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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 28, 2020
Camden National Corporation
(Exact name of registrant as specified in its charter)
 
Maine
 
01-28190
 
01-0413282
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)
 
Two Elm Street, Camden, Maine
 
04843
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code: (207) 236-8821
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, without par value
CAC
The NASDAQ Stock Market LLC





Item 2.02
Results of Operations and Financial Condition.
 
Camden National Corporation (the “Company”) issued a press release on April 28, 2020 announcing earnings for the fiscal quarter ended March 31, 2020. A copy of the press release is attached hereto as Exhibit 99.1. A quarterly letter from the Company's Chief Executive Officer to stockholders is attached as Exhibit 99.2 and a supplemental presentation is attached as Exhibit 99.3. This information is being furnished pursuant to Item 2.02, and the information contained therein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933.

Item 9.01
Financial Statements and Exhibits.
 
(d)    The following exhibits are filed with this Report:
Exhibit No.
Description


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

Dated: April 28, 2020
 
 
CAMDEN NATIONAL CORPORATION
(Registrant)
 
 
 
 
 
By: 
/s/ GREGORY A. WHITE
 
 
Gregory A. White
Chief Financial Officer and Principal Financial & Accounting Officer







(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
403765449_cncsignaturebrandmark_.jpg
CONTACT:                                
Michael Archer
Senior Vice President
Corporate Controller
Camden National Corporation
(800) 860-8821
[email protected]

FOR IMMEDIATE RELEASE


CAMDEN NATIONAL CORPORATION REPORTS
FIRST QUARTER 2020 FINANCIAL RESULTS

First Quarter 2020 Net Income of $13.5 Million and Diluted Earnings Per Share of $0.89

CAMDEN, Maine, April 28, 2020/PRNewswire/--Camden National Corporation (NASDAQ: CAC; “Camden National” or the “Company”), a $4.6 billion bank holding company headquartered in Camden, Maine, reported net income for the first quarter of 2020 of $13.5 million, a decrease of 5% compared to the first quarter of 2019, and diluted earnings per share ("EPS") of $0.89, a decrease of 2% over the same period. For the first quarter of 2020, the Company's return on average assets was 1.21% and return on average equity was 11.30%.

"These are unprecedented times – in just a few weeks, our focus shifted from working towards our long-term operational and financial goals to one that is focused on the next several quarters," said Gregory A. Dufour, President and Chief Executive Officer of the Company. "We entered this uncertain social and economic period in a strong financial position, which we fortified during the first quarter by adding about $1.4 million to our allowance for loan losses."

Dufour reported the Company’s response to the pandemic has been focused on its employees, customers and communities. "I'm extremely proud of the Camden National team and our quick response to this health crisis," he said. "In a matter of weeks, we transitioned over half of our employees to work from home, instituted a debt relief program to support customers impacted by COVID-19, and successfully rolled-out the Small Business Administration (SBA) Paycheck Protection Program to hundreds of businesses in need. The critical role banking plays for our customers and communities is magnified during times like these, and I feel very fortunate to see first-hand the actions the team has taken to serve our customers, communities and each other during these difficult times."

FINANCIAL HIGHLIGHTS

First quarter 2020 net income of $13.5 million decreased 5% compared to the first quarter of 2019 and 11% compared to the fourth quarter of 2019, driven by higher provision expense
Loans and loans held for sale grew 3% in the first quarter of 2020
First quarter 2020 net interest margin of 3.08% decreased 10 basis points compared to the first quarter of 2019 and 4 basis points compared to the fourth quarter of 2019



Delayed implementation of the new accounting guidance for expected credit losses, commonly referred to as "CECL"
Strong asset quality as of March 31, 2020, however, first quarter 2020 provision for credit losses increased $1.0 million over the first quarter of 2019 and $1.6 million over the fourth quarter of 2019 due to the COVID-19 pandemic
At March 31, 2020, the allowance for loan losses was 0.84% of total loans and 2.6 times non-performing loans
Repurchased 217,031 shares of the Company's common stock in the first quarter of 2020 before suspending repurchases in March to prioritize capital preservation during the COVID-19 pandemic

FINANCIAL CONDITION

Assets. Total assets increased 4% since December 31, 2019 to $4.6 billion at March 31, 2020. The increase was driven by: (i) loan growth, including loans held for sale, of $78.6 million, or 3%; (ii) an increase in other assets of $72.1 million, primarily driven by an increase in interest rate swaps and related collateral; and (iii) an increase in investment balances of $43.4 million.

In the first quarter of 2020, commercial real estate and commercial loan portfolios each grew 5%, driving net loan growth, while the consumer and home equity loan portfolio decreased 2%, and the residential mortgage loan portfolio decreased 1%.

In the first quarter of 2020, the Company originated $156.3 million of residential mortgages and sold 44% of its production to the secondary market. In comparison, in the first and fourth quarter of 2019, the Company originated $86.4 million and $182.5 million, respectively, of residential mortgages. Refinance activity was 61% of residential mortgage production for the first quarter of 2020, compared to 31% and 50% for the first and fourth quarter of 2019, respectively.

Deposits and Borrowings. Deposits increased 1% since December 31, 2019 to $3.6 billion at March 31, 2020. In the first quarter of 2020, savings and money market deposits grew 2% and certificates of deposit grew 4%, while checking account and brokered deposits each decreased 1%. The decrease in checking account balances was primarily driven by certain large depositors' balances reducing interest checking balances by $20.7 million. The Company did not see its normal core deposit1 outflows in the first quarter of 2020, likely because of changes in customer behavior due to the COVID-19 pandemic.

The Company's loan-to-deposit ratio was 89% at March 31, 2020, compared to 87% at December 31, 2019 and 85% at March 31, 2019.

Total borrowings increased $83.0 million since December 31, 2019 to $420.9 million at March 31, 2020. In the first quarter of 2020, we entered into two interest rate swaps to lock in $50.0 million of three-year funding at 0.71% and $50.0 million of ten-year funding at 0.86%. Each interest rate swap was designated as a cash flow hedge for accounting purposes.

Shareholders' Equity. The Company's capital strategy shifted during the first quarter of 2020 as the COVID-19 pandemic spread and growing uncertainty mounted as to its impact on the global, national and local economies. Through early-March 2020, the Company had repurchased 217,031 shares of its common stock at a cost of $8.0 million. In mid-March 2020, the Company suspended repurchasing shares of its common stock.

The Company enters this period of economic uncertainty well-positioned from a capital perspective. At March 31, 2020, the Company's capital position was well in excess of regulatory requirements, including a total risk-based capital ratio of 13.81%, a tier 1 risk-based capital ratio of 12.56%, common equity tier 1 risk-based capital ratio of 11.27%, and a tier 1 leverage ratio of 9.53%. Additionally, at March 31, 2020, the Company's common equity ratio was 10.72%, and tangible common equity ratio1 was 8.78%.




In March 2020, the Company announced a cash dividend to shareholders of $0.33 per share, an increase of 10% compared to a year ago. The cash dividend is payable to shareholders of record as of April 15, 2020, and shareholders will begin receiving payments on April 30, 2020. As of March 31, 2020, the Company's annualized dividend yield was 4.20%, based on Camden National's closing share price of $31.45, as reported by NASDAQ.

ASSET QUALITY

The Company enters into these unprecedented times with very strong asset quality. As of March 31, 2020, non-performing assets were 0.23% of total assets and past due loans were 0.24% of total loans. In comparison, at December 31, 2019, non-performing assets were 0.25% of total assets and past due loans were 0.17% of total loans. For the first quarter of 2020, net charge-offs (annualized) were 0.05% of average loans, compared to 0.09% for the fourth quarter of 2019 and 0.03% for the first quarter of 2019.

In March 2020, the Company offered temporary debt relief to business and retail customers impacted by the COVID-19 pandemic. Generally, the terms of the internal temporary debt relief program provided customers with 90 to 180 days of payment deferral.

The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law in March 2020. The CARES Act provided certain companies with optional temporary relief from applying the current expected credit losses model, commonly referred to as "CECL." The Company chose to delay its implementation of CECL under the terms of the CARES Act to allow its internal resources to focus on and prioritize the roll-out of its temporary debt relief program and the SBA Paycheck Protection Program. As such, the reported allowance for credit losses and related provision expense for the first quarter of 2020 was accounted for under the incurred loss model. Under the terms of the CARES Act, we are permitted to delay our compliance with CECL until the earlier of (i) the date on which the national emergency concerning the COVID-19 pandemic that the President of the United States declared on March 15, 2020 terminates, or (ii) December 31, 2020.

The provision for credit losses for the first quarter of 2020 was $1.8 million, an increase of $1.0 million over the first quarter of 2019 and $1.6 million over the fourth quarter of 2019. The increase in provision expense in the first quarter of 2020 over comparable periods reflects the impact of the pandemic as of March 31, 2020, based on known information at that time.

At March 31, 2020, the Company's allowance for loan losses was 0.84% of total loans and 2.6 times non-performing loans.

FINANCIAL OPERATING RESULTS (Q1 2020 vs. Q1 2019)

The Company reported net income of $13.5 million for the first quarter of 2020, a decrease of $780,000, or 5%, compared to the first quarter of 2019. Diluted EPS for the first quarter of 2020 was $0.89, a decrease of $0.02, or 2%.

Net Interest Income. Net interest income for the first quarter of 2020 was $31.8 million, a decrease of $69,000 compared to the first quarter of 2019 due to the decline in net interest margin of 10 basis points, partially offset by average interest-earning assets growth of 3% between periods.

Net interest margin for the first quarter of 2020 was 3.08%, compared to 3.18% for the first quarter of 2019. The Company's interest-earning asset yield decreased 30 basis points between periods to 3.90% for the first quarter of 2020, while its cost of funds decreased 21 basis points between periods to 0.86% for the first quarter of 2020. The decrease in yields and funding costs reflects the change in the interest rate environment over this period. The 10-year U.S. Treasury rate averaged 1.37% in the first quarter of 2020, compared to 2.65% for the first quarter of 2019. The Federal Funds rate was cut twice in the first quarter of 2020 dropping the rate to 0.25% at March 31, 2020, compared to 2.50% at March 31, 2019.




Average interest-earning assets for the first quarter of 2020 were $4.1 billion, an increase of $103.4 million, or 3%, compared to the first quarter of 2019. The primary drivers for the net growth between periods included (i) average loan growth of 3%; and (ii) an increase in average cash and due from banks of $36.2 million driven by cash collateral for loan and interest rate swaps; partially offset by a decrease in average investments of $19.6 million, or 2%.

Average funding liabilities for the first quarter of 2020 were $3.9 billion, an increase of $82.2 million, or 2%, compared to the first quarter of 2019. Average deposits grew 9% between periods, led by: (i) average certificates of deposit growth of $109.0 million, or 25%, driven by one large municipal depositor; (ii) average checking account growth of $100.6 million, or 6%; and (iii) average money market growth of $67.7 million, or 12%. Over this same period, average borrowings decreased $185.2 million, or 25%.

Provision for Credit Losses. The provision for credit losses for the first quarter of 2020 was $1.8 million, an increase of $1.0 million over the first quarter of 2019. The increase in provision expense between periods was primarily the result of an increase in the allowance for credit losses due to the estimated impact of the pandemic as of March 31, 2020, based on known information at that time.

Non-Interest Income. Non-interest income for the first quarter of 2020 was $11.4 million, an increase of $2.0 million, or 21%, over the first quarter of 2019. The net increase in non-interest income between periods was primarily driven by an increase in mortgage banking income of $2.3 million due to record residential loan production and pipeline activity in the first quarter of 2020, due to the low interest rate environment.

Non-Interest Expense. Non-interest expense for the first quarter of 2020 was $24.6 million, an increase of $1.8 million, or 8%, compared to the first quarter of 2019. The increase was primarily due to an increase in salaries and benefits costs of $1.3 million, or 10%, between periods, primarily driven by normal annual merit increases, an increase in employees, and higher incentive accruals. The Company's efficiency ratio for the first quarter of 2020, calculated as non-interest expense divided by total revenues2, was 56.82%, compared to 55.19% for the first quarter of 2019.

FINANCIAL OPERATING RESULTS (Q1 2020 vs. Q4 2019)

Reported net income decreased $1.7 million, or 11%, and diluted EPS decreased $0.10, or 10%, between quarters, primarily due to an increase in provision for credit losses of $1.6 million and a 1% decrease in net interest income.

Net Interest Income. Net interest income decreased $413,000, or 1%, between quarters as net interest margin decreased 4 basis points to 3.08% for the first quarter of 2020. The Company's interest-earning asset yield decreased 12 basis points and its cost of funds decreased 8 basis points between quarters. The decrease in yields and funding costs reflects the change in the interest rate environment between quarters. The 10-year U.S. Treasury rate averaged 1.37% in the first quarter of 2020, compared to 1.79% for the fourth quarter of 2019. The Federal Funds rate decreased 150 basis points in the first quarter of 2020 reaching 0.25% at March 31, 2020.

Average interest-earning assets increased $18.3 million between quarters, driven by average loan growth of $22.5 million, or 1%. Average funding liabilities increased $8.0 million between quarters, driven by an increase in average borrowings of $24.1 million, or 4%, but was partially offset by a decrease in average deposits of $16.1 million.

Provision for Credit Losses. The provision for credit losses increased $1.6 million between quarters, primarily due to an increase in the allowance for credit losses due to the estimated impact of the pandemic as of March 31, 2020, based on known information at that time.

Non-Interest Income. Non-interest income decreased $545,000, or 5%, between quarters. The net decrease in non-interest income between periods was primarily driven by (i) a decrease in other income of $918,000 as an unrealized gain on equity securities of $866,000 was recognized in the fourth quarter of 2019; (ii) a decrease in debit card income of $837,000, or 28%, due to the recognition of our annual volume incentive bonus of $579,000 in



the fourth quarter of 2019, and a decrease in card activity due to normal seasonal volumes and the impact of the pandemic; partially offset by an increase in mortgage banking income of $1.4 million driven by record residential loan production and pipeline activity in the first quarter of 2020, due to the low interest rate environment.

Non-Interest Expense. Non-interest expense decreased $253,000, or 1%, between quarters. The Company's efficiency ratio for the first quarter of 2020, calculated as non-interest expense divided by total revenues2, was 56.82%, compared to 56.16% for the fourth quarter of 2019.

ANNUAL MEETING

Camden National has scheduled its annual meeting of shareholders for Tuesday, April 28, 2020, at 3:00 p.m. Eastern time. To comply with the Executive Order issued by the Governor of the State of Maine that prohibits gatherings of more than ten people, the Company is requesting that all shareholders attend the meeting virtually by visiting www.virtualshareholdermeeting.com/CAC2020. Camden National is taking these necessary steps due to concerns regarding COVID-19, and to assist in protecting the health and well-being of its shareholders and employees. More information regarding virtual attendance at the Annual Meeting is available in additional proxy materials filed with the SEC, available at www.camdennationalcorporation.com.

CONFERENCE CALL

Camden National will host a conference call and webcast at 1:00 p.m., Eastern Time, on Tuesday, April 28, 2020 to discuss its first quarter 2020 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:            https://services.choruscall.com/links/cac200428.html

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.

ABOUT CAMDEN NATIONAL CORPORATION

Camden National Corporation (NASDAQ:CAC) is the largest publicly traded bank holding company in Northern New England with $4.6 billion in assets and nearly 650 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, 68 ATMs, and lending offices in New Hampshire and Massachusetts. Camden National Bank was named one of two "Customer Experience Leaders in U.S. Retail Banking" by Greenwich Associates, and in 2019, it was the only New England based organization included in Sandler O'Neill's "Bank and Thrift Sm-All Star" list of high-performing financial institutions. The Finance Authority of Maine has awarded Camden National Bank as "Lender at Work for Maine" for nine years. 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 the duration, extent and severity of the COVID-19 pandemic, including its effects on our business, operations and employees as well as its effect on our customers and service providers and on economies and markets more generally; 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 in Camden National’s Annual Report on Form 10-K for the year ended December 31, 2019, 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 return on average tangible equity; the efficiency and tangible common equity ratios; tangible book value per share; and 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 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.










_____________________________________________________________________________________________
1 This is a non-GAAP measure. Please refer to "Reconciliation of non-GAAP to GAAP Financial Measures" for further details.
2
Revenue is the sum of net interest income and non-interest income.    




Selected Financial Data
(unaudited)

 
 
At or For The
Three Months Ended
(In thousands, except number of shares and per share data)
 
March 31,
2020
 
December 31,
2019
 
March 31,
2019
Financial Condition Data
 
 
 
 
 
 
Investments
 
$
976,487

 
$
933,069

 
$
936,859

Loans and loans held for sale
 
3,185,492

 
3,106,877

 
3,051,237

Allowance for loan losses
 
26,521

 
25,171

 
25,201

Total assets
 
4,594,539

 
4,429,521

 
4,421,189

Deposits
 
3,563,705

 
3,537,743

 
3,578,197

Borrowings
 
420,877

 
337,889

 
325,159

Shareholders' equity
 
492,680

 
473,415

 
453,718

Operating Data
 
 
 
 
 
 
Net interest income
 
$
31,826

 
$
32,239

 
$
31,895

Provision for credit losses
 
1,775

 
214

 
744

Non-interest income
 
11,403

 
11,948

 
9,389

Non-interest expense
 
24,561

 
24,814

 
22,783

Income before income tax expense
 
16,893

 
19,159

 
17,757

Income tax expense
 
3,400

 
3,921

 
3,484

Net income
 
$
13,493

 
$
15,238

 
$
14,273

Key Ratios
 
 
 
 
 
 
Return on average assets
 
1.21
%
 
1.35
%
 
1.33
%
Return on average equity
 
11.30
%
 
12.77
%
 
13.13
%
GAAP efficiency ratio
 
56.82
%
 
56.16
%
 
55.19
%
Net interest margin (fully-taxable equivalent)
 
3.08
%
 
3.12
%
 
3.18
%
Non-performing assets to total assets
 
0.23
%
 
0.25
%
 
0.33
%
Common equity ratio
 
10.72
%
 
10.69
%
 
10.26
%
Tier 1 leverage capital ratio
 
9.53
%
 
9.55
%
 
9.47
%
Common equity tier 1 risk-based capital ratio
 
11.27
%
 
11.80
%
 
11.74
%
Tier 1 risk-based capital ratio
 
12.56
%
 
13.16
%
 
13.14
%
Total risk-based capital ratio
 
13.81
%
 
14.44
%
 
14.46
%
Per Share Data
 
 
 
 
 
 
Basic earnings per share
 
$
0.89

 
$
1.00

 
$
0.91

Diluted earnings per share
 
$
0.89

 
$
0.99

 
$
0.91

Cash dividends declared per share
 
$
0.33

 
$
0.33

 
$
0.30

Book value per share
 
$
32.95

 
$
31.26

 
$
29.16

Non-GAAP Measures(1)
 
 
 
 
 
 
Return on average tangible equity
 
14.35
%
 
16.26
%
 
17.08
%
Efficiency ratio
 
56.45
%
 
55.64
%
 
54.86
%
Tangible common equity ratio
 
8.78
%
 
8.66
%
 
8.21
%
Tangible book value per share
 
$
26.39

 
$
24.77

 
$
22.81

(1) Please see "Reconciliation of non-GAAP to GAAP Financial Measures (unaudited)."




Consolidated Statements of Condition Data
(unaudited)
 
 
 
(In thousands)
 
March 31,
2020
 
December 31,
2019
 
March 31,
2019
ASSETS
 
 

 
 

 
 

Cash and due from banks
 
$
32,477

 
$
39,586

 
$
43,722

Interest-bearing deposits in other banks (including restricted cash)
 
21,732

 
36,050

 
95,846

Total cash, cash equivalents and restricted cash
 
54,209

 
75,636

 
139,568

Investments:
 
 

 
 

 
 

Available-for-sale securities, at fair value (book value of $931,876, $913,978 and $933,135, respectively)
 
960,131

 
918,118

 
924,311

Held-to-maturity securities, at amortized cost (fair value of $1,358, $1,359 and $1,324, respectively)
 
1,300

 
1,302

 
1,306

Other investments
 
15,056

 
13,649

 
11,242

Total investments
 
976,487

 
933,069

 
936,859

Loans held for sale, at fair value (book value of $28,356, $11,915 and $8,711, respectively)
 
27,730

 
11,854

 
8,795

Loans:
 
 
 
 
 
 
Commercial real estate
 
1,299,860

 
1,243,397

 
1,258,474

Residential real estate
 
1,064,212

 
1,070,374

 
1,017,442

Commercial(1)
 
463,087

 
442,701

 
421,824

Consumer and home equity
 
330,603

 
338,551

 
344,702

Total loans
 
3,157,762

 
3,095,023

 
3,042,442

      Less: allowance for loan losses
 
(26,521
)
 
(25,171
)
 
(25,201
)
       Net loans
 
3,131,241

 
3,069,852

 
3,017,241

Goodwill
 
94,697

 
94,697

 
94,697

Core deposit intangible assets
 
3,355

 
3,525

 
4,054

Bank-owned life insurance
 
93,033

 
92,344

 
90,513

Premises and equipment, net
 
41,131

 
41,836

 
42,033

Deferred tax assets
 
10,708

 
16,823

 
18,854

Other assets
 
161,948

 
89,885

 
68,575

Total assets
 
$
4,594,539

 
$
4,429,521

 
$
4,421,189

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 

 
 

 
 
Liabilities
 
 

 
 

 
 
Deposits:
 
 

 
 

 
 
Non-interest checking
 
$
536,243

 
$
552,590

 
$
492,306

Interest checking
 
1,147,653

 
1,153,203

 
1,163,678

Savings and money market
 
1,146,038

 
1,119,193

 
1,059,897

Certificates of deposit
 
545,013

 
521,752

 
428,487

Brokered deposits
 
188,758

 
191,005

 
433,829

Total deposits
 
3,563,705

 
3,537,743

 
3,578,197

Short-term borrowings
 
326,722

 
268,809

 
256,181

Long-term borrowings
 
35,000

 
10,000

 
10,000

Subordinated debentures
 
59,155

 
59,080

 
58,978

Accrued interest and other liabilities
 
117,277

 
80,474

 
64,115

Total liabilities
 
4,101,859

 
3,956,106

 
3,967,471

Shareholders’ equity
 
492,680

 
473,415

 
453,718

Total liabilities and shareholders’ equity
 
$
4,594,539

 
$
4,429,521

 
$
4,421,189

(1) Includes the HPFC loan portfolio.





Consolidated Statements of Income Data
(unaudited)
 
 
For The
Three Months Ended
(In thousands, except per share data)
 
March 31,
2020
 
December 31,
2019
 
March 31,
2019
Interest Income
 
 

 
 

 
 

Interest and fees on loans
 
$
34,045

 
$
35,379

 
$
35,721

Taxable interest on investments
 
4,878

 
4,780

 
4,994

Nontaxable interest on investments
 
787

 
758

 
644

Dividend income
 
168

 
160

 
230

Other interest income
 
335

 
475

 
420

Total interest income
 
40,213

 
41,552

 
42,009

Interest Expense
 
 

 
 

 
 

Interest on deposits
 
6,662

 
7,459

 
8,423

Interest on borrowings
 
838

 
961

 
974

Interest on subordinated debentures
 
887

 
893

 
717

Total interest expense
 
8,387

 
9,313

 
10,114

Net interest income
 
31,826

 
32,239

 
31,895

Provision for credit losses
 
1,775

 
214

 
744

Net interest income after provision for credit losses
 
30,051

 
32,025

 
31,151

Non-Interest Income
 
 

 
 

 
 

Mortgage banking income, net
 
3,534

 
2,175

 
1,252

Debit card income
 
2,141

 
2,978

 
2,010

Service charges on deposit accounts
 
2,012

 
2,191

 
2,023

Income from fiduciary services
 
1,502

 
1,520

 
1,392

Bank-owned life insurance
 
689

 
615

 
594

Brokerage and insurance commissions
 
657

 
683

 
585

Customer loan swap fees
 
114

 
247

 
525

Net loss on sale of securities
 

 
(133
)
 

Other income
 
754

 
1,672

 
1,008

Total non-interest income
 
11,403

 
11,948

 
9,389

Non-Interest Expense
 
 

 
 

 
 

Salaries and employee benefits
 
14,327

 
14,446

 
12,978

Furniture, equipment and data processing
 
2,790

 
2,770

 
2,680

Net occupancy costs
 
2,003

 
1,784

 
1,914

Debit card expense
 
934

 
947

 
823

Consulting and professional fees
 
783

 
1,027

 
813

Amortization of intangible assets
 
170

 
176

 
176

Regulatory assessments
 
162

 
170

 
472

Other real estate owned and collection costs (recoveries), net
 
101

 
127

 
(307
)
Other expenses
 
3,291

 
3,367

 
3,234

Total non-interest expense
 
24,561

 
24,814

 
22,783

Income before income tax expense
 
16,893

 
19,159

 
17,757

Income Tax Expense
 
3,400

 
3,921

 
3,484

Net Income
 
$
13,493

 
$
15,238

 
$
14,273

Per Share Data
 
 

 
 

 
 

Basic earnings per share
 
$
0.89

 
$
1.00

 
$
0.91

Diluted earnings per share
 
$
0.89

 
$
0.99

 
$
0.91

 




Quarterly Average Balance and Yield/Rate Analysis
(unaudited)
 
 
Average Balance
 
Yield/Rate
 
 
For The Three Months Ended
 
For The Three Months Ended
(In thousands)
 
March 31,
2020
 
December 31,
2019
 
March 31,
2019
 
March 31,
2020
 
December 31,
2019
 
March 31, 2019
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits in other banks and other interest-earning assets
 
$
66,180

 
$
79,578

 
$
29,985

 
1.24
%
 
1.74
%
 
2.63
%
Investments - taxable
 
809,041

 
804,587

 
851,516

 
2.56
%
 
2.52
%
 
2.56
%
Investments - nontaxable(1)
 
117,537

 
112,730

 
94,710

 
3.39
%
 
3.40
%
 
3.44
%
Loans(2):
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
1,273,538

 
1,249,961

 
1,281,501

 
4.24
%
 
4.40
%
 
4.73
%
Residential real estate
 
1,078,836

 
1,078,485

 
1,008,285

 
4.19
%
 
4.38
%
 
4.30
%
Commercial(1)
 
416,527

 
403,601

 
369,832

 
4.21
%
 
4.41
%
 
4.70
%
Consumer and home equity
 
334,771

 
345,487

 
347,052

 
5.03
%
 
5.11
%
 
5.46
%
HPFC
 
20,336

 
22,516

 
32,171

 
7.83
%
 
7.56
%
 
7.91
%
Municipal(1)
 
16,990

 
18,469

 
15,333

 
3.67
%
 
3.66
%
 
3.60
%
     Total loans 
 
3,140,998

 
3,118,519

 
3,054,174

 
4.32
%
 
4.49
%
 
4.70
%
Total interest-earning assets
 
4,133,756

 
4,115,414

 
4,030,385

 
3.90
%
 
4.02
%
 
4.20
%
Other assets
 
354,436

 
349,786

 
308,064

 
 
 
 
 
 
Total assets
 
$
4,488,192

 
$
4,465,200

 
$
4,338,449

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities & Shareholders' Equity
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest checking
 
$
529,501

 
$
558,677

 
$
490,382

 
%
 
%
 
%
Interest checking
 
1,146,783

 
1,165,610

 
1,085,301

 
0.70
%
 
0.79
%
 
0.98
%
Savings
 
476,849

 
471,777

 
485,646

 
0.07
%
 
0.08
%
 
0.08
%
Money market
 
650,383

 
642,174

 
582,685

 
0.98
%
 
1.16
%
 
1.21
%
Certificates of deposit
 
552,079

 
533,416

 
443,107

 
1.61
%
 
1.66
%
 
1.34
%
Total deposits
 
3,355,595

 
3,371,654

 
3,087,121

 
0.70
%
 
0.77
%
 
0.78
%
Borrowings:
 
 
 
 
 
 
 
 
 
 
 
 
Brokered deposits
 
208,084

 
187,125

 
405,837

 
1.54
%
 
2.02
%
 
2.50
%
Customer repurchase agreements
 
236,351

 
247,780

 
238,499

 
1.08
%
 
1.20
%
 
1.24
%
Subordinated debentures
 
59,119

 
59,037

 
59,007

 
6.04
%
 
6.01
%
 
4.93
%
Other borrowings
 
59,257

 
44,816

 
44,711

 
1.39
%
 
1.88
%
 
2.22
%
Total borrowings
 
562,811

 
538,758

 
748,054

 
1.80
%
 
2.07
%
 
2.27
%
Total funding liabilities
 
3,918,406

 
3,910,412

 
3,835,175

 
0.86
%
 
0.94
%
 
1.07
%
Other liabilities
 
89,612

 
81,261

 
62,247

 
 
 
 
 
 
Shareholders' equity
 
480,174

 
473,527

 
441,027

 
 
 
 
 
 
Total liabilities & shareholders' equity
 
$
4,488,192

 
$
4,465,200

 
$
4,338,449

 
 
 
 
 
 
Net interest rate spread (fully-taxable equivalent)
 
3.04
%
 
3.08
%
 
3.13
%
Net interest margin (fully-taxable equivalent)
 
3.08
%
 
3.12
%
 
3.18
%
Net interest margin (fully-taxable equivalent), excluding fair value mark accretion and collection of previously charged-off acquired loans(3)
 
3.06
%
 
3.09
%
 
3.14
%
(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.
(3)
Excludes the impact of the fair value mark accretion on loans and certificates of deposit generated in purchase accounting and collection of previously charged-off acquired loans for the three months ended March 31, 2020, December 31, 2019 and March 31, 2019 totaling $283,000, $326,000 and $390,000, respectively.


 




Asset Quality Data
(unaudited)
(In thousands)
 
At or For The
Three Months Ended
March 31, 2020
 
At or For The
Year Ended
December 31, 2019
 
At or For The
Nine Months Ended
September 30, 2019
 
At or For The
Six Months Ended
June 30, 2019
 
At or For The
Three Months Ended
March 31, 2019
Non-accrual loans:
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
3,499

 
$
4,096

 
$
5,152

 
$
5,566

 
$
5,415

Commercial real estate
 
646

 
1,122

 
1,156

 
1,590

 
975

Commercial 
 
748

 
420

 
751

 
785

 
802

Consumer and home equity
 
2,102

 
2,154

 
2,616

 
3,039

 
2,476

HPFC
 
322

 
364

 
450

 
465

 
485

Total non-accrual loans
 
7,317

 
8,156

 
10,125

 
11,445

 
10,153

Loans 90 days past due and accruing
 

 

 

 
14

 
14

   Accruing troubled-debt restructured loans not included above
 
3,008

 
2,993

 
3,259

 
3,511

 
3,771

Total non-performing loans
 
10,325

 
11,149

 
13,384

 
14,970

 
13,938

Other real estate owned
 
94

 
94

 
94

 
130

 
673

Total non-performing assets
 
$
10,419

 
$
11,243

 
$
13,478

 
$
15,100

 
$
14,611

Loans 30-89 days past due:
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
1,781

 
$
2,227

 
$
1,447

 
$
2,536

 
$
2,265

Commercial real estate
 
2,641

 
1,582

 
2,242

 
3,378

 
2,947

Commercial 
 
1,560

 
548

 
1,135

 
1,400

 
1,205

Consumer and home equity
 
1,379

 
750

 
822

 
907

 
1,430

HPFC
 
165

 
243

 
193

 
171

 
187

Total loans 30-89 days past due
 
$
7,526

 
$
5,350

 
$
5,839

 
$
8,392

 
$
8,034

Allowance for loan losses at the beginning of the period
 
$
25,171

 
$
24,712

 
$
24,712

 
$
24,712

 
$
24,712

Provision for loan losses
 
1,772

 
2,862

 
2,658

 
1,925

 
750

Charge-offs:
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
96

 
462

 
436

 
25

 
11

Commercial real estate
 
50

 
300

 
157

 
65

 
65

Commercial 
 
253

 
1,167

 
636

 
453

 
236

Consumer and home equity
 
91

 
713

 
670

 
64

 
24

HPFC
 

 
71

 
11

 

 

Total charge-offs 
 
490

 
2,713

 
1,910

 
607

 
336

Total recoveries 
 
(68
)
 
(310
)
 
(228
)
 
(133
)
 
(75
)
Net charge-offs
 
422

 
2,403

 
1,682

 
474

 
261

Allowance for loan losses at the end of the period
 
$
26,521

 
$
25,171

 
$
25,688

 
$
26,163

 
$
25,201

Components of allowance for credit losses:
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses
 
$
26,521

 
$
25,171

 
$
25,688

 
$
26,163

 
$
25,201

Liability for unfunded credit commitments
 
24

 
21

 
11

 
14

 
16

Allowance for credit losses 
 
$
26,545

 
$
25,192

 
$
25,699

 
$
26,177

 
$
25,217

Ratios:
 
 
 
 
 
 
 
 
 
 
Non-performing loans to total loans
 
0.33
%
 
0.36
%
 
0.43
%
 
0.48
%
 
0.46
%
Non-performing assets to total assets
 
0.23
%
 
0.25
%
 
0.30
%
 
0.34
%
 
0.33
%
Allowance for loan losses to total loans
 
0.84
%
 
0.81
%
 
0.83
%
 
0.84
%
 
0.83
%
Net charge-offs to average loans (annualized):
 
 
 
 
 
 
 
 
 
 
Quarter-to-date
 
0.05
%
 
0.09
%
 
0.16
%
 
0.03
%
 
0.03
%
Year-to-date
 
0.05
%
 
0.08
%
 
0.07
%
 
0.03
%
 
0.03
%
Allowance for loan losses to non-performing loans
 
256.86
%
 
225.77
%
 
191.93
%
 
174.77
%
 
180.81
%
Loans 30-89 days past due to total loans
 
0.24
%
 
0.17
%
 
0.19
%
 
0.27
%
 
0.26
%






Reconciliation of non-GAAP to GAAP Financial Measures (unaudited)

Return on Average Tangible Equity:
 
 
For the
Three Months Ended
(Dollars in thousands)
 
March 31,
2020
 
December 31,
2019
 
March 31,
2019
Net income, as presented
 
$
13,493

 
$
15,238

 
$
14,273

Add: amortization of intangible assets, net of tax(1)
 
134

 
139

 
139

Net income, adjusted for amortization of intangible assets
 
$
13,627

 
$
15,377

 
$
14,412

Average equity, as presented
 
$
480,174

 
$
473,527

 
$
441,027

Less: average goodwill and other intangible assets
 
(98,143
)
 
(98,307
)
 
(98,838
)
Average tangible equity
 
$
382,031

 
$
375,220

 
$
342,189

Return on average equity
 
11.30
%
 
12.77
%
 
13.13
%
Return on average tangible equity
 
14.35
%
 
16.26
%
 
17.08
%
(1) Assumed a 21% tax rate.


Efficiency Ratio:
 
 
 
 
 
 
 
 
For the
Three Months Ended
(Dollars in thousands)
 
March 31,
2020
 
December 31,
2019
 
March 31,
2019
Non-interest expense, as presented
 
$
24,561

 
$
24,814

 
$
22,783

Net interest income, as presented
 
$
31,826

 
$
32,239

 
$
31,895

Add: effect of tax-exempt income(1)
 
280

 
277

 
244

Non-interest income, as presented
 
11,403

 
11,948

 
9,389

Add: net loss on sale of securities
 

 
133

 

Adjusted net interest income plus non-interest income
 
$
43,509

 
$
44,597

 
$
41,528

GAAP efficiency ratio
 
56.82
%
 
56.16
%
 
55.19
%
Non-GAAP efficiency ratio
 
56.45
%
 
55.64
%
 
54.86
%
(1) Assumed a 21% tax rate.






Tangible Book Value Per Share and Tangible Common Equity Ratio:
 
 
March 31,
2020
 
December 31,
2019
 
March 31,
2019
(In thousands, except number of shares, per share data and ratios)
 
Tangible Book Value Per Share:
 
 
 
 
 
 
Shareholders' equity, as presented
 
$
492,680

 
$
473,415

 
$
453,718

Less: goodwill and other intangible assets
 
(98,052
)
 
(98,222
)
 
(98,751
)
Tangible shareholders' equity
 
$
394,628

 
$
375,193

 
$
354,967

Shares outstanding at period end
 
14,951,597

 
15,144,719

 
15,560,565

Book value per share
 
$
32.95

 
$
31.26

 
$
29.16

Tangible book value per share
 
$
26.39

 
$
24.77

 
$
22.81

Tangible Common Equity Ratio:
Total assets
 
$
4,594,539

 
$
4,429,521

 
$
4,421,189

Less: goodwill and other intangible assets
 
(98,052
)
 
(98,222
)
 
(98,751
)
Tangible assets
 
$
4,496,487

 
$
4,331,299

 
$
4,322,438

Common equity ratio
 
10.72
%
 
10.69
%
 
10.26
%
Tangible common equity ratio
 
8.78
%
 
8.66
%
 
8.21
%


Core Deposits:
(In thousands)
 
March 31,
2020
 
December 31,
 2019
 
March 31,
2019
Total deposits
 
$
3,563,705

 
$
3,537,743

 
$
3,578,197

Less: certificates of deposit
 
(545,013
)
 
(521,752
)
 
(428,487
)
Less: brokered deposits
 
(188,758
)
 
(191,005
)
 
(433,829
)
Core deposits
 
$
2,829,934

 
$
2,824,986

 
$
2,715,881



Average Core Deposits:
(In thousands)
 
March 31,
2020
 
December 31,
 2019
 
March 31,
2019
Total average deposits
 
$
3,355,595

 
$
3,371,654

 
$
3,087,121

Less: average certificates of deposit
 
(552,079
)
 
(533,416
)
 
(443,107
)
Average core deposits
 
$
2,803,516

 
$
2,838,238

 
$
2,644,014




(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit
403765449_cncsignaturebrandmarka19.jpg First Quarter Report - 2020


Dear Fellow Shareholders:
On behalf of all of us at Camden National Corporation, I hope you and your families are safe and healthy.
Our strategic approach to the COVID-19 pandemic is based on three major priorities. The first is the safety and health of our employees, customers and communities during this health crisis. Our second priority is easing, as best we can, financial hardships that our customers and employees face during this current period of difficulty and uncertain economic future. Our third priority is to fortify the financial foundation of our company, which we have taken significant steps towards achieving.
Health and safety of employees, customers and communities. Safeguarding the health of our employees, customers and communities is our highest priority, while simultaneously seeking to ensure that our customers have access to essential financial services. As the crisis unfolded, we activated our pandemic and business continuity plans and leveraged many of our strategic investments. Guided by our Pandemic Work Group, over a period of a few days, we shifted over half of our employees to work from home, allowing them both to carry out their jobs safely and to address personal challenges like childcare. Our retail banking team has done a remarkable job providing critical banking services through our drive-up windows, with lobby visits by appointment only, while strategically closing certain branches temporarily to maximize our staffing resources.
We understand our communities are also under significant stress during this time. In addition to our ongoing philanthropic efforts, including a $500,000 donation to Pen Bay Medical Center and Maine Medical Center announced in 2019, we have expanded our support to other organizations such as Finding Our Voices, which is devoted to helping domestic abuse victims, especially during this period of isolation and social distancing.
Financial support for customers and employees. Our primary business focus has shifted from growth to support over the past several weeks. As banking is an essential service in the community, our teams are providing not only financial guidance, but also emotional reassurance. Each day, we seek to help customers find solutions and navigate difficult times and to demonstrate our strength as a community bank.
We were one of the first Maine banks to announce loan payment deferral and late fee waiver programs. As a U.S. Small Business Administration (SBA) Preferred Lender, we are also a participant in the CARES Act relief programs, most notably the Paycheck Protection Program administered through the SBA. Our wave of applications has been met by a full team effort led by our commercial, credit underwriting and special asset teams.
Effective customer communication is essential during a crisis. Our Customer Care Center, which is now working remotely, has fielded more than double the amount of inquiries from customers throughout this crisis. Additionally, our retail, lending, wealth management and brokerage teams are servicing customers through phone, email and web conferencing capabilities.
 

Understanding that our employees are our greatest asset and that we have asked them to make many personal sacrifices, we have taken several actions to support them. First, on March 19, 2020, we announced that we would not have any layoffs as a result of the COVID-19 crisis for a period of 90 days, and that we would reassess our position thereafter. Secondly, we added $100,000 to our employee emergency relief fund to support employees and their families. Finally, we have provided pay premiums for those members of our team who are in customer-facing areas. Along with various other support mechanisms and strong leadership from our management team, the response of our employees during this crisis can be summarized in one word - Amazing.
Fortifying our financial condition. We have already seen the impact of this health crisis on our economy. Fortunately, we are entering the economic and financial fallout after having a record 2019 and a solid start to 2020. At March 31, 2020, we reported total capital of over $490 million, which resulted in a tangible common equity ratio of 8.78%, compared to 8.21% a year ago. Our total risk-based capital ratio at March 31, 2020, of 13.81% was down from 14.46% a year ago, due to a combination of loan growth of $134.3 million and shares repurchased under the buyback program of $26.5 million over this period. Effective March 20, 2020, we suspended our repurchase program for capital preservation purposes.
Asset quality through the first quarter of 2020 has not yet been affected by the crisis and was highlighted by non-performing assets to total assets of 0.23% as of March 31, 2020, compared to 0.33% a year ago. Despite entering this coming phase from a position of strength, our first quarter 2020 loan loss provision for the quarter was $1.0 million higher than the first quarter of 2019 because of the health crisis and its impact on the economy and our markets.
Earnings per diluted share of $0.89 during the first quarter of 2020 was down from $0.91 for the first quarter of 2019, due to higher operating costs and our increased loan loss provision. Our earnings capacity and capital position allowed us to declare a dividend of $0.33 per share, a 10% increase from the first quarter of 2019.
Building for the future. During the first quarter of 2020, we announced two significant additions to our executive team and a change in the previously announced retirement date of our Chief Operating and Financial Officer. Gregory A. White has joined Camden National Corporation as Executive Vice President and Chief Financial Officer, and William H. Martel has joined as Executive Vice President of Technology and Support Services. Greg White previously served as Executive Vice President, Chief Financial Officer and Treasurer of Farmington Bank in Connecticut and brings over 30 years of experience in the financial services industry. Bill Martel was most recently U.S. Head of Technology Operations for Santander Bank in Boston, Massachusetts and prior to that held several senior level technology positions with TD Bank. Both Greg and Bill will complement our existing executive leadership team.



403765449_cncsignaturebrandmarka19.jpg First Quarter Report - 2020


We previously announced that Jennifer Mirabile was named Executive Vice President of Wealth Management. Jennifer joined Camden National over two years ago after serving in wealth management and private banking roles in other organizations.
Deborah Jordan, who previously announced her intent to retire on April 30, 2020, will stay on as Executive Vice President and Chief Operating Officer through early summer of 2020 to assist in the transition of Greg and Bill, as well as in our response to the COVID-19 crisis.
Stability through uncertainty. Since our founding in 1875, Camden National Bank, its employees, customers, communities and owners have weathered many crises and conflicts. Although



























 
our organization and communities have evolved over time, one important factor has remained the same: the dedication of our employees. I want to thank all of them for their willingness and passion to serve our constituents.

Be well,
403765449_sig_greg-dufoura18.jpg
Gregory A. Dufour
President and Chief Executive Officer




Financial Highlights (unaudited)
 
 
Three Months Ended
March 31,
(Dollars in thousands, except per share data)
 
2020
 
2019
Earnings and Dividends
 
 
 
 
Net interest income
 
$
31,826

 
$
31,895

Provision for credit losses
 
1,775

 
744

Non-interest income
 
11,403

 
9,389

Non-interest expense
 
24,561

 
22,783

Income before taxes
 
16,893

 
17,757

Income taxes
 
3,400

 
3,484

    Net income
 
$
13,493

 
$
14,273

Diluted earnings per share
 
$
0.89

 
$
0.91

Cash dividends declared per share
 
0.33

 
0.30

Performance Ratios
 
 
 
 
Return on average assets
 
1.21
%
 
1.33
%
Return on average equity
 
11.30
%
 
13.13
%
Net interest margin (fully-taxable equivalent)
 
3.08
%
 
3.18
%
Efficiency ratio1
 
56.45
%
 
54.86
%
Balance sheet (end of period)
 
 
 
 
Investments
 
$
976,487

 
$
936,859

Loans and loans held for sale
 
3,185,492

 
3,051,237

Allowance for loan losses
 
26,521

 
25,201

Total assets
 
4,594,539

 
4,421,189

Deposits
 
3,563,705

 
3,578,197

Shareholders' equity
 
492,680

 
453,718

Book Value per Share and Capital Ratios
 
 
 
 
Book value per share
 
$
32.95

 
$
29.16

Tangible book value per share1
 
26.39

 
22.81

Tangible common equity ratio1
 
8.78
%
 
8.21
%
Total risk-based capital ratio
 
13.81
%
 
14.46
%
Asset Quality
 
 
 
 
Allowance for loan losses to total loans
 
0.84
%
 
0.83
%
Net charge-offs to average loans (annualized)
 
0.05
%
 
0.03
%
Non-performing assets to total assets
 
0.23
%
 
0.33
%
1 This is a non-GAAP measure. A reconciliation of non-GAAP to GAAP financial measures can be found in the Company's earnings release dated and filed with the SEC on April 28, 2020.

















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Section 4: EX-99.3 (EXHIBIT 99.3)

ex993presentation


 


 
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$35.0 3.90% 3.70% $30.0 3.50% $25.0 3.30% 3.10% $20.0 2.90% 2.70% $15.0 2.50% • • • • • • • •


 
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