Exhibit 99.1
Camden National Corporation Reports 18% Increase in Earnings for the Third Quarter of 2010
CAMDEN, Maine--(BUSINESS WIRE)--October 26, 2010--Camden National Corporation (NASDAQ: CAC; the “Company”) reported net income of $7.4 million for the three months ended September 30, 2010 compared to $6.3 million in the third quarter of 2009 and $5.6 million in the second quarter of 2010. Net income for the third quarter of 2010 compared to the same period a year ago increased $1.1 million or 18%. Earnings per diluted share for the third quarter of 2010 were $0.97 compared to $0.83 for the same period last year and $0.73 in the previous quarter. For the third quarter of 2010, return on average assets was 1.29% and return on average equity was 14.66%.
Net income for the nine months ended September 30, 2010 was $18.3 million, an increase of 5% compared to $17.5 million for the same period in 2009. The return on average assets and average equity for the nine months ended September 30, 2010 was 1.08% and 12.43%, respectively.
Earnings for the third quarter were positively impacted by the legal settlement related to the Company’s investment in auction pass-through certificates with Federal Home Loan Mortgage Corporation preferred stock assets. This settlement resulted in an additional $2.0 million in pre-tax income or $0.17 per diluted common share after tax. “We are pleased that rigorous legal pursuit resulted in a partial recovery of the $15.0 million investment write-down recorded in 2008,” said Gregory A. Dufour, president and chief executive officer of the company. “The Company experienced an improvement in net interest income and lower credit provisions this quarter that were offset by a decline in non-interest income (excluding the $2.0 million legal settlement) and increased salaries and employee benefit expenses.”
Asset Quality and the Provision for Credit Losses
The Company’s level of non-performing assets declined in the third quarter of 2010 due to a combination of the sale of other real estate owned, charge-offs and fewer loans moving into non-performing status. Non-performing assets were $23.7 million, or 1.03% of total assets, at September 30, 2010 compared to $25.9 million, or 1.13% of total assets, at June 30, 2010 and $25.1 million, or 1.13% of total assets, at December 31, 2009. The Company’s non-performing assets to total assets ratio compares favorably to its national peer group’s average of 3.86% based on the most recent Bank Holding Company Performance Report dated June 30, 2010 provided by the Federal Reserve System.
Net loan charge-offs were $1.2 million and $3.2 million in the three and nine months ended September 30, 2010, respectively, compared with $1.2 million and $4.8 million in the same periods a year ago, respectively. Annualized net charge-offs to average loans equaled 0.32% for the third quarter of 2010 as well as for the third quarter of 2009 and the year-to-date annualized net charge-offs equaled 0.27% for 2010 and 0.42% for the same period a year ago. The Company’s annualized net loan charge-offs ratio compares favorably to its national peer group’s average of 1.15% based on the most recent Bank Holding Company Performance Report dated June 30, 2010 provided by the Federal Reserve System.
The provision for credit losses of $1.3 million for the third quarter of 2010 was slightly higher than the net loan charge-offs for the period resulting in the allowance for credit losses of 1.45% of total loans at September 30, 2010 which is consistent with the level at June 30, 2010. “Non-performing assets have shown signs of stabilization during 2010,” said Dufour. “However, we remain cautious as we recognize that the current economic situation might not change substantially until unemployment and the housing market show sustained signs of improvement.”
Balance Sheet Highlights
The Company’s total assets at September 30, 2010 were $2.3 billion, an increase of 2% compared to September 30, 2009. The $35.3 million increase in total assets is primarily due to increases in loans of $16.4 million and investments of $12.6 million. Growth in the loan portfolio resulted from an increase in commercial real estate loans of 5% and a home equity promotion that contributed to the increase in the consumer loan portfolio of 6%. These increases were partially offset by declines in commercial loans of 4% and residential real estate loans of 2%.
Deposits at September 30, 2010 were $1.6 billion, an increase of $68.9 million, or 5%, from September 30, 2009. The deposit growth is primarily derived from low cost deposits with an increase in demand deposit accounts of 13% and an increase in interest checking, savings and money market accounts of 7% from a year ago. Brokered funds increased $70.7 million from September 30, 2009 as a result of more favorable pricing compared to other funding alternatives, including retail certificates of deposit which declined $74.8 million from a year ago. Municipal relationships continue to represent a major contributing factor in the growth of interest checking balances during the past year.
Net Interest Income
Net interest income for the third quarter of 2010 increased to $18.9 million compared to $18.2 million for the third quarter of 2009 and $18.6 million for the second quarter of 2010. The tax equivalent net interest margin of 3.61% for the third quarter of 2010 represents an increase from 3.51% for the same period in 2009 and 3.59% for the second quarter of 2010.
The Company’s yield on earning assets was 4.99% in the third quarter of 2010 compared to 5.35% in the same period a year ago and 5.08% in the second quarter of 2010. The Company’s earning asset yield has gradually declined over the past year as the result of reinvestment of cash flows at lower rates, particularly in the investment portfolio.
The cost of funds was 1.60% in the third quarter of 2010 compared to 2.06% in the same period a year ago and 1.67% in the second quarter of 2010. The cost of funds declined over the past year due to lower interest rates on deposit accounts, maturing retail certificates of deposit and wholesale funding combined with a favorable change in the Company’s deposit mix as a result of growth in lower cost transaction accounts (demand deposit and interest checking accounts). Average transaction account balances increased $60.7 million, or 14%, in the third quarter of 2010 compared to the third quarter of 2009.
Net interest income for the nine months ended September 30, 2010 totaled $55.5 million, an increase of $429,000, or 1%, compared with $55.1 million for the same period a year ago. The increase in net interest income was achieved through an improvement in the Company’s tax equivalent net interest margin of 7 basis points to 3.59%, despite a decline in the average earning assets of $35.9 million in the first nine months of 2010 compared with the same period a year ago. A decrease of 40 basis points in the Company’s earning asset yield in the first nine months of 2010 as compared with the same period in 2009 was offset by a decrease of 49 basis points in the cost of funds.
Non-Interest Income and Non-Interest Expense
Non-interest income was $6.8 million in the third quarter of 2010 compared to $5.1 million in the third quarter of 2009 and $4.4 million in the second quarter of 2010. The increase of $1.7 million, or 32%, for the third quarter of 2010 compared to the same period in 2009 was primarily due to a $2.0 million legal settlement, increases in debit card interchange income of $185,000, and an increase in fiduciary services income of $147,000. These increases were offset by a $191,000 reduction in mortgage banking income, a decline in overdraft fees of $190,000, and a loss on the sale of securities of $188,000.
Non-interest income of $15.8 million for the nine months ended September 30, 2010 represents an increase of $1.1 million, or 7%, compared to the same period in 2009. This increase was primarily due to the $2.0 million legal settlement during the third quarter of 2010 partially offset by a reduction in mortgage banking income of $890,000 related to the sale of $72.5 million in residential mortgage loans during the first nine months of 2009 compared to loan sales of $4.7 million in the first nine months of 2010.
Non-interest expense was $13.5 million for the third quarter of 2010 compared to $12.1 million in the third quarter of 2009 and $12.9 million in the second quarter of 2010. The increase of $1.3 million, or 11%, for the third quarter of 2010 compared to the same period in 2009 was primarily the result of: 1) increases in salaries and employee benefits of $878,000 which reflects an increase in incentive compensation of $441,000 resulting from the success of exceeding financial performance targets, as well as a 5% increase in salary expense related to merit increases and new positions and a 17% increase in health insurance costs; 2) an increase in FDIC assessments of $141,000; 3) higher debit card expenses of $117,000; and 4) an increase in employee hiring and training costs of $87,000.
Non-interest expense of $39.2 million for the nine months ended September 30, 2010 increased 4% compared to the same period in 2009. The $1.4 million increase is due to increases in salaries and employee benefits of $1.3 million, OREO and collection costs of $827,000, and furniture, equipment and data processing costs of $318,000 partially offset by a decline in FDIC assessment costs of $1.2 million.
The Company’s efficiency ratio was 51.22% in the third quarter of 2010 compared to 51.02% in same period a year ago and 54.76% in the second quarter of 2010. The Company’s efficiency ratio was 53.90% in the nine months ended September 30, 2010 compared to 53.21% in the same period a year ago.
Dividends and Capital
The Board of Directors approved a dividend of $0.25 per share, payable on October 29, 2010 to shareholders of record on October 15, 2010. This resulted in an annualized dividend yield of 2.89% based on the September 30, 2010 closing price of the Company’s common stock of $34.65 per share as reported by NASDAQ.
The Company’s total risk-based capital ratio increased to 14.53% at September 30, 2010 compared to 13.15% at September 30, 2009 and 13.49% at December 31, 2009 as capital levels increased from retained earnings. The Company and Camden National Bank exceeded the minimum total risk-based, tier 1, and tier 1 leverage ratios of 10.0%, 6.0%, and 5.0%, respectively, required by the Federal Reserve for an institution to be considered “well capitalized.”
About Camden National Corporation
Camden National Corporation, ranked 12th in USBanker's 2010 list of top-performing mid-tier banks, is the holding company employing more than 400 Maine residents for two financial services companies: Camden National Bank, along with its division Union Trust, and the wealth management company, Acadia Trust, N.A. Camden National Bank, named in 2009 as the Finance Authority of Maine’s “Financial Institution of the Year,” is a full-service community bank with a network of 38 banking offices serving coastal, western, central, and eastern Maine, plus online banking at CamdenNational.com and UnionTrust.com. Acadia Trust offers investment management and fiduciary services with offices in Portland, Bangor, and Ellsworth. Located at Camden National Bank, Acadia Financial Consultants offers full-service brokerage and insurance services.
Forward-Looking Statements
This press release and the documents incorporated by reference herein contain certain statements that may be considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “will,” “should,” and other expressions which predict or indicate future events or trends and which do not relate to historical matters. Forward-looking statements should not be relied on, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of the Company. These risks, uncertainties and other factors may cause the actual results, performance or achievements of the Company to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.
Some of the factors that might cause these differences include the following: general, national, regional or local economic conditions which are less favorable than anticipated; changes in loan default and charge-off rates; declines in the equity and financial markets; reductions in deposit levels; declines in mortgage loan refinancing, equity loan and line of credit activity; changes in the domestic interest rate environment and inflation; changes in the carrying value of investment securities and other assets; further actions by the U.S. government and Treasury Department, including actions similar to the Federal Home Loan Mortgage Corporation conservatorship, which could have a negative impact on the Company’s investment portfolio and earnings; misalignment of the Company’s interest-bearing assets and liabilities; increases in loan repayment rates affecting interest income and the value of mortgage servicing rights; changing business, banking, or regulatory conditions or policies, or new legislation affecting the financial services industry, that could lead to changes in the competitive balance among financial institutions, restrictions on bank activities, changes in costs (including deposit insurance premiums), increased regulatory scrutiny, declines in consumer confidence in depository institutions, or changes in the secondary market for bank loan and other products; and changes in accounting rules, Federal and State laws, Internal Revenue Service regulations, and other regulations and policies governing financial holding companies and their subsidiaries which may impact our ability to take appropriate action to protect our financial interests in certain loan situations. Other factors could also cause these differences. For more information about these factors please see our Annual Report on Form 10-K, as updated by our Quarterly Reports on Form 10-Q and other filings on file with the SEC. All of these factors should be carefully reviewed, and readers should not place undue reliance on these forward-looking statements.
These forward-looking statements were based on information, plans and estimates at the date of this press release, and the Company does not promise to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.
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| Statement of Condition Data (unaudited) |
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| | | September 30, | | September 30, | | December 31, |
| (In thousands, except number of shares) | | 2010 | | | 2009 | | | 2009 | |
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| Assets | | | | | | | | | |
| Cash and due from banks | | $ | 33,382 | | | $ | 30,081 | | | $ | 29,772 | |
| Securities: | | | | | | | | | |
| Securities available for sale, at fair value | | | 541,235 | | | | 525,966 | | | | 479,708 | |
| Securities held to maturity, at amortized cost | | | 36,745 | | | | 39,366 | | | | 37,914 | |
| Federal Home Loan Bank and Federal Reserve Bank stock, at cost | | | 21,962 | | | | 21,965 | | | | 21,965 | |
| Total securities | | | 599,942 | | | | 587,297 | | | | 539,587 | |
| Trading account assets | | | 2,173 | | | | 1,667 | | | | 1,725 | |
| Loans held for sale | | | 2,456 | | | | 1,298 | | | | - | |
| Loans: | | | | | | | | | |
| Residential real estate | | | 613,890 | | | | 625,885 | | | | 627,655 | |
| Commercial real estate | | | 449,672 | | | | 428,059 | | | | 434,783 | |
| Commercial | | | 187,091 | | | | 195,818 | | | | 191,214 | |
| Consumer | | | 285,424 | | | | 269,919 | | | | 273,106 | |
| Total loans | | | 1,536,077 | | | | 1,519,681 | | | | 1,526,758 | |
| Less allowance for loan losses | | | (22,336 | ) | | | (19,435 | ) | | | (20,246 | ) |
| Net loans | | | 1,513,741 | | | | 1,500,246 | | | | 1,506,512 | |
| Goodwill and other intangible assets | | | 45,966 | | | | 46,543 | | | | 46,398 | |
| Bank-owned life insurance | | | 42,796 | | | | 41,310 | | | | 41,677 | |
| Premises and equipment, net | | | 25,884 | | | | 25,234 | | | | 26,054 | |
| Deferred tax asset | | | 11,317 | | | | 14,204 | | | | 10,317 | |
| Prepaid FDIC assessment | | | 6,686 | | | | 105 | | | | 8,197 | |
| Interest receivable | | | 7,337 | | | | 7,649 | | | | 7,236 | |
| Other real estate owned | | | 2,630 | | | | 5,465 | | | | 5,479 | |
| Other assets | | | 13,692 | | | | 11,647 | | | | 12,429 | |
| Total assets | | $ | 2,308,002 | | | $ | 2,272,746 | | | $ | 2,235,383 | |
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| Liabilities | | | | | | | | | |
| Deposits: | | | | | | | | | |
| Demand | | $ | 226,678 | | | $ | 201,451 | | | $ | 193,549 | |
| Interest checking, savings and money market | | | 747,000 | | | | 699,230 | | | | 675,681 | |
| Retail certificates of deposit | | | 492,397 | | | | 567,210 | | | | 545,789 | |
| Brokered deposits | | | 116,173 | | | | 45,443 | | | | 80,788 | |
| Total deposits | | | 1,582,248 | | | | 1,513,334 | | | | 1,495,807 | |
| Federal Home Loan Bank advances | | | 164,397 | | | | 210,495 | | | | 209,710 | |
| Other borrowed funds | | | 287,810 | | | | 291,646 | | | | 274,125 | |
| Junior subordinated debentures | | | 43,589 | | | | 43,487 | | | | 43,512 | |
| Accrued interest and other liabilities | | | 25,768 | | | | 27,013 | | | | 21,668 | |
| Total liabilities | | | 2,103,812 | | | | 2,085,975 | | | | 2,044,822 | |
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| Shareholders' Equity | | | | | | | | | |
| Common stock, no par value; authorized 20,000,000 shares, issued and | | | | | | | | | |
| outstanding 7,657,098, 7,644,829, and 7,644,837 shares on September 30, 2010 | | | | | | | | | |
| and 2009 and December 31, 2009, respectively | | | 50,763 | | | | 49,289 | | | | 50,062 | |
| Retained earnings | | | 146,179 | | | | 130,320 | | | | 133,634 | |
| Accumulated other comprehensive income | | | | | | | | | |
| Net unrealized gains on securities available for sale, net of tax | | | 10,817 | | | | 8,163 | | | | 7,083 | |
| Net unrealized (losses) gains on derivative instruments, at fair value, net of tax | | | (2,636 | ) | | | 11 | | | | 739 | |
| Net unrecognized losses on post-retirement plans, net of tax | | | (933 | ) | | | (1,012 | ) | | | (957 | ) |
| Total accumulated other comprehensive income | | | 7,248 | | | | 7,162 | | | | 6,865 | |
| Total shareholders' equity | | | 204,190 | | | | 186,771 | | | | 190,561 | |
| Total liabilities and shareholders' equity | | $ | 2,308,002 | | | $ | 2,272,746 | | | $ | 2,235,383 | |
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| Statement of Income Data (unaudited) | | | | | | |
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| | | | Three Months Ended September 30, | | | | Nine Months Ended September 30, |
| (In thousands, except number of shares and per share data) | | | 2010 | | | | 2009 | | | | | 2010 | | | | 2009 | |
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| Interest income | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 20,685 | | | $ | 21,121 | | | | $ | 61,725 | | | $ | 64,012 | |
| Interest on securities and other | | | 5,593 | | | | 6,859 | | | | | 17,051 | | | | 22,204 | |
| Total interest income | | | 26,278 | | | | 27,980 | | | | | 78,776 | | | | 86,216 | |
| Interest expense | | | | | | | | | | | | | |
| Interest on deposits | | | 3,734 | | | | 5,413 | | | | | 11,812 | | | | 17,743 | |
| Interest on borrowings | | | 3,665 | | | | 4,342 | | | | | 11,465 | | | | 13,403 | |
| Total interest expense | | | 7,399 | | | | 9,755 | | | | | 23,277 | | | | 31,146 | |
| Net interest income | | | 18,879 | | | | 18,225 | | | | | 55,499 | | | | 55,070 | |
| Provision for credit losses | | | 1,291 | | | | 2,000 | | | | | 5,237 | | | | 6,514 | |
| Net interest income after provision for credit losses | | | 17,588 | | | | 16,225 | | | | | 50,262 | | | | 48,556 | |
| Non-interest income | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 1,151 | | | | 1,361 | | | | | 3,716 | | | | 3,943 | |
| Other service charges and fees | | | 945 | | | | 777 | | | | | 2,507 | | | | 2,201 | |
| Income from fiduciary services | | | 1,618 | | | | 1,471 | | | | | 4,697 | | | | 4,332 | |
| Mortgage banking income | | | 160 | | | | 351 | | | | | 332 | | | | 1,222 | |
| Bank-owned life insurance | | | 401 | | | | 368 | | | | | 1,119 | | | | 1,108 | |
| Net (loss) gain on sale of securities | | | (188 | ) | | | 1 | | | | | (188 | ) | | | 1 | |
| Other income | | | 2,750 | | | | 815 | | | | | 3,830 | | | | 1,935 | |
| Non-interest income before other-than-temporary | | | | | | | | | | | | | |
| impairment of securities | | | 6,837 | | | | 5,144 | | | | | 16,013 | | | | 14,742 | |
| Other-than-temporary impairment of securities | | | (38 | ) | | | - | | | | | (217 | ) | | | - | |
| Total non-interest income | | | 6,799 | | | | 5,144 | | | | | 15,796 | | | | 14,742 | |
| Non-interest expenses | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 6,949 | | | | 6,071 | | | | | 19,472 | | | | 18,195 | |
| Net occupancy | | | 899 | | | | 874 | | | | | 2,830 | | | | 2,954 | |
| Furniture, equipment and data processing | | | 1,150 | | | | 1,045 | | | | | 3,396 | | | | 3,078 | |
| Consulting and professional fees | | | 589 | | | | 566 | | | | | 1,926 | | | | 1,750 | |
| OREO and collection costs | | | 636 | | | | 779 | | | | | 2,768 | | | | 1,941 | |
| Regulatory assessments | | | 832 | | | | 693 | | | | | 2,149 | | | | 3,304 | |
| Other expenses | | | 2,404 | | | | 2,119 | | | | | 6,697 | | | | 6,632 | |
| Total non-interest expenses | | | 13,459 | | | | 12,147 | | | | | 39,238 | | | | 37,854 | |
| Income before income taxes | | | 10,928 | | | | 9,222 | | | | | 26,820 | | | | 25,444 | |
| Income taxes | | | 3,487 | | | | 2,894 | | | | | 8,480 | | | | 7,898 | |
| Net income | | $ | 7,441 | | | $ | 6,328 | | | | $ | 18,340 | | | $ | 17,546 | |
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| Selected Financial and Per Share Data: | | | | | | | | | | | | | |
| Return on average equity | | | 14.66 | % | | | 13.93 | % | | | | 12.43 | % | | | 13.48 | % |
| Return on average tangible equity | | | 19.01 | % | | | 18.79 | % | | | | 16.22 | % | | | 18.43 | % |
| Return on average assets | | | 1.29 | % | | | 1.10 | % | | | | 1.08 | % | | | 1.02 | % |
| Efficiency ratio (1) | | | 51.22 | % | | | 51.02 | % | | | | 53.90 | % | | | 53.21 | % |
| Basic earnings per share | | $ | 0.97 | | | $ | 0.83 | | | $ | | 2.40 | | | $ | 2.30 | |
| Diluted earnings per share | | $ | 0.97 | | | $ | 0.83 | | | $ | | 2.39 | | | $ | 2.29 | |
| Cash dividends declared per share | | $ | 0.25 | | | $ | 0.25 | | | $ | | 0.75 | | | $ | 0.75 | |
| Weighted average number of common shares outstanding | | | 7,657,098 | | | | 7,644,829 | | | | | 7,655,097 | | | | 7,641,705 | |
| Diluted weighted average number of common shares outstanding | | | 7,663,051 | | | | 7,654,175 | | | | | 7,660,919 | | | | 7,645,824 | |
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(1) Computed by dividing non-interest expense by the sum of net interest income (tax equivalent) and non-interest income (excluding securities gains/losses). |
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| Asset Quality Data (unaudited) |
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| | | At or for Nine
Months Ended | | At or for Six
Months Ended | | At or for Three
Months Ended | | At or for Twelve
Months Ended | | At or for Nine
Months Ended |
| (In thousands) | | September 30, 2010 | | June 30, 2010 | | March 31, 2010 | | December 31, 2009 | | September 30, 2009 |
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| Non-accrual loans: | | | | | | | | | | | | | | | |
| Residential real estate | | $ | 5,793 | | | $ | 6,580 | | | $ | 6,234 | | | $ | 6,161 | | | $ | 5,779 | |
| Commercial real estate | | | 6,725 | | | | 7,130 | | | | 6,223 | | | | 6,476 | | | | 5,322 | |
| Commercial | | | 4,334 | | | | 5,379 | | | | 4,320 | | | | 4,145 | | | | 4,226 | |
| Consumer | | | 1,155 | | | | 1,249 | | | | 1,227 | | | | 1,158 | | | | 1,271 | |
| Total non-accrual loans | | | 18,007 | | | | 20,338 | | | | 18,004 | | | | 17,940 | | | | 16,598 | |
| Loans 90 days past due and accruing | | | 1,034 | | | | 545 | | | | 211 | | | | 1,135 | | | | 684 | |
| Renegotiated loans not included above | | | 2,055 | | | | 1,096 | | | | 677 | | | | 581 | | | | 917 | |
| Total non-performing loans | | | 21,096 | | | | 21,979 | | | | 18,892 | | | | 19,656 | | | | 18,199 | |
| Other real estate owned: | | | | | | | | | | | | | | | |
| Residential real estate | | | 412 | | | | 560 | | | | 570 | | | | 1,851 | | | | 2,314 | |
| Commercial real estate | | | 2,218 | | | | 3,407 | | | | 4,631 | | | | 3,628 | | | | 3,151 | |
| Total other real estate owned | | | 2,630 | | | | 3,967 | | | | 5,201 | | | | 5,479 | | | | 5,465 | |
| Total non-performing assets | | $ | 23,726 | | | $ | 25,946 | | | $ | 24,093 | | | $ | 25,135 | | | $ | 23,664 | |
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| Loans 30-89 days past due: | | | | | | | | | | | | | | | |
| Residential real estate | | $ | 3,186 | | | $ | 1,338 | | | $ | 74 | | | $ | 1,847 | | | $ | 2,397 | |
| Commercial real estate | | | 1,234 | | | | 749 | | | | 1,862 | | | | 2,196 | | | | 1,852 | |
| Commercial | | | 2,772 | | | | 1,367 | | | | 3,530 | | | | 639 | | | | 2,760 | |
| Consumer | | | 436 | | | | 537 | | | | 716 | | | | 563 | | | | 531 | |
| Total loans 30-89 days past due | | $ | 7,628 | | | $ | 3,991 | | | $ | 6,182 | | | $ | 5,245 | | | $ | 7,540 | |
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| Allowance for loan losses at the beginning of the period | | $ | 20,246 | | | $ | 20,246 | | | $ | 20,246 | | | $ | 17,691 | | | $ | 17,691 | |
| Provision for loan losses | | | 5,242 | | | | 3,950 | | | | 2,000 | | | | 8,162 | | | | 6,514 | |
| Charge-offs: | | | | | | | | | | | | | | | |
| Residential real estate | | | 1,103 | | | | 579 | | | | 268 | | | | 792 | | | | 752 | |
| Commercial real estate | | | 844 | | | | 752 | | | | 314 | | | | 1,844 | | | | 1,843 | |
| Commercial | | | 1,098 | | | | 684 | | | | 377 | | | | 2,640 | | | | 1,865 | |
| Consumer | | | 760 | | | | 395 | | | | 294 | | | | 1,180 | | | | 894 | |
| Total charge-offs | | | 3,805 | | | | 2,410 | | | | 1,253 | | | | 6,456 | | | | 5,354 | |
| Total recoveries | | | 653 | | | | 480 | | | | 386 | | | | 849 | | | | 584 | |
| Net charge-offs | | | 3,152 | | | | 1,930 | | | | 867 | | | | 5,607 | | | | 4,770 | |
| Allowance for loan losses at the end of the period | | $ | 22,336 | | | $ | 22,266 | | | $ | 21,379 | | | $ | 20,246 | | | $ | 19,435 | |
| | | | | | | | | | | | | | | |
| Components of allowance for credit losses: | | | | | | | | | | | | | | | |
| Allowance for loan losses | | $ | 22,336 | | | $ | 22,266 | | | $ | 21,379 | | | $ | 20,246 | | | $ | 19,435 | |
| Liability for unfunded credit commitments | | | 47 | | | | 47 | | | | 47 | | | | 51 | | | | - | |
| Balance of allowance for credit losses | | $ | 22,383 | | | $ | 22,313 | | | $ | 21,426 | | | $ | 20,297 | | | $ | 19,435 | |
| | | | | | | | | | | | | | | |
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| Ratios: | | | | | | | | | | | | | | | |
| Non-performing loans to total loans | | | 1.37 | % | | | 1.43 | % | | | 1.23 | % | | | 1.29 | % | | | 1.20 | % |
| Non-performing assets to total assets | | | 1.03 | % | | | 1.13 | % | | | 1.08 | % | | | 1.13 | % | | | 1.04 | % |
| Allowance for credit losses to total loans | | | 1.45 | % | | | 1.45 | % | | | 1.40 | % | | | 1.33 | % | | | 1.28 | % |
| Net charge-offs to average loans (annualized) | | | | | | | | | | | | | | | |
| Quarter-to-date | | | 0.32 | % | | | 0.28 | % | | | 0.23 | % | | | 0.22 | % | | | 0.32 | % |
| Year-to-date | | | 0.27 | % | | | 0.25 | % | | | 0.23 | % | | | 0.37 | % | | | 0.42 | % |
| Allowance for credit losses to non-performing loans | | | 106.10 | % | | | 101.52 | % | | | 113.41 | % | | | 103.26 | % | | | 106.79 | % |
| Loans 30-89 days past due to total loans | | | 0.50 | % | | | 0.26 | % | | | 0.40 | % | | | 0.34 | % | | | 0.50 | % |
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| Average Balance, Interest and Yield/Rate Analysis (unaudited) |
| | | | | | | | | | | | | | | | |
| | | At or for the Nine Months Ended | | | At or for the Nine Months Ended |
| | | September 30, 2010 | | | September 30, 2009 |
| (In thousands) | | | Average | | | | | Yield/ | | | Average | | | | | Yield/ |
| | | Balance | | | Interest | | Rate | | | Balance | | | Interest | | Rate |
| Assets | | | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | | | | |
| Securities - taxable | | $ | 497,312 | | | $ | 15,434 | | | 4.14 | % | | $ | 555,525 | | | $ | 20,312 | | | 4.88 | % |
| Securities - nontaxable (1) | | | 55,047 | | | | 2,463 | | | 5.97 | % | | | 64,956 | | | | 2,886 | | | 5.92 | % |
| Trading account assets | | | 1,895 | | | | 16 | | | 1.13 | % | | | 1,413 | | | | 16 | | | 1.55 | % |
| Loans: (1) (2) | | | | | | | | | | | | | | | | |
| Residential real estate | | | 623,409 | | | | 25,125 | | | 5.37 | % | | | 621,407 | | | | 27,089 | | | 5.81 | % |
| Commercial real estate | | | 440,720 | | | | 19,039 | | | 5.70 | % | | | 408,622 | | | | 18,803 | | | 6.07 | % |
| Commercial | | | 175,689 | | | | 7,236 | | | 5.43 | % | | | 183,775 | | | | 7,700 | | | 5.53 | % |
| Municipal | | | 16,417 | | | | 675 | | | 5.50 | % | | | 23,756 | | | | 913 | | | 5.14 | % |
| Consumer | | | 278,116 | | | | 9,887 | | | 4.75 | % | | | 265,006 | | | | 9,826 | | | 4.96 | % |
| Total loans | | | 1,534,351 | | | | 61,962 | | | 5.36 | % | | | 1,502,566 | | | | 64,331 | | | 5.69 | % |
| Total interest-earning assets | | | 2,088,605 | | | | 79,875 | | | 5.08 | % | | | 2,124,460 | | | | 87,545 | | | 5.48 | % |
| Cash and due from banks | | | 33,930 | | | | | | | | | 28,055 | | | | | | |
| Other assets | | | 162,130 | | | | | | | | | 154,800 | | | | | | |
| Less allowance for loan losses | | | (21,913 | ) | | | | | | | | (18,388 | ) | | | | | |
| Total assets | | $ | 2,262,752 | | | | | | | | $ | 2,288,927 | | | | | | |
| | | | | | | | | | | | | | | | |
| Liabilities & Shareholders' Equity | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | |
| Interest checking accounts | | $ | 249,441 | | | | 681 | | | 0.36 | % | | $ | 212,402 | | | | 759 | | | 0.48 | % |
| Savings accounts | | | 153,781 | | | | 358 | | | 0.31 | % | | | 138,039 | | | | 368 | | | 0.36 | % |
| Money market accounts | | | 285,972 | | | | 1,781 | | | 0.83 | % | | | 293,253 | | | | 2,407 | | | 1.10 | % |
| Certificates of deposit | | | 528,784 | | | | 7,694 | | | 1.95 | % | | | 584,747 | | | | 12,727 | | | 2.91 | % |
| Total retail deposits | | | 1,217,978 | | | | 10,514 | | | 1.15 | % | | | 1,228,441 | | | | 16,261 | | | 1.77 | % |
| Brokered deposits | | | 104,135 | | | | 1,298 | | | 1.67 | % | | | 80,973 | | | | 1,482 | | | 2.45 | % |
| Junior subordinated debentures | | | 43,553 | | | | 2,108 | | | 6.47 | % | | | 43,449 | | | | 2,136 | | | 6.57 | % |
| Borrowings | | | 477,023 | | | | 9,357 | | | 2.62 | % | | | 559,886 | | | | 11,267 | | | 2.69 | % |
| Total wholesale funding | | | 624,711 | | | | 12,763 | | | 2.73 | % | | | 684,308 | | | | 14,885 | | | 2.91 | % |
| Total interest-bearing liabilities | | | 1,842,689 | | | | 23,277 | | | 1.69 | % | | | 1,912,749 | | | | 31,146 | | | 2.18 | % |
| | | | | | | | | | | | | | | | |
| Demand deposits | | | 200,515 | | | | | | | | | 180,702 | | | | | | |
| Other liabilities | | | 22,200 | | | | | | | | | 21,448 | | | | | | |
| Shareholders' equity | | | 197,348 | | | | | | | | | 174,028 | | | | | | |
| Total liabilities & shareholders' equity | | $ | 2,262,752 | | | | | | | | $ | 2,288,927 | | | | | | |
| | | | | | | | | | | | | | | | |
| Net interest income (fully-taxable equivalent) | | | | | | 56,598 | | | | | | | | | 56,399 | | | |
| Less: fully-taxable equivalent adjustment | | | | | | (1,099 | ) | | | | | | | | (1,329 | ) | | |
| | | | | $ | 55,499 | | | | | | | | $ | 55,070 | | | |
| | | | | | | | | | | | | | | | |
| Net interest rate spread (fully-taxable equivalent) | | | | | | | | 3.39 | % | | | | | | | | 3.30 | % |
| Net interest margin (fully-taxable equivalent) | | | | | | | | 3.59 | % | | | | | | | | 3.52 | % |
| | | | | | | | | | | | | | | | |
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| (1) Reported on tax-equivalent basis calculated using a rate of 35%. |
| (2) Non-accrual loans and loans held for sale are included in total average loans. |
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| Selected Financial Data (unaudited) |
| | | | | | | | | | | | | |
| | | | | | | | | At or for | | | |
| | | At or for the Nine Months Ended | | | the Year Ended | | | |
| | | | September 30, | | | December 31, | | | |
| | | | 2010 | | | | 2009 | | | | | 2009 | | | | |
| | | | | | | | | | | | | |
| Tier 1 leverage capital ratio | | | 8.65 | % | | | 7.87 | % | | | | 8.17 | % | | | |
| Tier 1 risk-based capital ratio | | | 13.27 | % | | | 11.89 | % | | | | 12.24 | % | | | |
| Total risk-based capital ratio | | | 14.53 | % | | | 13.15 | % | | | | 13.49 | % | | | |
| Tangible equity to tangible assets (1) | | | 6.99 | % | | | 6.30 | % | | | | 6.59 | % | | | |
| Book value per share | | $ | 26.67 | | | $ | 24.43 | | | | $ | 24.93 | | | | |
| Tangible book value per share (2) | | $ | 20.66 | | | $ | 18.34 | | | | $ | 18.86 | | | | |
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| Investment Data (unaudited) |
| | | | | | | | | | | | | |
| | | | | | | September 30, 2010 | | | |
| | | Amortized | | | Unrealized | | | | Unrealized | | | Fair |
| (In thousands) | | | Cost | | | Gains | | | | Losses | | | Value |
| | | | | | | | | | | | | |
| Available for sale | | | | | | | | | | | | | |
| Obligations of U.S. government sponsored enterprises | | $ | 49,992 | | | $ | 333 | | | | $ | - | | | $ | 50,325 |
| Obligations of states and political subdivisions (3) | | | 16,502 | | | | 709 | | | | | - | | | | 17,211 |
| Mortgage-backed securities issued or guaranteed by | | | | | | | | | | | | | |
| U.S. government sponsored enterprises | | | 428,210 | | | | 18,484 | | | | | (51 | ) | | | 446,643 |
| Private issue collateralized mortgage obligations (CMO) (4) | | | 24,889 | | | | 58 | | | | | (2,389 | ) | | | 22,558 |
| Total debt securities | | | 519,593 | | | | 19,584 | | | | | (2,440 | ) | | | 536,737 |
| Equity securities (5) | | | 5,000 | | | | - | | | | | (502 | ) | | | 4,498 |
| Total securities available for sale | | $ | 524,593 | | | $ | 19,584 | | | | $ | (2,942 | ) | | $ | 541,235 |
| | | | | | | | | | | | | |
| Held to maturity | | | | | | | | | | | | | |
| Obligations of states and political subdivisions | | $ | 36,745 | | | $ | 3,156 | | | | $ | - | | | $ | 39,901 |
| Total securities held to maturity | | $ | 36,745 | | | $ | 3,156 | | | | $ | - | | | $ | 39,901 |
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| Other securities | | | | | | | | | | | | | |
| Federal Home Loan Bank Stock (6) | | $ | 21,031 | | | $ | - | | | | $ | - | | | $ | 21,031 |
| Federal Reserve Bank Stock | | | 931 | | | | - | | | | | - | | | | 931 |
| Total other securities | | $ | 21,962 | | | $ | - | | | | $ | - | | | $ | 21,962 |
| | | | | | | | | | | | | |
| Trading account assets (7) | | | | | | | | | | | | $ | 2,173 |
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| (1) Computed by dividing total shareholders’ equity less goodwill and other intangible assets by total assets less goodwill and other intangible assets. |
| (2) Computed by dividing total shareholders’ equity less goodwill and other intangible assets by the number of common shares outstanding. |
(3) 99% of the portfolio is rated by at least one of the three major rating agencies (Moody's, Standard & Poor's or Fitch) and all of these ratings are investment grade. |
(4) $11.3 million of the CMO's are rated Triple-A by at least one of the three rating agencies, while three CMO's currently carry ratings below investment grade; one CMO with a fair value of $2.7 million is rated Caa1 by Moody's and CCC by Standard & Poor's, a second CMO with a fair value of $1.9 million is rated CCC by Fitch and Standard & Poor's, and a third CMO with a fair value $4.3 million is rate BB by Standard & Poor's and A by Fitch. |
(5) The Duff & Phelps (DNP) Select Income Fund Auction Preferred Stock continues to fail at auction. We are currently collecting all amounts due according to contractual terms and have the ability and intent to hold the security until it clears auction, is called or matures on December 22, 2021. The DNP Auction Preferred Stock is rated Triple-A by Moody’s and Standard & Poor's. |
| (6) The Federal Home Loan Bank of Boston has suspended its quarterly dividend payment. |
| (7) Investments held in mutual funds that represent deferred director and executive compensation investments. |
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CONTACT:
Camden National Corporation
Susan M. Westfall, 207-230-2096
Senior Vice President, Clerk
swestfall@camdennational.com
