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Reports Fourth Quarter 2023 Net Income of $8.5 million and Diluted EPS of $0.58;Capital and Asset Quality Remain Strong at Year End
CAMDEN, Maine, Jan. 30, 2024 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National" or the "Company"), a $5.7 billion bank holding company headquartered in Camden, Maine, reported net income of $8.5 million and diluted earnings per share ("EPS") of $0.58 for the fourth quarter of 2023, both decreases of 13% compared to the third quarter of 2023. Throughout 2023, financial institutions, including Camden National, were faced with many challenges due to the interest rate environment and well-publicized bank failures. In response to these dynamics, the Company prioritized actions designed to maintain long-term shareholder value and to position ourselves to be able to capitalize on future growth opportunities. We believe the actions we took during 2023 fortified our balance sheet, stabilized net interest margin and positioned the Company for future earnings capacity.
Included in the Company's fourth quarter 2023 financial results are pre-tax investment losses of $5.0 million. The Company sold lower yielding investments at a loss in the third and fourth quarters of 2023 to adjust its balance sheet and to improve future earnings and profitability. Adjusted pre-tax, pre-provision income, which excludes the impact of the investment losses (non-GAAP), was $15.8 million, a decrease of 6% from the third quarter of 2023.
On November 20, 2023, Simon Griffiths joined the Company, and he took on the role of President and Chief Executive Officer effective January 1, 2024. "I am honored to join this Company and lead this talented team," said Mr. Griffiths. "Our balance sheet is one of our strengths and is supported by strong fundamentals, including capital, liquidity and asset quality. As we begin 2024, we are positioned well to lean into this strength and drive future growth."
FOURTH QUARTER 2023 HIGHLIGHTS
FINANCIAL CONDITION
As of December 31, 2023, total assets were $5.7 billion, a decrease of 1% since September 30, 2023, and an increase of 1% since December 31, 2022.
Loans
Loans at December 31, 2023 totaled $4.1 billion, a 1% increase since September 30, 2023, and an increase of 2% since December 31, 2022.
Investments
Investments totaled $1.2 billion as of December 31, 2023, an increase of 3% since September 30, 2023, and a decrease of 5% since December 31, 2022. Investment balances represented 21% of the Company's assets as of December 31, 2023, compared to 20% at September 30, 2023 and 22% at December 31, 2022.
Deposits
As of December 31, 2023, deposits totaled $4.6 billion, a decrease of 2% since September 30, 2023, and a decrease of 5% since December 31, 2022.
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 | |||||
Borrowings
As of December 31, 2023, borrowings totaled $529.9 million, an increase of 3%, since September 30, 2023, and an increase of 71%, since December 31, 2022.
Capital
As of December 31, 2023, the Company's regulatory capital ratios were each well in excess of regulatory capital requirements. In addition, the Company's common equity ratio was 8.66%, and its tangible common equity ratio (non-GAAP) was 7.11%, compared to 8.02% and 6.47%, respectively, at September 30, 2023, and 7.96% and 6.37%, respectively, at December 31, 2022.
On December 19, 2023, the Company announced a cash dividend of $0.42 per share, representing an annualized dividend yield of 4.46%, based on the Company's closing share price of $37.63, as reported by NASDAQ on December 29, 2023 (the last business day of the fourth quarter of 2023), payable on January 31, 2024, to shareholders of record on January 15, 2024.
The Company repurchased 65,692 shares of its common stock at an average price of $30.44 per share during the year ended December 31, 2023. In January 2024, the Company announced a new share repurchase program for 750,000 shares of the Company common stock, or approximately 5% of outstanding stock as of December 31, 2023. The new share repurchase program replaces the prior program, which expired in early January 2024.
ASSET QUALITY
The Company's asset quality in the fourth quarter of 2023 and as of December 31, 2023 remained strong. The Company continues to actively monitor its loan portfolio, particularly its commercial real estate loan portfolio, for signs of credit stress.
FINANCIAL OPERATING RESULTS (Q4 2023 vs. Q3 2023)
Net income for the fourth quarter of 2023 was $8.5 million, a decrease of $1.3 million, or 13%, compared to the third quarter of 2023. Excluding income taxes, provision for credit losses, investment losses and Small Business Administration Paycheck Protection Program ("SBA PPP") income (non-GAAP), net income for the fourth quarter of 2023 decreased $959,000, or 6%, compared to last quarter.
Net Interest Income and Net Interest Margin
Net interest income for the fourth quarter of 2023 was $32.7 million, an increase of $125,000 compared to the third quarter of 2023. The increase was driven by a 1 basis point increase in net interest margin between periods to 2.40% for the fourth quarter of 2023, partially offset by a decrease in average interest-earning assets between periods of less than 1%. This increase was aided by the adjustments to the Company's investment portfolio that were made in the third and fourth quarters of 2023 and the balance sheet derivatives entered into during 2023.
Provision (Credit) for Credit Losses
Provision expense for the fourth quarter of 2023 was $569,000 and increased $1.1 million over the third quarter of 2023. The increase was driven by loan growth between periods of 1% and completion of our annual allowance model re-assessment in the fourth quarter, which resulted in higher loss rates across our forecast period.
At December 31, 2023, the allowance for credit losses ("ACL") on loans was 0.90% of total loans, consistent with September 30, 2023. At December 31, 2023, the ACL was 5.0 times total non-performing loans, compared to 5.5 times at September 30, 2023.
The change in provision for credit losses between periods is highlighted in the table below:
($ in thousands) | Q4 2023 | Q3 2023 | Increase / (Decrease) | |||
Provision (credit) for credit losses - loans | $ 887 | $ (456) | $ 1,343 | |||
Credit for credit losses - off-balance sheet credit exposures | (318) | (118) | (200) | |||
Provision (credit) for credit losses | $ 569 | $ (574) | $ 1,143 |
Non-Interest Income
Non-interest income for the fourth quarter of 2023 was $6.0 million, an increase of $914,000, or 18%, over the third quarter of 2023. The significant changes in non-interest income between periods included:
Non-Interest Expense
Non-interest expense for the fourth quarter of 2023 was $27.8 million, an increase of $1.6 million, or 6%, compared to the third quarter of 2023. The increase in operating expenses between periods was driven by: (1) executive transition-related costs, which includes compensation, legal and other consulting support, (2) an increase in data processing costs due to the timing of the annual upgrade to the Company's core system in the fourth quarter, (3) an increase in occupancy-related costs during the winter months, and (4) elevated customer fraud losses.
The Company's GAAP efficiency ratio and non-GAAP efficiency ratio for the fourth quarter of 2023 was 71.69% and 63.48%, respectively, compared to 69.60% and 60.63% for the third quarter of 2023.
Q4 2023 CONFERENCE CALL
Camden National will host a conference call and webcast at 3:00 p.m., Eastern Time, on Tuesday, January 30, 2024, to discuss its fourth quarter 2023 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: | 013733 |
Live webcast: |
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 the largest publicly traded bank holding company in Northern New England with $5.7 billion in assets and was proudly listed as one of the Best Places to Work in Maine for the past three years. Founded in 1875, Camden National Bank is a full-service community bank dedicated to customers at every stage of their financial journey. With 57 banking centers and additional lending offices in New Hampshire and Massachusetts, Camden National Bank offers the latest in digital banking, complemented by award-winning, personalized service. To learn more, visit CamdenNational.bank. Member FDIC. Equal Housing Lender.
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 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, including Camden National, 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, 2022, as updated by other filings with the Securities and Exchange Commission ("SEC"). Further, statements regarding the potential effects of the war in Ukraine, the COVID-19 pandemic, 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: adjusted net income; adjusted diluted earnings per share; adjusted return on average assets; adjusted return on average equity; pre-tax pre-provision income; adjusted pre-tax pre-provision income; return on average tangible equity and adjusted 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 Year Ended | |||||||||
(In thousands, except number of shares and per share data) | December 31,2023 | September 30,2023 | December 31,2022 | December 31,2023 | December 31,2022 | |||||
Financial Condition Data | ||||||||||
Investments | $ 1,190,780 | $ 1,157,618 | $ 1,259,161 | $ 1,190,780 | $ 1,259,161 | |||||
Loans | 4,098,094 | 4,058,413 | 4,010,353 | 4,098,094 | 4,010,353 | |||||
Allowance for credit losses on loans | 36,935 | 36,407 | 36,922 | 36,935 | 36,922 | |||||
Total assets | 5,714,506 | 5,779,675 | 5,671,850 | 5,714,506 | 5,671,850 | |||||
Deposits | 4,597,360 | 4,678,406 | 4,826,929 | 4,597,360 | 4,826,929 | |||||
Borrowings | 529,938 | 514,471 | 309,507 | 529,938 | 309,507 | |||||
Shareholders' equity | 495,064 | 463,298 | 451,278 | 495,064 | 451,278 | |||||
Operating Data and Per Share Data | ||||||||||
Net income | $ 8,480 | $ 9,787 | $ 15,351 | $ 43,383 | $ 61,439 | |||||
Adjusted net income (non-GAAP)(1) | 12,410 | 14,002 | 16,064 | 52,980 | 62,159 | |||||
Diluted earnings per share | 0.58 | 0.67 | 1.05 | 2.97 | 4.17 | |||||
Adjusted diluted earnings per share (non-GAAP)(1) | 0.85 | 0.96 | 1.10 | 3.63 | 4.22 | |||||
Cash dividends declared per share | 0.42 | 0.42 | 0.42 | 1.68 | 1.62 | |||||
Book value per share | 33.99 | 31.82 | 30.98 | 33.99 | 30.98 | |||||
Tangible book value per share (non-GAAP)(1) | 27.42 | 25.24 | 24.37 | 27.42 | 24.37 | |||||
Profitability Ratios | ||||||||||
Return on average assets | 0.59 % | 0.68 % | 1.09 % | 0.76 % | 1.12 % | |||||
Adjusted return on average assets (non-GAAP)(1) | 0.87 % | 0.97 % | 1.14 % | 0.93 % | 1.14 % | |||||
Return on average equity | 7.20 % | 8.25 % | 14.03 % | 9.30 % | 13.15 % | |||||
Adjusted return on average equity (non-GAAP)(1) | 10.53 % | 11.80 % | 14.69 % | 11.35 % | 13.31 % | |||||
Return on average tangible equity (non-GAAP)(1) | 9.18 % | 10.48 % | 18.18 % | 11.83 % | 16.71 % | |||||
Adjusted return on average tangible equity (non-GAAP)(1) | 13.38 % | 14.94 % | 19.01 % | 14.42 % | 16.90 % | |||||
GAAP efficiency ratio | 71.96 % | 69.60 % | 57.72 % | 65.75 % | 56.72 % | |||||
Efficiency ratio (non-GAAP)(1) | 63.48 % | 60.63 % | 56.35 % | 61.52 % | 56.16 % | |||||
Net interest margin (fully-taxable equivalent) | 2.40 % | 2.39 % | 2.76 % | 2.46 % | 2.86 % | |||||
Asset Quality Ratios | ||||||||||
ACL on loans to total loans | 0.90 % | 0.90 % | 0.92 % | 0.90 % | 0.92 % | |||||
Non-performing assets to total assets | 0.13 % | 0.11 % | 0.09 % | 0.13 % | 0.09 % | |||||
Annualized net charge-offs to average loans | 0.04 % | 0.01 % | 0.03 % | 0.03 % | 0.02 % | |||||
Capital Ratios | ||||||||||
Common equity ratio | 8.66 % | 8.02 % | 7.96 % | 8.66 % | 7.96 % | |||||
Tangible common equity ratio (non-GAAP) | 7.11 % | 6.47 % | 6.37 % | 7.11 % | 6.37 % | |||||
Tier 1 leverage capital ratio | 9.40 % | 9.35 % | 9.22 % | 9.40 % | 9.22 % | |||||
Common equity tier 1 risk-based capital ratio | 12.31 % | 12.16 % | 11.74 % | 12.31 % | 11.74 % | |||||
Total risk-based capital ratio | 14.36 % | 14.19 % | 13.80 % | 14.36 % | 13.80 % | |||||
(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) | December 31,2023 | September 30,2023 | December 31,2022 | |||
ASSETS | ||||||
Cash, cash equivalents and restricted cash | $ 99,804 | $ 211,514 | $ 75,427 | |||
Investments: | ||||||
Trading securities | 4,647 | 4,195 | 3,990 | |||
Available-for-sale securities, at fair value (amortized cost of $702,937, $705,019 and $796,960, respectively) | 625,808 | 589,003 | 695,875 | |||
Held-to-maturity securities, at amortized cost (fair value of $510,595, $483,547, and $506,193, respectively) | 544,931 | 549,961 | 546,583 | |||
Other investments | 15,394 | 14,459 | 12,713 | |||
Total investments | 1,190,780 | 1,157,618 | 1,259,161 | |||
Loans held for sale, at fair value (book value of $10,152, $11,299, and $5,259 respectively) | 10,320 | 11,187 | 5,197 | |||
Loans: | ||||||
Commercial real estate | 1,672,306 | 1,653,288 | 1,624,937 | |||
Commercial | 403,901 | 400,031 | 430,131 | |||
Residential real estate | 1,763,378 | 1,752,401 | 1,700,266 | |||
Consumer and home equity | 258,509 | 252,693 | 255,019 | |||
Total loans | 4,098,094 | 4,058,413 | 4,010,353 | |||
Less: allowance for credit losses on loans | (36,935) | (36,407) | (36,922) | |||
Net loans | 4,061,159 | 4,022,006 | 3,973,431 | |||
Goodwill and core deposit intangible assets | 95,668 | 95,816 | 96,260 | |||
Other assets | 256,775 | 281,534 | 262,374 | |||
Total assets | $ 5,714,506 | $ 5,779,675 | $ 5,671,850 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Liabilities | ||||||
Deposits: | ||||||
Non-interest checking | $ 967,750 | 1,023,239 | $ 1,141,753 | |||
Interest checking | 1,553,787 | 1,579,991 | 1,763,850 | |||
Savings and money market | 1,364,401 | 1,389,180 | 1,439,622 | |||
Certificates of deposit | 609,503 | 552,111 | 300,451 | |||
Brokered deposits | 101,919 | 133,885 | 181,253 | |||
Total deposits | 4,597,360 | 4,678,406 | 4,826,929 | |||
Short-term borrowings | 485,607 | 470,140 | 265,176 | |||
Junior subordinated debentures | 44,331 | 44,331 | 44,331 | |||
Accrued interest and other liabilities | 92,144 | 123,500 | 84,136 | |||
Total liabilities | 5,219,442 | 5,316,377 | 5,220,572 | |||
Commitments and Contingencies | ||||||
Shareholders' Equity | ||||||
Common stock, no par value: authorized 40,000,000 shares, issued and outstanding 14,565,952, 14,558,137, 14,567,325 on December 31, 2023, September 30, 2023 and December 31, 2022, respectively | 115,602 | 114,842 | 115,069 | |||
Retained earnings | 481,014 | 478,664 | 462,164 | |||
Accumulated other comprehensive loss: | ||||||
Net unrealized loss on debt securities, net of tax | (107,409) | (139,228) | (131,539) | |||
Net unrealized gain on cash flow hedging derivative instruments, net of tax | 6,096 | 9,343 | 5,891 | |||
Net unrecognized loss on postretirement plans, net of tax | (239) | (323) | (307) | |||
Total accumulated other comprehensive loss | (101,552) | (130,208) | (125,955) | |||
Total Shareholders' equity | 495,064 | 463,298 | 451,278 | |||
Total liabilities and shareholders' equity | $ 5,714,506 | $ 5,779,675 | $ 5,671,850 | |||
Consolidated Statements of Income Data (unaudited) | ||||||||||
For the Three Months Ended | For the Year Ended | |||||||||
(In thousands, except per share data) | December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||
Interest Income | ||||||||||
Interest and fees on loans | $ 51,287 | $ 50,115 | $ 41,985 | $ 195,379 | $ 144,709 | |||||
Taxable interest on investments | 6,638 | 5,814 | 5,944 | 24,267 | 23,339 | |||||
Nontaxable interest on investments | 654 | 748 | 772 | 2,927 | 3,096 | |||||
Dividend income | 273 | 302 | 182 | 1,061 | 531 | |||||
Other interest income | 945 | 690 | 436 | 2,612 | 1,113 | |||||
Total interest income | 59,797 | 57,669 | 49,319 | 226,246 | 172,788 | |||||
Interest Expense | ||||||||||
Interest on deposits | 22,838 | 20,969 | 10,520 | 78,884 | 20,305 | |||||
Interest on borrowings | 3,700 | 3,577 | 1,277 | 12,949 | 2,649 | |||||
Interest on junior subordinated debentures | 550 | 539 | 540 | 2,150 | 2,140 | |||||
Total interest expense | 27,088 | 25,085 | 12,337 | 93,983 | 25,094 | |||||
Net interest income | 32,709 | 32,584 | 36,982 | 132,263 | 147,694 | |||||
Provision (credit) for credit losses | 569 | (574) | 466 | 2,100 | 4,500 | |||||
Net interest income after provision (credit) for credit losses | 32,140 | 33,158 | 36,516 | 130,163 | 143,194 | |||||
Non-Interest Income | ||||||||||
Debit card income | 3,466 | 3,130 | 3,969 | 12,613 | 13,340 | |||||
Service charges on deposit accounts | 2,102 | 2,040 | 1,882 | 7,839 | 7,587 | |||||
Income from fiduciary services | 1,653 | 1,641 | 1,560 | 6,669 | 6,407 | |||||
Mortgage banking income, net | 1,032 | 583 | 1,035 | 2,921 | 4,221 | |||||
Brokerage and insurance commissions | 1,188 | 1,217 | 878 | 4,650 | 4,147 | |||||
Bank-owned life insurance | 500 | 644 | 382 | 2,349 | 1,901 | |||||
Net loss on sale of securities | (4,975) | (5,335) | (903) | (10,310) | (912) | |||||
Other income | 1,020 | 1,152 | 979 | 4,303 | 4,011 | |||||
Total non-interest income | 5,986 | 5,072 | 9,782 | 31,034 | 40,702 | |||||
Non-Interest Expense | ||||||||||
Salaries and employee benefits | 15,404 | 14,744 | 15,262 | 60,009 | 62,019 | |||||
Furniture, equipment and data processing | 3,605 | 3,382 | 3,404 | 13,377 | 13,043 | |||||
Net occupancy costs | 1,939 | 1,804 | 1,863 | 7,674 | 7,578 | |||||
Debit card expense | 1,345 | 1,318 | 1,192 | 5,126 | 4,602 | |||||
Consulting and professional fees | 1,193 | 897 | 959 | 4,520 | 4,073 | |||||
Regulatory assessments | 839 | 861 | 593 | 3,413 | 2,338 | |||||
Amortization of core deposit intangible assets | 148 | 148 | 156 | 592 | 625 | |||||
Other real estate owned and collection costs (recoveries), net | 67 | (34) | 20 | 42 | 29 | |||||
Other expenses | 3,306 | 3,087 | 3,544 | 12,608 | 12,542 | |||||
Total non-interest expense | 27,846 | 26,207 | 26,993 | 107,361 | 106,849 | |||||
Income before income tax expense | 10,280 | 12,023 | 19,305 | 53,836 | 77,047 | |||||
Income Tax Expense | 1,800 | 2,236 | 3,954 | 10,453 | 15,608 | |||||
Net Income | $ 8,480 | $ 9,787 | $ 15,351 | $ 43,383 | $ 61,439 | |||||
Per Share Data | ||||||||||
Basic earnings per share | $ 0.58 | $ 0.67 | $ 1.05 | $ 2.98 | $ 4.18 | |||||
Diluted earnings per share | 0.58 | 0.67 | 1.05 | 2.97 | 4.17 | |||||
Quarterly Average Balance and Yield/Rate Analysis (unaudited) | ||||||||||||
Average Balance | Yield/Rate | |||||||||||
For the Three Months Ended | For the Three Months Ended | |||||||||||
(In thousands) | December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | September 30, 2023 | December 31, 2022 | ||||||
Assets | ||||||||||||
Interest-earning assets: | ||||||||||||
Interest-bearing deposits in other banks and other interest-earning assets | $ 44,577 | $ 48,401 | $ 28,219 | 6.70 % | 4.04 % | 3.52 % | ||||||
Investments - taxable | 1,186,959 | 1,177,367 | 1,256,135 | 2.39 % | 2.14 % | 2.01 % | ||||||
Investments - nontaxable(1) | 89,029 | 102,872 | 106,921 | 3.72 % | 3.68 % | 3.65 % | ||||||
Loans(2): | ||||||||||||
Commercial real estate | 1,661,720 | 1,658,125 | 1,591,392 | 4.87 % | 4.84 % | 4.37 % | ||||||
Commercial(1) | 388,518 | 391,052 | 409,233 | 6.25 % | 6.08 % | 4.91 % | ||||||
SBA PPP | 389 | 439 | 652 | 2.43 % | 2.40 % | 3.50 % | ||||||
Municipal(1) | 14,430 | 18,888 | 20,693 | 4.13 % | 4.41 % | 3.28 % | ||||||
Residential real estate | 1,765,099 | 1,762,860 | 1,667,256 | 4.35 % | 4.18 % | 3.58 % | ||||||
Consumer and home equity | 256,073 | 252,357 | 255,355 | 7.86 % | 7.74 % | 6.24 % | ||||||
Total loans | 4,086,229 | 4,083,721 | 3,944,581 | 4.96 % | 4.85 % | 4.21 % | ||||||
Total interest-earning assets | 5,406,794 | 5,412,361 | 5,335,856 | 4.39 % | 4.23 % | 3.67 % | ||||||
Other assets | 305,159 | 304,439 | 267,215 | |||||||||
Total assets | $ 5,711,953 | $ 5,716,800 | $ 5,603,071 | |||||||||
Liabilities & Shareholders' Equity | ||||||||||||
Deposits: | ||||||||||||
Non-interest checking | $ 985,458 | $ 1,019,450 | $ 1,182,999 | — % | — % | — % | ||||||
Interest checking | 1,547,438 | 1,584,314 | 1,665,360 | 2.53 % | 2.42 % | 1.56 % | ||||||
Savings | 622,094 | 661,126 | 763,858 | 0.17 % | 0.14 % | 0.05 % | ||||||
Money market | 756,407 | 721,423 | 689,738 | 3.14 % | 2.85 % | 1.46 % | ||||||
Certificates of deposit | 583,738 | 497,301 | 289,476 | 3.49 % | 3.05 % | 0.68 % | ||||||
Total deposits | 4,495,135 | 4,483,614 | 4,591,431 | 1.87 % | 1.67 % | 0.84 % | ||||||
Borrowings: | ||||||||||||
Brokered deposits | 120,920 | 161,623 | 120,150 | 5.24 % | 5.07 % | 2.75 % | ||||||
Customer repurchase agreements | 197,920 | 193,297 | 203,105 | 1.68 % | 1.69 % | 0.82 % | ||||||
Junior subordinated debentures | 44,331 | 44,331 | 44,331 | 4.92 % | 4.83 % | 4.83 % | ||||||
Other borrowings | 271,316 | 263,705 | 123,142 | 4.19 % | 4.14 % | 2.76 % | ||||||
Total borrowings | 634,487 | 662,956 | 490,728 | 3.66 % | 3.70 % | 2.14 % | ||||||
Total funding liabilities | 5,129,622 | 5,146,570 | 5,082,159 | 2.10 % | 1.93 % | 0.96 % | ||||||
Other liabilities | 115,157 | 99,480 | 86,827 | |||||||||
Shareholders' equity | 467,174 | 470,750 | 434,085 | |||||||||
Total liabilities & shareholders' equity | $ 5,711,953 | $ 5,716,800 | $ 5,603,071 | |||||||||
Net interest rate spread (fully-taxable equivalent) | 2.29 % | 2.30 % | 2.71 % | |||||||||
Net interest margin (fully-taxable equivalent) | 2.40 % | 2.39 % | 2.76 % | |||||||||
(1) | Reported on 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 Year Ended | For the Year Ended | |||||||
(In thousands) | December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||
Assets | ||||||||
Interest-earning assets: | ||||||||
Interest-bearing deposits in other banks and other interest-earning assets | $ 33,676 | $ 52,068 | 5.50 % | 0.99 % | ||||
Investments - taxable | 1,203,445 | 1,329,586 | 2.17 % | 1.84 % | ||||
Investments - nontaxable(1) | 100,614 | 111,113 | 3.68 % | 3.53 % | ||||
Loans(2): | ||||||||
Commercial real estate | 1,659,078 | 1,532,225 | 4.83 % | 4.01 % | ||||
Commercial(1) | 398,465 | 396,000 | 5.99 % | 4.17 % | ||||
SBA PPP | 483 | 6,999 | 2.99 % | 17.91 % | ||||
Municipal(1) | 16,702 | 19,305 | 4.04 % | 3.20 % | ||||
Residential real estate | 1,748,076 | 1,511,985 | 4.09 % | 3.49 % | ||||
Consumer and home equity | 253,877 | 243,901 | 7.56 % | 5.03 % | ||||
Total loans | 4,076,681 | 3,710,415 | 4.80 % | 3.90 % | ||||
Total interest-earning assets | 5,414,416 | 5,203,182 | 4.19 % | 3.34 % | ||||
Other assets | 292,910 | 285,618 | ||||||
Total assets | $ 5,707,326 | $ 5,488,800 | ||||||
Liabilities & Shareholders' Equity | ||||||||
Deposits: | ||||||||
Non-interest checking | $ 1,020,045 | $ 1,206,383 | — % | — % | ||||
Interest checking | 1,614,598 | 1,502,896 | 2.30 % | 0.77 % | ||||
Savings | 675,478 | 760,264 | 0.12 % | 0.05 % | ||||
Money market | 717,478 | 706,934 | 2.68 % | 0.76 % | ||||
Certificates of deposit | 453,723 | 295,586 | 2.85 % | 0.50 % | ||||
Total deposits | 4,481,322 | 4,472,063 | 1.56 % | 0.42 % | ||||
Borrowings: | ||||||||
Brokered deposits | 184,709 | 130,455 | 4.74 % | 1.20 % | ||||
Customer repurchase agreements | 191,646 | 215,761 | 1.49 % | 0.51 % | ||||
Junior subordinated debentures | 44,331 | 44,331 | 4.85 % | 4.83 % | ||||
Other borrowings | 246,058 | 80,100 | 4.11 % | 1.93 % | ||||
Total borrowings | 666,744 | 470,647 | 3.58 % | 1.35 % | ||||
Total funding liabilities | 5,148,066 | 4,942,710 | 1.83 % | 0.51 % | ||||
Other liabilities | 92,543 | 78,845 | ||||||
Shareholders' equity | 466,717 | 467,245 | ||||||
Total liabilities & shareholders' equity | $ 5,707,326 | $ 5,488,800 | ||||||
Net interest rate spread (fully-taxable equivalent) | 2.36 % | 2.83 % | ||||||
Net interest margin (fully-taxable equivalent) | 2.46 % | 2.86 % | ||||||
(1) | Reported on 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 Year Ended December 31, 2023 | At or For The Nine Months Ended September 30, 2023 | At or For The Six Months Ended June 30, 2023 | At or For The Three Months Ended March 31, 2023 | At or For The Year Ended December 31, 2022 | |||||
Non-accrual loans: | ||||||||||
Residential real estate | $ 2,539 | $ 2,775 | $ 1,781 | $ 1,713 | $ 1,733 | |||||
Commercial real estate | 386 | 92 | 56 | 56 | 57 | |||||
Commercial | 1,725 | 1,083 | 729 | 748 | 715 | |||||
Consumer and home equity | 798 | 674 | 482 | 441 | 486 | |||||
Total non-accrual loans | 5,448 | 4,624 | 3,048 | 2,958 | 2,991 | |||||
Accruing troubled-debt restructured loans not included above | 1,990 | 1,997 | 2,140 | 2,154 | 2,114 | |||||
Total non-performing loans | 7,438 | 6,621 | 5,188 | 5,112 | 5,105 | |||||
Other real estate owned | — | — | — | — | — | |||||
Total non-performing assets | $ 7,438 | $ 6,621 | $ 5,188 | $ 5,112 | $ 5,105 | |||||
Loans 30-89 days past due: | ||||||||||
Residential real estate | $ 1,290 | $ 751 | $ 1,192 | $ 313 | $ 1,038 | |||||
Commercial real estate | 740 | 188 | 112 | 111 | 323 | |||||
Commercial | 2,007 | 2,260 | 294 | 1,030 | 802 | |||||
Consumer and home equity | 922 | 603 | 653 | 684 | 391 | |||||
Total loans 30-89 days past due | $ 4,959 | $ 3,802 | $ 2,251 | $ 2,138 | $ 2,554 | |||||
ACL on loans at the beginning of the period | $ 36,922 | $ 36,922 | $ 36,922 | $ 36,922 | $ 33,256 | |||||
Provision for loan losses | 1,174 | 288 | 744 | 439 | 4,430 | |||||
Charge-offs: | ||||||||||
Residential real estate | 18 | 18 | 18 | 18 | 66 | |||||
Commercial real estate | 58 | 58 | — | — | — | |||||
Commercial | 1,560 | 1,101 | 846 | 312 | 1,042 | |||||
Consumer and home equity | 91 | 63 | 31 | 4 | 134 | |||||
Total charge-offs | 1,727 | 1,240 | 895 | 334 | 1,242 | |||||
Total recoveries | (566) | (437) | (212) | (107) | (478) | |||||
Net charge-offs | 1,161 | 803 | 683 | 227 | 764 | |||||
ACL on loans at the end of the period | $ 36,935 | $ 36,407 | $ 36,983 | $ 37,134 | $ 36,922 | |||||
Components of ACL: | ||||||||||
ACL on loans | $ 36,935 | $ 36,407 | $ 36,983 | $ 37,134 | $ 36,922 | |||||
ACL on off-balance sheet credit exposures(1) | 2,353 | 2,670 | 2,788 | 2,990 | 3,265 | |||||
ACL, end of period | $ 39,288 | $ 39,077 | $ 39,771 | $ 40,124 | $ 40,187 | |||||
Ratios: | ||||||||||
Non-performing loans to total loans | 0.18 % | 0.16 % | 0.13 % | 0.13 % | 0.13 % | |||||
Non-performing assets to total assets | 0.13 % | 0.11 % | 0.09 % | 0.09 % | 0.09 % | |||||
ACL on loans to total loans | 0.90 % | 0.90 % | 0.90 % | 0.91 % | 0.92 % | |||||
Net charge-offs to average loans (annualized) | ||||||||||
Quarter-to-date | 0.04 % | 0.01 % | 0.04 % | 0.02 % | 0.03 % | |||||
Year-to-date | 0.03 % | 0.03 % | 0.03 % | 0.02 % | 0.02 % | |||||
ACL on loans to non-performing loans | 496.57 % | 549.87 % | 712.86 % | 726.41 % | 723.25 % | |||||
Loans 30-89 days past due to total loans | 0.12 % | 0.09 % | 0.05 % | 0.05 % | 0.06 % | |||||
(1) Presented within accrued interest and other liabilities on the consolidated statements of condition |
Reconciliation of non-GAAP to GAAP Financial Measures (unaudited) | ||||||||||
Adjusted Net Income; Adjusted Diluted Earnings per Share; Adjusted Return on Average Assets; and Adjusted Return on Average Equity: | ||||||||||
For the Three Months Ended | For the Year Ended | |||||||||
(In thousands, except number of shares, per share data and ratios) | December 31,2023 | September 30,2023 | December 31,2022 | December 31,2023 | December 31,2022 | |||||
Adjusted Net Income: | ||||||||||
Net income, as presented | $ 8,480 | $ 9,787 | $ 15,351 | $ 43,383 | $ 61,439 | |||||
Adjustment for net loss on sale of securities | 4,975 | 5,335 | 903 | 10,310 | 912 | |||||
Adjustment for Signature Bank bond write-off | — | — | — | 1,838 | — | |||||
Tax impact of above adjustments(1) | (1,045) | (1,120) | (190) | (2,551) | (192) | |||||
Adjusted net income | $ 12,410 | $ 14,002 | $ 16,064 | $ 52,980 | $ 62,159 | |||||
Adjusted Diluted Earnings per Share: | ||||||||||
Diluted earnings per share, as presented | $ 0.58 | $ 0.67 | $ 1.05 | $ 2.97 | $ 4.17 | |||||
Adjustment for net loss on sale of securities | 0.34 | 0.37 | 0.06 | 0.71 | 0.06 | |||||
Adjustment for Signature Bank bond write-off | — | — | — | 0.13 | — | |||||
Tax impact of above adjustments(1) | (0.07) | (0.08) | (0.01) | (0.18) | (0.01) | |||||
Adjusted diluted earnings per share | $ 0.85 | $ 0.96 | $ 1.10 | $ 3.63 | $ 4.22 | |||||
Adjusted Return on Average Assets: | ||||||||||
Return on average assets, as presented | 0.59 % | 0.68 % | 1.09 % | 0.76 % | 1.12 % | |||||
Adjustment for net loss on sale of securities | 0.35 % | 0.37 % | 0.06 % | 0.18 % | 0.02 % | |||||
Adjustment for Signature Bank bond write-off | — | — | — | 0.03 % | — | |||||
Tax impact of above adjustments(1) | (0.07) % | (0.08) % | (0.01) % | (0.04) % | — | |||||
Adjusted return on average assets | 0.87 % | 0.97 % | 1.14 % | 0.93 % | 1.14 % | |||||
Adjusted Return on Average Equity: | ||||||||||
Return on average equity, as presented | 7.20 % | 8.25 % | 14.03 % | 9.30 % | 13.15 % | |||||
Adjustment for net loss on sale of securities | 4.22 % | 4.50 % | 0.83 % | 2.21 % | 0.20 % | |||||
Adjustment for Signature Bank bond write-off | — | — | — | 0.39 % | — | |||||
Tax impact of above adjustments(1) | (0.89) % | (0.95) % | (0.17) % | (0.55) % | (0.04) % | |||||
Adjusted return on average equity | 10.53 % | 11.80 % | 14.69 % | 11.35 % | 13.31 % | |||||
(1) Assumed a 21% tax rate. |
Pre-Tax, Pre-Provision Income and Adjusted Pre-Tax, Pre-Provision Income: | ||||||||||
For the Three Months Ended | For the Year Ended | |||||||||
(In thousands) | December 31,2023 | September 30,2023 | December 31,2022 | December 31,2023 | December 31,2022 | |||||
Net income, as presented | $ 8,480 | $ 9,787 | $ 15,351 | $ 43,383 | $ 61,439 | |||||
Adjustment for provision (credit) for credit losses | 569 | (574) | 466 | 2,100 | 4,500 | |||||
Adjustment for income tax expense | 1,800 | 2,236 | 3,954 | 10,453 | 15,608 | |||||
Pre-tax, pre-provision income | $ 10,849 | $ 11,449 | $ 19,771 | $ 55,936 | $ 81,547 | |||||
Adjustment for net loss on sale of securities | 4,975 | 5,335 | 903 | 10,310 | 912 | |||||
Adjustment for SBA PPP loan income | (2) | (3) | (6) | (14) | (1,254) | |||||
Adjusted pre-tax, pre-provision income | $ 15,822 | $ 16,781 | $ 20,668 | $ 66,232 | $ 81,205 | |||||
Efficiency Ratio: | ||||||||||
For the Three Months Ended | For the Year Ended | |||||||||
(Dollars in thousands) | December 31,2023 | September 30,2023 | December 31,2022 | December 31,2023 | December 31,2022 | |||||
Non-interest expense, as presented | $ 27,846 | $ 26,207 | $ 26,993 | $ 107,361 | $ 106,849 | |||||
Net interest income, as presented | $ 32,709 | $ 32,584 | $ 36,982 | $ 132,263 | $ 147,694 | |||||
Adjustment for the effect of tax-exempt income(1) | 199 | 237 | 237 | 901 | 937 | |||||
Non-interest income, as presented | 5,986 | 5,072 | 9,782 | 31,034 | 40,702 | |||||
Adjustment for net loss on sale of securities | 4,975 | 5,335 | 903 | 10,310 | 912 | |||||
Adjusted net interest income plus non- interest income | $ 43,869 | $ 43,228 | $ 47,904 | $ 174,508 | $ 190,245 | |||||
GAAP efficiency ratio | 71.96 % | 69.60 % | 57.72 % | 65.75 % | 56.72 % | |||||
Non-GAAP efficiency ratio | 63.48 % | 60.63 % | 56.35 % | 61.52 % | 56.16 % | |||||
(1) Assumed a 21% tax rate. |
Return on Average Tangible Equity and Adjusted Return on Average Tangible Equity: | ||||||||||
For the Three Months Ended | For the Year Ended | |||||||||
(Dollars in thousands) | December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||
Return on Average Tangible Equity: | ||||||||||
Net income, as presented | $ 8,480 | $ 9,787 | $ 15,351 | $ 43,383 | $ 61,439 | |||||
Adjustment for amortization of core deposit intangible assets | 148 | 148 | 156 | 592 | 625 | |||||
Tax impact of above adjustment(1) | (31) | (31) | (33) | (124) | (131) | |||||
Net income, adjusted for amortization of core deposit intangible assets | $ 8,597 | $ 9,904 | $ 15,474 | $ 43,851 | $ 61,933 | |||||
Average equity, as presented | $ 467,174 | $ 470,750 | $ 434,085 | $ 466,717 | $ 467,245 | |||||
Adjustment for average goodwill and core deposit intangible assets | (95,739) | (95,888) | (96,336) | (95,962) | (96,572) | |||||
Average tangible equity | $ 371,435 | $ 374,862 | $ 337,749 | $ 370,755 | $ 370,673 | |||||
Return on average equity | 7.20 % | 8.25 % | 14.03 % | 9.30 % | 13.15 % | |||||
Return on average tangible equity | 9.18 % | 10.48 % | 18.18 % | 11.83 % | 16.71 % | |||||
Adjusted Return on Average Tangible Equity: | ||||||||||
Adjusted net income (see "Adjusted Net Income" table above) | $ 12,410 | $ 14,002 | $ 16,064 | $ 52,980 | $ 62,159 | |||||
Adjustment for amortization of core deposit intangible assets | 148 | 148 | 156 | 592 | 625 | |||||
Tax impact of above adjustment(1) | (31) | (31) | (33) | (124) | (131) | |||||
Adjusted net income, adjusted for amortization of core deposit intangible assets | $ 12,527 | $ 14,119 | $ 16,187 | $ 53,448 | $ 62,653 | |||||
Adjusted return on average tangible equity | 13.38 % | 14.94 % | 19.01 % | 14.42 % | 16.90 % | |||||
(1) Assumed a 21% tax rate. |
Tangible Book Value Per Share and Tangible Common Equity Ratio: | ||||||
December 31,2023 | September 30,2023 | December 31,2022 | ||||
(In thousands, except number of shares and per share data) | ||||||
Tangible Book Value Per Share: | ||||||
Shareholders' equity, as presented | $ 495,064 | $ 463,298 | $ 451,278 | |||
Adjustment for goodwill and core deposit intangible assets | (95,668) | (95,816) | (96,260) | |||
Tangible shareholders' equity | $ 399,396 | $ 367,482 | $ 355,018 | |||
Shares outstanding at period end | 14,565,952 | 14,558,137 | 14,567,325 | |||
Book value per share | $ 33.99 | $ 31.82 | $ 30.98 | |||
Tangible book value per share | 27.42 | 25.24 | 24.37 | |||
Tangible Common Equity Ratio: | ||||||
Total assets | $ 5,714,506 | $ 5,779,675 | $ 5,671,850 | |||
Adjustment for goodwill and core deposit intangible assets | (95,668) | (95,816) | (96,260) | |||
Tangible assets | $ 5,618,838 | $ 5,683,859 | $ 5,575,590 | |||
Common equity ratio | 8.66 % | 8.02 % | 7.96 % | |||
Tangible common equity ratio | 7.11 % | 6.47 % | 6.37 % | |||
Core Deposits: | ||||||
(Dollars in thousands) | December 31, 2023 | September 30, 2023 | December 31, 2022 | |||
Total deposits | $ 4,597,361 | $ 4,678,406 | $ 4,826,929 | |||
Adjustment for certificates of deposit | (609,503) | (552,111) | (300,451) | |||
Adjustment for brokered deposits | (101,919) | (133,885) | (181,253) | |||
Core deposits | $ 3,885,939 | $ 3,992,410 | $ 4,345,225 | |||
Average Core Deposits: | ||||||||||
For the Three Months Ended | For the Year Ended | |||||||||
(Dollars in thousands) | December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||
Total average deposits, as presented(1) | $ 4,495,135 | $ 4,483,614 | $ 4,591,431 | $ 4,481,322 | $ 4,472,063 | |||||
Adjustment for average certificates of deposit | (583,738) | (497,301) | (289,476) | (453,723) | (295,586) | |||||
Average core deposits | $ 3,911,397 | $ 3,986,313 | $ 4,301,955 | $ 4,027,599 | $ 4,176,477 | |||||
(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
