CAMDEN NATIONAL CORPORATION CAMDEN, Maine, Jan. 31, 2017 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National" or the "Company"), a $3.9 billion bank holding company headquartered in Camden, Maine, reported net income for the fourth quarter of 2016 of $10.9 million and diluted earnings per share ("EPS")(1) of $0.70 per share, which was consistent with the previous quarter's performance.
For the year ended December 31, 2016, the Company reported net income of $40.1 million and diluted EPS of $2.57, representing a 91% increase in net income and a 49% increase in diluted EPS over last year. The Company's return on average assets and return on average equity for the year ended December 31, 2016 was 1.04% and 10.47%, respectively.
"We had strong financial results in 2016, which was our first full year after our merger with The Bank of Maine. We are extremely pleased with our many accomplishments and growth throughout the year," said Gregory A. Dufour, President and Chief Executive Officer of the Company. "We successfully executed our integration strategy to achieve the synergies and cost savings we had committed to by delivering on an efficiency ratio(2) of 57.53%, and increasing tangible book value(2) by 11% over last year."
Dufour added, "In addition to our strong financial performance in 2016, we also took steps to provide our shareholders with additional returns, through a 15% increase in our fourth quarter dividend, and increasing our stock liquidity through completion of a three-for-two stock split during the third quarter."
The Company reported adjusted net income(2 )for the fourth quarter of 2016 of $10.9 million and adjusted diluted EPS(2) of $0.70 per share, representing increases over the same period last year of 42% and 35%, respectively. For the year ended December 31, 2016, the Company reported adjusted net income(2) of $40.6 million and adjusted diluted EPS(2) of $2.61, representing increases over last year of 44% and 12%, respectively.
FOURTH QUARTER 2016 HIGHLIGHTS
-- Net income of $10.9 million and diluted EPS of $0.70 per share
-- Return on average assets of 1.12%, return on average equity of 11.01%,
and an efficiency ratio(2) of 57.89%
-- Dividend increase of $0.03 per share, or 15%, over last quarter
-- Completed merger of Camden National's wholly-owned subsidiary, Acadia
Trust, N.A., into Camden National Bank creating Camden National Wealth
Management, a division of Camden National Bank
YEAR-END DECEMBER 31, 2016 HIGHLIGHTS
-- Net income of $40.1 million and diluted EPS of $2.57 per share
-- Return on average assets of 1.04%, return on average equity of 10.47%
and an efficiency ratio(2) of 57.53%
-- Loan growth of 4% driven by growth of 11% within our commercial loan
portfolio
-- Residential mortgage production of approximately $370.0 million, of
which approximately 65% was sold to the secondary market
-- Core deposits growth (demand, interest checking, saving and money
market) of 4%
-- Tangible book value accretion of 11% in 2016
-- Completion of a three-for-two stock split
(1) All share and per share data
has been adjusted for all periods
presented to reflect the three-
for-two stock split on September
30, 2016.
2 This is a non-GAAP measure.
Please refer to the
"Reconciliation of non-GAAP to
GAAP Financial Measures" for
further details.
FINANCIAL CONDITION
Total assets at December 31, 2016 were $3.9 billion, compared to $3.7 billion last year. Total asset growth of 4% over last year was driven by loan growth (excluding loans held for sale) of $104.4 million, or 4%, and, secondarily, by growth of our investment portfolio of $41.7 million, or 5%. At both December 31, 2016 and 2015, our ratio of loans to total assets was 67% and investments to total assets was 23%.
Total loans at December 31, 2016 (excluding loans held for sale) were $2.6 billion, compared to $2.5 billion last year. Our 2016 loan growth, excluding the Healthcare Professional Funding Corporation ("HPFC") loan portfolio, was 5%. The HPFC loan portfolio was acquired as part of the acquisition of SBM Financial, Inc. ("SBM"), the parent company of The Bank of Maine, and shortly thereafter HPFC's operations were discontinued in the first quarter of 2016. Our 2016 loan growth was centered in commercial real estate loans and commercial loans with growth of 13% and 12%, respectively, driving commercial real estate loans to $1.1 billion and commercial loans to $333.6 million at December 31, 2016. Our retail portfolio at December 31, 2016 decreased 3% since last year to $1.1 billion. The decrease in our retail portfolio in 2016 was the result of our home equity portfolio declining by 5% and residential mortgages decreasing 2%. We focused our attention on residential mortgage production that translated into originations of approximately $370.0 million in 2016, of which we sold approximately 65%.
Total deposits at December 31, 2016 grew 4% over last year to $2.8 billion. Core deposits (demand, interest checking, saving and money market) increased 4% over last year to $2.1 billion. The decrease in certificate of deposit balances of 9% since last year was supplemented by an increase in brokered deposits of $73.5 million. Total borrowings increased 5% over last year to $600.0 million at December 31, 2016.
Our asset quality continues to remain strong with non-performing assets to total assets of 0.67% and non-performing loans to total loans of 0.97%, representing slight increases over last year of 1 basis point and 4 basis points, respectively. Our ratio of loans 30-89 days past due to total loans at December 31, 2016 was 0.24%, compared to 0.40% last year.
The Company and its wholly-owned subsidiary Camden National Bank, continue to maintain risk-based capital ratios in excess of the regulatory levels required for an institution to be considered "well capitalized." At December 31, 2016, the Company's total risk-based capital ratio, Tier I risk-based capital ratio, common equity Tier I risk-based capital ratio, and Tier I leverage capital ratio were 14.04%, 12.59%, 11.27%, and 8.83%, respectively.
FINANCIAL OPERATING RESULTS
FOURTH QUARTER 2016 COMPARED TO THIRD QUARTER 2016:
Net income for the third and fourth quarter of 2016 was $10.9 million, and diluted EPS for each period was $0.70 per share.
Total revenues(3) for the fourth quarter of 2016 of $38.4 million decreased 2% compared to the third quarter of 2016. The decrease in total revenues was driven by an 8% decrease in non-interest income and a less than 1% decrease in net interest income as detailed below.
-- The decrease in non-interest income of $850,000 was primarily due to
lower mortgage banking income of $1.1 million, which was driven by a
decrease in our interest rate locked residential mortgage loan pipeline
of $18.1 million compared to September 30, 2016, partially offset by
one-time proceeds received of $577,000 upon liquidation of a mortgage
insurance exchange in the fourth quarter of 2016.
3 Revenue is defined as
the sum of net interest
income and non-
interest income.
-- The decrease in net interest income of $128,000 was driven by a decrease
in average interest-earning assets of 1% compared to the third quarter
of 2016. Average investment and loan balances for the fourth quarter of
2016 decreased $18.9 million and $13.5 million, respectively, compared
to last quarter, partially offset by a 2 basis points increase in net
interest margin to 3.26%.
Non-interest expense for the fourth quarter of 2016 increased $359,000, or 2%, to $22.5 million over last quarter. Our efficiency ratio(2) for the fourth quarter of 2016 was 57.89%, compared to 55.39% last quarter. The net increase in non-interest expense was driven by:
-- An increase in salary and benefits costs of $394,000, or 3%, primarily
due to an increase in incentive compensation based on 2016 financial
performance; and
-- An increase in other real estate owned and collection costs of $222,000
was related to higher sub-servicing costs, as one major relationship
terminated on December 31, 2016, and the write-down of other real estate
owned properties based on current appraisals.
-- Partially offsetting the increases were lower consulting and
professional fees of $117,000 and lower debit card expense of $192,000.
The provision for credit losses was $255,000 for the fourth quarter of 2016, representing a decrease of $1.0 million compared to last quarter. The decrease was due to lower net charge-offs during the fourth quarter of $432,000 compared to $1.7 million in the third quarter of 2016, translating to an annualized net charge-offs ratio for the fourth quarter of 0.07%. Additionally, in the fourth quarter one large loan was upgraded from criticized to a pass rating, reducing the required allowance for loan loss by $201,000.
Our effective tax rate for the fourth quarter of 2016 of 30.3% was 1.3% lower than last quarter resulting in lower income tax expense of $210,000 compared to last quarter. The decrease in our effective tax rate for the quarter was driven by tax benefits generated upon exercise of stock options and vesting of restricted shares. Excluding these tax benefits, the Company's net income for the fourth quarter of 2016 was $10.7 million and its diluted EPS was $0.68 per share.
YEAR ENDED DECEMBER 31, 2016 COMPARED TO YEAR ENDED DECEMBER 31, 2015:
Net income for the year ended December 31, 2016 was $40.1 million compared to $21.0 million reported last year, representing an increase of $19.1 million, or 91%. Diluted EPS for the year ended December 31, 2016 was $2.57 per share compared to $1.73 per share reported last year, representing an increase of $0.84 per share, or 49%.
Our return on average assets, average equity and average tangible equity(2) for the year ended December 31, 2016 was 1.04%, 10.47% and 14.76%, respectively, compared to 0.70%, 7.54% and 9.91% last year. Our efficiency ratio(2) for the year ended December 31, 2016 was 57.53% compared to 61.13% last year.
The improvement in our financial performance and related key metrics for the year ended December 31, 2016 compared to last year highlights the benefits of the acquisition of SBM completed in the fourth quarter of 2015. Through the successful integration and execution of our acquisition strategy we were able to achieve the synergies and cost savings anticipated.
FOURTH QUARTER 2016 DIVIDEND
The Company increased its fourth quarter 2016 dividend by $0.03 per share, or 15%, to $0.23 per share, payable on January 31, 2017, to shareholders of record as of January 17, 2017. This distribution represents an annualized dividend yield of 2.07%, based on the December 30, 2016 (last business day) closing price of Camden National's common stock at $44.45 per share as reported by NASDAQ.
2 This is a non-GAAP measure.
Please refer to the
"Reconciliation of non-GAAP to
GAAP Financial Measures" for
further details.
ANNUAL MEETING
Camden National has scheduled its annual meeting of shareholders for Tuesday, April 25, 2017, at 3:00 p.m. local time, at Point Lookout Resort and Conference Center, 67 Atlantic Highway, Lincolnville, Maine 04849. The date for determining the Company's shareholders of record for the annual meeting is March 3, 2017.
CONFERENCE CALL
Camden National will host a conference call and webcast at 3:30 p.m. eastern time on January 31, 2017 to discuss our fourth quarter and year-to-date 2016 financial results and outlook. Participants should dial in to the call 10 - 15 minutes before it begins. Information about the conference call is as follows:
Live dial-in
(domestic): (888) 349-0139
Live dial-in
(international): (412) 542-4154
Live webcast: http://services.choruscall.com/links/cac170131.htmlA link to the live webcast will be will be available on Camden National's website under "Investors" at www.CamdenNational.com prior to the meeting. 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 holding company of Camden National Bank. Headquartered in Camden, Maine, the Company had approximately $3.9 billion in assets as of December 31, 2016 and is the largest publicly traded bank holding company in Northern New England. Camden National Bank, a leading financial services company offering financial products for consumers, businesses and wealth management clients, is a full-service community bank that employs over 625 people, features a network of 61 banking centers and 84 ATMs in Maine. Camden National Bank offers state-of-the-art online and mobile banking resources as well as comprehensive wealth management, and investment, insurance and financial planning services through Camden National Wealth Management and Camden Financial Consultants. To learn more, visit www.CamdenNational.com.
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, 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, changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the business in which Camden National is engaged, 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, 2015, as updated by other filings with the Securities and Exchange Commission ("SEC"). 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 the efficiency, tangible common equity, return on average tangible equity and adjusted return ratios; adjusted net income; adjusted diluted EPS; adjusted net interest margin; tangible book value per share; and tax-equivalent net interest income. Management believes these non-GAAP financial measures help investors in understanding the Company's operating performance and trends and allow for better performance comparisons to other banks. In addition, these non-GAAP financial measures remove the impact of unusual items that may obscure trends in the Company's underlying performance. These disclosures should not be viewed as a substitute for GAAP operating results, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other financial institutions. Reconciliation to the comparable GAAP financial measure can be found in this document.
ANNUALIZED DATA
Certain returns, yields, and performance ratios are presented on an "annualized" basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full year or year-over-year amounts.
Selected Financial Data (unaudited)
At or For The At or For The
Year Ended
Three Months Ended
(In thousands, except number of shares and per share data) December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
Financial Condition Data
Investments $897,679 $906,286 $855,995 $897,679 $855,995
Loans and loans held for sale 2,609,400 2,616,653 2,501,164 2,609,400 2,501,164
Allowance for loan losses (23,116) (23,290) (21,166) (23,116) (21,166)
Total assets 3,864,230 3,903,966 3,709,344 3,864,230 3,709,344
Deposits 2,828,529 2,889,225 2,726,379 2,828,529 2,726,379
Borrowings 599,675 559,273 572,362 599,675 572,362
Shareholders' equity 391,547 393,181 363,190 391,547 363,190
Operating Data
Net interest income $28,244 $28,372 $26,371 $113,072 $86,452
Provision for credit losses 255 1,279 957 5,258 1,936
Non-interest income 10,151 11,001 8,464 39,621 27,482
Non-interest expense 22,508 22,149 31,470 89,896 81,139
Income before income tax expense 15,632 15,945 2,408 57,539 30,859
Income tax expense 4,730 5,042 716 17,472 9,907
Net income $10,902 $10,903 $1,692 $40,067 $20,952
======= ======= ====== ======= =======
Key Ratios
Return on average assets 1.12% 1.11% 0.19% 1.04% 0.70%
Return on average equity 11.01% 11.18% 1.91% 10.47% 7.54%
Yield on average interest-earning assets 3.72% 3.72% 3.74% 3.80% 3.65%
Average cost of funds 0.47% 0.49% 0.46% 0.49% 0.47%
Net interest margin 3.26% 3.24% 3.30% 3.32% 3.19%
Non-performing loans to total loans 0.97% 0.98% 0.93% 0.97% 0.93%
Non-performing assets to total assets 0.67% 0.67% 0.66% 0.67% 0.66%
Annualized charge-offs to average loans 0.07% 0.26% 0.16% 0.13% 0.10%
Tier I leverage capital ratio 8.83% 8.48% 8.74% 8.83% 8.74%
Common equity Tier I risk-based capital ratio 11.27% 10.86% 10.42% 11.27% 10.42%
Tier I risk-based capital ratio 12.59% 12.16% 11.58% 12.59% 11.58%
Total risk-based capital ratio 14.04% 13.60% 12.98% 14.04% 12.98%
Per Share Data (1)
Basic earnings per share $0.70 $0.70 $0.11 $2.59 $1.73
Diluted earnings per share $0.70 $0.70 $0.11 $2.57 $1.73
Cash dividends declared per share $0.23 $0.20 $0.20 $0.83 $0.80
Book value per share $25.30 $25.47 $23.69 $25.30 $23.69
Weighted average number of common shares outstanding 15,457,498 15,425,452 14,601,030 15,422,160 12,031,294
Diluted weighted average number of common shares outstanding 15,569,346 15,507,561 14,683,769 15,504,239 12,074,579
Non-GAAP Measures(2)
Adjusted net income $10,872 $10,933 $7,662 $40,597 $28,186
Adjusted return on average tangible equity 15.22% 15.65% 11.96% 14.95% 13.20%
Return on average tangible equity 15.26% 15.61% 2.98% 14.76% 9.91%
Tangible common equity ratio 7.71% 7.66% 7.18% 7.71% 7.18%
Efficiency ratio 57.89% 55.39% 64.16% 57.53% 61.13%
Adjusted diluted earnings per share(1) $0.70 $0.70 $0.52 $2.61 $2.33
Tangible book value per share(1) $18.74 $18.87 $16.89 $18.74 $16.89
(1) Per share data adjusted for three-for-two stock split effective September 30, 2016.
(2) Please see "Reconciliation of non-GAAP to GAAP Financial Measures."
Consolidated Statements of Condition Data (unaudited)
(In thousands, except number of shares) December 31, December 31,
2016 2015
--- ---- ----
ASSETS
Cash and due from banks $87,707 $79,488
Securities:
Available-for-sale securities, at fair value 779,867 750,338
Held-to-maturity securities, at amortized cost 94,609 84,144
Federal Home Loan Bank and Federal Reserve Bank stock, at cost 23,203 21,513
------ ------
Total securities 897,679 855,995
Loans held for sale, at fair value 14,836 10,958
Loans 2,594,564 2,490,206
Less: allowance for loan losses (23,116) (21,166)
------- -------
Net loans 2,571,448 2,469,040
Goodwill 94,697 95,657
Other intangible assets 6,764 8,667
Bank-owned life insurance 78,119 59,917
Premises and equipment, net 42,873 45,959
Deferred tax assets 39,263 39,716
Interest receivable 8,654 7,985
Other real estate owned 922 1,304
Other assets 21,268 34,658
------ ------
Total assets $3,864,230 $3,709,344
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Demand $406,934 $357,673
Interest checking 701,494 740,084
Savings and money market 979,263 912,668
Certificates of deposit 468,203 516,867
Brokered deposits 272,635 199,087
------- -------
Total deposits 2,828,529 2,726,379
Short-term borrowings 530,129 477,852
Long-term borrowings 10,791 35,911
Subordinated debentures 58,755 58,599
Accrued interest and other liabilities 44,479 47,413
------ ------
Total liabilities 3,472,683 3,346,154
--------- ---------
Commitments and Contingencies
Shareholders' Equity
Common stock, no par value: authorized 20,000,000 shares, issued and outstanding 15,476,379 and 15,330,717 on December 31, 2016 and 2015,
respectively 156,041 153,083
Retained earnings 249,415 222,329
Accumulated other comprehensive loss:
Net unrealized losses on available-for-sale securities, net of tax (6,085) (3,801)
Net unrealized losses on cash flow hedging derivative instruments, net of tax (5,694) (6,374)
Net unrecognized losses on postretirement plans, net of tax (2,130) (2,047)
------ ------
Total accumulated other comprehensive loss (13,909) (12,222)
------- -------
Total shareholders' equity 391,547 363,190
------- -------
Total liabilities and shareholders' equity $3,864,230 $3,709,344
========== ==========
Consolidated Statements of Income Data (unaudited)
For The
Three Months Ended
(In thousands, except per share data) December 31, September 30, December 31,
2016 2016 2015
--- ---- ---- ----
Interest Income
Interest and fees on loans $27,107 $27,395 $25,144
Interest on U.S. government and sponsored enterprise obligations 4,027 4,049 3,904
Interest on state and political subdivision obligations 709 702 704
Interest on federal funds sold and other investments 433 448 231
--- --- ---
Total interest income 32,276 32,594 29,983
------ ------ ------
Interest Expense
Interest on deposits 2,278 2,204 1,881
Interest on borrowings 896 1,161 901
Interest on subordinated debentures 858 857 830
--- --- ---
Total interest expense 4,032 4,222 3,612
----- ----- -----
Net interest income 28,244 28,372 26,371
Provision for credit losses 255 1,279 957
--- ----- ---
Net interest income after provision for credit losses 27,989 27,093 25,414
------ ------ ------
Non-Interest Income
Debit card income 1,928 1,894 1,625
Service charges on deposit accounts 1,854 1,799 1,789
Mortgage banking income, net 1,337 2,407 1,056
Income from fiduciary services 1,224 1,225 1,193
Bank-owned life insurance 695 585 413
Brokerage and insurance commissions 505 594 337
Other service charges and fees 468 591 449
Net gain on sale of securities 47 - -
Other income 2,093 1,906 1,602
----- ----- -----
Total non-interest income 10,151 11,001 8,464
------ ------ -----
Non-Interest Expense
Salaries and employee benefits 12,438 12,044 11,670
Furniture, equipment and data processing 2,400 2,349 2,527
Net occupancy costs 1,736 1,685 1,790
Consulting and professional fees 625 742 891
Other real estate owned and collection costs 1,099 877 937
Regulatory assessments 615 667 650
Debit card expense 477 669 637
Amortization of intangible assets 476 475 444
Merger and acquisition costs - 45 8,786
Other expenses 2,642 2,596 3,138
----- ----- -----
Total non-interest expense 22,508 22,149 31,470
------ ------ ------
Income before income tax expense 15,632 15,945 2,408
Income tax expense 4,730 5,042 716
----- ----- ---
Net income $10,902 $10,903 $1,692
======= ======= ======
Per Share Data
Basic earnings per share $0.70 $0.70 $0.11
Diluted earnings per share $0.70 $0.70 $0.11
Consolidated Statements of Income Data (unaudited)
Year Ended
December 31,
(In thousands, except per share data) 2016 2015
------------------------------------ ---- ----
Interest Income
Interest and fees on loans $109,224 $81,221
Interest on U.S. government and sponsored enterprise obligations 16,082 15,091
Interest on state and political subdivision obligations 2,836 2,208
Interest on federal funds sold and other investments 1,484 624
----- ---
Total interest income 129,626 99,144
------- ------
Interest Expense
Interest on deposits 8,633 6,511
Interest on borrowings 4,506 3,457
Interest on subordinated debentures 3,415 2,724
----- -----
Total interest expense 16,554 12,692
------ ------
Net interest income 113,072 86,452
Provision for credit losses 5,258 1,936
----- -----
Net interest income after provision for credit losses 107,814 84,516
------- ------
Non-Interest Income
Debit card income 7,578 5,277
Service charges on deposit accounts 7,210 6,423
Mortgage banking income, net 6,258 2,031
Income from fiduciary services 4,960 4,918
Bank-owned life insurance 2,594 1,680
Brokerage and insurance commissions 2,074 1,699
Other service charges and fees 1,962 1,573
Net gain on sale of securities 51 4
Other income 6,934 3,877
----- -----
Total non-interest income 39,621 27,482
------ ------
Non-Interest Expense
Salaries and employee benefits 48,072 37,220
Furniture, equipment and data processing 9,557 8,057
Net occupancy costs 7,088 5,695
Consulting and professional fees 3,234 2,625
Other real estate owned and collection costs 3,128 2,491
Regulatory assessments 2,777 2,184
Debit card expense 2,584 1,936
Amortization of intangible assets 1,903 1,306
Merger and acquisition costs 866 10,415
Other expenses 10,687 9,210
------ -----
Total non-interest expense 89,896 81,139
------ ------
Income before income tax expense 57,539 30,859
Income tax expense 17,472 9,907
------ -----
Net income $40,067 $20,952
======= =======
Per Share Data
Basic earnings per share $2.59 $1.73
Diluted earnings per share $2.57 $1.73
Quarterly Average Balance, Interest and Yield/Rate Analysis (unaudited)
For the Three Months Ended
December 31, 2016 December 31, 2015
(In thousands) Average Balance Interest Yield/Rate Average Balance Interest Yield/Rate
------------- --------------- -------- ---------- --------------- -------- ----------
Assets
Interest-earning assets:
Securities - taxable $791,565 $4,460 2.25% $748,341 $4,135 2.21%
Securities - nontaxable(1) 103,904 1,090 4.20% 99,281 1,084 4.37%
Loans(2):
Residential real estate 813,846 8,451 4.15% 787,441 8,418 4.28%
Commercial real estate 1,051,346 10,538 3.92% 873,620 9,540 4.27%
Commercial(1) 299,425 3,032 3.96% 279,399 2,526 3.54%
Municipal(1) 20,971 153 2.90% 13,866 122 3.49%
Consumer 349,202 3,712 4.23% 359,851 3,500 3.86%
HPFC 63,662 1,373 8.44% 67,911 1,181 6.90%
------ ----- ---- ------ ----- ----
Total loans 2,598,452 27,259 4.14% 2,382,088 25,287 4.19%
--------- ------ ---- --------- ------ ----
Total interest-earning assets 3,493,921 32,809 3.72% 3,229,710 30,506 3.74%
--------- ------ ---- --------- ------ ----
Cash and due from banks 87,532 72,588
Other assets 304,114 264,503
Less: allowance for loan losses (23,323) (21,216)
------- -------
Total assets $3,862,244 $3,545,585
========== ==========
Liabilities & Shareholders' Equity
Deposits:
Demand $428,057 $ - - % $355,421 $ - - %
Interest checking 728,563 272 0.15% 691,191 136 0.08%
Savings 481,630 74 0.06% 406,723 61 0.06%
Money market 503,688 521 0.41% 441,431 388 0.35%
Certificates of deposit 477,569 958 0.80% 489,329 952 0.77%
------- --- ---- ------- --- ----
Total deposits 2,619,507 1,825 0.28% 2,384,095 1,537 0.26%
--------- ----- ---- --------- ----- ----
Borrowings:
Brokered deposits 276,347 453 0.65% 203,046 344 0.67%
Subordinated debentures 58,736 858 5.81% 57,973 830 5.68%
Other borrowings 460,708 896 0.77% 503,606 901 0.71%
------- --- ---- ------- --- ----
Total borrowings 795,791 2,207 1.10% 764,625 2,075 1.08%
------- ----- ---- ------- ----- ----
Total funding liabilities 3,415,298 4,032 0.47% 3,148,720 3,612 0.46%
--------- ----- ---- --------- ----- ----
Other liabilities 52,942 45,223
Shareholders' equity 394,004 351,642
------- -------
Total liabilities & shareholders' equity $3,862,244 $3,545,585
========== ==========
Net interest income (fully-taxable equivalent) 28,777 26,894
Less: fully-taxable equivalent adjustment (533) (523)
---- ----
Net interest income $28,244 $26,371
======= =======
Net interest rate spread (fully-taxable equivalent) 3.25% 3.28%
==== ====
Net interest margin (fully-taxable equivalent) 3.26% 3.30%
==== ====
(1) Reported on tax-equivalent basis calculated using a tax rate of 35%, including certain commercial loans.
(2) Non-accrual loans and loans held for sale are included in total average loans.
Year-to-Date Average Balance, Interest and Yield/Rate Analysis (unaudited)
For the Year Ended
December 31, 2016 December 31, 2015
(In thousands) Average Balance Interest Yield/Rate Average Balance Interest Yield/Rate
------------- --------------- -------- ---------- --------------- -------- ----------
Assets
Interest-earning assets:
Securities - taxable $796,423 $17,566 2.21% $739,168 $15,715 2.13%
Securities - nontaxable(1) 103,086 4,363 4.23% 76,779 3,397 4.42%
Loans(2):
Residential real estate 822,690 34,366 4.18% 636,516 26,505 4.16%
Commercial real estate(3) 1,004,169 41,228 4.11% 716,112 31,859 4.45%
Commercial(1) 292,709 12,350 4.22% 254,514 9,726 3.82%
Municipal(1) 19,238 572 2.97% 13,698 471 3.44%
Consumer 358,098 15,111 4.22% 310,664 12,053 3.88%
HPFC 70,188 6,191 8.82% 17,117 1,181 6.90%
------ ----- ---- ------ ----- ----
Total loans 2,567,092 109,818 4.28% 1,948,621 81,795 4.20%
--------- ------- ---- --------- ------ ----
Total interest-earning assets 3,466,601 131,747 3.80% 2,764,568 100,907 3.65%
--------- ------- ---- --------- ------- ----
Cash and due from banks 87,319 55,256
Other assets 305,440 200,857
Less: allowance for loan losses (22,663) (21,281)
------- -------
Total assets $3,836,697 $2,999,400
========== ==========
Liabilities & Shareholders' Equity
Deposits:
Demand $386,189 $ - - % $292,776 $ - - %
Interest checking 724,222 921 0.13% 543,330 427 0.08%
Savings 461,794 278 0.06% 306,536 180 0.06%
Money market 490,155 2,053 0.42% 394,367 1,283 0.33%
Certificates of deposit 489,040 3,793 0.78% 357,972 3,126 0.87%
------- ----- ---- ------- ----- ----
Total deposits 2,551,400 7,045 0.28% 1,894,981 5,016 0.26%
--------- ----- ---- --------- ----- ----
Borrowings:
Brokered deposits 231,610 1,588 0.69% 229,079 1,495 0.65%
Subordinated debentures 58,718 3,415 5.82% 47,569 2,724 5.73%
Other borrowings 557,684 4,506 0.81% 511,632 3,457 0.68%
------- ----- ---- ------- ----- ----
Total borrowings 848,012 9,509 1.12% 788,280 7,676 0.97%
------- ----- ---- ------- ----- ----
Total funding liabilities 3,399,412 16,554 0.49% 2,683,261 12,692 0.47%
--------- ------ ---- --------- ------ ----
Other liabilities 54,778 38,423
Shareholders' equity 382,507 277,716
------- -------
Total liabilities & shareholders' equity $3,836,697 $2,999,400
========== ==========
Net interest income (fully-taxable equivalent) 115,193 88,215
Less: fully-taxable equivalent adjustment (2,121) (1,763)
------ ------
Net interest income $113,072 $86,452
======== =======
Net interest rate spread (fully-taxable equivalent) 3.31% 3.18%
==== ====
Net interest margin (fully-taxable equivalent) 3.32% 3.19%
==== ====
(1) Reported on tax-equivalent basis calculated using a tax rate of 35%, including certain commercial loans.
(2) Non-accrual loans and loans held for sale are included in total average loans.
(3) Includes $734,000 of income recognized in the second quarter of 2015 upon payoff of one loan that was on non-accrual status.
Asset Quality Data (unaudited)
(In thousands) At or For The At or For The At or For The At or For The At or For The
Nine Months Ended Six Months Ended Three Months Ended Year Ended
Year Ended September 30, 2016 June 30, 2016 March 31, 2016 December 31, 2015
December 31, 2016
--- -----------------
Non-accrual loans:
Residential real estate $3,945 $3,986 $4,697 $6,275 $7,253
Commercial real estate 12,849 12,917 13,752 3,044 4,529
Commercial 2,088 2,259 3,539 4,128 4,489
Consumer 1,624 1,650 1,615 1,572 2,051
HPFC 207 216 110 357 -
--- --- --- --- ---
Total non-accrual loans 20,713 21,028 23,713 15,376 18,322
Loans 90 days past due and accruing - - 112 - -
Accruing troubled-debt restructured loans not included above 4,338 4,468 4,509 4,594 4,861
----- ----- ----- ----- -----
Total non-performing loans 25,051 25,496 28,334 19,970 23,183
------ ------ ------ ------ ------
Other real estate owned:
Residential real estate 14 75 80 273 407
Commercial real estate 908 736 775 955 897
--- --- --- --- ---
Total other real estate owned 922 811 855 1,228 1,304
--- --- --- ----- -----
Total non-performing assets $25,973 $26,307 $29,189 $21,198 $24,487
======= ======= ======= ======= =======
Loans 30-89 days past due:
Residential real estate $2,470 $2,228 $2,159 $1,109 $3,590
Commercial real estate 971 599 2,267 4,201 4,295
Commercial 851 463 630 667 637
Consumer 1,018 552 1,090 808 1,255
HPFC 1,029 492 876 624 165
----- --- --- --- ---
Total loans 30-89 days past due $6,339 $4,334 $7,022 $7,409 $9,942
====== ====== ====== ====== ======
Allowance for loan losses at the beginning of the period $21,166 $21,166 $21,166 $21,166 $21,116
Provision for loan losses 5,269 5,011 3,724 870 1,938
Charge-offs:
Residential real estate 356 229 229 210 801
Commercial real estate 315 273 241 222 481
Commercial 2,218 1,970 429 226 655
Consumer 409 289 226 143 679
HPFC 507 507 302 - -
--- --- --- --- ---
Total charge-offs 3,805 3,268 1,427 801 2,616
Total recoveries 486 381 254 104 728
--- --- --- --- ---
Net charge-offs 3,319 2,887 1,173 697 1,888
----- ----- ----- --- -----
Allowance for loan losses at the end of the period $23,116 $23,290 $23,717 $21,339 $21,166
======= ======= ======= ======= =======
Components of allowance for credit losses:
Allowance for loan losses $23,116 $23,290 $23,717 $21,339 $21,166
Liability for unfunded credit commitments 11 14 22 24 22
--- --- --- --- ---
Allowance for credit losses $23,127 $23,304 $23,739 $21,363 $21,188
======= ======= ======= ======= =======
Ratios:
Non-performing loans to total loans 0.97% 0.98% 1.10% 0.80% 0.93%
Non-performing assets to total assets 0.67% 0.67% 0.75% 0.56% 0.66%
Allowance for loan losses to total loans 0.89% 0.90% 0.92% 0.86% 0.85%
Net charge-offs to average loans (annualized)
Quarter-to-date 0.07% 0.26% 0.07% 0.11% 0.16%
Year-to-date 0.13% 0.15% 0.09% 0.11% 0.10%
Allowance for loan losses to non-performing loans 92.28% 91.35% 85.71% 106.86% 91.30%
Loans 30-89 days past due to total loans 0.24% 0.17% 0.27% 0.30% 0.40%
Reconciliation of non-GAAP to GAAP Financial Measures
-----------------------------------------------------
Efficiency Ratio:
-----------------
For the For the
Year Ended
Three Months Ended
(In thousands) December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
--- ---- ---- ---- ---- ----
Non-interest expense, as presented $22,508 $22,149 $31,470 $89,896 $81,139
Less: merger and acquisition costs - (45) (8,786) (866) (10,415)
Adjusted non-interest expense $22,508 $22,104 $22,684 $89,030 $70,724
======= ======= ======= ======= =======
Net interest income, as presented $28,244 $28,372 $26,371 $113,072 $86,452
Add: effect of tax-exempt income(1) 533 533 523 2,121 1,763
Non-interest income, as presented 10,151 11,001 8,464 39,621 27,482
Less: net gain on sale of securities (47) - - (51) (4)
Adjusted net interest income plus non- $38,881 $39,906 $35,358 $154,763 $115,693
interest income
Non-GAAP efficiency ratio(2) 57.89% 55.39% 64.16% 57.53% 61.13%
GAAP efficiency ratio 58.62% 56.25% 90.34% 58.87% 71.22%
(1) Assumed a 35% tax rate.
(2) For the three months and nine months ended September 30, 2016 non-GAAP efficiency ratio has been adjusted from what was previously reported to remove the adjustments to non-interest expense for bank-owned life insurance death benefits and legal settlement proceeds. The Company had previously reported a non-GAAP efficiency ratio for the three and nine months ended
of 56.29% and 57.92%, respectively, and as revised was 55.39% and 57.40%.
Tax-Equivalent Net Interest Income:
-----------------------------------
For the For the
Year Ended
Three Months Ended
(In thousands) December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
--- ---- ---- ---- ---- ----
Net interest income, as presented $28,244 $28,372 $26,371 $113,072 $86,452
Add: effect of tax-exempt income(1) 533 533 523 2,121 1,763
---
Net interest income, tax equivalent $28,777 $28,905 $26,894 $115,193 $88,215
======= ======= ======= ======== =======
(1) Assumed a 35.0% tax rate.
Tangible Book Value Per Share and Tangible Common Equity Ratio:
---------------------------------------------------------------
December 31, September 30, December 31,
2016 2016 2015
---- ---- ----
(In thousands, except number of shares and per share data)
Tangible Book Value Per Share:
------------------------------
Shareholders' equity, as presented $391,547 $393,181 $363,190
Less: goodwill and other intangible assets (101,461) (101,937) (104,324)
Tangible equity $290,086 $291,244 $258,866
======== ======== ========
Shares outstanding at period end 15,476,379 15,434,856 15,330,717
Tangible book value per share $18.74 $18.87 $16.89
Book value per share $25.30 $25.47 $23.69
Tangible Common Equity Ratio:
-----------------------------
Total assets $3,864,230 $3,903,966 $3,709,344
Less: goodwill and other intangibles (101,461) (101,937) (104,324)
-------- -------- --------
Tangible assets $3,762,769 $3,802,029 $3,605,020
========== ========== ==========
Tangible common equity ratio 7.71% 7.66% 7.18%
Shareholders' equity to total assets 10.13% 10.07% 9.79%
Adjusted Net Income and Adjusted Diluted EPS:
---------------------------------------------
For the For the
Three Months Ended Year Ended
(In thousands, except per share data) December 31, September 30, December 31, December 31, December 31,
2016 2015 2016 2015
2016
--- ----
Adjusted Net Income:
--------------------
Net income, as presented $10,902 $10,903 $1,692 $40,067 $20,952
Merger and acquisition costs, net of tax(1) - 30 5,970 563 7,237
Net gain on sale of securities, net of tax(1) (30) - - (33) (3)
--- --- --- --- ---
Adjusted net income $10,872 $10,933 $7,662 $40,597 $28,186
======= ======= ====== ======= =======
Adjusted Diluted EPS:
---------------------
Diluted EPS, as presented $0.70 $0.70 $0.11 $2.57 $1.73
Adjusted net income impact - - 0.41 0.04 0.60
--- --- ---- ---- ----
Adjusted diluted EPS $0.70 $0.70 $0.52 $2.61 $2.33
===== ===== ===== ===== =====
(1) Assumed a 35% tax rate for deductible expenses.
Adjusted Return on Average Tangible Equity and Adjusted Return on Average Tangible Equity:
------------------------------------------------------------------------------------------
For the For the
Three Months Ended Year Ended
(In thousands) December 31, September 30, December 31, December 31, December 31,
2016 2015 2016 2015
2016
--- ----
Net income, as presented $10,902 $10,903 $1,692 $40,067 $20,952
Amortization of intangible assets, net of 309 309 289 1,237 849
tax(1)
Net income, adjusted for amortization of 11,211 11,212 1,981 41,304 21,801
intangible assets
Merger and acquisition costs, net of tax(2) - 30 5,970 563 7,237
Net gain on sale of securities, net of tax(1) (30) - - (33) (3)
--- --- --- --- ---
Adjusted tangible net income $11,181 $11,242 $7,951 $41,834 $29,035
======= ======= ====== ======= =======
Average equity $394,004 $387,972 $351,642 $382,507 $277,716
Less: average goodwill and other (101,689) (102,168) (87,814) (102,711) (57,833)
intangible assets
Average tangible equity $292,315 $285,804 $263,828 $279,796 $219,883
======== ======== ======== ======== ========
Adjusted return on average tangible equity 15.22% 15.65% 11.96% 14.95% 13.20%
Return on average tangible equity 15.26% 15.61% 2.98% 14.76% 9.91%
Return on average equity 11.01% 11.18% 1.91% 10.47% 7.54%
(1) Assumed a 35% tax rate.
(2) Assumed a 35% tax rate for tax deductible expenses.
Adjusted Net Interest Margin
----------------------------
For the For the
Three Months Ended Year Ended
(In thousands) December 31, September 30, December 31, December 31, December 31,
2016 2015 2016 2015
2016
--- ----
Net interest income, tax equivalent, as $28,777 $28,905 $26,894 $115,193 $88,215
presented
Less: fair value mark accretion from (912) (1,030) (737) (5,082) (812)
purchase accounting
Less: collection of previously charged-off (94) (208) (52) (1,078) (52)
acquired loans
Adjusted net interest income, tax equivalent $27,771 $27,667 $26,105 $109,033 $87,351
======= ======= ======= ======== =======
Average total interest-earnings assets $3,493,921 $3,526,353 $3,229,710 $3,466,601 $2,764,568
Net interest margin (fully-taxable 3.26% 3.24% 3.30% 3.32% 3.19%
equivalent)(1)
Adjusted net interest margin (fully-taxable 3.14% 3.10% 3.22% 3.15% 3.16%
equivalent)(1)
(1) Annualized.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/camden-national-corporation-reports-2016-net-income-of-401-million-and-earnings-per-share-of-257-300399405.html
SOURCE Camden National Corporation
