Attached files
| file | filename |
|---|---|
| 8-K - 8-K - CAMDEN NATIONAL CORP | a8k_102814earnings.htm |
| EX-99.1 - EXHIBIT 99-1 - CAMDEN NATIONAL CORP | earningsreleaseq314.htm |
THIRD QUARTER REPORT − 2014 Dear Fellow Shareholders: The strength and endurance of Camden National can be seen in our results for the third quarter of 2014. Our consistent, solid earnings allow us to invest capital and other resources back into our organization to help position us for the future. We have begun to realize returns on prior investments, which include: • Acquiring 14 branches in higher growth markets in October 2012; • Divesting 5 branches in lower growth markets in October 2013; • Recruiting several seasoned commercial and retail lenders throughout our franchise; • Opening a loan production office in Manchester, New Hampshire in February 2014; and • Investing in technologies to keep pace with ever changing customer demands for faster response times and convenience, while at the same time improving our productivity and efficiency. Our loan portfolio has grown to $1.7 billion at September 30, 2014, a 12% annualized growth rate since year-end. Fueling this growth has been a $138.8 million increase in commercial loans reflecting our focused activities on serving Maine and New Hampshire businesses. Asset quality improved meaningfully at September 30, 2014 compared to December 31, 2013 with a 19% reduction in non-performing assets to $24.8 million. Non-performing assets as a percentage of total assets of 0.90% now stand at the lowest level since 2009. We are pleased with our financial performance, with net income year-to-date of $18.5 million, up $123,000 from the comparable period a year ago, and diluted earnings per share of $2.46, up $0.07 per share, or 3%, from the comparable period a year earlier. This translates to a return on equity of 10.53% and return on assets of 0.93%. The financial results include overcoming the decline in pre-tax mortgage banking revenue of $1.1 million due to a subdued residential mortgage market after last year’s robust refinancing boom. Our earnings growth reflects the impact of the investments and strategic decisions made to position the Company for sustainable growth in the future. We believe that community banks must make investments in technology, process, customer service, products and ‘‘right-sizing’’ their franchises, in order to remain relevant in the future. In October 2013, Camden National divested its five Franklin County branches, resulting in the sale of $46.0 million in loans and $80.4 million in deposits, and a pre-tax gain on the sale of $2.7 million. Although this transaction impacted short-term earnings, particularly in 2014, we remain focused on driving long-term shareholder value. These branches contributed $424,000 to net income, or diluted earnings per share of $0.06, for the nine months ended September 30, 2013. When adjusting for this divesture, net income is up $547,000, or 3%, year-to-date in 2014 and diluted earnings per share increased $0.13 per share. We have been able to support our shareholders by repurchasing shares of the Company’s common stock using the proceeds from the sale of the divested branches to reinvest in the Company. Since a year ago, tangible book value per share has increased 10% to $25.80 per share. This is both an exciting and critical time for community banks as proactive organizations determine the best way to transform themselves for the future. Successful community banks will be those that have the ability to invest for the future while at the same time providing personal service to customers through new and emerging technologies. Your support is much appreciated. Sincerely, Gregory A. Dufour President and Chief Executive Officer CamdenNational.com | 800-860-8821
FINANCIAL HIGHLIGHTS (unaudited) Three Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands, except per share data) 2014 2013 2014 2013 Earnings and Dividends Net interest income $ 19,374 $ 18,707 $ 57,032 $ 57,125 Provision for credit losses 539 665 1,675 2,034 Non-interest income 5,949 6,475 18,138 19,187 Non-interest expense 15,179 15,199 46,096 47,347 Income before taxes 9,605 9,318 27,399 26,931 Income taxes 3,154 2,952 8,917 8,572 Net income $ 6,451 $ 6,366 $ 18,482 $ 18,359 Diluted earnings per share $ 0.86 $ 0.83 $ 2.46 $ 2.39 Cash dividends declared per share 0.27 0.27 0.81 0.81 Performance Ratios Return on average equity 10.70% 11.03% 10.53% 10.52% Return on average assets 0.94% 0.98% 0.93% 0.95% Net interest margin 3.10% 3.13% 3.10% 3.21% Efficiency ratio 59.18% 61.25% 61.01% 61.81% Balance Sheet (end of period) Investments $ 803,675 $ 802,967 Loans and loans held for sale 1,726,227 1,591,259 Allowance for loan losses 21,585 22,661 Total assets 2,741,989 2,597,255 Deposits 1,928,543 1,973,364 Borrowings 541,227 347,352 Shareholders’ equity 239,912 232,282 Book Value per Share and Capital Ratios Book value per share $ 32.33 $ 30.38 Tangible book value per share 25.80 23.52 Tier I leverage capital ratio 9.15% 9.24% Total risk-based capital ratio 15.14% 16.21% Asset Quality Allowance for credit losses to total loans 1.25% 1.43% Net charge-offs to average loans (annualized) 0.13% 0.20% Non-performing loans to total loans 1.35% 1.92% Non-performing assets to total assets 0.90% 1.24% BILLION S LOAN BALANCES AT END OF PERIOD $1.50 $1.55 $1.60 $1.65 $1.70 $1.75 1st Q 2013 2nd Q 2013 3rd Q 2013 4th Q 2013 1st Q 2014 2nd Q 2014 3nd Q 2014 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec CAMDEN NATIONAL STOCK PRICE (as of last business day of month) 2013 2014 $33.08 $35.47 $40.76 $41.84 $41.20 $38.76 $30 $35 $40 $45 $35.00 A complete set of financial statements for Camden National Corporation may be obtained upon written request to Camden National Corporation, P.O. Box 310, Camden, Maine 04843. CamdenNational.com | 800-860-8821