CAC - Earnings call transcript Q1 2018 | Camden National Corporation

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Operator

Good day, and welcome to the Camden National Corporation First Quarter 2018 Earnings Conference Call. [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 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. Please also note that today's event is being recorded. would turn I to conference time, Dufour. Greg this like the to over At sir. ahead, go Please

Gregory Dufour

greatly Thank welcome Results. past Laura, on on $XX.X per discuss take the you, some and few those our Call troubled report Corporation's on a to resolution million from We diluted first of accomplishments provide pleased income the First earnings to call of this events, results Conference We're or of and Quarter loan, an important to our year. for share XXXX moments I'd $X.XX then quarter. was to discussed the benefited to two net like previously. which first comment Camden we've update National this a during of

that provision very combined is note loan also loss strong, in release quality negative asset the with in of our a for when reserves through the loan resulted recovery, losses. quarter which the You'll

rate The we a a is in ratios. lower other deferred tax fund January. rebuild and also line our This our as The great capital compensation tax will performance nonexecutive last write-down as help well federal rate. benefit tax from of which quarter's bottom us help to reduced provided review resulting programs, income asset a announced

region, market. quarter Loan appears combined demand when Our an of loan weaker first to and competitive makes credit volumes. which estate growth pricing have during a was the result as across volume flat extremely real the with lower residential structure, commercial been aggressive mortgage

of real seen comfortable we estate for both few demand and past with mid-single-digit commercial in the growth remain we've weeks, year. in so uptick loan the Over our goal an products, residential

areas management. loan gaining office that are combined opened with pleased be Southern first wealth exposure New franchise New markets to faster-growing Portsmouth, eventually commercial production office. Maine complement our Massachusetts with Hampshire, in in our our bankers quarter, to house other the our up residential mortgage and in Manchester, and Braintree, we During When our office along mortgage will we Hampshire

be Colby spearheading Waterville, and will current of multiuse we that into to Downtown selling announced street who our branch is also the moving be existing down from location new Maine location. our Colby's we'll We facility a major Waterville, redevelopment College,

expand to introduce part suite of capability continue our digital-based We person-to-person of payment and mobile the offerings our as products. banking

we is Some in online mortgage while our we of see like of on how MortgageTouch others changes said, year, December, slower into to capabilities, our which usage we Last new continue these expect had we're and communicating that discovering will after ramp chat introducing chat sessions. in nearly in outreach up our offerings with to we're rate. communicate, still adoption increased is our resulting over quickly a channels XXX,XXX With customers. be even phone-based customer responses; e-mail increasing. X,XXX add What we online offerings, calls is that, digital center; assistance though application XX,XXX just

support advanced in technology lending conducted include want. constantly and build these continue This lines changes the improve our calls, our brokerage, With network. highlight another focus our however, will delivery service still need It be happened X.X million and ways service as countless transactions that as ATM as people That X.X in wealth well areas. teller last in We on in investment events to areas mortgage, to we year, capacity. the we're investing ensure servicing customers our on million capabilities. our through they well doesn't though, to streamline as service and does, transactions to those sales on management

as of to Controller from of ago, our opportunity Directors provided Controller a recently earlier our Robin to retired that rejoin after Semiconductor. which Robin appointed she of like to WEX, Board an was our Fairchild year-or-so board as for I'd serving her today, from down Finally, you Directors. Board Sawyer share board. She stepped with of the WEX

to addition will being team, bring have experience the in we're her publicly Debbie. excited I'd back. and CPA, number to by her Her the now over and serving In to was turn our large the discussion of a board management traded X. women highly like valued to to board organizations appointment on

Deborah Jordan

afternoon, Greg, you, and Thank good everyone.

reduction growth about in benefited operating which a $X.X tax for the We report income increase offset revenue a provision expenses income of net partially an first We loss results first which loan return $X.X from million; of our in of quarter by $X.XX of to on $XXX,XXX. growth corporate a X.XX% are with tangible pleased rate taxes due XXXX of lower average XXXX of XXXX, by the net income equity EPS XX.XX%. boosted quarter translates quarter. $X.X $XX.X $X.X lower of of to or XX% the We million, and to over first return of share on the the assets of for diluted experienced quarter million, million million; a

or a to is a and ago XXXX. was We normalized driven XX%, when in net million increases or fee $X with XX-point of growth a just rate income of of year in have estimated growth and Total loans grew in XXXX of of The effective X% to deposit revenue interest interest from nearly $XXX,XXX. quarter decrease under million tax X% by income net first growth which X% average X% compared XXXX. million average comparing $XXX $XXX income

basis accounted related basis in margin declined was X rate fair for lower the taxable income. equivalent the And impact X.XX% to periods in decline X between Our margin the net of interest X points accretion tax lower to fully The result was of points. XXXX. points on basis value which

loan since resulting with financial year X.XX% the compensation employees. quarter, to a total Operating biggest Nonperforming merit at driver total past a of the specific results X% due and and Asset increase operating to for will to of for the cost of pretax strong. first our quarter. ago the from expenses now credit Historically, deferred X%, has loans. increases of earnings first XX XX lower benefits reasons. low And speaks loan, write-down fourth estate of of released an earnings X.XX% several of it we the comparing days additional resolution due increased quarter. quality related loss stand assets I a reserve our commercial loans previous our a the compared to than before in quarter remains to on to year real In focus trend tax reached in results rest that assets the drove a and the $XXX,XXX

fourth quarter, resulting in with lower borrowing in first is base half deposit in quarter levels our the trends First, year. seasonal balances and the each first higher in the peaking of

the for higher Our declined first quarter mortgage X% mortgage the between Both linked income from million the special to interest banking a pretax winter X% a related customer Revenue for adjusting soft net linked for impacted decreasing occupancy quarter income $X lower income when by X% programs million quarter and months. quarter also the are bonus taxes Pretax with $XX.X the costs of earnings And of income. quarters. loan XXXX $XXX,XXX, banking first swap decline swap and and $XXX,XXX due fourth production. due quarter. fee and compared loan to to to the for employees, increased declined or payroll decreased by XXXX income in

mortgages we in The larger As expect more a weather the mortgage source from year-end. slowdown up of mortgage And the seasonal quarter. fee market. $X.X first with portfolio XX% homebuyers quarter, revenue, loan rates sold into $XX volatility refinancing totaled of previous banking issues, decline market the was in activities. out down income. And rising million just million, also the slowed since kept The the of secondary total becomes combined a

which several influencing during was quarters, the factor this, net including to additional basis the margin staffing margin there increase net points between net our accretion to periods, margin special of the as deposit down shift X to interest the every value income deposits expense. collection points happens decline impact another with basis from adjustment, mix due Operating funding seasonality from and equivalent it year compensation overnight offset between amortization. The linked decreases cycled pertains basis by costs were interest Higher taxable for occupancy lower-cost first We Although our quarters, X our quarter. through. lower to change a to interest to quarter. quarter full operating points we factors anticipate bonus in over in interest first drives in days excluding the cost X.X% Between shifting and the increases X compared QX between net expenses the first the XX the and when to and into our Drilling basis income core relates were million in deposits X.XX% at an borrowings. benefits of merit to interest X and fair declined the the for experienced points X% biggest linked X% fewer the employees. pertains the levels fourth for slightly do $XX.X relates to costs to intangible increasing quarter had of quarter and borrowings,

for ran year below now the we XX% anticipate first financial the on comments but for We'll That open target Our XX% questions. first higher averaging up level, efficiency quarter call the of full the ratio Laura? XXXX. for quarter slightly our concludes our results. than

Operator

KBW. Damon first question our Instructions]. DelMonte And [Operator from will of come

Damon DelMonte

go just I the wanted I guess decline over again. question. margin get in if could quarter-over-quarter Deb of didn't to first My all the those details. I --

Deborah Jordan

Sure.

accounts the was basis accretion, our X borrowing. which margin one two deposits, fair and checking change is trending overnight relates component our between that rate, the every then to point quarters, has points taxable basis been basis from X equivalent decline For really the tax lower value quarter; shifting to in core the income; points due to

Damon DelMonte

Got you.

pick how year you from And kind rest expectation is growth this going level view of the up, X.XX% margin of forward the kind the of for Okay. that going the with back look to forward? you as loan tonight do

Deborah Jordan

Yes.

we again, -- second might think and dip quarter we'll improves little funding lift our up. see as what it I see in then a the

the the around So trading think we'll year. be I in rest range this for of

Damon DelMonte

to And regards the a any response expense provision with at a provision, of favorable do the in look we you the provision type quarter? absent quarters Okay, resolution resolution in obviously, this upcoming the then credit. like this of all saw quarter to negative right. How

Deborah Jordan

Yes.

new on rate. around that I points XX volume, a annualized said were basis so think XX in past Charge-offs assume would on basis I points at the just I've basis.

on quality us for news this front great certainly year. asset So the

Damon DelMonte

it. got Great,

more It there? I cards else a Okay. lastly on going income. just is fee like And on debit the guess down that from that something seasonal of there then was the Is quarter-over-quarter. looks Or effect? income

Deborah Jordan

seasonal. it's more Yes. I feel like

If year the it like next up you should at ago, quarters. -- you look about in we're it back to a few see compared come

Damon DelMonte

back go second for then a should Okay. debit $X card. and we fourth not quarterly with third, over And noninterest then easily income, pretty rate overall pretty the million in that, so run just quarters the

Deborah Jordan

Yes.

news, banking I we're that's fee. think on what is the certainly is what the -- side heating that seeing the of the will mortgage up. good driver And incremental big --

yes. for that of I with the say I'm year. comfortable rest So would the

Operator

Matthew next Jaffray. The of Piper from question comes Breese

Matthew Breese

growth to could for really a environment? sense growth And to I competition eating region, the mid-single-digit on comments just what slower is to regards your you the perhaps quarter, much do your is outlook. wanted for that tied you then Greg, much just how to away to in touch to get ground to year And the where slower comments make how get? a the growth potentially up just get in opening expect about and

Gregory Dufour

even a then, of I probably the had attributed that were though start helped banks back other unknown fourth I'd quite situation. saying we quarter that to a doing, to talking pretty strong we're of kind that looking tax said, year back then the out slowdown that think and also close observing and do do as point weather at the said, rate and increase Even refinancing on the seeing down, by guess slowed -- good, of in down you're the Yes. some kind what Well, the with to lack bit. and probably residential the not the Debbie housing more building on of I up reports Wingeling, side, in for slowed mortgage so side, market. sale the and the at least across Wingeling inventory kind of hearing than region much

fill seeing I'd pent start demand. up, up So that pipeline to we're said, but that's it call contributing. With to probably those

periods also but less period rates On larger are volumes larger C&I market think rates on where We're and seeing seeing competition always highly extending on just nonrecourse. because competitive side, hear time. the for pricing, estate that there. commercial that fixing longer of people are a lot of Structure comment there's you'll interest-only from to is real I out transactions a higher loan-to-value everybody, going

So on X a weeks that the putting pie at over seen But we're and term as probably higher we've commercial smaller competition. a looking of that deals pipelines, we're uptick is sheet it, well or lot phase deals it call the so. in in some again, past, as

Matthew Breese

we'll a quarters, see Okay. Or snapback three general over think And growth that? you to you of in a see get of the a just do XQ? to more we'll pickup is a that next in -- the bit

Gregory Dufour

that Right what for out now, or new not. I'm not trend we've the weeks comfortable past line year a us in is saying for of seen coming few last

we off more I had building would see I a the today. couple I quarters what next based would it up if gradually over venture So -- to see guess, of

Matthew Breese

talk and about you figures in from production the bit into expense help a sale that to and the and And just little how minuses but X loan Deb, Okay. around Portsmouth? then office branch efficiency me just work bakes Colby pluses guidance. could the those And then College, the

Deborah Jordan

The the future. a high with building occupancy perspective, is costs major from pretty in We owned Waterville needed a really really pretty some large renovations financial neutral. that transaction,

house And that loan impact that shouldn't able operating tearing sell to regards to perspective will from and facility down Portsmouth, we're going said, us cost other so that also In the an a bankers. but and office, mortgage have into Colby moving to us being all. production be at state-of-the-art their folks building

located management. wealth our there support also in will be of area Some

not it's the investment big so of run big it have shouldn't rate operating cost impact a side. a So on

Matthew Breese

years What your ask. are the we Okay. strategic spending want to did on? top three And for priorities picture, think time then your bigger just I Greg, maybe you're the institution. X as about next

Gregory Dufour

one more we of aggressively the in number our lot Cumberland that area what from into we can putting is franchise, of southern still call Portsmouth now have but a of greater Manchester and bit a a part teams did, in acquiring our the Well, retail It teams. building having Maine, Portland that thing venturing into great we're south fulfilling York our effort Maine, that again. out just Sure. way, Southern do and we County. in lot really Bank and establish expanding of it the little lending was growth We're that a there, teams,

growth into and it we by up a the bit building New hiring a individuals big on Hampshire. engine So get that's de originators We're mortgage probably where basis, slower more you little novo all. that but can like supplement

the of is, that other The still from part Portland which in variable it in profitability way is we North in be there. have that market the And strategic what and so share share that more would building we call market expansion those cost people, call of building infrastructure be again, place again, a way markets, areas. will legacy efficiently

an to we've organic Overall, go and more acquisition of from -- growth those like talked us organic size, and all what model. I'd our I front. for the probably The on We because of that factors with relevant organization banks the rates day. larger investor back position that an keep factors, to think and growth really the customers. with we two done. that increasing they're is remain to here we've we what looking and web digital to area doing we're at why look just at other And is And I ourselves XX% some model more XX% to that's seeing we we're especially that's perspective, up need -- those strategic what highlighted doing kind presentations other adoption each -- have about

continuously where on the growth it. we've organic However, for improvements, makes model, of company which out can an us also run look efficiencies day-to-day especially we get

will will so And up. position that opportunistic pull that that be should a lever opportunity if the be us and to acquisition other comes

Matthew Breese

Got it.

for that you. Now last one my helpful. was Deb, maybe very

point, this yield on the where curve flatter about balance just of sensitivity Camden's the might the about you and curve sheet thing it talk at that yield us the Could outline this is? balance sensitivity on impacts Just with the the -- sheet. the for and have

Deborah Jordan

be happy I'd to. Yes.

to years, still a base, over a interest at deposits, our funding few you we're We a accounts. liability-sensitive the environment. still As reprices deposit borrowing in when that low we And have checking bank doing know, look some last pretty cost broker from transitioned attractive rate you neutral in side. levels And reinvested funding the that yield. off core rather really on a base but we to very a duration quickly of the a the on lot treasury have regards make a years portfolio, flow of lot big coming to certainly a little be investment that to clients. And front will grow and related the we cash of at asset In to will have continue side, business that. we higher X management difference that have

side, On being funding we've portfolio -- transitioned ARM-based. commercial fixed of now our chunk is a the of estate or loan real instead LIBOR-based big to

flatter curve environment, positioned And be so us, to continuing our is we're that market. going but for cost all yield in not an think funding And lower. the of to a real core easy I okay is keep key

Matthew Breese

Got it.

how just prime-based core estate at is much book this point? of LIBOR Okay. And or the real

Deborah Jordan

back the it's No. think of loan have I'll I'd on million about I to that. total get portfolio. $X.X you --

think over it's I -- definitely XX%.

Operator

[Operator Instructions].

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

Gregory Dufour

all interest to Camden and And again, a day. you to again thank we forward their Laura. chatting National quarter. want next Have Thank Corporation, just I good Great. everyone in look for

Operator

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

now may disconnect. You

Camden National (CAC) 24 Apr 182018 Q1 Earnings call transcript