,887 $9,125 $10,520 $10,224 $8,624
Commercial real estate 6,282 8,278 7,799 9,847 6,634
Commercial 3,840 1,935 2,146 2,994 3,233
Consumer 2,575 2,457 2,012 2,018 1,945
Total non-accrual loans 20,584 21,795 22,477 25,083 20,436
Loans 90 days past due and
accruing 109 50 455 24 -
Renegotiated loans not
included above 5,379 5,413 5,468 5,379 5,701
Total non-performing loans 26,072 27,258 28,400 30,486 26,137
------ ------ ------ ------ ------
Other real estate owned:
Residential real estate 912 1,035 1,044 1,126 1,038
Commercial real estate 1,305 1,677 1,151 676 1,117
----- ----- ----- --- -----
Total other real estate owned 2,217 2,712 2,195 1,802 2,155
Total non-performing assets $28,289 $29,970 $30,595 $32,288 $28,292
======= ======= ======= ======= =======
Loans 30-89 days past due:
Residential real estate $1,800 $1,349 $1,551 $1,419 $1,827
Commercial 466 1,007 313 529 202
Consumer 569 632 1,571 1,207 716
--- --- ----- ----- ---
Total loans 30-89 days past
due $3,986 $4,704 $6,030 $3,988 $4,336
====== ====== ====== ====== ======
Allowance for loan losses at
the beginning of the period $21,590 $21,590 $23,044 $23,044 $23,044
Provision for loan losses 1,141 492 2,052 2,051 1,384
Charge-offs:
Residential real estate 361 183 1,059 687 347
Commercial real estate 176 171 952 762 171
Commercial 526 219 1,426 823 444
Consumer 146 76 837 598 470
--- --- --- --- ---
Total charge-offs 1,209 649 4,274 2,870 1,432
Total recoveries 383 237 768 436 325
Net charge-offs 826 412 3,506 2,434 1,107
--- --- ----- ----- -----
the end of the period $21,905 $21,670 $21,590 $22,661 $23,321
Components of allowance for
credit losses:
Allowance for loan losses $21,905 $21,670 $21,590 $22,661 $23,321
Liability for unfunded credit
commitments 16 22 21 28 30
Balance of allowance for
credit losses $21,921 $21,692 $21,611 $22,689 $23,351
Ratios:
Non-performing loans to total
loans 1.54% 1.68% 1.80% 1.92% 1.63%
Non-performing assets to
total assets 1.05% 1.13% 1.18% 1.24% 1.09%
Allowance for credit losses to
total loans 1.29% 1.34% 1.37% 1.43% 1.45%
Net charge-offs to average
loans (annualized):
Quarter-to-date 0.10% 0.10% 0.27% 0.33% 0.20%
Year-to-date 0.10% 0.10% 0.22% 0.20% 0.14%
non-performing loans 84.08% 79.58% 76.09% 74.42% 89.34%
Loans 30-89 days past due to
Reconciliation of non-GAAP to GAAP Financial Measures
Camden National presents its efficiency ratio using non-GAAP information. The GAAP-based efficiency ratio is non-interest expense divided by net interest income plus non-interest income from the consolidated statements of income. The non-GAAP efficiency ratio excludes branch acquisition costs from non-interest expense, excludes net gain on sale of securities from non-interest income, and adds the tax-equivalent adjustment (assumed 35.0% tax rate) to net interest income. The following table provides a reconciliation between the GAAP and non-GAAP efficiency ratio:
Three Months Ended Six Months Ended
------------------ ----------------
(In Thousands) June 30, March 31, June 30, June 30, June 30,
Non-interest expense, as
presented $15,792 $15,125 $15,648 $30,917 $32,148
Less: branch acquisition
costs - - 71 - 232
Adjusted non-interest
expense $15,792 $15,125 $15,577 $30,917 $31,916
Net interest income, as
Add: effect of tax-
exempt income 214 198 205 411 415
Non-interest income, as
presented 6,504 5,685 6,376 12,189 12,712
Less: net gain on sale of
securities 285 166 - 451 138
Adjusted net interest
income plus non-
interest income $25,681 $24,127 $25,831 $49,807 $51,407
Non-GAAP efficiency ratio 61.49% 62.69% 60.30% 62.07% 62.08%
GAAP efficiency ratio 61.32% 62.77% 61.06% 62.02% 62.88%
The following table provides a reconciliation between tax-equivalent net interest income to GAAP net interest income using a 35.0% tax rate:
--- ---- ---- ---- ---- ----
income, as
Add: effect of
tax-exempt
income 214 198 205 411 415
income, tax
equivalent $19,462 $18,608 $19,455 $38,069 $38,833
Return on average tangible equity is the ratio of (i) net income, adjusted for tax-effected amortization of intangible assets to (ii) average equity, adjusted for goodwill and other intangible assets. The following table reconciles the return on average tangible equity to GAAP return on average equity:
Net income, as presented $6,316 $5,715 $6,331 $12,031 $11,993
Add: tax-effected
amortization of
intangible assets 187 187 187 373 373
Net income, adjusted $6,503 $5,902 $6,518 $12,404 $12,366
====== ====== ====== ======= =======
Average equity $231,949 $232,539 $237,166 $232,243 $235,679
Less: average goodwill
and other intangible
assets 48,880 49,168 52,860 49,023 53,007
Average tangible equity $183,069 $183,371 $184,306 $183,220 $182,672
======== ======== ======== ======== ========
tangible equity 14.25% 13.05% 14.18% 13.65% 13.65%
Return on average equity 10.92% 9.97% 10.71% 10.45% 10.26%
The following table provides a reconciliation between tangible book value per share and GAAP book value per share:
(In
Thousands,
and Per
Data) June 30, March 31, June 30
Shareholders'
equity,
presented $237,720 $231,469 $229,620
Less:
intangible
assets 48,745 49,032 52,725
equity $188,975 $182,437 $176,895
======== ======== ========
end 7,421,445 7,484,560 7,640,712
share $25.46 $24.38 $23.15
The following table provides a reconciliation between tangible equity to tangible assets and GAAP equity to assets:
Thousands) June 30, March 31, June 30,
intangibles 48,745 49,032 52,725
assets $2,691,706 $2,640,666 $2,601,778
========== ========== ==========
assets 7.15% 7.04% 6.94%
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Camden National Corporation