CAC - Earnings call transcript Q4 2017 | Camden National Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Camden National Corporation Fourth Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note that this presentation contains forward-looking statements, which involve significant risks and are described in the Company’s annual report on Form 10-K, and in other filings with the SEC. Today’s call presenters are Greg Dufour, President, Chief Executive Officer and Director; and Deborah Jordan, Executive Vice President, Chief Operating Officer and Chief Financial Officer. today’s being that note also event recorded. is Please to conference over this time, Greg the like I’d At to turn Dufour. Please go ahead.

Greg Dufour

recorded Thank in we to the comments, aside a of several XXXX National Corporation’s results X% growth of this financial Cuts and other fourth in welcome the moments to and Setting $X.XX million the on net on to to of or a tax provide growth our tax fourth to and year-end income of basis act. impacted Debbie earnings, our recognized some XXXX financial diluted XXXX of on experienced impact like and quarter The you, discuss XXXX of our XXXX the loan which an few a of I’d performance take In $XX.X then share. will $XX.X of tax comment fourth of past act, additional our conference year. the Rachel call results. primarily Camden assets. We tax due X%. per accomplishments as resulted deferred Act of review revaluation in during million and Jobs the her deposit tax expense reported for quarter We strong. items was impact GAAP the result the quarter the year update

adjusted income increase $XX.X was operating our million per charge, XXXX reform and X% of an tax X% diluted $X.XX onetime share, the respectively Excluding results. or from

was from Also the we X% dividend. fourth adjusted and from I no our in on increase operating Last quarter, XXXX in organization return up up announced that while adjusted continue our XX.XX%. equity return average to our average we operating to was X.XX% the mentioned quarter a quarterly assets different. invest X.XX%, was quarter, during on Our XX.XX%,

internal our while loan answer underwriting processing work process the customers. others for that improve like months EMV are we several are our to hard those will underwriting ATMs infrastructure-related both efficiencies work, our same experience. as of that upgrading at of customer Some to our oriented platform investments After new to automated as time speed more increase our well chip business technology improve commercial our implemented a while

having as Our area and to of And management of like called announced find to continues pleased opportunities quarter, banking application we mortgage I streamlined to share million the capabilities XXXX. process, introduced have we in also contributed over expand is which to MortgageTouch. mortgage branded I’m new This online a these TreasuryLink. deposit we continued commercial originators we higher system deposits to mortgage our adoption treasury expanded I’d platform. backbone that note our in last new see $XXX

All us starting point a of this gives for XXXX. great

growth, looking and while on loan continues expand sources. noninterest focus revenue related to to the be time same Our our deposit at

like opportunities Some activities of already new ways for our new over Debbie. turn investments refining to to With and existing expand be Other these segments. will I’d the into our activities will be made. reach to and looking customer introducing geographies and we’ve new that, that our leveraging products discussion

Deborah Jordan

and Greg, afternoon, good you, Thank everyone.

and we in As to as report pleased the tax lower strong such operating tax mentioned quarter, of the ending excluding quarter our fourth the we’ll $XX.X tax adjusted corporate by In revalued In results income differed reviewing as rate excluded new legislation, position. the of we and we this tax results, nonrecurring the recorded expense additional solid impact event Greg, assets reference fourth of million. the and impact liabilities, resulting are well year numbers. from our a have

due per X% income in or of and share. from to $X.XX to EPS amounted $X.XX was primarily Company’s fourth per Adjusted XXXX, expenses the of adjusted For operating special the down bonus resulted adjusted $XXX,XXX which quarter, granted share. quarter employees diluted to nonexecutive EPS the operating diluted additional was million $XX.X the quarter previous fourth

For X.XX% for the our our quarter when was adjusting was and average the XX.XX%. ratio efficiency on tax operating charge, return assets

with net a interest provision. a in in improvement, quarter interest loan We a fourth due performance to credit loan continued with resulted our of deposit an pleased combination widening that and are margin increase to translating growth lower net and income loss quality

annualized million our sheet for loan of X% up was total our million, X% $XX Looking representing quarters, balance increased deposits. for and and loan the portfolio portfolio an at growth $XX deposits between rate

decline relationships. to net Our deposit interest X balances deposit in points $X.X of base inflow X factors our quarter of fourth attracting XX% expansion margin high resulted XXXX reaching Comparing grew from average cost our cost benefited our margin new quarter of basis experienced borrowings our shift this success interest include account with to X.XX%. net funds the to XXXX, in during and billion. improvement basis The normal our fourth quarter a funding influencing as in from business base in market which money as accounts, fourth We well in seasonal points. the checking checking

net a the the and we portfolio ratio X just quality driving loan for remained addition, yield. basis-point pickup repriced, of charge-off year quarter a in In X full had points. metrics increase loan in Credit at portion asset yield both as strong with basis our our our

increased income came the of the total on X% to $XXX,XXX. of of for included swap loss excluding employees fee operating the $XXX,XXX, back for in The $XXX,XXX. deposit-related increase primarily quarter. quarter grew income credit fees expenses quarter growth in and the increased $XX.X of and quarter due technology gains the number million. as third to the fourth compared bonus to When XXXX back the Our excluding income the of quarter fourth line investments fourth quarter special quarter Operating to bonus, the fourth X% $X.X third was loan a an was investment million to for for during cost $XXX,XXX. When in provision

concludes the fourth the on Our slightly XX%. the quarter efficiency ratio quarter That We’ll results. comments up for financial call fourth open the excluding for under now our Rachel? bonus questions. was

Operator

Thank you.

KBW. question from Damon [Operator comes DelMonte now the ahead. The will instructions] We with Please begin question-and-answer go first session.

Damon DelMonte

First to want bit What accretable forward. a talk the quarter? going the of margin kind yield question, was expectations this your little ex and I core about margin just

Deborah Jordan

fourth margin quarter Damon, for core The was X.XX%. the actually,

Damon DelMonte

Okay.

Deborah Jordan

so, And basis that to core the third was up X the points on quarter compared basis.

good I two really one, think, having things, contribute to helped deposit that. solid growth

will also on and contributed deposit of pretty will the X% not first between X% and base that also We’re pricing being outflow deposit that. it some our our I we moving to look is core of When standard, our very-disciplined outflow. rates, quarter, at so have be and

to shift expect some funds will would I little back a So, of the borrowings cost see bit. up a into and so, move

the I would going be first margin down at when So, to I say a couple maybe is quarter, the points. of look basis

Damon DelMonte

get you moves I do a quarter, if guys performing get should had increase, sensitive on December side. the see margin we been the I in And then, March. get or rate in -- if one one know you you How we say? liability those rate if just we obviously, first another here move, rate that beyond historically have somewhat the

Deborah Jordan

lot things to of We’ve be a Yes. asset-sensitive. done more

we our this have -- deposits our loans point. reprice more at so, loans And that actually will then

or been be, core aggressive wildcard CD other will the in how think, has rates. and folks banks I rates competitors moving

the going this And a so, in think funding better rising we’re for the again, I on pretty be rate environment at point. side. position And to we’re disciplined

Damon DelMonte

you’re that I And for this think your year, is growth, quarter then, reasonable we the outlook out Do next X%, XXXX? off as range as into year mid-single-digit as with you in for as you year. far on look to something the loan you the go think finished X%

Greg Dufour

Yes, Damon.

I good we think continue we’re feel really in that about that number work that to XXXX, talking was and that��s throughout We XXXX. a what -- with. will

Damon DelMonte

as a and from, sourcing as you’re And class little that? on asset you an that geographically, from far color provide could where both growth

Greg Dufour

lot focused Maine can -- albeit really oriented in southern franchise, the CRE products to we’re be transactions. Southern that part the a and of the It’s move more or the geographies in, the and on diversify, really with New We of Hampshire. Sure. tend does needle our it’s dial it on

However, that do will. C&I have if Portland we’re look commercial office. lender our intend lenders is, when real there based you are that’s And out estate the have four us commercial on in seeing have to lending, there; C&I a really C&I way staff. it others in of we Portland banking we you But team, we up doing Maine for just our we and pick that we’re The centers. some at Southern in expand our

So, that build to ground more we’re feet the business. putting on up

Damon DelMonte

Got you.

place, with tax tax you that And the you law modeling guys, rate? new Okay. given the just was regard for then, effective for in new what are rate put to

Deborah Jordan

forward. going XX% of rate effective an using we’re Damon,

Damon DelMonte

some okay. circle offset on before. will XX%, There impact And the that obviously margin is on FTE then, adjustment, the the from correct? back question be

Deborah Jordan

is down margin first quarter. partly the Yes. That would is why correct and go in that the

Operator

The next go Breese from Please Jaffray. question with ahead. comes Piper Matthew

Matthew Breese

yield to extent you’ve the the pass I able on sense at just talk been want a higher borrowers and curve to that? just and wanted to to your through your about rates for ability get do which

Deborah Jordan

coming of of LIBOR on on part books; of mix. existing that XXX; over at the yield LIBOR than LIBOR, Commercial instead it our we’re to slightly was And about the Matt, to real fourth spread XX% the estate, yield we’re fixed overall on I new manage We was still that. rate. of is a on new lower production challenging. doing our is Sure. our But, quarter, look portfolio. portfolio target loans CRE the the trying based

go really not side, We’re up. rates the seeing on commercial least at

we X.XX% residential in I the quarter. average mortgages that side, we on the yield booked the think, actually on our fourth -- was

pickup we did get a So, there. little

Matthew Breese

lot thinking to Got item profile in from line really mortgage, done And new I growth of the the market, two about a things. is a hires that on secondary it. the sticking with there, should how then, be get ahead? on of sale you’ve what year And One, residential and two, think we work investments. the loans? gain you wanted then, a of lot sense helpful. That’s for

Deborah Jordan

we Sure. XX%. When XXXX I versus look for at growth XXXX, up production were

million about this put we’re portfolio. sell sheet actually forecasted the growth as first have production didn’t on room balance We the in $XXX to we for some much because year. were So, as -- of we

changed little So, we strategy a our bit.

about sold XX% about we and XX%. So, retained

targeting portfolio for XX% hold the significant a production good looking it’s sheet. attractive to decide We of gross And we’re to We’re for that some saleable. that; balance pay on for in really XXXX. might to increase

piece. receiving We’re saleable X% gain a the still on

so, maintain And crossed fingers spread. that we that can

Matthew Breese

Okay. That’s looking really investing for geographies. your commentary new products helpful. new And then, constantly you you’re in opening mentioned that Greg, and in maybe

those footprint, current outside if what are curious it’s to geographies of extent? your Just and what

Greg Dufour

markets legacy been still the Matt, have our we before. we’ve it we in is helping consider to existing growth support We do talking what Southern to Maine, really want here that Correct. Maine. in what geography about our the And with

We have continue to up like up do production few in office actually and Manchester; another that experience loan We a Portsmouth. weeks we’re Hampshire. New opening in office

we we’ll is expand see and way do like build lending And We also can’t we competitive and east commercial go Massachusetts out there, and target do Northern the grow that XXX, of recruiting, this from of people we’re our I especially, it that would can to I from and that expand but define that’s growth. by and we a the very market to recruiting sweet way call north low us not that. area down but around from The it’s area people.

is make a management a people. we wealth service a Hampshire manager of the location, have One one market ultimately or not, they that can our one yet. of location. in continue So on they of fit offices look it for where find it’s mass, two Once up to good our there the an us more then complement up type side. up build critical Portsmouth, either ground we full those model. bank That wealth have to that individual we easy New area very advances right in as relatively to to we where we’ll in we’re open From in of type those we if investment are people, product lines perspective, don’t can

Southern area. Hampshire We very in haven’t had Southern one New Maine, to-date that

that out dollars, are, of banking. into and is our you our that. like it online feature making, $XXX,XXX that One of out is, really we we example broadening our investments will few of cost thousands other making or bank I can product, The when we we’ll is that get new let’s be say say in from these tens loan system offerings at something rolling a be of our investments, in now point maybe on -- person-to-person to when some size effective manage or kind $XXX,XXX payment online weeks PXP they are of

have So, that. we’ll

sales overall focus investments of other in those Some XXXX. on training, that a have major we’ll as

some system our is our investments reflecting dovetail infrastructure management human growth And new make that well. and is, of that installing to into will trying that our we’re more that size we talent do resource, information as

high be will view kind level where focusing XXXX. on think of in of a that’s So, we we

Matthew Breese

of let’s Well, talked that. you’ve goal prior think, ratio. targeted XX% Deb, in continue about, quarters, I efficiency

bottom-line new to a obviously the your at is all? better. Does tax rate, going With bit that be change

Deborah Jordan

We year efficiency ended just at XX% the ratio.

we’re We’re at operating I operating referenced had left I line. and XX% comfortable costs loan to happy quarter, some a systems going we of on would that bit these coming our little say still is to at. because where deposit be level. Last under very were felt that we platform

Matthew Breese

follow-up. a Greg, just And then,

be the focus down Northern as mean, that know Massachusetts? Should Northern growth is should between see going Boston, Northern a little Massachusetts? bit Portsmouth read little the here mentioned geographically, but I I from lines far really, Camden more we you’ve your as Manchester and think and strayed bit from legacy I kind to and historically You’ve south markets going on away more to of from Massachusetts. there

Greg Dufour

today, what that project without office today Massachusetts Well, actually I’d we estate real have our service. do finance Braintree, I’d in remiss mentioning area. Northern at even be mortgage and commercial in that when we group, And you do Massachusetts. we look say, can

lines are that get can call exposed and mortgage Northern that operating on originators that We our of product we market very Those that I to So, specific are that get have we into. are already do based south Boston. in Massachusetts, case, have.

at important people Braintree areas like we before defined build of large versus some Again, place. mass critical center fixed we So, up investment to opening do or our the type like call cost it, that we look through, banking that and in a structure. office

Operator

follow-up Please have [Operator a from Damon KBW. instructions] DelMonte with We do go ahead.

Damon DelMonte

want I a what could around circle for? a just thanks. framework reasonable expense Hi, expenses. quarterly be Deb, you’d looking on kind give just of back would -- to you rate be little

Deborah Jordan

would year, first is I run between of occupancy There some higher cost. of say We’ll because the and year. million. average be Yes. quarter $XX.X seasonality we’d $XX.X on every million for

Damon DelMonte

solid. mean, of or you. trends Should Okay. a Thank the covering credit with provision, provision That’s in helpful. is are just then, And we I more less regards to growth? kind pretty factor the that’s

Deborah Jordan

makes a at lot that sense in whole think this point I cycle. Yes, of the

Damon DelMonte

the all All Okay. right. follow-ups. That’s that I had. Thanks for

Deborah Jordan

you. Thank

Operator

I no As session. the we further turn would for to conference have to our questions, over closing remarks. like concludes back any Dufour this question-and-answer Greg

Greg Dufour

like income about know conversations really the the the Thank for great reaching a had just and organization; I $XX.X I’d quarters of -- operating over milestone you. adjusted some say major we’ve basis past several million on major, is us. to

the And support of are support analysts. it’s a the lot team but as products takes organization, story several proud of whole some from extremely just We’re throughout as it has with the areas those a and deliver great of results, as that of the shareholders, you well on helped that’s call not those pleased well.

look So, year, and back towards a year. as look also a being we’re at we looking great XXXX great

we for So, attention. thank a you great Have your day.

Operator

has you Thank today’s now conference presentation. for concluded. The attending

You your lines. may now disconnect

Camden National (CAC) 30 Jan 182017 Q4 Earnings call transcript