CAMDEN NATIONAL CORPORATION REPORTS FOURTH QUARTER AND YEAR END 2023 FINANCIAL RESULTS
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
Our capital position remained strong and improved compared to the third quarter, highlighted by increases in our common equity ratio to 8.66% and our tangible common equity ratio (non-GAAP) to 7.11% at December 31, 2023, compared to 8.02% and 6.47%, respectively, at September 30, 2023.Our asset quality continues to be strong, highlighted by loans 30-89 days past due of 0.12% of total loans and non-performing assets of 0.13% of total assets at December 31, 2023.Our return on average assets was 0.59% and adjusted return on average assets (non-GAAP) was 0.87% for the fourth quarter of 2023.Our return on average equity was 7.20% and adjusted return on average equity (non-GAAP) was 10.53%, while our return on average tangible equity (non-GAAP) was 9.18% and adjusted return on average tangible equity (non-GAAP) was 13.38% for the fourth quarter of 2023.Uninsured and uncollateralized1 deposits were 14.6% of total deposits and available liquidity sources were 2.0 times uninsured and uncollateralized deposits at December 31, 2023, compared to 15.3% and 2.1 times, respectively, at September 30, 2023.
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.
Loan growth for the fourth quarter of 2023 was spread across all of our loan portfolios, including residential real estate, commercial real estate and commercial loan portfolios each growing 1%, and the consumer and home equity loan portfolio growing 2%.The increase in loans for the year ended 2023 was driven by residential real estate loan growth of 4% and commercial real estate loan growth of 3%, partially offset by a decrease in commercial loans of 6%.The Company shifted its loan pricing strategy in 2023 to slow on-books loan production given the focus on deposits, net interest margin and asset quality, which included selling more of its residential mortgage production. The Company sold 48% of residential mortgages it originated for the year ended December 31, 2023, compared to 20% for the year ended 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.
The Company sold $70.4 million of investments in the fourth quarter of 2023 with a weighted-average yield of 3.02% at a pre-tax loss of $5.0 million. The proceeds from the sale were used to fund loan growth or were reinvested into higher interest-earning investments.As of December 31, 2023, the Company’s debt securities designated as available-for-sale (“AFS”) and held-to-maturity (“HTM”) were, collectively, in a net unrealized loss position of $111.5 million, decreasing from a net unrealized loss position of $182.4 million and $141.5 million as of September 30, 2023 and December 31, 2022, respectively.As of December 31, 2023 and 2022, the weighted-average life of the Company’s debt securities was 7.8 years and the duration was 5.7 years and 5.8 years, respectively.
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.
Checking and savings account balances decreased $115.4 million, or 4%, in the fourth quarter of 2023, primarily due to the combination of seasonal outflows and the shift from checking and savings accounts to higher interest-bearing deposit accounts.Certificates of deposit (“CD”) balances grew $57.4 million, or 10%, and money market balances grew $8.9 million, or 1%, in the fourth quarter of 2023.The loan-to-deposit ratio was 89% at December 31, 2023, compared to 87% at September 30, 2023 and 83% at 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.
As of December 31, 2023, the Company’s borrowings consisted of: (1) $200.7 million of customer repurchase agreements, (2) $135.0 million from the Bank Term Funding Program (“BTFP”) at a fixed rate of 4.70% which the Company may prepay at any time without penalty, (3) $150.0 million of short-term Federal Home Loan Bank of Boston borrowings, of which $125.0 million supports interest rate swap derivatives, and (4) $44.3 million of junior subordinated debentures.
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.
Loans 30-89 days past due were 0.12% of total loans at December 31, 2023, compared to 0.09% at September 30, 2023, and 0.06% of total loans at December 31, 2022.Non-performing loans were 0.18% of total loans at December 31, 2023, compared to 0.16% at September 30, 2023, and 0.13% at December 31, 2022.Annualized net charge-offs to average loans was 0.04% for the fourth quarter of 2023, compared to 0.01% for the third quarter of 2023, and 0.03% for the fourth quarter of 2022.
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:
An increase in mortgage banking income of $449,000, driven by a positive fair value adjustment on the residential mortgage loan pipeline designated for sale, which was primarily due to the sharp decrease in the 10-year U.S. Treasury interest rate at the end of the fourth quarter.A smaller loss on sale of investments of $360,000.An increase in debit card income of $336,000, as the Company recognized its annual Visa incentive bonus in the fourth quarter of $400,000.
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
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