CAMDEN NATIONAL CORPORATION REPORTS FIRST QUARTER 2022 FINANCIAL RESULTS

Rhea-AI Summary

Camden National Corporation (NASDAQ: CAC) reported a net income of $16.8 million and diluted EPS of $1.13 for Q1 2022, marking a 2% increase from Q4 2021. However, year-over-year comparisons reveal a 15% decline in net income and a 14% drop in EPS. Despite strong asset quality and a return on average equity of 12.96%, the bank faced challenges due to rising interest rates, leading to an unrealized loss of $94.2 million in its available-for-sale investment portfolio. Overall, the bank's total assets fell to $5.4 billion, driven by decreased investment balances.

Positive

• Net income increased by 2% from Q4 2021.
• Return on average equity improved to 12.96%.
• Strong asset quality metrics maintained with non-performing assets at 0.12%.
• Loan growth of 3% during Q1 2022.

Negative

• Net income decreased by 15% and EPS by 14% compared to Q1 2021.
• Unrealized loss of $94.2 million on the available-for-sale investment portfolio.
• Total assets decreased by $80 million, or 1%, since last quarter.
• Non-interest income decreased by 19% from Q4 2021.

Camden National Reports a 2% Increase in Net Income and Diluted EPS for the First Quarter of 2022 over the Fourth Quarter of 2021

CAMDEN, Maine, April 26, 2022 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National" or the "Company"), a $5.4 billion bank holding company headquartered in Camden, Maine, reported net income of $16.8 million and diluted earnings per share ("EPS") of $1.13 for the first quarter of 2022, each an increase of 2% over the fourth quarter of 2021. Net income decreased $2.9 million, or 15%, and EPS decreased $0.18, or 14%, compared to the first quarter of 2021. The Company's return on average equity was 12.96% and return on average tangible equity (non-GAAP) was 16.01%, compared to 12.0% and 14.71%, respectively, for the fourth quarter of 2021.

"We are pleased to report a strong start to 2022 in light of emerging economic and geopolitical challenges," said Gregory A. Dufour, President and Chief Executive Officer. "Diluted EPS for the first quarter of 2022 increased 2% over last quarter, while diluted EPS decreased 14% compared to the first quarter of 2021. This decrease year-over-year was expected given the significant change in the macro-economic environment between periods. In the first quarter of 2021, we were originating SBA PPP loans and residential mortgage sales were at or near record levels, which drove higher revenues in comparison to the first quarter of this year."

"We enter the second quarter with strong asset quality indicators and regulatory capital levels, which are essential as interest rates have begun to increase and are forecasted to rise sharply this year, along with a flattening yield curve that is at risk of inversion. We are closely monitoring these events," Dufour explained.

FIRST QUARTER 2022 HIGHLIGHTS

• Net income increased by $304,000, or 2%, over the fourth quarter of 2021, while earnings before income taxes, provision and Small Business Administration Paycheck Protection Program ("SBA PPP") income (non-GAAP) decreased $298,000, or 2%, compared to the fourth quarter of 2021.
• Loans grew $102.7 million, or 3%, during the first quarter of 2022, or $132.4 million, or 4%, excluding SBA PPP loans (non-GAAP) driven by residential mortgage growth.
• Asset quality remains strong, highlighted by a non-performing assets to total assets ratio of 0.12% and loans 30-89 days past due to total loans ratio of 0.04% at March 31, 2022, compared to 0.13% and 0.04% as of December 31, 2021, respectively.
• Allowance for credit losses on loans coverage ratio decreased 7 basis points during the first quarter of 2022 to 0.90% of total loans at March 31, 2022 driven by the release of reserves provided for certain loans previously granted short-term modifications for COVID-19 pandemic hardships.
• Repurchased 13,086 shares of the Company's common stock at a weighted average price $46.51 during the first quarter of 2022.

FINANCIAL CONDITION

As of March 31, 2022, total assets were $5.4 billion, a decrease of $80.0 million, or 1%, since December 31, 2021. The decrease in assets was driven by a decrease in investment balances of $86.1 million, or 6%, and cash balances of $81.2 million, or 37%, which was driven by loan growth of $102.7 million, or 3%, during the quarter.

Investment balances totaled $1.4 billion, or 27% of total assets at March 31, 2022, compared to $1.5 billion, or 28% of total assets, as of December 31, 2021. The decrease in investment balances during the first quarter of 2022 was driven by the change in market value of the investment portfolio designated as available-for-sale ("AFS") due to the sharp increase in interest rates during the quarter as the Federal Open Market Committee signaled more increases in the Federal Funds Interest Rate in 2022 and 2023 to combat inflation. The increase in interest rates drove lower bond prices and resulted in an unrealized loss on the Company's AFS investment portfolio of $94.2 million, or 6% of its book value, as of March 31, 2022, compared to an unrealized loss of $1.5 million, which was less than 1% of its book value, as of December 31, 2021. As of March 31, 2022, the AFS investment portfolio consisted primarily of mortgage-backed securities and collateralized mortgage obligations, and the weighted-average life and duration of the AFS investments portfolio was 6.4 years and 5.4 years, respectively, compared to 5.9 years and 4.7 years as of December 31, 2021.

Loan balances grew 3% to $3.5 billion, or 65% of total assets, at March 31, 2022, compared to $3.4 billion, or 62% of total assets, as of December 31, 2021. Residential mortgage loan balances grew $85.8 million, or 7%, and commercial loan balances grew $40.0 million, or 11%, during the first quarter of 2022, while SBA PPP loans decreased $29.6 million over this period to $6.3 million as of March 31, 2022. For the first quarter of 2022, the Company held in its residential mortgage portfolio 77% of its funded production, compared to 67% for the fourth quarter of 2021. The increase in the percentage of residential mortgages held within the loan portfolio is the result of local market interest rates not keeping pace with secondary market expectations as financial institutions work to put excess liquidity to work in an environment with lower housing inventory levels and slower refinance activity. Based on these factors, the Company anticipates the majority of its residential mortgage production will be held within its loan portfolio for the remainder of the year.

Total deposits decreased $32.2 million, or 1%, during the first quarter of 2022 and remained at $4.6 billion as of March 31, 2022, driven by a decrease in brokered deposits as short-term borrowings and core deposits (non-GAAP) growth of 1% supplemented the Company's funding needs.

The Company's loan-to-deposit ratio was 77% at March 31, 2022, compared to 74% at December 31, 2021.

As of March 31, 2022, the Company's regulatory capital ratios were each well in excess of regulatory capital requirements. Despite the Company's regulatory capital ratios remaining strong, a decrease in the market value of the AFS investment portfolio due to the increase in interest rates during the first quarter of 2022 caused decreases across the common equity ratio, tangible common equity ratio (non-GAAP), book value per share and tangible book value per share (non-GAAP) over this period. During the first quarter of 2022, the Company's common equity ratio decreased 94 basis points to 8.90% at March 31, 2022 and its tangible common equity ratio (non-GAAP) decreased 97 basis points to 7.25%, while its book value per share decreased 11% to $32.72 at March 31, 2022 and tangible book value per share (non-GAAP) decreased 13% to $26.16 at March 31, 2022.

In the first quarter of 2022, the Company initiated a new share repurchase program for up to 750,000 shares of its common stock, or approximately 5% of the Company's shares outstanding. This share repurchase program replaces the 2021 program and will continue until the earlier of: (1) reaching the authorized share repurchase amount, (2) a vote by the Board of Directors to terminate the program, or (3) January 3, 2023. During the first quarter of 2022, the Company repurchased 13,086 shares of its outstanding common stock at an average price of $46.51. Subsequent to March 31, 2022, another 46,794 shares of the Company's common stock were purchased at a weighted average price of $46.89 through April 11, 2022.

ASSET QUALITY

As of March 31, 2022, the Company's asset quality metrics remained very strong with non-performing assets of 0.12% of total assets and loans 30-89 days past due of 0.04% of total loans. In comparison, at December 31, 2021 and March 31, 2021, non-performing assets were 0.13% and 0.20%, respectively, of total assets, and loans 30-89 days past due were 0.04% and 0.05%, respectively, of total loans.

ALLOWANCE FOR CREDIT LOSSES ("ACL")

The Company accounts for its ACL on loans in accordance with the current expected credit losses model, commonly referred to as "CECL." At March 31, 2022, the ACL on loans was $31.8 million, or 0.90% of total loans, compared to $33.3 million, or 0.97% of total loans, at December 31, 2021. In estimating the ACL on loans at March 31, 2022, the Company considered portfolio make-up and loan balances, current and forecasted macroeconomic and credit trends, as well as Company-specific factors. The decrease in the ACL on loans of $1.5 million for the first quarter of 2022 was primarily driven by the release of $1.9 million of additional reserves provided for certain commercial real estate loans in response to COVID-19 modifications due to the heightened credit risk. The Company had established certain metrics that needed to be met prior to the release of these additional reserves, during the first quarter of 2022, the first tranche of these loans met all required metrics and the associated additional reserves were released. As of March 31, 2022, there were $3.2 million of additional reserves provided for certain commercial loans within the Company's ACL on loans that are subject to release upon certain metrics being met, and it is anticipated the Company will release the majority of these reserves over the coming quarters.

Overall, the global and national markets continue to be volatile and carry a high degree of uncertainty. These factors subject our ACL estimate under CECL to a higher risk of fluctuation between periods.

FINANCIAL OPERATING RESULTS (Q1 2022 vs. Q4 2021)

Net income for the first quarter of 2022 was $16.8 million, an increase of $304,000, or 2%, over the fourth quarter of 2021. Diluted EPS for the first quarter of 2022 was $1.13, an increase of $0.02, or 2%, over this same period.

Earnings before income taxes, provision and SBA PPP income for the first quarter of 2022 was $18.9 million, a decrease of $298,000, or 2%, from the fourth quarter of 2021.

Net Interest Income and Net Interest Margin.  Net interest income for the first quarter of 2022 was $36.4 million, a decrease of $432,000, or 1%, from the fourth quarter of 2021.

• Interest income for the first quarter of 2022 of $38.9 million was $593,000, or 2%, lower than the fourth quarter of 2021 driven by: (1) a decrease in SBA PPP income of $1.7 million as SBA PPP loan forgiveness accelerated during the first quarter of 2022 and, as a result, SBA PPP loans decreased $29.6 million during the quarter, partially offset by (2) by an increase in average loan balances of $104.9 million, or 3%. The yield on average interest-earning assets for the first quarter was 3.07%, an increase of 5 basis points over the fourth quarter of 2021. However, adjusting for SBA PPP loans and excess liquidity, the yield on average-interest earning assets for the first quarter was 3.04%, an increase of 3 basis points compared to the fourth quarter of 2021. This increase was driven primarily by higher investment yields of 6 basis points between periods.
• Interest expense for the first quarter of 2022 of $2.5 million was $161,000, or 6%, lower than the fourth quarter of 2021 driven by a decrease in average brokered deposit balances between periods of $95.1 million. Cost of funds for the first quarter of 2022 and fourth quarter of 2021 were 0.21%.

Net interest margin for the first quarter of 2022 was 2.87%, an increase of 5 basis points over the fourth quarter of 2021. Adjusted net interest margin, which excludes SBA PPP loans and excess liquidity (non-GAAP), for the first quarter of 2022 was 2.84%, an increase of 5 basis points compared to the fourth quarter of 2021.

Provision for Credit Losses.  The change in provision for credit losses between periods is highlighted in the table below:

($ in thousands)		Q1 2022		Q4 2021		Increase / (Decrease)
(Credit) provision for credit losses - loans		$                    (1,236)		$                      1,220		$                    (2,456)
Provision for credit losses - off-balance sheet credit exposures		161		10		151
(Credit) provision for credit losses		$                    (1,075)		$                      1,230		$                    (2,305)

• For the first quarter of 2022, a negative provision for credit losses on loans of $1.2 million was recorded as $1.9 million of additional reserves that were established on certain loans in response to COVID-19 modifications due to their heightened credit risk were released, which more than offset the provision expense that would have otherwise be required on $102.7 million of loan growth during the quarter.
• For the fourth quarter of 2021, provision expense for credit losses on loans of $1.2 million was recorded driven by loan growth of $116.2 million during the quarter.

Non-Interest Income. Non-interest income for the first quarter of 2022 was $9.8 million, a decrease of $2.3 million, or 19%, from the fourth quarter of 2021, which was primarily driven by lower mortgage banking income of $1.1 million and debit card income of $1.1 million.

• The decrease in mortgage banking income was driven by residential mortgage sales to the secondary market of $46.6 million, or 23% of production, for the first quarter of 2022, compared to residential mortgage sales to the secondary market of $82.1 million, or 33% of production, for the fourth quarter of 2021.
• The decrease in debit card income was primarily driven by receipt of our annual incentive bonus of $741,000 in the fourth quarter of 2021 and a decrease in seasonal spend between periods.

Non-Interest Expense.  Non-interest expense for the first quarter of 2022 was $26.2 million, a decrease of $759,000, or 3%, compared to the fourth quarter of 2021. The primary driver for the decrease between periods was due to lower other expenses of $852,000, which was the result of: (1) a decrease in the valuation adjustment on the Company's back-to-back loan swap program that resulted in a lower expense of $283,000, (2) lower customer-related fraud costs of $204,000, (3) lower employee-related costs of $185,000 and (4) lower marketing-related costs of $134,000.

SUMMARY OF FINANCIAL OPERATING RESULTS (Q1 2022 vs. Q1 2021)

Net income for the first quarter of 2022 decreased $2.9 million, or 15%, compared to the first quarter of 2021. Diluted EPS for the first quarter of 2022 decreased $0.18, or 14%, to $1.13 as compared to the same period last year.

Net Interest Income and Net Interest Margin.  Net interest income increased $4.0 million, or 12%, between periods driven by: (1) higher average investment balances of $459.7 million, or 43%, and loan balances $213.6 million, or 7%, (2) lower interest expense of $531,000, or 18%, due to an 8 basis point decrease in costs of funds due to shift in funding mix from borrowings to deposits and lower interest rates, partially offset by (3) lower SBA PPP loan income of $844,000 and (4) a decrease in average loan yields of 8 basis points.

Net interest margin for the first quarter of 2022 was 2.87%, a decrease of 1 basis point from the first quarter of 2021. Adjusted net interest margin, which excludes SBA PPP loans and excess liquidity (non-GAAP), for the first quarter of 2022 was 2.84%, a decrease of 7 basis points compared to the first quarter of 2021, due to a 15 basis point decrease in adjusted average yield on interest-earning assets, partially offset by an 8 basis point decrease in cost of funds.

Credit for credit losses.  An increase in provision for credit losses of $881,000, as the negative provision expense for the first quarter of 2022 was $1.2 million compared to $2.0 million for the first quarter of 2021.

Non-Interest Income. The decrease in non-interest income of $5.4 million, or 35%, was primarily driven by a decrease in mortgage banking income of $6.1 million as the Company sold $46.6 million, or 23% of residential mortgage production, during the first quarter of 2022, compared to $196.6 million, or 66% of residential mortgage production, during the first quarter of 2021, partially offset by an increases in other fee income products.

Non-Interest Expense. The increase in non-interest expense of $1.3 million, or 5%, was primarily driven by higher salary costs of 11% due to normal merit cycles and an off-cycle merit increase in October 2021.

The Company's GAAP efficiency ratio for the first quarter of 2022 was 56.74% and non-GAAP efficiency ratio was 56.47%, compared to 52.33% and 50.96% for the first quarter of 2021, respectively.

Q1 2022 CONFERENCE CALL

Camden National will host a conference call and webcast at 1:00 p.m., Eastern Time, on Tuesday, April 26, 2022 to discuss its first quarter 2022 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):	(844) 200-6205
Live dial-in (international):	(929) 526-1599
Participant access code:	297057
Live webcast:	https://events.q4inc.com/attendee/363726320

A link to the live webcast will be available on Camden National's website under "Investor Relations" at www.CamdenNational.com 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.

2022 ANNUAL MEETING OF SHAREHOLDERS

Camden National has scheduled its annual meeting of shareholders for Tuesday, April 26, 2022, at 3:00 p.m. Eastern Daylight Time. Due to the ongoing concerns regarding the public health impact of COVID-19, the Company will hold its annual meeting both in person and virtually via live audio webcast. Shareholders will be permitted to attend the annual meeting in person at Camden National's Hanley Center, Fox Ridge Office Park, 245 Commercial Street, Rockport, Maine 04856, only to the extent consistent with, or permitted by, applicable law and directives of public health authorities. We strongly urge shareholders to attend the annual meeting virtually by visiting www.virtualshareholdermeeting.com/CAC2022.

Camden National's proxy materials for its annual meeting of shareholders and additional information can be found at www.cacannualmeeting.com.

ABOUT CAMDEN NATIONAL CORPORATION

Camden National Corporation (NASDAQ:CAC) is the largest publicly traded bank holding company in Northern New England with $5.4 billion in assets and approximately 620 employees. Camden National Bank, its subsidiary, is a full-service community bank founded in 1875 in Camden, Maine. Dedicated to customers at every stage of their financial journey, the bank offers the latest in digital banking, complemented by personalized service with 58 banking centers, 24/7 live phone support, 66 ATMs, and additional lending offices in New Hampshire and Massachusetts. For the past four years, Camden National Bank was named a Customer Experience (CX) Leader by Coalition Greenwich, a division of CRISIL. In 2021, it received awards in two CX categories: U.S. Retail Banking and U.S. Commercial Small Business Banking. The Finance Authority of Maine has awarded Camden National Bank as "Lender at Work for Maine" for eleven years, and the bank was included in the 2021 list of Best Places to Work in Maine. Comprehensive wealth management, investment and financial planning services are delivered by Camden National Wealth Management. To learn more, visit CamdenNational.com. Member FDIC.

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; 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; 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, 2021, as updated by other filings with the Securities and Exchange Commission ("SEC"). Further, statements about the potential effects of the COVID-19 pandemic on our business, results of operations and financial condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly 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 our control, including the scope and duration of the pandemic, the emergence of new variants and the continued effectiveness of vaccines against those variants, action taken by government authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, service providers and on economies and markets more generally. 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 earnings before income taxes and provision and earnings before income taxes, provision and SBA PPP loan income; return on average tangible equity; the efficiency and tangible common equity ratios; tangible book value per share; core deposits and average core deposits; adjusted yield on interest-earning assets and adjusted net interest margin (fully-taxable equivalent); and total loans, excluding SBA PPP loans. 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 measure 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. 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. Annualized data may not be indicative of any four-quarter period, and are presented for illustrative purposes only.

 

Selected Financial Data (unaudited)
		At or For The Three Months Ended
(In thousands, except number of shares and per share data)		March 31, 2022		December 31, 2021		March 31, 2021
Financial Condition Data
Investments		$   1,437,410		$    1,523,485		$    1,131,178
Loans and loans held for sale		3,540,923		3,437,289		3,259,275
Allowance for credit losses on loans		31,770		33,256		35,775
Total assets		5,420,415		5,500,356		5,089,279
Deposits		4,576,664		4,608,889		4,211,630
Borrowings		281,999		255,939		245,739
Shareholders' equity		482,446		541,294		532,120
Operating Data
Net interest income		$        36,365		$         36,797		$         32,364
(Credit) provision for credit losses		(1,075)		1,230		(1,956)
Non-interest income		9,825		12,101		15,215
Non-interest expense		26,209		26,968		24,899
Income before income tax expense		21,056		20,700		24,636
Income tax expense		4,261		4,209		4,896
Net income		$        16,795		$         16,491		$         19,740
Key Ratios
Return on average assets		1.26 %		1.18 %		1.62 %
Return on average equity		12.96 %		12.00 %		15.00 %
GAAP efficiency ratio		56.74 %		55.15 %		52.33 %
Net interest margin (fully-taxable equivalent)		2.87 %		2.82 %		2.88 %
Non-performing assets to total assets		0.12 %		0.13 %		0.20 %
Common equity ratio		8.90 %		9.84 %		10.46 %
Tier 1 leverage capital ratio		9.30 %		8.92 %		9.61 %
Common equity tier 1 risk-based capital ratio		12.38 %		12.47 %		13.11 %
Per Share Data
Basic earnings per share		$            1.14		$             1.11		$             1.32
Diluted earnings per share		$            1.13		$             1.11		$             1.31
Cash dividends declared per share		$            0.40		$             0.40		$             0.36
Book value per share		$          32.72		$           36.72		$           35.64
Non-GAAP Measures(1)
Return on average tangible equity		16.01 %		14.71 %		18.47 %
Efficiency ratio		56.47 %		54.90 %		50.96 %
Adjusted net interest margin (fully-taxable equivalent)		2.84 %		2.79 %		2.91 %
Earnings before income taxes and provision for credit losses		$        19,981		$         21,930		$         22,680
Earnings before income taxes, provision for credit losses and SBA PPP loan income		$        18,948		$         19,246		$         20,803
Tangible common equity ratio		7.25 %		8.22 %		8.71 %
Tangible book value per share		$          26.16		$           30.15		$           29.12
(1) Please see "Reconciliation of non-GAAP to GAAP Financial Measures (unaudited)."

 

Consolidated Statements of Condition Data (unaudited)
(In thousands)		March 31, 2022		December 31, 2021		March 31, 2021
ASSETS
Cash, cash equivalents and restricted cash		$           139,383		$           220,625		$           368,247
Investments:
Trading securities		4,124		4,428		4,123
Available-for-sale securities, at fair value (amortized cost of $1,516,057, $1,508,981 and       $1,100,515, respectively)		1,421,809		1,507,486		1,115,548
Held-to-maturity securities, at amortized cost (fair value of $1,300, $1,380 and $1,397,       respectively)		1,290		1,291		1,295
Other investments		10,187		10,280		10,212
Total investments		1,437,410		1,523,485		1,131,178
Loans held for sale, at fair value (book value of $6,818, $5,786 and $22,243, respectively)		6,705		5,815		22,229
Loans:
Commercial real estate		1,503,890		1,495,460		1,390,327
Commercial		403,352		363,695		366,159
SBAPPP		6,311		35,953		169,407
Residential real estate		1,392,199		1,306,447		1,051,765
Consumer and home equity		228,466		229,919		259,388
Total loans		3,534,218		3,431,474		3,237,046
Less: allowance for credit losses on loans		(31,770)		(33,256)		(35,775)
Net loans		3,502,448		3,398,218		3,201,271
Goodwill and core deposit intangible assets		96,729		96,885		97,377
Other assets		237,740		255,328		268,977
Total assets		$        5,420,415		$        5,500,356		$        5,089,279
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Non-interest checking		$        1,200,807		$        1,279,565		$           860,024
Interest checking		1,440,390		1,351,736		1,349,528
Savings and money market		1,474,300		1,459,472		1,367,274
Certificates of deposit		299,865		309,648		346,046
Brokered deposits		161,302		208,468		288,758
Total deposits		4,576,664		4,608,889		4,211,630
Short-term borrowings		237,668		211,608		186,408
Subordinated debentures		44,331		44,331		59,331
Accrued interest and other liabilities		79,306		94,234		99,790
Total liabilities		4,937,969		4,959,062		4,557,159
Commitments and Contingencies
Shareholders' equity
Common stock, no par value: authorized 40,000,000 shares, issued and outstanding  14,746,410, 14,739,956 and 14,928,434 shares on March 31, 2022, December 31, 2021  and March 31, 2021, respectively		123,012		123,111		131,695
Retained earnings		435,347		424,412		391,860
Accumulated other comprehensive (loss) income:
Net unrealized (loss) gain on available-for-sale securities, net of tax		(73,984)		(1,173)		11,801
Net unrealized gain (loss) on cash flow hedging derivative instruments, net of tax		1,166		(1,779)		538
Net unrecognized loss on postretirement plans, net of tax		(3,095)		(3,277)		(3,774)
Total accumulated other comprehensive (loss) income		(75,913)		(6,229)		8,565
Total shareholders' equity		482,446		541,294		532,120
Total liabilities and shareholders' equity		$        5,420,415		$        5,500,356		$        5,089,279

 

Consolidated Statements of Income Data (unaudited)
		For The Three Months Ended
(In thousands, except per share data)		March 31, 2022		December 31, 2021		March 31, 2021
Interest Income
Interest and fees on loans		$           32,035		$           32,827		$           30,560
Taxable interest on investments		5,789		5,507		3,829
Nontaxable interest on investments		764		754		728
Dividend income		106		106		105
Other interest income		164		257		166
Total interest income		38,858		39,451		35,388
Interest Expense
Interest on deposits		1,833		1,963		2,063
Interest on borrowings		131		151		156
Interest on subordinated debentures		529		540		805
Total interest expense		2,493		2,654		3,024
Net interest income		36,365		36,797		32,364
(Credit) provision for credit losses		(1,075)		1,230		(1,956)
Net interest income after (credit) provision for credit losses		37,440		35,567		34,320
Non-Interest Income
Debit card income		2,924		3,979		2,736
Service charges on deposit accounts		1,833		1,826		1,539
Income from fiduciary services		1,631		1,656		1,526
Mortgage banking income, net		1,034		2,084		7,109
Brokerage and insurance commissions		994		1,028		953
Bank-owned life insurance		576		590		594
Other income		833		938		758
Total non-interest income		9,825		12,101		15,215
Non-Interest Expense
Salaries and employee benefits		15,506		15,265		14,522
Furniture, equipment and data processing		3,132		3,293		3,027
Net occupancy costs		2,144		1,963		1,951
Debit card expense		1,066		1,147		986
Consulting and professional fees		1,007		1,039		863
Regulatory assessments		655		562		503
Amortization of core deposit intangible assets		156		164		164
Other real estate owned and collection (recoveries) costs, net		(85)		55		(191)
Other expenses		2,628		3,480		3,074
Total non-interest expense		26,209		26,968		24,899
Income before income tax expense		21,056		20,700		24,636
Income Tax Expense		4,261		4,209		4,896
Net Income		$           16,795		$           16,491		$           19,740
Per Share Data
Basic earnings per share		$               1.14		$               1.11		$               1.32
Diluted earnings per share		$               1.13		$               1.11		$               1.31

 

Quarterly Average Balance and Yield/Rate Analysis (unaudited)
		Average Balance						Yield/Rate
		For The Three Months Ended						For The Three Months Ended
(Dollars in thousands)		March 31, 2022		December 31, 2021		March 31, 2021		March 31, 2022		December 31, 2021		March 31, 2021
Assets
Interest-earning assets:
Interest-bearing deposits in other banks and other interest-earning assets		$          100,002		$          322,779		$          210,844		0.13 %		0.15 %		0.09 %
Investments - taxable		1,409,567		1,392,645		946,456		1.71 %		1.65 %		1.71 %
Investments - nontaxable(1)		115,021		113,429		118,469		3.36 %		3.36 %		3.11 %
Loans(2):
Commercial real estate		1,489,304		1,450,454		1,382,794		3.64 %		3.61 %		3.58 %
Commercial(1)		372,910		338,402		346,008		3.54 %		3.58 %		3.82 %
SBA PPP		21,687		55,982		154,900		19.05 %		18.76 %		4.85 %
Municipal(1)		15,221		14,966		24,133		3.46 %		3.56 %		3.33 %
Residential real estate		1,347,427		1,273,342		1,083,101		3.46 %		3.47 %		3.72 %
Consumer and home equity		226,731		235,232		268,711		4.26 %		4.24 %		4.17 %
Total loans		3,473,280		3,368,378		3,259,647		3.70 %		3.85 %		3.76 %
Total interest-earning assets		5,097,870		5,197,231		4,535,416		3.07  %		3.02  %		3.15  %
Other assets		323,233		361,169		401,973
Total assets		$       5,421,103		$        5,558,400		$        4,937,389
Liabilities & Shareholders' Equity
Deposits:
Non-interest checking		$       1,199,456		$        1,286,858		$          817,631		—       %		—       %		—       %
Interest checking		1,414,704		1,343,206		1,289,511		0.19 %		0.20 %		0.19 %
Savings		750,899		726,085		626,591		0.04 %		0.04 %		0.04 %
Money market		710,256		726,890		685,026		0.30 %		0.29 %		0.31 %
Certificates of deposit		304,720		315,908		351,555		0.45 %		0.47 %		0.63 %
Total deposits		4,380,035		4,398,947		3,770,314		0.15  %		0.15  %		0.19  %
Borrowings:
Brokered deposits		176,399		271,474		284,620		0.55 %		0.46 %		0.45 %
Customer repurchase agreements		208,147		208,055		165,721		0.25 %		0.29 %		0.29 %
Subordinated debentures		44,331		44,331		59,331		4.84 %		4.84 %		5.50 %
Other borrowings		1,613		1		14,444		0.39 %		0.40 %		0.99 %
Total borrowings		430,490		523,861		524,116		0.85 %		0.76  %		0.99 %
Total funding liabilities		4,810,525		4,922,808		4,294,430		0.21  %		0.21  %		0.29  %
Other liabilities		85,140		90,245		109,314
Shareholders' equity		525,438		545,347		533,645
Total liabilities & shareholders' equity		$       5,421,103		$        5,558,400		$        4,937,389
Net interest rate spread (fully-taxable equivalent)								2.86  %		2.81  %		2.86  %
Net interest margin (fully-taxable equivalent)								2.87  %		2.82  %		2.88  %
Adjusted net interest margin (fully-taxable equivalent) (non-GAAP)								2.84  %		2.79  %		2.91  %
(1)  Reported on a 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 Three Months Ended March 31, 2022		At or For The Year Ended December 31, 2021		At or For The Nine Months Ended September 30, 2021		At or For The Six Months Ended June 30, 2021		At or For The Three Months Ended March 31, 2021
Non-accrual loans:
Residential real estate		$               2,052		$               2,107		$               2,576		$               2,725		$               3,637
Commercial real estate		183		184		207		222		309
Commercial		1,045		829		860		1,511		1,737
Consumer and home equity		1,172		1,207		1,429		1,424		1,897
Total non-accrual loans		4,452		4,327		5,072		5,882		7,580
Accruing troubled-debt restructured loans not       included above		2,303		2,392		2,564		2,519		2,579
Total non-performing loans		6,755		6,719		7,636		8,401		10,159
Other real estate owned		—		165		165		165		204
Total non-performing assets		$               6,755		$               6,884		$               7,801		$               8,566		$              10,363
Loans 30-89 days past due:
Residential real estate		$                  575		$                  400		$               1,195		$                  303		$                  772
Commercial real estate		91		47		—		99		177
Commercial		169		552		557		183		425
Consumer and home equity		466		509		386		214		264
Total loans 30-89 days past due		$               1,301		$               1,508		$               2,138		$                  799		$               1,638
ACL on loans at the beginning of the period		$             33,256		$             37,865		$             37,865		$             37,865		$             37,865
(Credit) provision for loan losses		(1,236)		(3,817)		(5,037)		(5,306)		(1,854)
Charge-offs:
Residential real estate		—		92		92		88		53
Commercial real estate		—		—		—		—		—
Commercial		245		799		503		406		147
Consumer and home equity		67		273		233		213		87
Total charge-offs		312		1,164		828		707		287
Total recoveries		(62)		(372)		(272)		(208)		(51)
Net charge-offs		250		792		556		499		236
ACL on loans at the end of the period		$              31,770		$              33,256		$              32,272		$              32,060		$              35,775
Components of ACL:
ACL on loans		$              31,770		$              33,256		$              32,272		$              32,060		$              35,775
ACL on off-balance sheet credit exposures(1)		3,356		3,195		3,185		2,515		2,466
ACL, end of period		$              35,126		$              36,451		$              35,457		$              34,575		$              38,241
Ratios:
Non-performing loans to total loans		0.19  %		0.20  %		0.23  %		0.26  %		0.31  %
Non-performing assets to total assets		0.12  %		0.13  %		0.14  %		0.17  %		0.20  %
ACL on loans to total loans		0.90  %		0.97  %		0.97  %		0.98  %		1.11  %
Net charge-offs (recoveries) to average loans (annualized):
Quarter-to-date		0.03  %		0.03  %		0.01  %		0.03  %		0.03  %
Year-to-date		0.03  %		0.02  %		0.02  %		0.03  %		0.03  %
ACL on loans to non-performing loans		470.32  %		494.95  %		422.63  %		381.62  %		352.15  %
Loans 30-89 days past due to total loans		0.04  %		0.04  %		0.06  %		0.02  %		0.05  %
(1)   Presented within accrued interest and other liabilities on the consolidated statements of condition.

 

Reconciliation of non-GAAP to GAAP Financial Measures (unaudited)
Return on Average Tangible Equity:
		For the Three Months Ended
(Dollars in thousands)		March 31, 2022		December 31, 2021		March 31, 2021
Net income, as presented		$        16,795		$        16,491		$        19,740
Add: amortization of core deposit intangible assets, net of tax(1)		123		130		130
Net income, adjusted for amortization of core deposit intangible assets		$        16,918		$        16,621		$        19,870
Average equity, as presented		$      525,438		$      545,347		$      533,645
Less: average goodwill and core deposit intangible assets		(96,815)		(96,965)		(97,463)
Average tangible equity		$      428,623		$      448,382		$      436,182
Return on average equity		12.96 %		12.00 %		15.00 %
Return on average tangible equity		16.01 %		14.71 %		18.47 %
(1) Assumed a 21% tax rate.

 

Efficiency Ratio:
		For the Three Months Ended
(Dollars in thousands)		March 31, 2022		December 31, 2021		March 31, 2021
Non-interest expense, as presented		$        26,209		$        26,968		$        24,899
Less: prepayment penalty on borrowings		—		—		(514)
Adjusted non-interest expense		$        26,209		$        26,968		$        24,385
Net interest income, as presented		$        36,365		$        36,797		$        32,364
Add: effect of tax-exempt income(1)		226		224		271
Non-interest income, as presented		9,825		12,101		15,215
Adjusted net interest income plus non-interest income		$        46,416		$        49,122		$        47,850
GAAP efficiency ratio		56.74 %		55.15 %		52.33 %
Non-GAAP efficiency ratio		56.47 %		54.90 %		50.96 %
(1) Assumed a 21% tax rate.

 

Earnings before Income Taxes and Provision, and Earnings before Income Taxes, Provision and SBA PPP Loan Income:
		For the Three Months Ended
(In thousands)		March 31, 2022		December 31, 2021		March 31, 2021
Net income, as presented		$            16,795		$            16,491		$            19,740
Add: (credit) provision for credit losses		(1,075)		1,230		(1,956)
Add: income tax expense		4,261		4,209		4,896
Earnings before income taxes and provision for credit losses		$            19,981		$            21,930		$            22,680
Less: SBA PPP loan income		(1,033)		(2,684)		(1,877)
Earnings before income taxes and provision for credit losses and SBA PPP loan income		$            18,948		$            19,246		$            20,803

 

Adjusted Yield on Interest-Earning Assets:
		For the Three Months Ended
		March 31, 2022		December 31, 2021		March 31, 2021
Yield on interest-earning assets, as presented		3.07  %		3.02  %		3.15  %
Add: effect of excess liquidity on yield on interest-earning assets		0.04  %		0.16  %		0.10  %
Less: effect of SBA PPP loans on yield on interest-earning assets		(0.07) %		(0.17) %		(0.06) %
Adjusted yield on interest-earning assets		3.04  %		3.01  %		3.19  %

 

Adjusted Net Interest Margin (Fully-Taxable Equivalent):
		For the Three Months Ended
		March 31, 2022		December 31, 2021		March 31, 2021
Net interest margin (fully-taxable equivalent), as presented		2.87  %		2.82  %		2.88  %
Add: effect of excess liquidity on net interest margin (fully-taxable equivalent)		0.04  %		0.15  %		0.10  %
Less: effect of SBA PPP loans on net interest margin (fully-taxable equivalent)		(0.07) %		(0.18) %		(0.07) %
Adjusted net interest margin (fully-taxable equivalent)		2.84  %		2.79  %		2.91  %

 

Tangible Book Value Per Share and Tangible Common Equity Ratio:
		March 31, 2022		December 31, 2021		March 31, 2021
(In thousands, except number of shares, per share data and ratios)
Tangible Book Value Per Share:
Shareholders' equity, as presented		$      482,446		$      541,294		$      532,120
Less: goodwill and other intangible assets		(96,729)		(96,885)		(97,377)
Tangible shareholders' equity		$      385,717		$      444,409		$      434,743
Shares outstanding at period end		14,746,410		14,739,956		14,928,434
Book value per share		$           32.72		$           36.72		$           35.64
Tangible book value per share		$           26.16		$           30.15		$           29.12
Tangible Common Equity Ratio:
Total assets		$   5,420,415		$   5,500,356		$   5,089,279
Less: goodwill and other intangible assets		(96,729)		(96,885)		(97,377)
Tangible assets		$   5,323,686		$   5,403,471		$   4,991,902
Common equity ratio		8.90 %		9.84 %		10.46 %
Tangible common equity ratio		7.25 %		8.22 %		8.71 %

 

Core Deposits:
(In thousands)		March 31, 2022		December 31, 2021		March 31, 2021
Total deposits		$       4,576,664		$       4,608,889		$       4,211,630
Less: certificates of deposit		(299,865)		(309,648)		(346,046)
Less: brokered deposits		(161,302)		(208,468)		(288,758)
Core deposits		$       4,115,497		$       4,090,773		$       3,576,826

 

Average Core Deposits:
		For the Three Months Ended
(In thousands)		March 31, 2022		December 31, 2021		March 31, 2021
Total average deposits		$       4,380,035		$       4,398,947		$       3,770,314
Less: average certificates of deposit		(304,720)		(315,908)		(351,555)
Average core deposits		$       4,075,315		$       4,083,039		$       3,418,759

 

Total loans, excluding SBA PPP loans:
(In thousands)		March 31, 2022		December 31, 2021		March 31, 2021
Total loans, as presented		$   3,534,218		$   3,431,474		$   3,237,046
Less: SBA PPP loans		(6,311)		(35,953)		(169,407)
Total loans, excluding SBA PPP loans		$   3,527,907		$   3,395,521		$   3,067,639

 

 

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SOURCE Camden National Corporation

FAQ

What were Camden National's net income and EPS for Q1 2022?

Camden National reported a net income of $16.8 million and diluted EPS of $1.13 for Q1 2022.

How does Camden National's Q1 2022 performance compare to Q4 2021?

Net income increased by 2% and diluted EPS also rose by 2% compared to Q4 2021.

What is the outlook for Camden National regarding interest rates?

The company is monitoring rising interest rates and indicated potential challenges due to a flattening yield curve.

What caused the decrease in Camden National's net income compared to Q1 2021?

The decrease was largely due to lower revenues from SBA PPP loans and reduced residential mortgage sales.

What is the current status of Camden National's asset quality?

Camden National maintains strong asset quality with non-performing assets at 0.12% of total assets.