CAC - Earnings call transcript Q1 2024 | Camden National Corporation

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Operator

Good day, and welcome to Camden National Corporation's First Quarter 2024 Earnings Conference Call. My name is Seth, and I will be your operator for today's call. [Operator Instructions] I will now turn the call over to Renée Smyth, Executive Vice President, Chief Experience and Marketing Officer.

Renée Smyth

Thank you, Seth. Good afternoon, and welcome to Camden National Corporation's Conference Call for the First Quarter of 2024.

Joining us this afternoon are members of Camden National Corporation's executive team Simon Griffiths, President and Chief Executive Officer; and Mike Archer, Executive Vice President, Chief Financial Officer.

presentation from statements, today's what today's could actual call. that materially differ is note contains and forward-looking results Please discussed on first well as Cautionary contained other reports which forward-looking these with in issued quarter the file our SEC. was as language release, XXXX morning statements this we earnings regarding in is camdennational.bank. public and materials on these are available our Investor All filings Relations website at the Camden under the trades on NASDAQ Corporation National CAC. symbol

are release, a includes to addition, of to Griffiths. financial measures. to insights presentation host, National reference are our in measures also introduce In Any with non-GAAP financial Simon Corporation's pleased on President and non-GAAP discussion intended Relations meaningful which provide GAAP today's Chief website. I'm and available Officer, Camden Investor reconciled our is earnings Executive

Simon Griffiths

afternoon, then thank us and into Renée, will Thank call and you We appreciate for good and you, Q&A. our our on quarter will I and your and comments, Mike the joining interest. some sincerely then up time today. we call performance open dive first give for will everyone,

our management depth like experience I to team leveraging team position now into and the banking of days including, be strategies team on diligently XX I President as with executing Executive role report, as our and impressed the First, over the and the organization. continue I'm executing strength. of member Chief throughout the talented members to would Each Officer. on focused primary is growing relationships and our

quality financial pleased liquidity. net quarter quarterly results, XXXX. per share first diluted this our income of capital, by $XX.X strong earnings $X.XX are we for morning, of asset supported Earlier we million and reported or Overall, the with

regulatory steadily be capital of excess levels ratios continue well in Our regulatory and grow. to required

first X point we quarter ratio X.XX%, tangible year-end. of a up equity since basis with closed reported common the As

continues manage rigorously us with which to We our disciplined culture, continue to consistent serve credit credit well.

points XX of quarter, total assets by reported at asset assets. basis evidenced strong nonperforming For the quality, we first just

Our balanced risks. with remains well meaningful portfolio no commercial loan concentration

portfolio and of credit teams Our special found areas asset and not have proactively review any our systematic continue to concern.

look credit and we context For maturing and of rollover to asset significant communities knowledge strong early of testament certain indicators. due migration classes borrowers for our efforts, the in-depth our is other interest that in amongst continue a loans, rate relationships example, in score areas lease at rate we the This risk resets with serve. to diligence of

commercial fuel customers As continues our and to strength. have character our our credit team which indicates depth

with see consistent our to few over reasonably quarters. continue past We moderate approved demand our communities pipeline in the remaining loan

new Our customers both commercial teams are developing and and categories. relationships in consumer

a first remains quarter noninterest and fourth control decreased quarter X% of as to the was for Expense expense compared evident the XXXX of focus XXXX. key

pressure response revenue During caused we costs maintain decreasing to took interest this quarter, in and to margin. manage by net actions

to mobile XX serving expertise and years areas month, wealth services efforts. the the This Managing welcomed intelligence access with provide management fiduciary and team recent we unprecedented after more and bolster to wealth and our to financial by teams clients their Garrett XX and clients We're anytime, incredibly of of transformation app is McKnight Senior services. client wealth Jennifer families wealth the and of market our leader, Northern launch And investment than to adding the has insights leading Director in nearly Company management management, lead our our retired industry. former new Trust years a excited portfolio at to planning a management wealth anywhere. executive Garrett's our portal and experience, Garrett in

latest they live platform use at to fund and customers our milestone deposit customer expand transformation within efforts wherever experience road whenever and mobile successful unifying state-of-the-art go online on Our scheduled further This digital opening and our and minutes technology in-person accounts the customer is map to and our advancements also include allowing a to digital base. year-end, new account open, choose.

ability In are summary, to the although our we and adapt solid changing the the financial landscape through deliver services industry to face returns economic continues in current to confident challenges. uncertainty,

positioned well are are to on our We relationships capitalize future. our customer exceptional in investing and

it. a Our on a plan confidence team clear growth comes talented from to having drive focused profitable strategic and having executing

Now Mike will provide some first quarter highlights.

Michael Archer

Good Simon. afternoon, you, everyone. Thank Excellent.

XXXX. per we reported with results are pleased diluted $XX.X cycle. of earnings continue first income quarter interest morning, a This for navigate to share and we these of rate as of million the Overall, $X.XX through challenging net we

Signature higher than the XX% the for higher X% quarter the of year realized $XXX,XXX compared for income investment the losses ago. non-GAAP basis, income a in last on previously quarter XXXX. and last increased a adjusting year quarter quarter the net XX% Net we of Bank than recovery over X% Adjusted first was wrote-off decreased bond to and first a XXXX. sale fourth of that the and On

basis tangible the was to of tangible per an and increase XXXX months. share first continues for over of X return first value adjusted by assets quarter highlighted X% book past our increase point XX average quarter an X.XX% of and in on build, Our of the capital XXXX, XX% the up to during

on was basis quarter experienced our continue products. a to our decreased deposit points In anticipated. XX to markets and We first net Funding few quarter, increased last points a the the we and we in earnings normal see quarter, expectations than outflows cost remix communicated lower linked-quarter the first basis higher points deposit in seasonal XX was costs the from than call. during higher the first X.XX% to which our basis lower basis margin to interest X.XX%, for

derivative. be optimize the interest examples bank program, interest first including revenues net checking Through which grow quarter, and sheet alternatives, calculated few term CDs of optimizing brokered $XX increase cost to balances include continue replacing advantageous million net margin. actions included and maintain Our of and and cost margin funding profitability. deposits deposits, interest funding the take on higher our attention and to million sheet continues to the balance we A balance to more with $XX

hold margin certain in of will normal or anticipate half balance we June, As quarter, anticipate quarter. with deposit the the to early and mature interest as X.XX% at we inflows currently look derivatives sheet seasonal second the upside towards picking back net around second possible up we

In forecast the basis continued below first $XX.X lower to response of linked first $XX.X to expenses doing interest pressure during million, to able closely. expenses the net $XX quarter which X% quarter In million. were on took is we a manage for communicated expense our to to actions on quarter by million our previously manage well so, we margin,

anticipate X%, rest the trend slightly balances higher and with loan will the by for real estate closer first year $XX.X In we line forward, look guidance. operating quarter, we increasing do by commercial grew driven prior expenses the loans of As in million.

in rate continue mix we We and environment. current our Based current and anticipate products for quarter. with currently strategy, interest the to our on loan similar be across the loan the second pricing disciplined pipelines growth loan

total current past quality charge-offs and segments, loan reduce recognized quarter reserve March supported metrics, the and $X.X a Bank including a recovery continued loan total growth quarter This us stress for have of very of $XXX,XXX by net negative and for performed provision strong, $X.X due total of testing quarter. basis million X.XX% first of the loans loans, X on the Our loans to nonperforming our annualized to The million points to excellent total loan X.XX% average points of for bond, loss and loan strength loans. resulted Signature the first of of modest combined be combined credit we asset X gave XX. of loans of the of certain we credit the quality internal in with past for our basis asset quality on at expense confidence loans with first losses

liquidity continue and to strong. be also capital Our positions

board improved in capital regulatory first and the has book ratio quarter. Our the across

ratio tangible March March XX, XXXX, at December XX, was common compared equity X.XX% at X.XX% at XXXX, to XXXX. Our and XX, X.XX%

at and be previous deposits sources available Our with continues very were total and of deposits, X.Xx which to XXXX, March XX.X% uncollateralized deposits periods. uninsured uncollateralized consistent uninsured our XX, liquidity were and

concludes now the questions. our call open This for comments. We'll

Operator

[Operator Instructions] Our James. Moss first question Raymond from Steve from comes

Stephen Moss

seeing just days. also down I by pricing quarter-over-quarter. And loan what about loan went Maybe loans as in XX basis for commercial with Curious you're front, noticed starting your these pricing markets to that yield along in here. getting points

-- curious there's unique of kind if what anything Just there?

Michael Archer

Sure.

in think, was origination our of Just higher. and continue for be we our first to X.X% loan our terms continue to some too, part originated, of the to interest hold in X% in that terms I We the seeing, of neighborhood on steady the we're there rates pricing, keeping neighborhood in -- pipelines rates yield Steve. currently pretty right of quarter keeping really what

where and that disciplined. on focused that very be and can to price being continue we So we getting

go the piece On ahead, Steve. sorry, the for second there I'm --

Stephen Moss

go No, sorry. Mike, I'm ahead,

Michael Archer

I to did there. say -- refinanced or that's one nothing atypical the syndication abnormal the So quarter, rather decrease. primary really going and the was that have we the for piece, driver on loan C&I essentially C&I But during repriced

Stephen Moss

come of of like and quarter. And June, what kind during balance you maturing takes to referenced, help sounds terms it. the do added in puts Got moves the sheet just have it Okay. then you here. the some derivatives the of you with some And Mike, just of then

Michael Archer

Sure.

executed frame. the December actually we derivative the time So in

top either was say January. or I forward $XX sole start think million I mentioned, $XX the CD had Really of we it it in expensive of my that that more $XX head. million. was was replacing with a the with idea to off million want that

swaps. our really books costs the terms They've off June up rolling has that where in we have of trying Just our in in margin tables. time be compressing derivatives quite for been can. And funding and some again, million to that yields our some $XXX in of sheet of essentially, then frame, balance of on showing time, terms CRE advantageous we the are been

a we rolling do provide X, past So to X go-forward anticipate point. and do should those points basis on we once that that off get margin we here, basis anticipate

Stephen Moss

I appreciate Okay. Got it. that.

as hold XXX-ish the the some third of basically, this kind So quarter quarter. rates head in margin into if this kind then and range, of upside we

Michael Archer

think a that's I summary. fair Yes,

Stephen Moss

And terms that. just Appreciate here. on Okay. side of mortgage in the

mortgages saw You -- sold this more guys quarter.

your just more production saleable forward? Just we given going should higher here about kind of think business volumes curious or the mix appetite

Simon Griffiths

say, Steve, seeing Simon. single-digit overall, growth we're I'd where is it. low

which side, think, demand I see is resi strength and the the -- continue We nice reflect, economy in general. the to to of consumer continues the on

to and certainly growth, that positioning how continue we're demand but certainly loan within out that's So our of modest growth, see some strong sort there.

Stephen Moss

Okay. And release the I a regard Simon, also, deeper then reference reserve in about credit. diving Appreciate heard and to just that. with the

reviews more little that comfort maybe this how the reserve dynamics quarter and the to Should Just us we color expect more you as any release gave curious, just a the give in buckets at some looked around upcoming X? or quarter.

Simon Griffiths

Yes.

think, think to and a and test as talked the look, strong remarks, in we just we we opening see stress the credit and just continue I about portfolio I strong performance have identified team this opportunity. very very

to is of going certainly and change. And this made look uncertainty And quarter was just credit add for I strong key think Mike, there's obviously at a -- want year, of certainly, a the of I on going the sense. rest appropriate for Obviously, position, think, back for case, year. But do a you right driver but it forward, how lot the the felt we terms this is that in of team I a overall, anything? case we're quarter. feels position think outlook now I of it just the release a could thought to as the half potentially the very

Michael Archer

other interest problem issues And the, controls Yes. book. very loans portfolios. factors so really areas or we're some not call continue there and seeing in of forth, an perspective. some just dove strong I felt any those headline specifically, rate of to risk just some interest-only would the debt really service as We examples. and seeing a across material We're around have LTVs and -- the we that from credit news the stressing systemic there anything rent just I'll of it, our Steve, team into say and

but we think I is own monitor, said been we've where and that commentary, was coupled And we just like in combined with testing to how And macroeconomic prudent it just felt how this we'll to accordingly. this adjust and continue change, appropriate very cetera, reserves, factors some we to feel good at certainly, the But of monitor. release if et at level. stress and performed, we're with, our I continuing time we'll

Operator

from Damon next KBW. Our question comes from DelMonte

Damon Del Monte

Just to follow provision up on credit outlook. kind the of questioning and the on

cover a be we little net like new a If be come the loans kind putting on targeted of just if new you're growth, so, you what low reserve should kind books? loan of bit expect provisioning guys like the expecting would absent that would to like of And loan single-digit on any charge-offs, growth?

Michael Archer

David, Yes. it's Mike.

further we I around loan quarter. of think for there, ACL, the hold I commentary, think digits we some terms if to single our like growth low we anticipate we'll right do said I probably just next are in mean where mid-XXs in now. continue

that we expected anticipated have at Certainly, now But So nothing size were, pretty or if to at probably end, right are really But where low again, charge-offs, we level. certainly. feel this provisions. that pretty we'll account for this accordingly. point, if strong about we net

Damon Del Monte

BTFP the guys you increased And you of drawdown that Great. then your I noted the think before quarter. end

funds and ARB spread? of for cash put used the of where Or funding purposes? guys actual took it being that an that kind did able are a you is kind and you clip wondering, small to use in like as opportunity Just

Michael Archer

No, we in really drive from just before was any it more into for to program get of of some were dynamics call that change. use optimization a truly. expansion. that to We able regard the NII it, that didn't It incremental, margin

year sense have to point, rates, we and proves that. just -- position $XXX it we for rising those -- other opportunity saw given any just the bolster really interest and an at come so our in beneficial rates thought And can risk honestly, favorable or prepay X.XX%. it different down, this we tranches again, it's considerations, to at X made from locked risk of in So rate million some really and a

Damon Del Monte

it. Got

ticking $XX.X quarter? just Okay. And to Could of your to you commentary your the higher prior million just if lastly, expenses kind prior guidance on us guidance. $XX then remind per million like

Michael Archer

Damon. right, that's Yes,

I some think additional provide just clarity. to

I the the midrange closer see in quarter, think XX in -- there. second we somewhere to that could

flush again, back or is quarter, in that good this on But in range of minus. a certainly that, plus some seasonality that after through year, think end, of the the the second the just probably I half lower items still. but

Simon Griffiths

franchise. short Yes. Mike add, investments we've next but got up in the we Damon, is long-term longer that And probably if mentioned, the on side invest bit term can balance I and a the -- think, and I the with technology we of little quarter, balance right, that as and the said, to in great the just as to continue pushes health getting continue some term health

Operator

from from comes Inc. The next Stephens question Matthew Breese

Matthew Breese

not out I early those kind -- with the deposit of you are of was the trends any margin hoping stability help in me signs and month-over-month could of in costs there and whether of either signs or items?

Michael Archer

question, Matt. Great Yes.

and We see level in we're basis more maybe word, months on stabilize or increase recent starting deposit a right the but is isn't certainly that pleased see a to that slowing. in costs of to costs funding are is the month-to-month

to line kind and seasonal of with from X.XX%, speaks until the part, in benefit asset near look of to kind see more So of seeing earning derivative. you in will, in the the the as kind on staying I term yield flat think it's as starting we what start relatively the the inflows it's that well like to we're if

Matthew Breese

Got it.

And then of interest-bearing. deposit like the little mix bit Okay. the just felt or shift frustration front, continued the lines into out capitulation reading mix on between of noninterest-bearing in a

out and I shake thoughts say, now X you we then a and items. deposit think get I would those hey, to love how ahead on If have in here's look terms to of mix growth, from year your deposit

Simon Griffiths

certainly to and on environment, of on into low the moving on that's that lot the consistent no rate and of a front obviously, Fed depend CD lot strong a very continue, on think into is likely how a Mike as I has relationships around We with cost with customers volumes. cost. is terms to start potential Matthew, look think relationships. and say downward But portfolio. I Fed Yes, maturity a one rate base indicated, customer our And customer the things well we'll in of stabilizing focus those as sort playbook of see certainly We the higher from sort extremely sort going of I we've we've continuing and think new to think certainly of but it's effectively obviously, that depends to have team, trend moves. well sort customers around book as drive CD customer. I'd value. I to those to build that brought the our in the the that's of manage a done seen, deepen And the question. team it as we generally, into look relationships, Yes. a Simon. great environment And

we we at them earnings Maine and deepen team. both new in I of take for the beginning, that serve tremendous another and the the new mentioned communities call Garrett us the the the in And in and the call, those platform to wealth capabilities have, opportunity that's mentioned. we addition the digital leader think then we the And to leverage relationships,

think those basis. leverage certainly a I can that So go-forward going be are on things

Matthew Breese

I about bump out couple dynamics then a more just It even quarter. Fed Fed appreciate look bit be more yield deposits all about thinking to terms If and second of or in of out expansion? that, we hikes, quarter. your a third sound are more for forward had cuts flush might some And NIM that. beyond the assuming the commentary, in a of little the repricing stable NIM no fully asset as optimistic quarters no earning year you these

Michael Archer

Yes.

yes, short the think is answer I Matt.

bit we're honestly. point, think that kind a of of inflection I little

even increase in I to I for start opportunity here. from margin environment us, seeing think this expansion to for do to us continue see

be for year the beneficial. make would if the hold upside if certainly, we to be call it were longer. cuts, that And think -- I added So Fed

to I again think we're beyond. margin hopefully well the in and second positioned see half expansion certainly

Matthew Breese

Got it.

at just liquidity versus Okay. little from a cash want to that bit one what here elevated out? we of the maintain Should be? And last we've end then me. assets. Cash position you level that was historically, where to X% Is for quarter seen on

Michael Archer

No. share has I normal was now, cash flows. come that would right to down mean, of that, our timing levels. just with more position you I some

timing just Matt. So really,

Operator

have questions call. on [Operator the no Instructions] We further

So I'll hand floor Simon to Griffiths. the back

Simon Griffiths

Corporation, just of interest National Seth. want I your all time you, for a you rest your you and thank great Thank of Camden we your day. all for in wish to today and

Operator

conference This joining. all you for very concludes Thank much call. the

Camden National (CAC) 30 Apr 242024 Q1 Earnings call transcript