CAC - Earnings call transcript Q2 2019 | Camden National Corporation

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Operator

Good day and welcome to the Camden National Corporation Second Quarter 2019 Earnings Conference Call. My name is Chuck, and I will be your operator for today's call. [Operator Instructions].

Please note that this presentation contains forward-looking statements, which involve significant risks and uncertainties that may cause actual results to vary materially from those projected in the forward-looking statements.

Additional information concerning factors that could cause actual results to differ materially from those in such forward-looking statements are described in the company's earnings press release, the company's 2018 annual report on Form 10-K and other filings with the SEC. undertake circumstances to after or statements made. not statements any the does are reflect to events company any update obligation forward-looking forward-looking The that occur intended presentation with reconciled in your financial Any and GAAP to release. in meaningful insights today's measures references are to press provide are non-GAAP

Chief is Greg also and Director; Chief Officer. Officer Please and being Chief Deborah presenters are Executive President, Officer Today's Jordan, that Operating event this note recorded. Dufour, President, and Executive Vice Financial

the turn to over like would I time, ahead, this Dufour. Greg go conference Please At to sir.

Gregory Dufour

X% today, Good welcome. an second the released and second XXXX the per afternoon XXXX. increase quarter of over was quarter a earnings increase $XX.X Early quarter over reflected we which EPS share our Earnings earnings. for diluted million, for second XXXX our of $X.XX X% quarter,

needless Our non-GAAP quarter performance with XX.XX%; half of average assets also average ratio X.XX%; helped with very and per levels XX% XXXX. say, share return of earnings our both efficiency increase and performance of half an on first strong, us the equity, we're over ratios return are This drive on earnings million for and performance record something the of first These a results were diluted of pleased of half for with. first XX.XX%. $X.XX, $XX.X to of

our our specifics In like provide review into a will few insights performance, markets. but I'd on Debbie of the some first some minutes, to

June over year, from past strong For the to portfolio growth, we've seen XXXX. X% our loan June XXXX with growing

period. off the on long-term XX.X% our paid growth same focus addition, In with generation over deposit

have of We've activity changes and of in seen loan in significant seen seen a the Over commercial market. the several loosening we've Overall, months, structures, margins. lowering we've continued past loan slowed. areas few

stepping so for are we've pursue can where from selectively And a liking. increasing team professionals, credit we strong our margins too of transactions. built thin on basis, away and an transactions we're lending Fortunately, the

a and also we're to in against of selective. allow the positioned being many sides. commercial, the the more in we great uniquely in On seeing the retail marketplace and capabilities same service seeing place in house, We're We're our sales At us interest. product both team resulting us believe have we and pricing side competitors the deposit technology have pricing that pressures our time, competitors. putting we treasury not professionals larger are compete long-term best of strategies as on

some are Here from for opportunities short- again, appropriately to feel not we expect step and priced away we market considerations. that long-term

year experienced growth the for well and the loan-to-deposit as and as conditions to loan-to-deposit positioning, client. our customer right ratio past these the the Fortunately, flexibility with opportunistic solid over remain have we've in market we

a of term at of you shareholders serve and guidance, long lot we our our As us know, the don't will feel looking but view well. we extremely share give I will

You'll XXX,XXX of first for the half also at note cost our total that average per shares share. share $XX.XX repurchases an were

billion, the and Intelligence most community the Maine. bank named assets ranging National Camden $XX billion the $X banks as S&P to of from with XX Bankrate.com popular Market Global list its best-performing During quarter, Corporation to top named National Camden in

its Finally, giving we're $XXX,XXX to mark the for Hope@Home program, that homelessness in shelters communities, homeless our which extremely proud addresses our since donations in surpassed inception XXXX.

ask now our performance. financial to review I'd like to Debbie

Deborah Jordan

everyone. afternoon, Good

in in income. a previous income results to comparing net due slight operating with deposit the and X% and and loan due a When same decreased interest to over to we an of net mentioned, $XX.X period year income primarily our the income. net interest decline up last the fee pleased second quarter, are Greg increase million As margin with or results quarter in growth, expansion increase $X.X million net X% strong X% costs

representing quarter, an $X.X increase reached expenses of second an for the million million Operating expected periods. $XX between level

Foreclosure in recorded the and previous quarter. increased periods costs recovery $XXX,XXX between a to due collection

quarter a personnel reflecting up of merit X%, increases. In were costs addition, full

increased we with growth. up growth and and since quarter, portfolio income the March million had X%. During solid loan balances $XX.X X% a healthy in deposit C&I and XX residential loan The generation mortgages fee

are net growth up were unit for very home of with estate quarter. volume $XX.X We the million, pleased increasing equity our with quarters. balances the and real Commercial slightly C&I balances between

to adjusting CD net and to large relationship, to to one quarters. between points income quarter, compared basis the basis interest and the million X% deposit million interest balances margin was quarters asset points declined to of When points yield net balances interest between growth X compression from the funding solid Net $XX.X basis for a quarters. deposits of the X.XX%. X X% result due in previous grew decreasing X margin decrease total for account the or quarter. the company's deposit the loan costs X% quarter increasing for checking checking and Core CDs $XX shift between Despite increased related of the

average quarters, a points This was than The X cost X.XX% higher was increase between which for basis little company's the quarter. deposits of an second of reflects anticipated.

XXXX with We year total interest a increase points. basis management the June of have costs funding rate over cycle. of its of has funds The this Xx from Reserve rising rate XXX been our Fed through raised for December Federal happy

increased cost During deposit this full-cycle resulting by company's of deposits a period, points, basis in XX%. XX average of beta the

lower the of several balance the we income. current Given the taken position, interest rate have and to net reduce company's for to sheet outlook longer interest actions impact a period rates

duration portfolio during the entered also to have emphasized company recent us downward against $XXX more movement. commercial rate fixed-rate and The purchases. a million We for hedge investment into have quarter both protect to help lending through and residential our added

this interest anticipate relatively of will impact basis second expectations interest we net for normally eliminate half remaining margin deposits from fourth providing to In of the cut our in the the flat seasonal the the rate tomorrow result in Fed net estimate remainder year, receive third we year. this and for point We of the XX core quarter. benefit the margin

The year-to-date X under and to due net past quality provision portfolio increase level assets basis loan The or in of loss points largely expense with just $XX of nonperforming for million on average to X was quarters at growth. loan between charge-off remains basis. quarters strong our the annualized an the $XXX,XXX

final worthy area of mention The is income. fee

of Our income over X% most second Fee increase quarter second which largely to periods quarter quarter fee up a X% due fee over topped of categories. over seasonality. $XX is The million, and the across quarter the a income over XXXX. last previous was each increase these was increase

for the you. quarter the comments questions. Thank concludes on now That our up second open results. We'll call

Operator

Instructions]. [Operator

Damon comes from first with DelMonte The KBW. question

Damon DelMonte

was the Deb, a So margin. I for more first bit question. looking little just color on

for that some I think for the back a Is half that have you year. given cut expect rate said that cut rate in, taken the and the to hold relatively you to of you prepare correct? coming guys the flat actions margin

Deborah Jordan

Yes. We still are slightly asset-sensitive.

cut, income with see base. deposit year, around and second do Keep the Fed a margin. would half a so demand that And of normally in in the each net in rate pickup you interest mind slight our decline we X% get

that will our will deposit reprice XX% at the on X/X have of a portfolio you will that side. It's is XX impact offset loan envisioning our cut. we're look we reprice of deposits what XX our rate next that in within When the the about on sheet, days days. So benefit balance help about versus

most -- certainly I banks with we like a feel rate the So will cut. impact think slight

whole saw The rate on great increase up. were in the environment, did markets, other quarters, rates you We our on are rate rising seeing deposit thing moving is the through that we're and we it deposit we but funding. knew the between still lagging

so still competition pricing reduced our promotions a and lot of a have And in market. acceptable that our there's to we've by dropped level quite bit, although seem off exception

think shift the feel especially on going So little a we're still side. some pressure to we they the deposits, if to of CD

for hoping this I'm for rest of flat seasonality. a just what is margin the deposit given year So the

Damon DelMonte

it. I the into large that past this in checking moved correct? you borrower Is deposits Got interest-bearing you that think from a And CDs. mentioned accounts had quarter, the

Deborah Jordan

correct. is That Yes.

Damon DelMonte

pretty growth Any on quarter was color this balance And the what strong. growth. I quarter on Okay. guess then drove end increase? quickly C&I loan

Deborah Jordan

came then the is quarter. part of I I process. but banking fronts. the think we We automate that count on saw to business $XX in, unit compared activity our have it on of still one application side. on really credit that, larger MortgageTouch, XX% And drilled news from first the we more retail million, the helps participating up loan all had when touch, lenders business was mean, great We the side, which a center

that volume. the of happy kind across So to board, see

Damon DelMonte

half that general And of the initial -- the then, play Greg, in into kind does kind year? softening comments your greater of footprint. some growth for about back commercial commercial market of the in your How

Gregory Dufour

replicate Sure half obviously don't will. expect Damon, half. I'd say, the to in back we the first What is growth

and loan a said However, as all growth, on the we're mid-single-digit we've look seeing along, it little we end. higher bit to

So on we end what will we us year in expect in back the will bring to the expect happen be. where

Damon DelMonte

range? that's mid-single-digit And kind a of Okay.

Gregory Dufour

Yes.

Operator

Breese question Matthew next from The comes Jaffray. Piper with

Matthew Breese

quarter in on look wanted benefit kind the and margin vary when terms year. to the just the back outlook received. it the for I the past, second half can third of the I to focus from in years In margin the quarter, of of

what so would know I XXXX? in happens without flat benefit NIM, a margin what of I cut, have so guidance the but And Fed idea is been good get a the

Deborah Jordan

Matt, back have we of pricing X pressure. and I weren't increase seen probably if half rate a this would of some the the cut Yes. X to point think have seeing we deposit year in basis competitive didn't we

Matthew Breese

Right.

you provide from you those front Okay. and the of -- deposit on some fronts, the can the loan I competition loan hoping both was front. And mentioned on increase anecdote. on an both

C&I -- a a some being a you there? and it, it's were on if both it CRE competitive lost us on is instance, or Could were you perspective? that and color you how give For much more you competitive structure loan rate loan

Gregory Dufour

on in especially And the New England, more Sure. be CRE. tends to in market, markets are larger CRE our the Yes. be again, primarily to transactions which And it tend broker-driven.

some all a as XX, shopped. could so basis say, And effect, that out be being would on the as points. deals seeing in on of much XX we're we are basis credits, market I spread

more dramatic the that our of better over competitive pricing XX be say will deals, get get our but below, credits. quality we to not on we credit for to we XX for high But we'd the box. that's that see competitive Now will benchmark by approach, when out down

the pressures side, transom. amortization may tend the be on across to we amortizations. It's starting acceptable, on to pretty being And that deals see or the again, credit, we as point all right increase to a transaction, see but structure to well apply that XX-year as you mark. And LTV still right out market, normal spread right conversation can't come

Matthew Breese

Right.

just then back And the commercial that the last growth. of kind I looking at quarters Okay. mean explains estate stepping two and of numbers, real

should the think as loans that C&I and residential about of getting here? So we wagon of to we kind growth, kind consider pulling mid-single-digit

Gregory Dufour

should. They

Of course, choose a variability residential is to or them The always housing the conditions them. market. to are hold whether sell we compared big

that not small our lenders retail business for through a do tend to bit larger commitment a us. small business and That's just Debbie as little those more see aiming a that fungible it's the So referenced, like for want asset from grow. we loans long-term transactions, to C&I coming strategic C&I We're way. movement, bread-and-butter seeing franchises. been We very but always good be some our

see of do we more want So that. to

so takes in all had have it our that I one to of and million you maybe can lot think of C&I loans, situation multiple of a on CRE has book work a struggle we the banks deal growth could is big XX, because business $X be to always probably doing that. monitor get that

Deborah Jordan

pipeline, also I And $XXX really over XX. committed say It's of our June mark million as is strong. will mortgage the pipeline

Matthew Breese

to And to that what that compare -- compares did last quarter?

Deborah Jordan

want to around million. at say -- under I were quarter, we last Oh, $XX

Gregory Dufour

a Again, lot this seasonal brand. should is higher. be a It

Matthew Breese

Correct. Correct. Yes.

back then release, some quarter. $XXX,XXX. And you to Understood. note going in Okay. expenses, were they expenses that there to this tied And the just additional picked up OREO,

expect that secondly, still you're should there is, a or was if is that first out, And in expecting. there we Is than what something I nature? the we in bit were back unusual $XXX,XXX higher continue? to to onetime is then little anything that So else

Deborah Jordan

line we normalized Yes. around In should on item, -- I that we say that see should in quarter a basis, line a $XXX,XXX item. would

So related to hit the subservicing quarter. that portfolio we something have did during

was about that So that is recurring, not and $XXX,XXX.

Gregory Dufour

Yes.

Matthew Breese

Okay. course was And normal else then everything business? of

Deborah Jordan

Yes. Yes.

Matthew Breese

the last thing repurchases. our And Okay. touch wanted on just I then share to is

the little you -- be everything so, of bit pace extent more a we And Given it's laid if to out that think? will challenging. you've Could do of what in see environment, difficult. up? repurchases kind It's growth pick

Gregory Dufour

that at making it always at. say an that like really, it's almost look we would investment from -- I look we

probably So else, like buy a to prefer on we dip. anybody

comfortable I you just get up. of driven. we at quarters. tool or a when think really a focused, to commitment we're a it is really flip trading pick for pop And up believe Matt, several next the we're to I good repurchasing going the look conditions, pace share so may are here is on we still the of up over the do by because that, overall And management, we when don't prices the want or quarters capital at side make though whatever not we economic tool in, even will, capital -- looking the if you and few

Operator

Instructions]. [Operator

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

Gregory Dufour

just I Chuck. pleased declines, rate the pleased to say you, our with with we positioning feel economic want Thank for quarter, conditions.

getting I to great of anything, into recognize, well. that great of have put for us, a lot for with of a do those are lot a done people job a thought hard team you They've want just we of the us positioning that. work investors, our and As shareholders and really, call, on

that, just the your to efforts. company. I to the and in and those With talking support publicly look day all a as future. forward great So appreciate want always, I you attention Have recognize to acknowledge and of also,

Operator

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

disconnect. now may You

Camden National (CAC) 31 Jul 192019 Q2 Earnings call transcript