Camden National Corporation Reports Net
Income of $14.3 Million for
the Third Quarter of 2022 and $46.1 Million for the Nine Months Ended
September 30, 2022
CAMDEN,
Maine, Oct. 25, 2022 /PRNewswire/ -- Camden
National Corporation (NASDAQ: CAC; "Camden National" or the
"Company"), a $5.6 billion bank
holding company headquartered in Camden,
Maine, reported net income of $14.3
million and diluted earnings per share of ("EPS") of
$0.97, both a decrease of 5% compared
to the second quarter of 2022. The decrease in earnings between
quarters was, in part, the result of higher provision for credit
losses and less Small Business Administration Paycheck Protection
Program ("SBA PPP") loan income. Excluding the impact of income
taxes, provision for credit losses and SBA PPP loan income,
adjusted earnings (non-GAAP) decreased 2% on a linked
quarter-basis. The decrease in adjusted earnings was led by a
decrease in non-interest income as the effects of the changing
broad market continue to affect mortgage banking and other
market-related revenue sources, and was partially offset by net
interest margin expansion of 4 basis points
quarter-over-quarter.
"Our revenues for the first nine months of the year grew 2% over
the same period last year, this demonstrates the flexibility and
strong core operating capacity of Camden National," said
Gregory A. Dufour, President and
Chief Executive Officer. "The 2% increase in revenues were in light
of the impact of the stock market on our wealth and brokerage
businesses, as well as a reduction in mortgage sale activity and
SBA Paycheck Protection Program loan income." Dufour further
shared, "Residential mortgage activity continues to slow in
comparison to recent quarters and the prior year as mortgage
interest rates have risen sharply, and we expect overall activity
will continue to slow. Commercial activity, including small
business lending, has remained fairly steady and we anticipate
continued growth, in terms of both volume and yield, from these
business lines moving forward."
"We will prioritize maintaining our allowance for credit losses
in light of macro-economic conditions although current asset
quality remains extremely strong," Dufour added. "We added nearly
$3 million of provision expense
during the quarter and $4 million
year-to-date, which increased our allowance for credit losses as a
percent of total loans to 95 basis points and 7.2 times total
non-performing loans."
Net income for the nine months ended September 30, 2022, was $46.1 million and diluted EPS was $3.12, a decrease of 12% and 11%, respectively,
compared to the same period in 2021. This decrease was driven by an
increase in provision for credit losses of $8.5 million and lower SBA PPP income of
$4.2 million. Excluding the impact of
income taxes, provision for credit losses and SBA PPP loan income,
adjusted earnings (non-GAAP) for the nine months ended September 30, 2022, increased 8% over the same
period of 2021.
"In late-September, we announced the appointment of Rebecca Hatfield as a director of the Company,
effective December 31, 2022. We are
excited to welcome her aboard as she brings a great knowledge of
our markets and the needs across our state in her role as President
and Chief Executive Officer of Avesta Housing, along with her
leadership and banking experience. Rebecca's experience will help
advance and expand our corporate strategy while enhancing
shareholder value. We look forward to her contributions," said
Dufour.
In September, the Company announced a cash dividend of
$0.40 per share, payable on
October 31, 2022, to shareholders of
record on October 14, 2022,
representing an annualized dividend yield of 3.76%, based on the
Company's closing share price of $42.60, as reported by NASDAQ on September 30, 2022.
Through the nine months ended September
30, 2022, the Company repurchased 225,245 shares of its
common stock at an average price of $45.46 per share.
THIRD QUARTER 2022 HIGHLIGHTS
- Net income decreased by $759,000,
or 5%, over the second quarter of 2022, while earnings before
income taxes, provision and SBA PPP loan income (non-GAAP)
decreased $328,000, or 2%, compared
to the second quarter of 2022.
- Return on average equity of 12.50% and return on average
tangible equity (non-GAAP) of 16.02%, compared to 13.16% and
16.83%, respectively, for the second quarter of 2022.
- Net interest margin increased 4 basis points to 2.88%, compared
to the second quarter of 2022, while adjusted net interest margin
(non-GAAP) expanded 3 basis points to 2.88% over the same
period.
- Deposit beta, which is calculated using core deposits and
certificates of deposits, was 14.2% through the nine months ended
September 30, 2022, and its overall
funding beta was 15.2% over the same period.
- Loans grew $136.5 million, or 4%,
during the third quarter of 2022, resulting in loan growth of 13%
through the nine months ended September 30,
2022.
- The allowance for credit losses ("ACL") on loans to total loans
ratio increased 3 basis points in the third quarter of 2022 to
0.95% of total loans at September 30,
2022, driven by strong loan growth and the continued risk of
a broad economic slowdown, despite overall asset quality remaining
strong with non-performing assets totaling 0.09% of total
assets.
- Repurchased 63,689 shares of the Company's common stock at a
weighted average price $44.38 during
the third quarter of 2022.
FINANCIAL CONDITION
As of September 30, 2022, total
assets were $5.6 billion, an increase
of $51.4 million, or 1%, since
December 31, 2021. The increase in
assets was driven by the increase in loans of $429.2 million, or 13%, during the nine months
ended September 30, 2022, but was
partially offset by a decrease in investments of $246.7 million, or 16%, and cash of $138.6 million, or 63%. Through the nine months
ended September 30, 2022, the Company
redeployed investment cash flows and excess cash balances to fund
higher interest-earning loan growth.
As of September 30, 2022, loans
totaled $3.9 billion, an increase of
13% since December 31, 2021, and
represented 70% of total assets as of the end of the third quarter
of 2022. Over this period, our loan growth was led by: (1)
residential mortgage loans, which grew $313.0 million, or 24%, (2) commercial real
estate loans, which grew $67.4
million, or 5%, and (3) commercial loan balances, which grew
$59.6 million, or 16%.
Through the nine months ended September
30 2022, the Company held 79% of its residential mortgage
production within its loan portfolio.
As of September 30, 2022, our
residential mortgage loan pipeline stood at $113.4 million, a decrease of $36.6 million, or 24%, since December 31, 2021. At September 30, 2022 our commercial real estate and
commercial loan pipelines were $93.1
million, an increase of $17.7
million, or 23%, since year end.
As of September 30, 2022,
investments totaled $1.3 billion, or
23% of total assets, compared to $1.5
billion, or 28%, of total assets as of December 31, 2021. The decrease in investment
balances through the third quarter of 2022 was driven by the
overall decrease in market value of the investment portfolio
designated as available-for-sale ("AFS") due to the sharp rise in
interest rates through the nine months ended September 30, 2022, and the continued
redeployment of investment cash flows.
As of September 30, 2022, the
weighted-average life and duration of the AFS investment portfolio
was 5.8 years and 4.8 years, respectively, and the weighted-average
life and duration of the held-to-maturity investment portfolio was
8.8 years and 7.1 years, respectively. As of September 30, 2022, agency-issued
mortgage-backed, collateralized mortgage obligations and debt
securities comprised 90% of the book value of the Company's
investment portfolio.
As of September 30, 2022, deposits
totaled $4.6 billion, a decrease of
$40.3 million, or 1%, since year end.
The decrease over this period was driven by a decrease in brokered
deposits of $118.7 million as
alternative borrowing sources were used to manage funding levels.
Core deposits (non-GAAP) totaled $4.2
billion as of September 30,
2022, an increase of $108.5
million, or 3%, since year end, driven by checking account
growth of $74.4 million, or 3%, which
was primarily driven by one large municipal relationship.
The Company's loan-to-deposit ratio was 85% at September 30, 2022, compared to 82% at
June 30, 2022 and 74% at December 31, 2021.
As of September 30, 2022, total
borrowings were $465.4 million, an
increase of $209.5 million, or 82%,
since year end. The increase is the result of the shift in
alternative funding over this period from brokered deposits to more
cost-effective overnight borrowings, as well as the need for
additional funding to support strong loan growth during the nine
months ended September 30, 2022.
As of September 30, 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, the continued decreases in the
market value of the AFS investment portfolio due to the sharp rise
in interest rates through the nine months ended September 30, 2022, caused decreases across the
common equity ratio and tangible common equity ratio (non-GAAP), as
well as book value per share and tangible book value per share
(non-GAAP) over this period. These decreases are temporary and not
reflective of underlying credit risk within the investment
portfolio. The Company's non-regulatory capital ratios and book
value as of the dates indicated were as follows:
- As of September 30, 2022, the
Company's common equity ratio was 7.76% and its tangible common
equity ratio (non-GAAP) was 6.13%, compared to 8.17% and 6.51% as
of June 30, 2022, respectively, and
9.84% and 8.22% as of December 31,
2021, respectively.
- As of September 30, 2022, the
Company's book value per share was $29.59 and its tangible book value per share
(non-GAAP) was $22.97, compared to
$30.52 and $23.92 as of June 30,
2022, respectively, and $36.72
and $30.15 as of December 31, 2021, respectively.
Under the 2022 share repurchase program, the Company repurchased
225,245 shares of its outstanding common stock at a
weighted-average price of $45.46
through the nine months ended September 30,
2022, which included the repurchase of 63,689 shares at
a weighted-average price of $44.38
per share during the third quarter of 2022.
ASSET QUALITY
As of September 30, 2022, the
Company's asset quality metrics remained very strong with
non-performing assets strengthening to 0.09% of total assets,
compared to 0.11% and 0.13%, at June 30,
2022 and December 31, 2021,
respectively. As of September 30,
2022, loans 30-89 days past due increased to 0.12% of total
loans, compared to 0.06% and 0.04% at June 30, 2022 and December
31, 2021, respectively. The increase in past due loans
during the third quarter of 2022 was primarily within the
residential mortgage loans portfolio and commercial real estate
loans portfolio and was the result of a few large loans becoming
delinquent and not indicative of a larger trend at this point.
ALLOWANCE FOR CREDIT LOSSES ("ACL")
At September 30, 2022, the ACL on
loans was $36.5 million, or 0.95% of
total loans, compared to $34.2
million, or 0.92% of total loans, as of June 30, 2022, and $33.3
million, or 0.97% of total loans, as of December 31, 2021. The increase in the ACL on
loans of $2.3 million for the third
quarter of 2022 was driven by: (1) the risk of a forecasted broad
economic slowdown, and (2) strong loan growth of 4% during this
period, that was partially offset by (3) the release of
$768,000 of additional reserves
provided for certain commercial real estate loans in response to
COVID-19 modifications that were initially recorded due to the
heightened credit risk. As of September 30,
2022, the Company no longer carried any additional reserves
on these loans.
Overall, the global and national markets continue to be volatile
and carry a high degree of uncertainty. These factors are currently
forecasted using external economic data in the ACL model and
subject our ACL estimate under the current expected credit losses
("CECL") accounting model to a higher risk of fluctuation between
periods based on actual macroeconomic conditions and changes to
updated forecasted factors. The Company continues to monitor these
economic factors, and is proactively assessing the portfolio for
any future risk in specific industries that could be materially
impacted by these forecasts.
FINANCIAL OPERATING RESULTS (Q3 2022 vs. Q2 2022)
Net income for the third quarter of 2022 was $14.3 million, a decrease of $759,000, or 5%, compared to the second quarter
of 2022. Excluding income taxes, provision for credit losses and
SBA PPP loan income, adjusted earnings (non-GAAP) for the third
quarter of 2022 were $20.6 million, a
decrease of $328,000, or 2%, compared
to last quarter.
Net Interest Income and Net Interest Margin. Net interest
income for the third quarter of 2022 was $37.8 million, an increase of $1.3 million, or 4%, over the second quarter of
2022.
- Interest income for the third quarter of 2022 of $44.6 million was $4.6
million, or 11%, higher than the previous quarter. Our yield
on average interest-earning assets for the third quarter increased
29 basis points to 3.40% over the second quarter of 2022 driven by
a rise in our loan yield of 27 basis points over this same period
to 3.91% for the third quarter of 2022. The increase in
interest-earning asset yields reflects the continued increase in
interest rates through the third quarter of 2022 and continued
redeployment of lower yielding cash and investments to fund strong
average loan growth between quarters of $174.8 million, or 5%.
- Interest expense for the third quarter of 2022 of $6.8 million was $3.3
million, or 94%, higher than the second quarter of 2022
driven by higher funding costs as short-term interest rates
continued to rise sharply in the third quarter of 2022, highlighted
by a 150 basis points increase in the Federal Fund rate in the
third quarter bringing the range at the end of the third quarter of
2022 to 3.00% - 3.25%. Cost of deposits for the third quarter of
2022 were 0.45%, an increase of 24 basis points over the previous
quarter, primarily the result of interest checking costs increasing
53 basis points between periods to 0.85% and money market funds
increasing 42 basis points to 0.84% in 2022. Total borrowing costs
also increased during this period, increasing 41 basis points
between quarters to 1.38% for the third quarter of 2022.
Net interest margin for the third quarter of 2022 was 2.88%, an
increase of 4 basis points compared to the second quarter of 2022.
Adjusted net interest margin, which excludes SBA PPP loans and
excess liquidity (non-GAAP), for the third quarter of 2022 was
2.88% as well, an increase of 3 basis points compared to last
quarter.
Provision for Credit Losses. The change in
provision for credit losses between periods is highlighted in the
table below:
($ in
thousands)
|
|
Q3
2022
|
|
Q2
2022
|
|
Increase
/
(Decrease)
|
Provision for credit
losses - loans
|
|
$
2,513
|
|
$
2,511
|
|
$
2
|
Provision (credit) for
credit losses - off-
balance sheet credit exposures
|
|
251
|
|
(166)
|
|
417
|
Provision for credit
losses
|
|
$
2,764
|
|
$
2,345
|
|
$
419
|
For the third quarter of 2022, a $2.5
million provision for credit losses on loans was recorded
as: (1) our forecasted economic outlook, which incorporates the
risk of a broad macroeconomic slowdown, and (2) strong loan growth
during the quarter of 4%. Higher provisions for our economic
outlook and strong loan growth were partially offset by the release
of the last $768,000 of additional
reserves that were established on certain loans in response to
COVID-19 modifications due to their heightened credit risk and the
reserves no longer required as the loans were deemed fully
recovered and performing at or above pre-pandemic levels. As of
September 30, 2022, the Company no
longer carried any additional reserves on these loans.
For the second quarter of 2022, the Company recorded
$2.3 million of provision for credit
losses on loans primarily due to the deterioration of economic
forecasts and potential downturn along with loan growth of 5%
during the quarter. These amounts were offset by the release of
$2.4 million of additional reserves
provided in response to COVID-19 modifications that were no
longer outstanding and the loans were deemed recovered.
Non-Interest Income. Non-interest income for the third
quarter of 2022 was $10.0 million, a
decrease of $1.2 million, or 11%,
over the second quarter of 2022, primarily led by: (1) lower
mortgage banking income of $882,000,
(2) lower brokerage and wealth management income of $415,000, and (3) a decrease in bank-owned life
insurance ("BOLI") income of $195,000, partially offset by (4) an increase in
other income of $267,000 primarily
due to the sale of property.
Mortgage banking activity slowed during the third quarter as
interest rates continued to rise sharply driving lower purchase
activity and refinance activity. For the third quarter of 2022, the
Company sold 21% of its residential mortgage loan production,
compared to 20% last quarter. Furthermore, a negative fair value
adjustment on the Company's residential mortgage loans designated
for sale as of September 30, 2022,
resulted in a $439,000 charge to
mortgage banking income for the third quarter of 2022, compared to
a positive fair value adjustment of $185,000 for the second quarter of 2022.
Non-Interest Expense. Non-interest expense for the third
quarter of 2022 was $27.1 million, an
increase of $535,000, or 2%, over the
second quarter of 2022 led by: (1) higher salaries and employees
benefits costs due to the timing of bonus accrual adjustments
between periods, and (2) higher marketing and other
employee-related costs, partially offset by (3) a decrease in
consulting and professional fee costs between periods as our
directors receive their annual equity award grant in the second
quarter each year.
The Company's GAAP efficiency ratio and non-GAAP efficiency
ratio for the third quarter of 2022 was 56.71% and 56.43%,
respectively, compared to 55.70% and 55.42%, respectively, for the
second quarter of 2022.
SUMMARY OF FINANCIAL OPERATING RESULTS (Q3 2022 vs. Q3
2021)
Net income for the third quarter of 2022 decreased $373,000, or 3%, to $14.3
million compared to the third quarter of 2021. Earnings
before income taxes, provision and SBA PPP loan income (non-GAAP)
for the third quarter of 2022 were $20.6
million, an increase of $3.0
million, or 17%, compared to the same quarter last year.
Net interest income increased $3.1
million, or 9%, between periods as average interest-earning
assets grew $221.6 million, or 4%,
and net interest margin expanded 12 basis points to 2.88% for the
third quarter of 2022 as interest rates sharply rose. Average loans
grew $497.1 million, or 15%, over
this period, while interest-earning cash balances decreased
$274.5 million, or 90%, as excess
liquidity was redeployed into higher yielding assets.
Provision for credit losses for the third quarter of 2022
increased $1.8 million over the third
quarter of 2021 led by a change in the forecasted economic outlook
over this period, as well as loan growth of 16% over the last 12
months.
Non-interest income for the third quarter of 2022 decreased
$1.1 million, or 10%, compared to the
third quarter of 2022 led by a decrease in mortgage banking income
of $1.3 million, or 67%, as
residential mortgage production slowed between periods (consistent
with that seen across the industry) and we sold 21% of our
production in the third quarter of 2022, compared to 33% for the
third quarter of 2021.
Non-interest expense for the third quarter of 2022 increased
$828,000, or 3%, over the third
quarter of 2021. The Company's GAAP efficiency ratio and non-GAAP
efficiency ratio for the third quarter of 2022 was 56.71% and
56.43%, respectively, compared to 57.29% and 57.00% for the third
quarter of 2021, respectively.
Q3 2022 CONFERENCE CALL
Camden National will host a conference call and webcast at
3:00 p.m., Eastern Time, on
Tuesday, October 25, 2022 to discuss
its third 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
(Canada):
|
(833)
950-0062
|
Live dial-in (All other
locations):
|
(929)
526-1599
|
Participant access
code:
|
242036
|
Live
webcast:
|
https://events.q4inc.com/attendee/927783145
|
A link to the live webcast will be available on Camden
National's website under "Investor Relations" at
CamdenNationalCorporation.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
$5.6 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 three years,
Camden National Bank was named a
Customer Experience (CX) Leader by independent research firm,
Greenwich Associates. In 2021, it received awards in two CX
categories: U.S. Retail Banking and U.S. Commercial Small Business
and the bank was included in the Best Places to Work in
Maine, for the second year. Member
FDIC. Equal Housing Lender.
Comprehensive wealth management, investment and financial
planning services are delivered by Camden National Wealth
Management. To learn more, visit CamdenNational.bank.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release that are not
statements of historical fact constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, as amended, including certain plans, expectations, goals,
projections and other statements, which are subject to numerous
risks, assumptions and uncertainties. Forward-looking statements
can be identified by the fact that they do not relate strictly to
historical or current facts. They often include words like
"believe," "expect," "anticipate," "estimate," and "intend" or
future or conditional verbs such as "will," "would," "should,"
"could" or "may." Certain factors that could cause actual results
to differ materially from expected results include increased
competitive pressures; inflation; ongoing competition in labor
markets and employee turnover; deterioration in the value of Camden
National's investment securities; changes in consumer spending and
savings habits; changes in the interest rate environment; changes
in general economic conditions; operational risks including, but
not limited to, cybersecurity, fraud and natural disasters;
legislative and regulatory changes that adversely affect the
business in which Camden National is engaged; 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 regarding the potential
effects of the war in Ukraine, the
COVID-19 pandemic and other notable and global current events on
the Company's business, financial condition, liquidity and results
of operations may constitute forward-looking statements and are
subject to the risk that the actual effects may differ, possible
materially, from what is reflected in those forward-looking
statements due to factors and future developments that are
uncertain, unpredictable and in many cases beyond the Company's
control. Camden National does not have any obligation to update
forward-looking statements.
USE OF NON-GAAP MEASURES
In addition to evaluating the Company's results of operations in
accordance with generally accepted accounting principles in
the United States ("GAAP"),
management supplements this evaluation with certain non-GAAP
financial measures, such as 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
|
|
At or For
The
Nine Months
Ended
|
(In thousands,
except number of shares and per share data)
|
|
September
30,
2022
|
|
June 30,
2022
|
|
September
30,
2021
|
|
September
30,
2022
|
|
September
30,
2021
|
Financial Condition
Data
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
$
1,276,762
|
|
$
1,352,882
|
|
$
1,471,118
|
|
$
1,276,762
|
|
$
1,471,118
|
Loans and loans held
for sale
|
|
$
3,865,309
|
|
$
3,727,567
|
|
$
3,326,129
|
|
$
3,865,309
|
|
$
3,326,129
|
Allowance for credit
losses on loans
|
|
$
36,542
|
|
$
34,244
|
|
$
32,272
|
|
$
36,542
|
|
$
32,272
|
Total assets
|
|
$
5,551,724
|
|
$
5,466,496
|
|
$
5,502,902
|
|
$
5,551,724
|
|
$
5,502,902
|
Deposits
|
|
$
4,568,604
|
|
$
4,527,061
|
|
$
4,605,180
|
|
$
4,568,604
|
|
$
4,605,180
|
Borrowings
|
|
$ 465,432
|
|
$
415,833
|
|
$
255,883
|
|
$
465,432
|
|
$
255,883
|
Shareholders'
equity
|
|
$ 431,007
|
|
$
446,381
|
|
$
545,984
|
|
$
431,007
|
|
$
545,984
|
Operating
Data
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
$
37,813
|
|
$
36,534
|
|
$
34,746
|
|
$
110,712
|
|
$
100,639
|
Provision (credit) for
credit losses
|
|
2,764
|
|
2,345
|
|
939
|
|
4,034
|
|
(4,420)
|
Non-interest
income
|
|
9,954
|
|
11,141
|
|
11,099
|
|
30,920
|
|
37,634
|
Non-interest
expense
|
|
27,091
|
|
26,556
|
|
26,263
|
|
79,856
|
|
76,752
|
Income before income
tax expense
|
|
17,912
|
|
18,774
|
|
18,643
|
|
57,742
|
|
65,941
|
Income tax
expense
|
|
3,645
|
|
3,748
|
|
4,003
|
|
11,654
|
|
13,418
|
Net income
|
|
$
14,267
|
|
$
15,026
|
|
$
14,640
|
|
$
46,088
|
|
$
52,523
|
Key
Ratios
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.03 %
|
|
1.11 %
|
|
1.08 %
|
|
1.13 %
|
|
1.36 %
|
Return on average
equity
|
|
12.50 %
|
|
13.16 %
|
|
10.51 %
|
|
12.88 %
|
|
12.96 %
|
GAAP efficiency
ratio
|
|
56.71 %
|
|
55.70 %
|
|
57.29 %
|
|
56.38 %
|
|
55.51 %
|
Net interest margin
(fully-taxable equivalent)
|
|
2.88 %
|
|
2.84 %
|
|
2.76 %
|
|
2.86 %
|
|
2.82 %
|
Non-performing assets
to total assets
|
|
0.09 %
|
|
0.11 %
|
|
0.14 %
|
|
0.09 %
|
|
0.14 %
|
Common equity
ratio
|
|
7.76 %
|
|
8.17 %
|
|
9.92 %
|
|
7.76 %
|
|
9.92 %
|
Tier 1 leverage capital
ratio
|
|
9.24 %
|
|
9.25 %
|
|
9.13 %
|
|
9.24 %
|
|
9.13 %
|
Common equity tier 1
risk-based capital ratio
|
|
11.72 %
|
|
12.04 %
|
|
12.77 %
|
|
11.72 %
|
|
12.77 %
|
Total risk-based
capital ratio
|
|
13.81 %
|
|
14.15 %
|
|
15.06 %
|
|
13.81 %
|
|
15.06 %
|
Per Share
Data
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
0.97
|
|
$
1.02
|
|
$
0.98
|
|
$
3.13
|
|
$
3.51
|
Diluted earnings per
share
|
|
$
0.97
|
|
$
1.02
|
|
$
0.97
|
|
$
3.12
|
|
$
3.49
|
Cash dividends declared
per share
|
|
$
0.40
|
|
$
0.40
|
|
$
0.36
|
|
$
1.20
|
|
$
1.08
|
Book value per
share
|
|
$
29.59
|
|
$
30.52
|
|
$
36.77
|
|
$
29.59
|
|
$
36.77
|
Non-GAAP
Measures(1)
|
|
|
|
|
|
|
|
|
|
|
Earnings before income
taxes and provision for credit
losses
|
|
$
20,676
|
|
$
21,119
|
|
$
19,582
|
|
$
61,776
|
|
$
61,521
|
Earnings before income
taxes, provision for credit losses
and SBA PPP loan income
|
|
$
20,626
|
|
$
20,954
|
|
$
17,631
|
|
$
60,528
|
|
$
56,034
|
Tangible book value per
share
|
|
$
22.97
|
|
$
23.92
|
|
$
30.23
|
|
$
22.97
|
|
$
30.23
|
Tangible common equity
ratio
|
|
6.13 %
|
|
6.51 %
|
|
8.30 %
|
|
6.13 %
|
|
8.30 %
|
Return on average
tangible equity
|
|
16.02 %
|
|
16.83 %
|
|
12.86 %
|
|
16.27 %
|
|
15.91 %
|
Efficiency
ratio
|
|
56.43 %
|
|
55.42 %
|
|
57.00 %
|
|
56.10 %
|
|
54.83 %
|
Adjusted net interest
margin (fully-taxable equivalent)
|
|
2.88 %
|
|
2.85 %
|
|
2.82 %
|
|
2.86 %
|
|
2.87 %
|
|
(1) Please see
"Reconciliation of non-GAAP to GAAP Financial Measures
(unaudited)."
|
Consolidated Statements of Condition Data
(unaudited)
|
|
(In thousands)
|
|
September
30,
2022
|
|
December 31,
2021
|
|
September
30,
2021
|
ASSETS
|
|
|
|
|
|
|
Cash, cash equivalents
and restricted cash
|
|
$
82,012
|
|
$
220,625
|
|
$
379,656
|
Investments:
|
|
|
|
|
|
|
Trading
securities
|
|
3,727
|
|
4,428
|
|
4,335
|
Available-for-sale
securities, at fair value (amortized cost of $833,888,
$1,508,981
and $1,443,800, respectively)
|
|
723,618
|
|
1,507,486
|
|
1,455,210
|
Held-to-maturity
securities, at amortized cost (fair value of $491,759, $1,380 and
$1,390,
respectively)
|
|
534,309
|
|
1,291
|
|
1,293
|
Other
investments
|
|
15,108
|
|
10,280
|
|
10,280
|
Total
investments
|
|
1,276,762
|
|
1,523,485
|
|
1,471,118
|
Loans held for sale, at
fair value (book value of $4,863, $5,786 and $10,789,
respectively)
|
|
4,629
|
|
5,815
|
|
10,826
|
Loans:
|
|
|
|
|
|
|
Commercial real
estate
|
|
1,562,887
|
|
1,495,460
|
|
1,419,677
|
Commercial
|
|
423,325
|
|
363,695
|
|
352,533
|
SBA PPP
|
|
685
|
|
35,953
|
|
81,959
|
Residential real
estate
|
|
1,619,409
|
|
1,306,447
|
|
1,222,084
|
Consumer and home
equity
|
|
254,374
|
|
229,919
|
|
239,050
|
Total loans
|
|
3,860,680
|
|
3,431,474
|
|
3,315,303
|
Less: allowance for
credit losses on loans
|
|
(36,542)
|
|
(33,256)
|
|
(32,272)
|
Net
loans
|
|
3,824,138
|
|
3,398,218
|
|
3,283,031
|
Goodwill and core
deposit intangible assets
|
|
96,416
|
|
96,885
|
|
97,049
|
Other assets
|
|
267,767
|
|
255,328
|
|
261,222
|
Total
assets
|
|
$
5,551,724
|
|
$
5,500,356
|
|
$
5,502,902
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Non-interest
checking
|
|
$
1,245,137
|
|
$
1,279,565
|
|
$
1,289,018
|
Interest
checking
|
|
1,460,571
|
|
1,351,736
|
|
1,266,242
|
Savings and money
market
|
|
1,493,518
|
|
1,459,472
|
|
1,437,550
|
Certificates of
deposit
|
|
279,603
|
|
309,648
|
|
323,395
|
Brokered
deposits
|
|
89,775
|
|
208,468
|
|
288,975
|
Total
deposits
|
|
4,568,604
|
|
4,608,889
|
|
4,605,180
|
Short-term
borrowings
|
|
421,101
|
|
211,608
|
|
211,552
|
Subordinated
debentures
|
|
44,331
|
|
44,331
|
|
44,331
|
Accrued interest and
other liabilities
|
|
86,681
|
|
94,234
|
|
95,855
|
Total
liabilities
|
|
5,120,717
|
|
4,959,062
|
|
4,956,918
|
Commitments and
Contingencies
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
Common stock, no par
value: authorized 40,000,000 shares, issued and outstanding
14,563,828, 14,739,956 and 14,849,327 shares on September
30, 2022, December 31,
2021 and September 30, 2021, respectively
|
|
114,536
|
|
123,111
|
|
127,925
|
Retained
earnings
|
|
452,927
|
|
424,412
|
|
413,892
|
Accumulated other
comprehensive (loss) income:
|
|
|
|
|
|
|
Net unrealized (loss)
gain on debt securities, net of tax
|
|
(140,268)
|
|
(1,173)
|
|
8,958
|
Net unrealized gain
(loss) on cash flow hedging derivative instruments, net of
tax
|
|
6,545
|
|
(1,779)
|
|
(1,359)
|
Net unrecognized loss
on postretirement plans, net of tax
|
|
(2,733)
|
|
(3,277)
|
|
(3,432)
|
Total accumulated
other comprehensive (loss) income
|
|
(136,456)
|
|
(6,229)
|
|
4,167
|
Total shareholders'
equity
|
|
431,007
|
|
541,294
|
|
545,984
|
Total liabilities
and shareholders' equity
|
|
$
5,551,724
|
|
$
5,500,356
|
|
$
5,502,902
|
Consolidated
Statements of Income Data
(unaudited)
|
|
|
|
For
The
Three Months
Ended
|
|
For
The
Nine Months
Ended
|
(In thousands, except per
share data)
|
|
September
30,
2022
|
|
June 30,
2022
|
|
September
30,
2021
|
|
September
30,
2022
|
|
September
30,
2021
|
Interest
Income
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
37,568
|
|
$
33,121
|
|
$
31,185
|
|
$
102,724
|
|
$
92,610
|
Taxable interest on
investments
|
|
5,756
|
|
5,850
|
|
5,157
|
|
17,395
|
|
13,362
|
Nontaxable interest on
investments
|
|
790
|
|
770
|
|
756
|
|
2,324
|
|
2,247
|
Dividend
income
|
|
137
|
|
106
|
|
99
|
|
349
|
|
306
|
Other interest
income
|
|
330
|
|
183
|
|
182
|
|
677
|
|
508
|
Total interest
income
|
|
44,581
|
|
40,030
|
|
37,379
|
|
123,469
|
|
109,033
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
5,442
|
|
2,510
|
|
1,973
|
|
9,785
|
|
5,957
|
Interest on
borrowings
|
|
787
|
|
454
|
|
122
|
|
1,372
|
|
454
|
Interest on
subordinated debentures
|
|
539
|
|
532
|
|
538
|
|
1,600
|
|
1,983
|
Total interest
expense
|
|
6,768
|
|
3,496
|
|
2,633
|
|
12,757
|
|
8,394
|
Net interest
income
|
|
37,813
|
|
36,534
|
|
34,746
|
|
110,712
|
|
100,639
|
Provision (credit)
for credit losses
|
|
2,764
|
|
2,345
|
|
939
|
|
4,034
|
|
(4,420)
|
Net interest income
after provision (credit) for
credit losses
|
|
35,049
|
|
34,189
|
|
33,807
|
|
106,678
|
|
105,059
|
Non-Interest
Income
|
|
|
|
|
|
|
|
|
|
|
Debit card
income
|
|
3,234
|
|
3,213
|
|
3,278
|
|
9,371
|
|
9,126
|
Service charges on
deposit accounts
|
|
1,941
|
|
1,931
|
|
1,744
|
|
5,705
|
|
4,800
|
Income from fiduciary
services
|
|
1,535
|
|
1,681
|
|
1,627
|
|
4,847
|
|
4,860
|
Brokerage and insurance
commissions
|
|
1,003
|
|
1,272
|
|
993
|
|
3,269
|
|
2,885
|
Mortgage banking
income, net
|
|
635
|
|
1,517
|
|
1,913
|
|
3,186
|
|
11,620
|
Bank-owned life
insurance
|
|
374
|
|
569
|
|
589
|
|
1,519
|
|
1,774
|
Net loss on sale of
securities
|
|
—
|
|
(9)
|
|
—
|
|
(9)
|
|
—
|
Other income
|
|
1,232
|
|
967
|
|
955
|
|
3,032
|
|
2,569
|
Total non-interest
income
|
|
9,954
|
|
11,141
|
|
11,099
|
|
30,920
|
|
37,634
|
Non-Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
15,849
|
|
15,402
|
|
15,902
|
|
46,757
|
|
45,742
|
Furniture, equipment
and data processing
|
|
3,305
|
|
3,202
|
|
2,980
|
|
9,639
|
|
8,954
|
Net occupancy
costs
|
|
1,765
|
|
1,806
|
|
1,813
|
|
5,715
|
|
5,569
|
Debit card
expense
|
|
1,210
|
|
1,134
|
|
1,106
|
|
3,410
|
|
3,166
|
Consulting and
professional fees
|
|
814
|
|
1,293
|
|
792
|
|
3,114
|
|
2,652
|
Regulatory
assessments
|
|
575
|
|
515
|
|
522
|
|
1,745
|
|
1,512
|
Amortization of core
deposit intangible assets
|
|
156
|
|
157
|
|
163
|
|
469
|
|
491
|
Other real estate owned
and collection costs (recoveries),
net
|
|
56
|
|
38
|
|
60
|
|
9
|
|
(156)
|
Other
expenses
|
|
3,361
|
|
3,009
|
|
2,925
|
|
8,998
|
|
8,822
|
Total non-interest
expense
|
|
27,091
|
|
26,556
|
|
26,263
|
|
79,856
|
|
76,752
|
Income before
income tax expense
|
|
17,912
|
|
18,774
|
|
18,643
|
|
57,742
|
|
65,941
|
Income Tax
Expense
|
|
3,645
|
|
3,748
|
|
4,003
|
|
11,654
|
|
13,418
|
Net
Income
|
|
$
14,267
|
|
$
15,026
|
|
$
14,640
|
|
$
46,088
|
|
$
52,523
|
Per Share
Data
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
0.97
|
|
$
1.02
|
|
$
0.98
|
|
$
3.13
|
|
$
3.51
|
Diluted earnings per
share
|
|
$
0.97
|
|
$
1.02
|
|
$
0.97
|
|
$
3.12
|
|
$
3.49
|
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)
|
|
September
30,
2022
|
|
June 30,
2022
|
|
September
30,
2021
|
|
September
30,
2022
|
|
June 30,
2022
|
|
September
30,
2021
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits in other banks
and other interest-earning assets
|
|
$
30,063
|
|
$
51,018
|
|
$
304,594
|
|
2.24 %
|
|
0.43 %
|
|
0.12 %
|
Investments -
taxable
|
|
1,288,172
|
|
1,366,612
|
|
1,284,851
|
|
1.88 %
|
|
1.78 %
|
|
1.66 %
|
Investments -
nontaxable(1)
|
|
109,661
|
|
112,954
|
|
114,033
|
|
3.65 %
|
|
3.45 %
|
|
3.36 %
|
Loans(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
1,546,638
|
|
1,500,284
|
|
1,410,201
|
|
4.04 %
|
|
3.73 %
|
|
3.59 %
|
Commercial(1)
|
|
402,152
|
|
399,240
|
|
348,619
|
|
4.26 %
|
|
3.64 %
|
|
3.59 %
|
SBA PPP
|
|
1,254
|
|
4,696
|
|
105,742
|
|
15.67 %
|
|
13.88 %
|
|
7.22 %
|
Municipal(1)
|
|
22,574
|
|
18,633
|
|
17,021
|
|
3.01 %
|
|
3.13 %
|
|
3.41 %
|
Residential real
estate
|
|
1,571,449
|
|
1,457,639
|
|
1,174,559
|
|
3.49 %
|
|
3.42 %
|
|
3.53 %
|
Consumer and home
equity
|
|
252,145
|
|
240,967
|
|
242,921
|
|
5.21 %
|
|
4.26 %
|
|
4.27 %
|
Total loans
|
|
3,796,212
|
|
3,621,459
|
|
3,299,063
|
|
3.91 %
|
|
3.64 %
|
|
3.73 %
|
Total
interest-earning assets
|
|
5,224,108
|
|
5,152,043
|
|
5,002,541
|
|
3.40 %
|
|
3.11 %
|
|
2.97 %
|
Other assets
|
|
292,973
|
|
259,592
|
|
384,766
|
|
|
|
|
|
|
Total
assets
|
|
$
5,517,081
|
|
$
5,411,635
|
|
$
5,387,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities &
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
checking
|
|
$
1,243,174
|
|
$
1,199,678
|
|
$
1,251,492
|
|
— %
|
|
— %
|
|
— %
|
Interest
checking
|
|
1,502,436
|
|
1,426,335
|
|
1,246,634
|
|
0.85 %
|
|
0.32 %
|
|
0.20 %
|
Savings
|
|
774,725
|
|
751,274
|
|
688,331
|
|
0.04 %
|
|
0.04 %
|
|
0.04 %
|
Money
market
|
|
720,641
|
|
707,176
|
|
709,705
|
|
0.84 %
|
|
0.42 %
|
|
0.29 %
|
Certificates of
deposit
|
|
290,043
|
|
298,335
|
|
327,802
|
|
0.45 %
|
|
0.44 %
|
|
0.49 %
|
Total
deposits
|
|
4,531,019
|
|
4,382,798
|
|
4,223,964
|
|
0.45 %
|
|
0.21 %
|
|
0.15 %
|
Borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokered
deposits
|
|
80,701
|
|
145,735
|
|
289,374
|
|
1.40 %
|
|
0.59 %
|
|
0.45 %
|
Customer repurchase
agreements
|
|
228,495
|
|
223,212
|
|
182,114
|
|
0.57 %
|
|
0.40 %
|
|
0.26 %
|
Subordinated
debentures
|
|
44,331
|
|
44,331
|
|
44,331
|
|
4.83 %
|
|
4.81 %
|
|
4.81 %
|
Other
borrowings
|
|
108,084
|
|
85,917
|
|
—
|
|
1.68 %
|
|
1.07 %
|
|
— %
|
Total
borrowings
|
|
461,611
|
|
499,195
|
|
515,819
|
|
1.38 %
|
|
0.97 %
|
|
0.76 %
|
Total funding
liabilities
|
|
4,992,630
|
|
4,881,993
|
|
4,739,783
|
|
0.54 %
|
|
0.29 %
|
|
0.22 %
|
Other
liabilities
|
|
71,636
|
|
71,838
|
|
94,803
|
|
|
|
|
|
|
Shareholders'
equity
|
|
452,815
|
|
457,804
|
|
552,721
|
|
|
|
|
|
|
Total liabilities
& shareholders' equity
|
|
$
5,517,081
|
|
$
5,411,635
|
|
$
5,387,307
|
|
|
|
|
|
|
Net interest rate
spread (fully-taxable equivalent)
|
|
2.86 %
|
|
2.82 %
|
|
2.75 %
|
Net interest margin
(fully-taxable equivalent)
|
|
2.88 %
|
|
2.84 %
|
|
2.76 %
|
Adjusted net
interest margin (fully-taxable equivalent)
(non-GAAP)
|
|
2.88 %
|
|
2.85 %
|
|
2.82 %
|
(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.
|
Year-to-Date Average
Balance and Yield/Rate Analysis
(unaudited)
|
|
|
|
Average
Balance
|
|
Yield/Rate
|
|
|
For The Nine Months
Ended
|
|
For The Nine Months
Ended
|
(Dollars in
thousands)
|
|
September
30,
2022
|
|
September
30,
2021
|
|
September
30,
2022
|
|
September
30,
2021
|
Assets
|
|
|
|
|
|
|
|
|
Interest-earning
assets:
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits in other banks and other interest-earning
assets
|
|
$
60,105
|
|
$
250,715
|
|
0.57 %
|
|
0.10 %
|
Investments -
taxable
|
|
1,354,339
|
|
1,121,569
|
|
1.79 %
|
|
1.66 %
|
Investments -
nontaxable(1)
|
|
112,526
|
|
115,755
|
|
3.49 %
|
|
3.28 %
|
Loans(2):
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
1,512,285
|
|
1,400,224
|
|
3.81 %
|
|
3.59 %
|
Commercial(1)
|
|
391,540
|
|
341,510
|
|
3.82 %
|
|
3.81 %
|
SBA PPP
|
|
9,138
|
|
139,453
|
|
18.01 %
|
|
5.19 %
|
Municipal(1)
|
|
18,837
|
|
22,404
|
|
3.17 %
|
|
3.32 %
|
Residential real
estate
|
|
1,459,659
|
|
1,117,389
|
|
3.46 %
|
|
3.67 %
|
Consumer and home
equity
|
|
240,041
|
|
255,058
|
|
4.60 %
|
|
4.20 %
|
Total loans
|
|
3,631,500
|
|
3,276,038
|
|
3.75 %
|
|
3.75 %
|
Total
interest-earning assets
|
|
5,158,470
|
|
4,764,077
|
|
3.19 %
|
|
3.06 %
|
Other assets
|
|
291,821
|
|
389,409
|
|
|
|
|
Total
assets
|
|
$
5,450,291
|
|
$
5,153,486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities &
Shareholders' Equity
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
Non-interest
checking
|
|
$
1,214,263
|
|
$
1,014,778
|
|
— %
|
|
— %
|
Interest
checking
|
|
1,448,146
|
|
1,282,358
|
|
0.46 %
|
|
0.19 %
|
Savings
|
|
759,053
|
|
658,497
|
|
0.04 %
|
|
0.04 %
|
Money
market
|
|
712,729
|
|
699,594
|
|
0.52 %
|
|
0.30 %
|
Certificates of
deposit
|
|
297,646
|
|
339,230
|
|
0.44 %
|
|
0.55 %
|
Total
deposits
|
|
4,431,837
|
|
3,994,457
|
|
0.27 %
|
|
0.17 %
|
Borrowings:
|
|
|
|
|
|
|
|
|
Brokered
deposits
|
|
133,928
|
|
286,080
|
|
0.74 %
|
|
0.45 %
|
Customer repurchase
agreements
|
|
220,026
|
|
177,559
|
|
0.41 %
|
|
0.31 %
|
Subordinated
debentures
|
|
44,331
|
|
50,045
|
|
4.83 %
|
|
5.30 %
|
Other
borrowings
|
|
65,595
|
|
4,762
|
|
1.41 %
|
|
0.99 %
|
Total
borrowings
|
|
463,880
|
|
518,446
|
|
1.07 %
|
|
0.88 %
|
Total funding
liabilities
|
|
4,895,717
|
|
4,512,903
|
|
0.35 %
|
|
0.25 %
|
Other
liabilities
|
|
76,154
|
|
98,742
|
|
|
|
|
Shareholders'
equity
|
|
478,420
|
|
541,841
|
|
|
|
|
Total liabilities
& shareholders' equity
|
|
$
5,450,291
|
|
$
5,153,486
|
|
|
|
|
Net interest rate
spread (fully-taxable equivalent)
|
|
2.84 %
|
|
2.81 %
|
Net interest margin
(fully-taxable equivalent)
|
|
2.86 %
|
|
2.82 %
|
Adjusted net
interest margin (fully-taxable equivalent)
(non-GAAP)
|
|
2.86 %
|
|
2.87 %
|
(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
Nine Months
Ended
September 30,
2022
|
|
At or For
The
Six Months
Ended
June 30,
2022
|
|
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
|
Non-accrual
loans:
|
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
|
$
1,562
|
|
$
1,831
|
|
$
2,052
|
|
$
2,107
|
|
$
2,576
|
Commercial real
estate
|
|
73
|
|
182
|
|
183
|
|
184
|
|
207
|
Commercial
|
|
541
|
|
723
|
|
1,045
|
|
829
|
|
860
|
Consumer and home
equity
|
|
589
|
|
769
|
|
1,172
|
|
1,207
|
|
1,429
|
Total non-accrual
loans
|
|
2,765
|
|
3,505
|
|
4,452
|
|
4,327
|
|
5,072
|
Accruing troubled-debt
restructured loans not
included above
|
|
2,285
|
|
2,316
|
|
2,303
|
|
2,392
|
|
2,564
|
Total non-performing
loans
|
|
5,050
|
|
5,821
|
|
6,755
|
|
6,719
|
|
7,636
|
Other real estate
owned
|
|
—
|
|
—
|
|
—
|
|
165
|
|
165
|
Total non-performing
assets
|
|
$
5,050
|
|
$
5,821
|
|
$
6,755
|
|
$
6,884
|
|
$
7,801
|
Loans 30-89 days
past due:
|
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
|
$
2,326
|
|
$
918
|
|
$
575
|
|
$
400
|
|
$
1,195
|
Commercial real
estate
|
|
195
|
|
258
|
|
91
|
|
47
|
|
—
|
Commercial
|
|
1,344
|
|
422
|
|
169
|
|
552
|
|
557
|
Consumer and home
equity
|
|
843
|
|
577
|
|
466
|
|
509
|
|
386
|
Total loans 30-89
days past due
|
|
$
4,708
|
|
$
2,175
|
|
$
1,301
|
|
$
1,508
|
|
$
2,138
|
ACL on loans at the
beginning of the period
|
|
$
33,256
|
|
$
33,256
|
|
$
33,256
|
|
$
37,865
|
|
$
37,865
|
Provision (credit) for
loan losses
|
|
3,788
|
|
1,275
|
|
(1,236)
|
|
(3,817)
|
|
(5,037)
|
Charge-offs:
|
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
|
65
|
|
16
|
|
—
|
|
92
|
|
92
|
Commercial real
estate
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Commercial
|
|
744
|
|
561
|
|
245
|
|
799
|
|
503
|
Consumer and home
equity
|
|
130
|
|
84
|
|
67
|
|
273
|
|
233
|
Total
charge-offs
|
|
939
|
|
661
|
|
312
|
|
1,164
|
|
828
|
Total
recoveries
|
|
(437)
|
|
(374)
|
|
(62)
|
|
(372)
|
|
(272)
|
Net
charge-offs
|
|
502
|
|
287
|
|
250
|
|
792
|
|
556
|
ACL on loans at the
end of the period
|
|
$
36,542
|
|
$
34,244
|
|
$
31,770
|
|
$
33,256
|
|
$
32,272
|
Components of
ACL:
|
|
|
|
|
|
|
|
|
|
|
ACL on
loans
|
|
$
36,542
|
|
$
34,244
|
|
$
31,770
|
|
$
33,256
|
|
$
32,272
|
ACL on off-balance
sheet credit exposures(1)
|
|
3,441
|
|
3,190
|
|
3,356
|
|
3,195
|
|
3,185
|
ACL, end of
period
|
|
$
39,983
|
|
$
37,434
|
|
$
35,126
|
|
$
36,451
|
|
$
35,457
|
Ratios:
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans to
total loans
|
|
0.13 %
|
|
0.16 %
|
|
0.19 %
|
|
0.20 %
|
|
0.23 %
|
Non-performing assets
to total assets
|
|
0.09 %
|
|
0.11 %
|
|
0.12 %
|
|
0.13 %
|
|
0.14 %
|
ACL on loans to total
loans
|
|
0.95 %
|
|
0.92 %
|
|
0.90 %
|
|
0.97 %
|
|
0.97 %
|
Net charge-offs to
average loans (annualized):
|
|
|
|
|
|
|
|
|
|
|
Quarter-to-date
|
|
0.02 %
|
|
0.00 %
|
|
0.03 %
|
|
0.03 %
|
|
0.01 %
|
Year-to-date
|
|
0.02 %
|
|
0.02 %
|
|
0.03 %
|
|
0.02 %
|
|
0.02 %
|
ACL on loans to
non-performing loans
|
|
723.60 %
|
|
588.28 %
|
|
470.32 %
|
|
494.95 %
|
|
422.63 %
|
Loans 30-89 days past
due to total loans
|
|
0.12 %
|
|
0.06 %
|
|
0.04 %
|
|
0.04 %
|
|
0.06 %
|
|
(1)
Presented within accrued interest and other liabilities on the
consolidated statements of condition.
|
Reconciliation of
non-GAAP to GAAP Financial Measures (unaudited)
|
|
Return on Average
Tangible Equity:
|
|
|
|
|
|
|
For
the
Three Months
Ended
|
|
For
the
Nine Months
Ended
|
(Dollars in
thousands)
|
|
September
30,
2022
|
|
June
30,
2022
|
|
September
30,
2021
|
|
September
30,
2022
|
|
September
30,
2021
|
Net income, as
presented
|
|
$
14,267
|
|
$
15,026
|
|
$
14,640
|
|
$
46,088
|
|
$
52,523
|
Add: amortization of
core deposit intangible
assets, net of tax(1)
|
|
123
|
|
124
|
|
129
|
|
371
|
|
388
|
Net income, adjusted
for amortization of core
deposit intangible assets
|
|
$
14,390
|
|
$
15,150
|
|
$
14,769
|
|
$
46,459
|
|
$
52,911
|
Average equity, as
presented
|
|
$ 452,815
|
|
$ 457,804
|
|
$ 552,721
|
|
$ 478,420
|
|
$ 541,841
|
Less: average goodwill
and core deposit
intangible assets
|
|
(96,493)
|
|
(96,648)
|
|
(97,128)
|
|
(96,651)
|
|
(97,293)
|
Average tangible
equity
|
|
$ 356,322
|
|
$ 361,156
|
|
$ 455,593
|
|
$ 381,769
|
|
$ 444,548
|
Return on average
equity
|
|
12.50 %
|
|
13.16 %
|
|
10.51 %
|
|
12.88 %
|
|
12.96 %
|
Return on average
tangible equity
|
|
16.02 %
|
|
16.83 %
|
|
12.86 %
|
|
16.27 %
|
|
15.91 %
|
|
(1) Assumed a 21% tax
rate.
|
Efficiency
Ratio:
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the
Three Months
Ended
|
|
For
the
Nine Months
Ended
|
(Dollars in
thousands)
|
|
September
30,
2022
|
|
June
30,
2022
|
|
September
30,
2021
|
|
September
30,
2022
|
|
September
30,
2021
|
Non-interest expense,
as presented
|
|
$
27,091
|
|
$
26,556
|
|
$
26,263
|
|
$
79,856
|
|
$
76,752
|
Less: prepayment
penalty on borrowings
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(514)
|
Adjusted non-interest
expense
|
|
$
27,091
|
|
$
26,556
|
|
$
26,263
|
|
$
79,856
|
|
$
76,238
|
Net interest income, as
presented
|
|
$
37,813
|
|
$
36,534
|
|
$
34,746
|
|
$ 110,712
|
|
$ 100,639
|
Add: effect of
tax-exempt income(1)
|
|
242
|
|
231
|
|
228
|
|
700
|
|
764
|
Non-interest income, as
presented
|
|
9,954
|
|
11,141
|
|
11,099
|
|
30,920
|
|
37,634
|
Add: net loss on sale
of securities
|
|
—
|
|
9
|
|
—
|
|
9
|
|
—
|
Adjusted net interest
income plus non-interest
income
|
|
$
48,009
|
|
$
47,915
|
|
$
46,073
|
|
$ 142,341
|
|
$ 139,037
|
GAAP efficiency
ratio
|
|
56.71 %
|
|
55.70 %
|
|
57.29 %
|
|
56.38 %
|
|
55.51 %
|
Non-GAAP efficiency
ratio
|
|
56.43 %
|
|
55.42 %
|
|
57.00 %
|
|
56.10 %
|
|
54.83 %
|
|
(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
|
|
For
the
Nine Months
Ended
|
(In
thousands)
|
|
September
30,
2022
|
|
June
30,
2022
|
|
September
30,
2021
|
|
September
30,
2022
|
|
September
30,
2021
|
Net income, as
presented
|
|
$
14,267
|
|
$
15,026
|
|
$
14,640
|
|
$
46,088
|
|
$
52,523
|
Add: provision
(credit) for credit losses
|
|
2,764
|
|
2,345
|
|
939
|
|
4,034
|
|
(4,420)
|
Add: income tax
expense
|
|
3,645
|
|
3,748
|
|
4,003
|
|
11,654
|
|
13,418
|
Earnings before income
taxes and provision
for credit losses
|
|
20,676
|
|
21,119
|
|
19,582
|
|
61,776
|
|
61,521
|
Less: SBA PPP loan
income
|
|
(50)
|
|
(165)
|
|
(1,951)
|
|
(1,248)
|
|
(5,487)
|
Earnings before income
taxes and provision
(credit) for credit losses and SBA PPP loan
income
|
|
$
20,626
|
|
$
20,954
|
|
$
17,631
|
|
$
60,528
|
|
$
56,034
|
Adjusted Yield on
Interest-Earning Assets:
|
|
|
For
the
Three Months
Ended
|
|
For
the
Nine Months
Ended
|
|
|
September
30,
2022
|
|
June
30,
2022
|
|
September
30,
2021
|
|
September
30,
2022
|
|
September
30,
2021
|
Yield on
interest-earning assets, as presented
|
|
3.40 %
|
|
3.11 %
|
|
2.97 %
|
|
3.19 %
|
|
3.06 %
|
Add: effect of excess
liquidity on yield on
interest-earning assets
|
|
— %
|
|
0.02 %
|
|
0.16 %
|
|
0.03 %
|
|
0.12 %
|
Less: effect of SBA
PPP loans on yield on
interest-earning assets
|
|
(0.01) %
|
|
(0.01) %
|
|
(0.09) %
|
|
(0.02) %
|
|
(0.06) %
|
Adjusted yield on
interest-earning assets
|
|
3.39 %
|
|
3.12 %
|
|
3.04 %
|
|
3.20 %
|
|
3.12 %
|
Adjusted Net
Interest Margin (Fully-Taxable Equivalent):
|
|
|
For
the
Three Months
Ended
|
|
For
the
Nine Months
Ended
|
|
|
September
30,
2022
|
|
June
30,
2022
|
|
September
30,
2021
|
|
September
30,
2022
|
|
September
30,
2021
|
Net interest margin
(fully-taxable equivalent),
as presented
|
|
2.88 %
|
|
2.84 %
|
|
2.76 %
|
|
2.86 %
|
|
2.82 %
|
Add: effect of excess
liquidity on net
interest margin (fully-taxable equivalent)
|
|
— %
|
|
0.02 %
|
|
0.15 %
|
|
0.02 %
|
|
0.12 %
|
Less: effect of SBA
PPP loans on net
interest margin (fully-taxable equivalent)
|
|
— %
|
|
(0.01) %
|
|
(0.09) %
|
|
(0.02) %
|
|
(0.07) %
|
Adjusted net interest
margin (fully-taxable
equivalent)
|
|
2.88 %
|
|
2.85 %
|
|
2.82 %
|
|
2.86 %
|
|
2.87 %
|
Tangible Book
Value Per Share and Tangible Common Equity
Ratio:
|
|
|
September
30,
2022
|
|
June
30,
2022
|
|
September
30,
2021
|
(In thousands,
except number of shares, per share data and ratios)
|
|
Tangible Book
Value Per Share:
|
|
|
|
|
|
|
Shareholders' equity,
as presented
|
|
$ 431,007
|
|
$ 446,381
|
|
$ 545,984
|
Less: goodwill and
other intangible assets
|
|
(96,416)
|
|
(96,573)
|
|
(97,049)
|
Tangible shareholders'
equity
|
|
$ 334,591
|
|
$ 349,808
|
|
$ 448,935
|
Shares outstanding at
period end
|
|
14,563,828
|
|
14,625,041
|
|
14,849,327
|
Book value per
share
|
|
$
29.59
|
|
$
30.52
|
|
$
36.77
|
Tangible book value per
share
|
|
$
22.97
|
|
$
23.92
|
|
$
30.23
|
Tangible Common
Equity Ratio:
|
Total assets
|
|
$
5,551,724
|
|
$
5,466,496
|
|
$
5,502,902
|
Less: goodwill and
other intangible assets
|
|
(96,416)
|
|
(96,573)
|
|
(97,049)
|
Tangible
assets
|
|
$
5,455,308
|
|
$
5,369,923
|
|
$
5,405,853
|
Common equity
ratio
|
|
7.76 %
|
|
8.17 %
|
|
9.92 %
|
Tangible common equity
ratio
|
|
6.13 %
|
|
6.51 %
|
|
8.30 %
|
Core
Deposits:
|
(In
thousands)
|
|
September
30,
2022
|
|
June 30,
2022
|
|
September
30,
2021
|
Total
deposits
|
|
$
4,568,604
|
|
$
4,527,061
|
|
$
4,605,180
|
Less: certificates of
deposit
|
|
(279,603)
|
|
(296,408)
|
|
(323,395)
|
Less: brokered
deposits
|
|
(89,775)
|
|
(83,379)
|
|
(288,975)
|
Core
deposits
|
|
$
4,199,226
|
|
$
4,147,274
|
|
$
3,992,810
|
Average Core
Deposits:
|
|
|
|
|
|
|
For
the
Three Months
Ended
|
|
For
the
Nine Months
Ended
|
(In
thousands)
|
|
September
30,
2022
|
|
June
30,
2022
|
|
September
30,
2021
|
|
September
30,
2022
|
|
September
30,
2021
|
Total average
deposits
|
|
$
4,531,019
|
|
$
4,382,798
|
|
$
4,223,964
|
|
$
4,431,837
|
|
$
3,994,457
|
Less: average
certificates of deposit
|
|
(290,043)
|
|
(298,335)
|
|
(327,802)
|
|
(297,646)
|
|
(339,230)
|
Average core
deposits
|
|
$
4,240,976
|
|
$
4,084,463
|
|
$
3,896,162
|
|
$
4,134,191
|
|
$
3,655,227
|
Total loans,
excluding SBA PPP loans:
|
|
|
|
|
|
|
(In
thousands)
|
|
September
30,
2022
|
|
June
30,
2022
|
|
September
30,
2021
|
Total loans, as
presented
|
|
$
3,860,680
|
|
$
3,724,227
|
|
$
3,315,303
|
Less: SBA PPP
loans
|
|
(685)
|
|
(2,509)
|
|
(81,959)
|
Total loans, excluding
SBA PPP loans
|
|
$
3,859,995
|
|
$
3,721,718
|
|
$
3,233,344
|
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SOURCE Camden National Corporation