January 30, 2024

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.

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:

https://events.q4inc.com/attendee/843601593

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

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 %

0.92 %

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 %

0.02 %

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

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

156

592

625

Other real estate owned and collection costs (recoveries),
net

(34)

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

(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

4.92 %

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

(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

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

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

$ 33,256

Provision for loan losses

1,174

288

744

439

4,430

Charge-offs:

Residential real estate

Commercial real estate

—

Commercial

1,560

1,101

846

312

1,042

Consumer and home equity

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 %

Non-performing assets to total assets

0.13 %

0.11 %

0.09 %

ACL on loans to total loans

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 %

0.02 %

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 %

0.06 %

(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

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

156

592

625

Tax impact of above adjustment(1)

(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

156

592

625

Tax impact of above adjustment(1)

(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

CAMDEN NATIONAL CORPORATION REPORTS FOURTH QUARTER AND YEAR END 2023 FINANCIAL RESULTS

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CAMDEN NATIONAL CORPORATION REPORTS FOURTH QUARTER AND YEAR END 2023 FINANCIAL RESULTS

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