Key Highlights

  • Net income rose 8% year over year to USD 22.8 million, or USD 1.34 per diluted share.
  • Net interest margin expanded 15 basis points from the second quarter to 3.41% as borrowings fell 26% on average.
  • Deposits grew 5% in the quarter to USD 5.8 billion, with core deposits up 7% to USD 5.2 billion.
  • Non-performing loans were 0.16% of total loans, and annualized net charge-offs were 0.07% of average loans.

Deposit Growth Reshapes Funding

Camden National (NASDAQ:CAC) reported on Tuesday third-quarter net income of USD 22.8 million, or USD 1.34 per diluted share, up 8% and 7% from a year earlier and each 1% below the prior quarter's record. Return on average assets was 1.31%, return on average equity 12.36%, and return on average tangible equity 17.47% on a non-GAAP basis. Nine-month net income reached a record USD 67.7 million, or USD 3.98 per share, against USD 42.6 million and USD 2.51.

Total deposits rose 5% from June to USD 5.8 billion, with core deposits up 7% to USD 5.2 billion, or 88% of the total. Borrowings fell to USD 374.4 million from USD 571.1 million, and the loan-to-deposit ratio dropped to 86% from 90%. Chief Executive Simon Griffiths tied the margin gain to deposit growth and customer acquisition.

Margin, Credit and Expenses

Net interest income rose 5% from the second quarter to USD 55.4 million, and the net interest margin widened to 3.41% as a 3% rise in average deposits supported a 26% reduction in average borrowings. Fair value mark accretion added USD 4.2 million, or 31 basis points of margin.

Provision expense was USD 1.9 million against USD 710,000, and the allowance for credit losses was 0.92% of total loans. Non-performing loans were 0.16% of loans and past-due loans 0.14%.

Non-interest income fell 8% to USD 13.2 million on quarter-end fair value adjustments to mortgage banking and bank-owned life insurance income. Non-interest expense was USD 37.5 million, up less than 1%, and the GAAP efficiency ratio improved to 54.60% from 55.42%.

Capital and Securities

Total assets were USD 7.1 billion and loans USD 5.0 billion, with commercial real estate loans down 2% and commercial loans down 3% on large prepayments. Higher rates widened unrealized losses on available-for-sale securities by USD 32.6 million to USD 77.5 million, reducing tangible book value per share to USD 31.40 from USD 31.64 in June.

Book value per share was USD 42.65, up 7% from a year earlier. The Common Equity Tier 1 ratio was 12.53% and the Tier 1 leverage ratio 9.92%. No shares were repurchased in the quarter. The board declared a dividend of USD 0.42 per share, payable on Oct. 30 to holders of record on Oct. 15, an annualized yield of 3.04% on the Sept. 30 close of USD 55.35.

Regional Bank Markers to Follow

Tracking points include net interest margin against 3.41%, core deposit share relative to 88%, and loan balances after USD 2.2 million of net decline in the quarter.

Further items are the unrealized loss on the securities portfolio against USD 77.5 million, the efficiency ratio relative to 54.60%, and provision expense against the allowance of 0.92% of loans.