Camden National Corporation Reports an 8%
Increase in Fourth Quarter 2022 Net Income over
Third Quarter 2022
CAMDEN,
Maine, Jan. 31, 2023 /PRNewswire/ -- Camden
National Corporation (NASDAQ®: CAC; "Camden National" or the
"Company"), a $5.7 billion bank
holding company headquartered in Camden,
Maine, closed the year with fourth quarter 2022 earnings of
$15.4 million and diluted earnings
per share ("EPS") of $1.05, each an
8% increase over the third quarter of 2022. The Company posted
solid returns for the fourth quarter of 2022, including a return on
average equity of 14.03%, return on average tangible equity
(non-GAAP) of 18.18% and return on average assets of 1.09%,
compared to 12.50%, 16.02% and 1.03%, respectively, for the third
quarter of 2022.
For the year ended 2022, the Company reported net income of
$61.4 million, which was down 11%
from last year's record annual earnings of $69.0 million. The change in earnings
year-over-year reflects the significant change in market dynamics
between periods as short-term interest rates rose rapidly in 2022
and COVID 19 pandemic-related stimulus stopped. In response,
residential mortgage activity decreased sharply, Small Business
Administration Paycheck Protection Program ("SBA PPP") loan income
abated, and the Company increased its allowance for credit losses
("ACL") to strengthen its financial position in light of current
and forecasted economic conditions. For the year ended 2022,
earnings adjusted for income taxes, provision for credit losses,
and SBA PPP loan income (non-GAAP) totaled $80.3 million, an increase of 7% over the year
ended 2021.
"We're pleased to report annual earnings of $61.4 million for 2022 and $15.4 million for the fourth quarter of 2022. The
strength of our core operating earnings allowed us to further build
loan loss reserves throughout the year in response to growing
economic concerns, while our asset quality continues to remain
extremely favorable," said Gregory A.
Dufour, President and Chief Executive Officer of the
Company. "We are confident that our capital levels and strong
credit quality position us for continued success in light of a
dynamic and, at times, uncertain future economic conditions."
Dufour added, "The sharp rise in interest rates in 2022 resulted
in a prolonged and steep yield curve, which we anticipate will
continue in 2023. While this will challenge all financial
institutions, our strong core deposit base, excellent credit
quality, disciplined expense management, solid capital position,
and commitment to long-term sustainable growth will help us
navigate through the coming quarters."
In December, the Company announced a $0.02 per share, or 5%, increase in its quarterly
cash dividend. Over the past ten years, the Company has increased
its cash dividend from $0.67 to
$1.68 per share on an annualized
basis, highlighting its ability to generate long-term, sustainable
earnings and its commitment to deliver returns to its shareholders.
The dividend is payable on January 31,
2023 to shareholders of record on January 13, 2023. The Company's annualized
dividend yield at December 30, 2022
(last business day) was 4.03%, based on the Company's closing stock
price of $41.69.
FOURTH QUARTER 2022 HIGHLIGHTS
- Net income increased by $1.1
million, or 8%, over the third quarter of 2022, while
earnings before income taxes, provision and SBA PPP (non-GAAP)
decreased $861,000, or 4%, compared
to the third quarter of 2022.
- Net interest margin decreased 12 basis points to 2.76%,
compared to the third quarter of 2022, as rising funding costs of
42 basis points outpaced rising interest-earning asset yields of 27
basis points.
- Deposit beta, which is calculated using core deposits
(non-GAAP) and certificates of deposits, was 20.2% for the year
ended 2022, and our overall funding beta was 21.0% over the same
period.
- Loans grew $149.7 million, or 4%,
during the fourth quarter of 2022, resulting in loan growth of 17%
for the year ended 2022.
- Deposits grew $258.3 million, or
6%, during the fourth quarter of 2022, and core deposits grew
$146.0 million, or 3%, over this
period. For the year ended 2022, deposits grew 5% and core deposits
grew 6%.
- The ACL on loans to total loans ratio was 0.92% at December 31, 2022, a decrease of 3 basis points
in the fourth quarter of 2022 and a decrease of 5 basis points
compared to December 31, 2021. As of
December 31, 2022, asset quality
remained historically strong with non-performing assets totaling
0.09% of total assets, compared to 0.09% as of September 30, 2022 and 0.13% at December 31, 2021.
- Repurchased 225,245 shares of the Company's common stock at a
weighted-average price of $45.46 per
share during the year ended 2022.
FINANCIAL CONDITION
Total assets grew $171.5 million,
or 3%, during 2022 to $5.7 billion as
of December 31, 2022. The increase in
assets was primarily driven by the increase in loans of
$578.9 million, or 17%, partially
offset by a decrease in investments of $264.3 million, or 17%, and cash of $145.2 million, or 66%. Throughout 2022, the
Company redeployed investment cash flows and excess cash balances
to fund higher interest-earning loan growth.
As of December 31, 2022, loans
totaled $4.0 billion and represented
71% of total assets. During 2022, loan growth was led by: (1)
residential mortgage loans, which grew $393.8 million, or 30%, (2) commercial real
estate loans, which grew $129.5
million, or 9%, and (3) commercial loan balances, which grew
$65.8 million, or 18%. Loan pipelines
at December 31, 2022, have slowed in
comparison to recent periods as demand begins to wane and we are
committed to maintaining loan pricing discipline through this
current period of yield-curve inversion. At December 31, 2022, the retail and commercial loan
portfolio pipelines were each approximately $50.0 million.
As of December 31, 2022,
investments totaled $1.3 billion, or
22% of total assets, compared to $1.5
billion, or 28%, of total assets as of December 31, 2021. The decrease in investment
balances as of December 31, 2022, was
driven by the overall decrease in market value of the investment
portfolio designated as available-for-sale ("AFS"), primarily due
to the sharp rise in interest rates throughout 2022, and the
continued redeployment of investment cash flows to fund loan
growth. The net unrealized loss on the AFS investment portfolio was
$167.6 million at December 31, 2022, which included $66.5 million of un-accreted unrealized losses
from the transfer of AFS investments to held-to-maturity ("HTM") in
the second quarter of 2022, and $1.5
million at December 31,
2021.
As of December 31, 2022, the
weighted-average life and duration of the AFS investment portfolio
was 6.4 years and 4.9 years, respectively, and the weighted-average
life and duration of the held-to-maturity investment portfolio was
9.6 years and 7.0 years, respectively. As of December 31, 2022, agency-issued mortgage-backed,
collateralized mortgage obligations and debt securities comprised
91% of the book value of the Company's investment portfolio.
As of December 31, 2022, deposits
totaled $4.8 billion, an increase of
$218.0 million, or 5%, over last
year. The increase was driven by a 6% increase in core deposits
(non-GAAP). As short-term interest rates continued to rise in the
fourth quarter of 2022, customers continued to migrate from
non-interest-bearing checking to interest-bearing checking.
Interest-bearing checking balances grew $303.3 million, or 21%, in the fourth quarter,
while non-interest checking balances decreased $103.4 million, or 8%. Although brokered deposits
decreased $27.2 million, or 13%,
during 2022 to $181.3 million at
December 31, 2022, the Company
increased $91.5 million of brokered
deposits in the fourth quarter of 2022 using a laddered strategy of
12 months as a supplement to borrowings to protect against
short-term interest rates continuing to rise.
As of December 31, 2022, total
borrowings were $309.5 million, an
increase of $53.6 million, or 21%,
since December 31, 2021. Total
borrowings at December 31, 2022, were
comprised of $196.5 million of
repurchase agreements, $68.7 million
of Federal Home Loan Bank short-term borrowings and $44.3 million of subordinated debentures.
As of December 31, 2022, the
Company's regulatory capital ratios were each well in excess of
regulatory capital requirements. Despite the Company's regulatory
capital ratios remaining strong, the decreases in the market value
of the AFS investment portfolio due to the rise in interest rates
throughout 2022, caused decreases across the common equity ratio
and tangible common equity ratio (non-GAAP), as well as book value
per share and tangible book value per share (non-GAAP) over this
period. The Company anticipates these decreases are temporary and
not reflective of underlying credit risk within the investment
portfolio. The Company's non-regulatory capital ratios and book
value as of the dates indicated were as follows:
- As of December 31, 2022, the
Company's common equity ratio was 7.96% and its tangible common
equity ratio (non-GAAP) was 6.37%, compared to 7.76% and 6.13% as
of September 30, 2022, respectively,
and 9.84% and 8.22% as of December 31,
2021, respectively.
- As of December 31, 2022, the
Company's book value per share was $30.98 and its tangible book value per share
(non-GAAP) was $24.37, compared to
$29.59 and $22.97 as of September 30,
2022, respectively, and $36.72
and $30.15 as of December 31, 2021, respectively.
In January 2023, the Company
announced a new share repurchase program for 750,000 shares of
Company common stock, or approximately 5% of outstanding stock at
December 31, 2022. The new share
repurchase program replaces the prior program, which expired upon
the announcement of the new program.
ASSET QUALITY
Through the fourth quarter of 2022, asset quality remained very
strong with non-performing assets of 0.09% of total assets at
December 31, 2022, compared to 0.09%
at September 30, 2022 and 0.13% at
December 31, 2021. Annualized net
charge-offs for the fourth quarter of 2022 were negligible at 0.03%
of average loans, compared to 0.02% for the third quarter of 2022
and 0.03% for the fourth quarter of 2021.
The Company continues to actively monitor its loan portfolio for
signs of credit stress and, as of December
31, 2022, there have been no materials trends or concerns
identified. As of December 31, 2022,
loans 30-89 days past due were 0.06% of total loans, compared to
0.12% at September 30, 2022 and 0.04%
at December 31, 2021.
ALLOWANCE FOR CREDIT LOSSES ("ACL")
At December 31, 2022, the ACL on
loans was $36.9 million, or 0.92% of
total loans, compared to $36.5
million, or 0.95% of total loans, as of September 30, 2022, and $33.3 million, or 0.97% of total loans, as of
December 31, 2021. The decrease in
the ACL on loans to total loans ratio of 3 basis points in the
fourth quarter of 2022 reflects the Company's strong asset quality
and release of certain qualitative reserves as our ACL model
continues to mature. As of December 31,
2022, the ACL on loans covered 7.2 times non-performing
loans, compared to 7.2 times at September
30, 2022 and 4.9 times at December
31, 2021.
Overall, the global and national markets continue to be volatile
and carry a high degree of uncertainty. These factors are currently
forecasted using external economic data in the ACL model and
subject our ACL estimate to a high risk of fluctuation between
periods based on actual macroeconomic conditions and changes to
updated forecasted factors. We continue to monitor economic factors
and proactively assess the portfolio for any future risk.
FINANCIAL OPERATING RESULTS (Q4 2022 vs. Q3 2022)
Net income for the fourth quarter of 2022 was $15.4 million, an increase of $1.1 million, or 8%, over the third quarter of
2022. Diluted EPS for the fourth quarter of 2022 was $1.05, an increase of $0.08, or 8%, on a linked quarter-basis. Earnings
before income taxes, provision and SBA PPP income (non-GAAP) for
the fourth quarter of 2022 was $19.8
million, a decrease of $861,000 or 4%, compared to the third quarter of
2022.
Net Interest Income and Net Interest Margin. Net interest
income for the fourth quarter of 2022 was $37.0 million, a decrease of $831,000, or 2%, compared to the third quarter of
2022.
- Interest income for the fourth quarter of 2022 of $49.3 million was $4.7
million, or 11%, higher than the previous quarter. Our yield
on average interest-earning assets for the fourth quarter increased
27 basis points over the third quarter of 2022 to 3.67% driven by a
30 basis points increase in our loan yield to 4.21% for the fourth
quarter of 2022. The increase in interest-earning asset yields
reflects the continued increase in interest rates through the
fourth quarter of 2022 and continued redeployment of lower yielding
cash and investments to fund strong average loan growth between
quarters of $148.4 million, or
4%.
- Interest expense for the fourth quarter of 2022 of $12.3 million was $5.6
million, or 82%, higher than the third quarter of 2022
driven by higher funding costs as short-term interest rates
continued to rise in the fourth quarter of 2022, as the Fed Funds
rate increased 125 basis points bringing the range at the end of
the year to 4.25% - 4.50%. Costs of deposits for the fourth quarter
of 2022 were 0.84%, an increase of 39 basis points over the
previous quarter, primarily the result of interest checking costs
increasing 71 basis points between periods to 1.56% and money
market funds increasing 62 basis points to 1.46% in the fourth
quarter of 2022. Total borrowing costs also increased during this
period, increasing 76 basis points between quarters to 2.14% for
the fourth quarter of 2022.
Net interest margin for the fourth quarter of 2022 was 2.76%, a
decrease of 12 basis points compared to the third quarter of
2022.
Provision for Credit Losses. The change in provision for
credit losses between periods is highlighted in the table
below:
($ in
thousands)
|
|
Q4
2022
|
|
Q3
2022
|
|
Increase
/
(Decrease)
|
Provision for credit
losses - loans
|
|
$
642
|
|
$
2,513
|
|
$
(1,871)
|
Provision (credit) for
credit losses - off-balance sheet credit exposures
|
|
(176)
|
|
251
|
|
(427)
|
Provision for credit
losses
|
|
$
466
|
|
$
2,764
|
|
$
(2,298)
|
The decrease in provision for credit losses on loans between
periods was driven by the reduction of qualitative reserves as we
completed our annual ACL model review in the fourth quarter. This
release was offset by another quarter of strong loan growth of 4%
in the fourth quarter of 2022.
The decrease in provision for credit losses on off-balance sheet
credit exposures between periods reflects the decrease in loan
pipelines between quarters of $67.7
million as loan demand has slowed and we remain committed to
discipline loan pricing in the current interest rate
environment.
Non-Interest Income. Non-interest income for the fourth
quarter of 2022 was $9.8 million, a
decrease of $172,000, or 2%, compared
to the third quarter of 2022, primarily led by:
- A loss on the sale of investment securities of $903,000 in the fourth quarter of 2022 as the
Company executed a restructure trade; and
- A decrease in other income of $264,000 driven by a gain recognized on the sale
of a property in the third quarter of 2022, partially offset
by;
- An increase in debit card income of $735,000 as we recognized our annual debit card
volume-based incentive in the fourth quarter of 2022 of
$806,000, and;
- An increase in mortgage banking of $400,000 primarily driven by a positive fair
value adjustment on the Company's residential mortgage loan
pipeline designated for sale between periods.
Non-Interest Expense. Non-interest expense for the fourth
quarter of 2022 was $27.0 million, a
decrease of $98,000, compared to the
third quarter of 2022. The decrease was driven by lower salaries
and benefits costs of $587,000 as
incentive accruals were adjusted to reflect annual performance to
target. The decrease in salaries and benefits expense was offset by
higher customer fraud claims of $259,000 between quarters, higher consulting and
professional fees of $145,000, and
higher equipment and data processing fees of $100,000.
The Company's GAAP efficiency ratio and non-GAAP efficiency
ratio for the fourth quarter of 2022 was 57.72% and 56.35%,
respectively, compared to 56.71% and 56.43%, respectively, for the
third quarter of 2022.
SUMMARY OF ANNUAL FINANCIAL OPERATING RESULTS
Net income for the year ended 2022 was $61.4 million, a decrease of $7.6 million, or 11%, compared to the year ended
2021. Diluted EPS for the year ended 2022 was $4.17, a decrease of $0.43, or 9%. The decrease in earnings between
periods reflects the changing environment between years as Federal
stimulus programs in response to the pandemic stopped, recessionary
fears grew, and interest rates increased rapidly and ultimately the
yield-curve inverted during the second half of 2022. Earnings
before income taxes, provision and SBA PPP loan income (non-GAAP)
for the year ended totaled $80.3
million, an increase of $5.0
million, or 7%, over last year.
Net interest income for the year ended 2022 increased
$10.3 million, or 7%, over last year
as average interest-earning assets grew 7% driven by average loan
growth of 12%. The interest rate environment saw a dramatic shift
between years as the Federal Open Markets Committee aggressively
raised interest rates to curb inflation. The Federal Funds Target
Range started 2022 at 0.00% - 0.25% and closed 2022 at 4.25% -
4.50%. As a result, asset yields and funding costs rose sharply in
2022 and net interest margin increased 2 basis points over last
year to 2.86% for the year ended 2022.
Provision for credit losses for the year ended 2022 was
$4.5 million, compared to a credit of
$3.2 million last year. The increase
reflects the strong loan growth during 2022 of 17% and growing
recessionary fears in 2022 that are being accounted for within the
ACL model.
Non-interest income for the year ended 2022 decreased
$9.0 million, or 18%, compared to
last year, primarily the result of lower mortgage banking income of
$9.5 million, a decrease 69%. The
rapid rise in interest rates during 2022 increased residential
mortgage rates sharply, which slowed residential mortgage
production between years by 30%. Additionally, local market factors
contributed to lower residential mortgage sales as local market
interest rates did not keep pace with secondary market interest
rates.
Non-interest expense for the year ended 2022 increased
$3.1 million, or 3%. The Company's
GAAP efficiency ratio and non-GAAP efficiency ratio for the year
ended 2022 was 56.72% and 56.16%, respectively, compared to 55.41%
and 54.85% for the year ended 2021, respectively.
Q4 2022 CONFERENCE CALL
Camden National will host a conference call and webcast at
3:00 p.m., Eastern Time, on
Tuesday, January 31, 2023 to discuss
its fourth quarter and year ended 2022 financial results and
outlook. Participants should dial in to the call 10 - 15 minutes
before it begins. Information about the conference call is as
follows:
Live dial-in (Domestic): (844) 200-6205
Live dial-in (Canada):
(833) 950-0062
Live dial-in (All other locations): (929) 526-1599
Participant access code: 266790
Live
webcast:
https://events.q4inc.com/attendee/812519935
A link to the live webcast will be available on Camden
National's website under "Investor Relations" at
www.CamdenNationalCorporation.com prior to the meeting, and a
replay of the webcast will be available on Camden National's
website following the conference call. The transcript of the
conference call will also be available on Camden National's website
approximately two days after the conference call.
ABOUT CAMDEN NATIONAL CORPORATION
Camden National Corporation (NASDAQ®: CAC) is the largest
publicly traded bank holding company in Northern New England with
$5.7 billion in assets, and was
proudly listed as one of the Best Places to Work in Maine in 2021 and 2022. Founded in 1875,
Camden National Bank is a
full-service community bank dedicated to customers at every stage
of their financial journey. With 24/7 live phone support, 58
banking centers, and additional lending offices in New Hampshire and Massachusetts, Camden
National Bank offers the latest in digital banking,
complemented by award-winning, personalized service. To learn more,
visit CamdenNational.bank. Member FDIC. Equal Housing Lender.
Comprehensive wealth management, investment and financial
planning services are delivered by Camden National Wealth
Management.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release that are not
statements of historical fact constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, as amended, including certain plans, expectations, goals,
projections and other statements, which are subject to numerous
risks, assumptions and uncertainties. Forward-looking statements
can be identified by the fact that they do not relate strictly to
historical or current facts. They often include words like
"believe," "expect," "anticipate," "estimate," and "intend" or
future or conditional verbs such as "will," "would," "should,"
"could" or "may." Certain factors that could cause actual results
to differ materially from expected results include increased
competitive pressures; inflation; ongoing competition in labor
markets and employee turnover; deterioration in the value of Camden
National's investment securities; changes in consumer spending and
savings habits; changes in the interest rate environment; changes
in general economic conditions; operational risks including, but
not limited to, cybersecurity, fraud and natural disasters;
legislative and regulatory changes that adversely affect the
business in which Camden National is engaged; changes in the
securities markets and other risks and uncertainties disclosed from
time to time in Camden National's Annual Report on Form 10-K for
the year ended December 31, 2021, as
updated by other filings with the Securities and Exchange
Commission ("SEC"). Further, statements regarding the potential
effects of the war in Ukraine, the
COVID-19 pandemic and other notable and global current events on
the Company's business, financial condition, liquidity and results
of operations may constitute forward-looking statements and are
subject to the risk that the actual effects may differ, possible
materially, from what is reflected in those forward-looking
statements due to factors and future developments that are
uncertain, unpredictable and in many cases beyond the Company's
control. Camden National does not have any obligation to update
forward-looking statements.
USE OF NON-GAAP MEASURES
In addition to evaluating the Company's results of operations in
accordance with generally accepted accounting principles in
the United States ("GAAP"),
management supplements this evaluation with certain non-GAAP
financial measures, such as earnings before income taxes and
provision and earnings before income taxes, provision and SBA PPP
loan income; return on average tangible equity; the efficiency and
tangible common equity ratios; tangible book value per share; core
deposits and average core deposits; adjusted yield on
interest-earning assets and adjusted net interest margin
(fully-taxable equivalent); and total loans, excluding SBA PPP
loans. Management utilizes these non-GAAP financial measures for
purposes of measuring our performance against our peer group and
other financial institutions and analyzing our internal
performance. We also believe these non-GAAP financial measure help
investors better understand the Company's operating performance and
trends and allow for better performance comparisons to other
financial institutions. In addition, these non-GAAP financial
measures remove the impact of unusual items that may obscure trends
in the Company's underlying performance. These disclosures should
not be viewed as a substitute for GAAP operating results, nor are
they necessarily comparable to non-GAAP performance measures that
may be presented by other financial institutions. Reconciliation to
the comparable GAAP financial measure can be found in this
document.
ANNUALIZED DATA
Certain returns, yields and performance ratios are presented on
an "annualized" basis. This is done for analytical and
decision-making purposes to better discern underlying performance
trends when compared to full-year or year-over-year amounts.
Annualized data may not be indicative of any four-quarter period,
and are presented for illustrative purposes only.
Selected Financial
Data
(unaudited)
|
|
|
|
At or For
The
Three Months
Ended
|
|
At or For
The
Year
Ended
|
(In thousands, except number of shares
and per share data)
|
|
December 31,
2022
|
|
September
30,
2022
|
|
December 31,
2021
|
|
December 31,
2022
|
|
December 31,
2021
|
Financial Condition
Data
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
$ 1,259,161
|
|
$ 1,276,762
|
|
$ 1,523,485
|
|
$ 1,259,161
|
|
$ 1,523,485
|
Loans and loans held
for sale
|
|
$ 4,015,550
|
|
$ 3,865,309
|
|
$ 3,437,289
|
|
$ 4,015,550
|
|
$ 3,437,289
|
Allowance for credit
losses on loans
|
|
$
36,922
|
|
$
36,542
|
|
$
33,256
|
|
$
36,922
|
|
$
33,256
|
Total assets
|
|
$ 5,671,850
|
|
$ 5,551,724
|
|
$ 5,500,356
|
|
$ 5,671,850
|
|
$ 5,500,356
|
Deposits
|
|
$ 4,826,929
|
|
$ 4,568,604
|
|
$ 4,608,889
|
|
$ 4,826,929
|
|
$ 4,608,889
|
Borrowings
|
|
$
309,507
|
|
$
465,432
|
|
$
255,939
|
|
$
309,507
|
|
$
255,939
|
Shareholders'
equity
|
|
$
451,278
|
|
$
431,007
|
|
$
541,294
|
|
$
451,278
|
|
$
541,294
|
Operating
Data
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
|
$
36,982
|
|
$
37,813
|
|
$
36,797
|
|
$
147,694
|
|
$
137,436
|
Provision (credit) for
credit losses
|
|
466
|
|
2,764
|
|
1,230
|
|
4,500
|
|
(3,190)
|
Non-interest
income
|
|
9,782
|
|
9,954
|
|
12,101
|
|
40,702
|
|
49,735
|
Non-interest
expense
|
|
26,993
|
|
27,091
|
|
26,968
|
|
106,849
|
|
103,720
|
Income before income
tax expense
|
|
19,305
|
|
17,912
|
|
20,700
|
|
77,047
|
|
86,641
|
Income tax
expense
|
|
3,954
|
|
3,645
|
|
4,209
|
|
15,608
|
|
17,627
|
Net income
|
|
$
15,351
|
|
$
14,267
|
|
$
16,491
|
|
$
61,439
|
|
$
69,014
|
Key
Ratios
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.09 %
|
|
1.03 %
|
|
1.18 %
|
|
1.12 %
|
|
1.31 %
|
Return on average
equity
|
|
14.03 %
|
|
12.50 %
|
|
12.00 %
|
|
13.15 %
|
|
12.72 %
|
GAAP efficiency
ratio
|
|
57.72 %
|
|
56.71 %
|
|
55.15 %
|
|
56.72 %
|
|
55.41 %
|
Net interest margin
(fully-taxable equivalent)
|
|
2.76 %
|
|
2.88 %
|
|
2.82 %
|
|
2.86 %
|
|
2.84 %
|
Non-performing assets
to total assets
|
|
0.09 %
|
|
0.09 %
|
|
0.13 %
|
|
0.09 %
|
|
0.13 %
|
Common equity
ratio
|
|
7.96 %
|
|
7.76 %
|
|
9.84 %
|
|
7.96 %
|
|
9.84 %
|
Tier 1 leverage capital
ratio
|
|
9.22 %
|
|
9.24 %
|
|
8.92 %
|
|
9.22 %
|
|
8.92 %
|
Common equity tier 1
risk-based capital ratio
|
|
11.74 %
|
|
11.72 %
|
|
12.47 %
|
|
11.74 %
|
|
12.47 %
|
Total risk-based
capital ratio
|
|
13.80 %
|
|
13.81 %
|
|
14.71 %
|
|
13.80 %
|
|
14.71 %
|
Per Share
Data
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
1.05
|
|
$
0.97
|
|
$
1.11
|
|
$
4.18
|
|
$
4.62
|
Diluted earnings per
share
|
|
$
1.05
|
|
$
0.97
|
|
$
1.11
|
|
$
4.17
|
|
$
4.60
|
Cash dividends declared
per share
|
|
$
0.42
|
|
$
0.40
|
|
$
0.40
|
|
$
1.62
|
|
$
1.48
|
Book value per
share
|
|
$
30.98
|
|
$
29.59
|
|
$
36.72
|
|
$
30.98
|
|
$
36.72
|
Non-GAAP
Measures(1)
|
|
|
|
|
|
|
|
|
|
|
Earnings before income
taxes and provision for credit losses
|
|
$
19,771
|
|
$
20,676
|
|
$
21,930
|
|
$
81,547
|
|
$
83,451
|
Earnings before income
taxes and provision (credit) for credit
losses and SBA PPP loan income
|
|
$
19,765
|
|
$
20,626
|
|
$
19,246
|
|
$
80,293
|
|
$
75,281
|
Tangible book value per
share
|
|
$
24.37
|
|
$
22.97
|
|
$
30.15
|
|
$
24.37
|
|
$
30.15
|
Tangible common equity
ratio
|
|
6.37 %
|
|
6.13 %
|
|
8.22 %
|
|
6.37 %
|
|
8.22 %
|
Return on average
tangible equity
|
|
18.18 %
|
|
16.02 %
|
|
14.71 %
|
|
16.71 %
|
|
15.61 %
|
Efficiency
ratio
|
|
56.35 %
|
|
56.43 %
|
|
54.90 %
|
|
56.16 %
|
|
54.85 %
|
Adjusted net interest
margin (fully-taxable equivalent)
|
|
2.76 %
|
|
2.88 %
|
|
2.79 %
|
|
2.85 %
|
|
2.87 %
|
|
|
(1)
|
Please see
"Reconciliation of non-GAAP to GAAP Financial Measures
(unaudited)."
|
Consolidated
Statements of Condition Data
(unaudited)
|
|
(In thousands)
|
|
December 31,
2022
|
|
September
30,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
|
|
|
Cash, cash equivalents
and restricted cash
|
|
$
75,427
|
|
$
82,012
|
|
$
220,625
|
Investments:
|
|
|
|
|
|
|
Trading
securities
|
|
3,990
|
|
3,727
|
|
4,428
|
Available-for-sale
securities, at fair value (amortized cost of $796,960, $883,887 and
$1,508,981, respectively)
|
|
695,875
|
|
723,618
|
|
1,507,486
|
Held-to-maturity
securities, at amortized cost (fair value of $506,193, $491,760,
and $1,380, respectively)
|
|
546,583
|
|
534,309
|
|
1,291
|
Other
investments
|
|
12,713
|
|
15,108
|
|
10,280
|
Total
investments
|
|
1,259,161
|
|
1,276,762
|
|
1,523,485
|
Loans held for sale, at
fair value (book value of $5,259, $4,863, and $5,786
respectively)
|
|
5,197
|
|
4,629
|
|
5,815
|
Loans:
|
|
|
|
|
|
|
Commercial real
estate
|
|
1,624,937
|
|
1,562,887
|
|
1,495,460
|
Commercial
|
|
429,499
|
|
423,325
|
|
363,695
|
SBA PPP
|
|
632
|
|
685
|
|
35,953
|
Residential real
estate
|
|
1,700,266
|
|
1,619,409
|
|
1,306,447
|
Consumer and home
equity
|
|
255,019
|
|
254,374
|
|
229,919
|
Total loans
|
|
4,010,353
|
|
3,860,680
|
|
3,431,474
|
Less: allowance for
credit losses on loans
|
|
(36,922)
|
|
(36,542)
|
|
(33,256)
|
Net
loans
|
|
3,973,431
|
|
3,824,138
|
|
3,398,218
|
Goodwill and core
deposit intangible assets
|
|
96,260
|
|
96,416
|
|
96,885
|
Other assets
|
|
262,374
|
|
267,767
|
|
255,328
|
Total
assets
|
|
$
5,671,850
|
|
$
5,551,724
|
|
$
5,500,356
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
Non-interest
checking
|
|
$
1,141,753
|
|
1,245,137
|
|
$
1,279,565
|
Interest
checking
|
|
1,763,850
|
|
1,460,571
|
|
1,351,736
|
Savings and money
market
|
|
1,439,622
|
|
1,493,518
|
|
1,459,472
|
Certificates of
deposit
|
|
300,451
|
|
279,603
|
|
309,648
|
Brokered
deposits
|
|
181,253
|
|
89,775
|
|
208,468
|
Total
deposits
|
|
4,826,929
|
|
4,568,604
|
|
4,608,889
|
Short-term
borrowings
|
|
265,176
|
|
421,101
|
|
211,608
|
Subordinated
debentures
|
|
44,331
|
|
44,331
|
|
44,331
|
Accrued interest and
other liabilities
|
|
84,136
|
|
86,681
|
|
94,234
|
Total
liabilities
|
|
5,220,572
|
|
5,120,717
|
|
4,959,062
|
Commitments and
Contingencies
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
Common stock, no par
value: authorized 40,000,000 shares, issued and outstanding
14,567,325, 14,563,828, 14,739,956 on
December 31, 2022, September 30, 2022 and December 31, 2021,
respectively
|
|
115,069
|
|
114,536
|
|
123,111
|
Retained
earnings
|
|
462,164
|
|
452,927
|
|
424,412
|
Accumulated other
comprehensive loss:
|
|
|
|
|
|
|
Net unrealized loss on
debt securities, net of tax
|
|
(131,539)
|
|
(140,268)
|
|
(1,173)
|
Net unrealized gain
(loss) on cash flow hedging derivative instruments, net of
tax
|
|
5,891
|
|
6,545
|
|
(1,779)
|
Net unrecognized loss
on postretirement plans, net of tax
|
|
(307)
|
|
(2,733)
|
|
(3,277)
|
Total accumulated
other comprehensive loss
|
|
(125,955)
|
|
(136,456)
|
|
(6,229)
|
Shareholders'
equity
|
|
451,278
|
|
431,007
|
|
541,294
|
Total liabilities
and shareholders' equity
|
|
$
5,671,850
|
|
$
5,551,724
|
|
$
5,500,356
|
Consolidated
Statements of Income Data
(unaudited)
|
|
|
|
For
the
Three Months
Ended
|
|
For
the
Year
Ended
|
(In thousands, except per share data)
|
|
December
31,
2022
|
|
September
30,
2022
|
|
December
31,
2021
|
|
December
31,
2022
|
|
December
31,
2021
|
Interest
Income
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
41,985
|
|
$
37,568
|
|
$
32,827
|
|
$
144,709
|
|
$
125,437
|
Taxable interest on
investments
|
|
5,944
|
|
5,756
|
|
5,507
|
|
23,339
|
|
18,869
|
Nontaxable interest on
investments
|
|
772
|
|
790
|
|
754
|
|
3,096
|
|
3,001
|
Dividend
income
|
|
182
|
|
137
|
|
106
|
|
531
|
|
412
|
Other interest
income
|
|
436
|
|
330
|
|
257
|
|
1,113
|
|
765
|
Total interest
income
|
|
49,319
|
|
44,581
|
|
39,451
|
|
172,788
|
|
148,484
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
10,520
|
|
5,442
|
|
1,963
|
|
20,305
|
|
7,920
|
Interest on
borrowings
|
|
1,277
|
|
787
|
|
151
|
|
2,649
|
|
605
|
Interest on
subordinated debentures
|
|
540
|
|
539
|
|
540
|
|
2,140
|
|
2,523
|
Total interest
expense
|
|
12,337
|
|
6,768
|
|
2,654
|
|
25,094
|
|
11,048
|
Net interest
income
|
|
36,982
|
|
37,813
|
|
36,797
|
|
147,694
|
|
137,436
|
Provision (credit)
for credit losses
|
|
466
|
|
2,764
|
|
1,230
|
|
4,500
|
|
(3,190)
|
Net interest income
after provision (credit) for credit losses
|
|
36,516
|
|
35,049
|
|
35,567
|
|
143,194
|
|
140,626
|
Non-Interest
Income
|
|
|
|
|
|
|
|
|
|
|
Debit card
income
|
|
3,969
|
|
3,234
|
|
3,979
|
|
13,340
|
|
13,105
|
Service charges on
deposit accounts
|
|
1,882
|
|
1,941
|
|
1,826
|
|
7,587
|
|
6,626
|
Income from fiduciary
services
|
|
1,560
|
|
1,535
|
|
1,656
|
|
6,407
|
|
6,516
|
Mortgage banking
income, net
|
|
1,035
|
|
635
|
|
2,084
|
|
4,221
|
|
13,704
|
Brokerage and insurance
commissions
|
|
878
|
|
1,003
|
|
1,028
|
|
4,147
|
|
3,913
|
Bank-owned life
insurance
|
|
382
|
|
374
|
|
590
|
|
1,901
|
|
2,364
|
Net loss on sale of
securities
|
|
(903)
|
|
—
|
|
—
|
|
(912)
|
|
—
|
Other income
|
|
979
|
|
1,232
|
|
938
|
|
4,011
|
|
3,507
|
Total non-interest
income
|
|
9,782
|
|
9,954
|
|
12,101
|
|
40,702
|
|
49,735
|
Non-Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
15,262
|
|
15,849
|
|
15,265
|
|
62,019
|
|
61,007
|
Furniture, equipment
and data processing
|
|
3,404
|
|
3,305
|
|
3,293
|
|
13,043
|
|
12,247
|
Net occupancy
costs
|
|
1,863
|
|
1,765
|
|
1,963
|
|
7,578
|
|
7,532
|
Debit card
expense
|
|
1,192
|
|
1,210
|
|
1,147
|
|
4,602
|
|
4,313
|
Consulting and
professional fees
|
|
959
|
|
814
|
|
1,039
|
|
4,073
|
|
3,691
|
Regulatory
assessments
|
|
593
|
|
575
|
|
562
|
|
2,338
|
|
2,074
|
Amortization of core
deposit intangible assets
|
|
156
|
|
156
|
|
164
|
|
625
|
|
655
|
Other real estate owned
and collection costs (recoveries), net
|
|
20
|
|
56
|
|
55
|
|
29
|
|
(101)
|
Other
expenses
|
|
3,544
|
|
3,361
|
|
3,480
|
|
12,542
|
|
12,302
|
Total non-interest
expense
|
|
26,993
|
|
27,091
|
|
26,968
|
|
106,849
|
|
103,720
|
Income before
income tax expense
|
|
19,305
|
|
17,912
|
|
20,700
|
|
77,047
|
|
86,641
|
Income Tax
Expense
|
|
3,954
|
|
3,645
|
|
4,209
|
|
15,608
|
|
17,627
|
Net
Income
|
|
$
15,351
|
|
$
14,267
|
|
$
16,491
|
|
$
61,439
|
|
$
69,014
|
Per Share
Data
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
1.05
|
|
$
0.97
|
|
$
1.11
|
|
$
4.18
|
|
$
4.62
|
Diluted earnings per
share
|
|
$
1.05
|
|
$
0.97
|
|
$
1.11
|
|
$
4.17
|
|
$
4.60
|
Quarterly Average
Balance and Yield/Rate Analysis
(unaudited)
|
|
|
|
Average
Balance
|
|
Yield/Rate
|
|
|
For the Three Months
Ended
|
|
For the Three Months
Ended
|
(In
thousands)
|
|
December
31,
2022
|
|
September
30,
2022
|
|
December
31,
2021
|
|
December
31,
2022
|
|
September
30,
2022
|
|
December
31,
2021
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits in other banks
and other interest-earning assets
|
|
$
28,219
|
|
$
30,063
|
|
$
322,779
|
|
3.52 %
|
|
2.24 %
|
|
0.15 %
|
Investments -
taxable
|
|
1,256,135
|
|
1,288,172
|
|
1,392,645
|
|
2.01 %
|
|
1.88 %
|
|
1.65 %
|
Investments -
nontaxable(1)
|
|
106,921
|
|
109,661
|
|
113,429
|
|
3.65 %
|
|
3.65 %
|
|
3.36 %
|
Loans(2):
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
1,591,392
|
|
1,546,638
|
|
1,450,454
|
|
4.37 %
|
|
4.04 %
|
|
3.61 %
|
Commercial(1)
|
|
409,233
|
|
402,152
|
|
338,402
|
|
4.91 %
|
|
4.26 %
|
|
3.58 %
|
SBA PPP
|
|
652
|
|
1,254
|
|
55,982
|
|
3.50 %
|
|
15.67 %
|
|
18.76 %
|
Municipal(1)
|
|
20,693
|
|
22,574
|
|
14,966
|
|
3.28 %
|
|
3.01 %
|
|
3.56 %
|
Residential real
estate
|
|
1,667,256
|
|
1,571,449
|
|
1,273,342
|
|
3.58 %
|
|
3.49 %
|
|
3.47 %
|
Consumer and home
equity
|
|
255,355
|
|
252,145
|
|
235,232
|
|
6.24 %
|
|
5.21 %
|
|
4.24 %
|
Total
loans
|
|
3,944,581
|
|
3,796,212
|
|
3,368,378
|
|
4.21 %
|
|
3.91 %
|
|
3.85 %
|
Total
interest-earning assets
|
|
5,335,856
|
|
5,224,108
|
|
5,197,231
|
|
3.67 %
|
|
3.40 %
|
|
3.02 %
|
Other assets
|
|
267,215
|
|
292,973
|
|
361,169
|
|
|
|
|
|
|
Total
assets
|
|
$
5,603,071
|
|
$
5,517,081
|
|
$
5,558,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities &
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
checking
|
|
$
1,182,999
|
|
$
1,243,174
|
|
$
1,286,858
|
|
— %
|
|
— %
|
|
— %
|
Interest
checking
|
|
1,665,360
|
|
1,502,436
|
|
1,343,206
|
|
1.56 %
|
|
0.85 %
|
|
0.20 %
|
Savings
|
|
763,858
|
|
774,725
|
|
726,085
|
|
0.05 %
|
|
0.04 %
|
|
0.04 %
|
Money
market
|
|
689,738
|
|
720,641
|
|
726,890
|
|
1.46 %
|
|
0.84 %
|
|
0.29 %
|
Certificates of
deposit
|
|
289,476
|
|
290,043
|
|
315,908
|
|
0.68 %
|
|
0.45 %
|
|
0.47 %
|
Total
deposits
|
|
4,591,431
|
|
4,531,019
|
|
4,398,947
|
|
0.84 %
|
|
0.45 %
|
|
0.15 %
|
Borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
Brokered
deposits
|
|
120,150
|
|
80,701
|
|
271,474
|
|
2.75 %
|
|
1.40 %
|
|
0.46 %
|
Customer repurchase
agreements
|
|
203,105
|
|
228,495
|
|
208,055
|
|
0.82 %
|
|
0.57 %
|
|
0.29 %
|
Subordinated
debentures
|
|
44,331
|
|
44,331
|
|
44,331
|
|
4.83 %
|
|
4.83 %
|
|
4.84 %
|
Other
borrowings
|
|
123,142
|
|
108,084
|
|
1
|
|
2.76 %
|
|
1.68 %
|
|
0.40 %
|
Total
borrowings
|
|
490,728
|
|
461,611
|
|
523,861
|
|
2.14 %
|
|
1.38 %
|
|
0.76 %
|
Total funding
liabilities
|
|
5,082,159
|
|
4,992,630
|
|
4,922,808
|
|
0.96 %
|
|
0.54 %
|
|
0.21 %
|
Other
liabilities
|
|
86,827
|
|
71,636
|
|
90,245
|
|
|
|
|
|
|
Shareholders'
equity
|
|
434,085
|
|
452,815
|
|
545,347
|
|
|
|
|
|
|
Total liabilities
& shareholders' equity
|
|
$
5,603,071
|
|
$
5,517,081
|
|
$
5,558,400
|
|
|
|
|
|
|
Net interest rate
spread (fully-taxable equivalent)
|
|
2.71 %
|
|
2.86 %
|
|
2.81 %
|
Net interest margin
(fully-taxable equivalent)
|
|
2.76 %
|
|
2.88 %
|
|
2.82 %
|
Adjusted net
interest margin (fully-taxable equivalent)
(non-GAAP)
|
|
2.76 %
|
|
2.88 %
|
|
2.79 %
|
|
|
(1)
|
Reported on
tax-equivalent basis calculated using the federal corporate income
tax rate of 21%, including certain commercial loans.
|
(2)
|
Non-accrual loans and
loans held for sale are included in total average loans.
|
Year-to-Date Average
Balance and Yield/Rate Analysis
(unaudited)
|
|
|
|
Average
Balance
|
|
Yield/Rate
|
|
|
For the Year
Ended
|
|
For the Year
Ended
|
(In
thousands)
|
|
December
31,
2022
|
|
December
31,
2021
|
|
December
31,
2022
|
|
December
31,
2021
|
Assets
|
|
|
|
|
|
|
|
|
Interest-earning
assets:
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits in other banks and other interest-earning
assets
|
|
$
52,068
|
|
$
268,879
|
|
0.99 %
|
|
0.12 %
|
Investments -
taxable
|
|
1,329,586
|
|
1,189,895
|
|
1.84 %
|
|
1.66 %
|
Investments -
nontaxable(1)
|
|
111,113
|
|
115,169
|
|
3.53 %
|
|
3.30 %
|
Loans(2):
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
|
1,532,225
|
|
1,412,884
|
|
4.01 %
|
|
3.64 %
|
Commercial(1)
|
|
396,000
|
|
340,727
|
|
4.17 %
|
|
3.67 %
|
SBA PPP
|
|
6,999
|
|
118,414
|
|
17.91 %
|
|
6.90 %
|
Municipal(1)
|
|
19,305
|
|
20,529
|
|
3.20 %
|
|
3.37 %
|
Residential real
estate
|
|
1,511,985
|
|
1,156,698
|
|
3.49 %
|
|
3.61 %
|
Consumer and home
equity
|
|
243,901
|
|
250,061
|
|
5.03 %
|
|
4.21 %
|
Total
loans
|
|
3,710,415
|
|
3,299,313
|
|
3.90 %
|
|
3.81 %
|
Total
interest-earning assets
|
|
5,203,182
|
|
4,873,256
|
|
3.34 %
|
|
3.07 %
|
Other assets
|
|
285,618
|
|
382,290
|
|
|
|
|
Total
assets
|
|
$
5,488,800
|
|
$
5,255,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities &
Shareholders' Equity
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
Non-interest
checking
|
|
$
1,206,383
|
|
$
1,083,357
|
|
— %
|
|
— %
|
Interest
checking
|
|
1,502,896
|
|
1,297,695
|
|
0.77 %
|
|
0.19 %
|
Savings
|
|
760,264
|
|
675,533
|
|
0.05 %
|
|
0.04 %
|
Money
market
|
|
706,934
|
|
706,474
|
|
0.76 %
|
|
0.29 %
|
Certificates of
deposit
|
|
295,586
|
|
333,352
|
|
0.50 %
|
|
0.53 %
|
Total
deposits
|
|
4,472,063
|
|
4,096,411
|
|
0.42 %
|
|
0.16 %
|
Borrowings:
|
|
|
|
|
|
|
|
|
Brokered
deposits
|
|
130,455
|
|
282,399
|
|
1.20 %
|
|
0.45 %
|
Customer repurchase
agreements
|
|
215,761
|
|
185,246
|
|
0.51 %
|
|
0.31 %
|
Subordinated
debentures
|
|
44,331
|
|
48,605
|
|
4.83 %
|
|
5.19 %
|
Other
borrowings
|
|
80,100
|
|
3,562
|
|
1.93 %
|
|
0.99 %
|
Total
borrowings
|
|
470,647
|
|
519,812
|
|
1.35 %
|
|
0.85 %
|
Total funding
liabilities
|
|
4,942,710
|
|
4,616,223
|
|
0.51 %
|
|
0.24 %
|
Other
liabilities
|
|
78,845
|
|
96,598
|
|
|
|
|
Shareholders'
equity
|
|
467,245
|
|
542,725
|
|
|
|
|
Total liabilities
& shareholders' equity
|
|
$
5,488,800
|
|
$
5,255,546
|
|
|
|
|
Net interest rate
spread (fully-taxable equivalent)
|
|
2.83 %
|
|
2.83 %
|
Net interest margin
(fully-taxable equivalent)
|
|
2.86 %
|
|
2.84 %
|
Adjusted net
interest margin (fully-taxable equivalent)
(non-GAAP)
|
|
2.85 %
|
|
2.87 %
|
|
|
(1)
|
Reported on
tax-equivalent basis calculated using the federal corporate income
tax rate of 21%, including certain commercial loans.
|
(2)
|
Non-accrual loans and
loans held for sale are included in total average loans.
|
Asset Quality
Data
(unaudited)
|
|
(In
thousands)
|
|
At or For
The
Year
Ended
December 31,
2022
|
|
At or For
The
Nine Months
Ended
September 30,
2022
|
|
At or For
The
Six Months
Ended
June 30,
2022
|
|
At or For
The
Three Months
Ended
March 31,
2022
|
|
At or For
The
Year
Ended
December 31,
2021
|
Non-accrual
loans:
|
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
|
$
1,733
|
|
$
1,562
|
|
$
1,831
|
|
$
2,052
|
|
$
2,107
|
Commercial real
estate
|
|
57
|
|
73
|
|
182
|
|
183
|
|
184
|
Commercial
|
|
715
|
|
541
|
|
723
|
|
1,045
|
|
829
|
Consumer and home
equity
|
|
486
|
|
589
|
|
769
|
|
1,172
|
|
1,207
|
Total non-accrual
loans
|
|
2,991
|
|
2,765
|
|
3,505
|
|
4,452
|
|
4,327
|
Accruing
troubled-debt restructured loans
not included
above
|
|
2,114
|
|
2,285
|
|
2,316
|
|
2,303
|
|
2,392
|
Total non-performing
loans
|
|
5,105
|
|
5,050
|
|
5,821
|
|
6,755
|
|
6,719
|
Other real estate
owned
|
|
—
|
|
—
|
|
—
|
|
—
|
|
165
|
Total non-performing
assets
|
|
$
5,105
|
|
$
5,050
|
|
$
5,821
|
|
$
6,755
|
|
$
6,884
|
Loans 30-89 days
past due:
|
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
|
$
1,038
|
|
$
2,326
|
|
$
918
|
|
$
575
|
|
$
400
|
Commercial real
estate
|
|
323
|
|
195
|
|
258
|
|
91
|
|
47
|
Commercial
|
|
802
|
|
1,344
|
|
422
|
|
169
|
|
552
|
Consumer and home
equity
|
|
391
|
|
843
|
|
577
|
|
466
|
|
509
|
Total loans 30-89
days past due
|
|
$
2,554
|
|
$
4,708
|
|
$
2,175
|
|
$
1,301
|
|
$
1,508
|
ACL on loans at the
beginning of the period
|
|
$
33,256
|
|
$
33,256
|
|
$
33,256
|
|
$
33,256
|
|
$
37,865
|
Provision (credit) for
loan losses
|
|
4,430
|
|
3,788
|
|
1,275
|
|
(1,236)
|
|
(3,817)
|
Charge-offs:
|
|
|
|
|
|
|
|
|
|
|
Residential real
estate
|
|
66
|
|
65
|
|
16
|
|
—
|
|
92
|
Commercial
|
|
1,042
|
|
744
|
|
561
|
|
245
|
|
799
|
Consumer and home
equity
|
|
134
|
|
130
|
|
84
|
|
67
|
|
273
|
Total
charge-offs
|
|
1,242
|
|
939
|
|
661
|
|
312
|
|
1,164
|
Total
recoveries
|
|
(478)
|
|
(437)
|
|
(374)
|
|
(62)
|
|
(372)
|
Net
charge-offs
|
|
764
|
|
502
|
|
287
|
|
250
|
|
792
|
ACL on loans at the
end of the period
|
|
$
36,922
|
|
$
36,542
|
|
$
34,244
|
|
$
31,770
|
|
$
33,256
|
Components of
ACL:
|
|
|
|
|
|
|
|
|
|
|
ACL on
loans
|
|
$
36,922
|
|
$
36,542
|
|
$
34,244
|
|
$
31,770
|
|
$
33,256
|
ACL on off-balance
sheet credit exposures(1)
|
|
3,265
|
|
3,441
|
|
3,190
|
|
3,356
|
|
3,195
|
ACL, end of
period
|
|
$
40,187
|
|
$
39,983
|
|
$
37,434
|
|
$
35,126
|
|
$
36,451
|
Ratios:
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans to
total loans
|
|
0.13 %
|
|
0.13 %
|
|
0.16 %
|
|
0.19 %
|
|
0.20 %
|
Non-performing assets
to total assets
|
|
0.09 %
|
|
0.09 %
|
|
0.11 %
|
|
0.12 %
|
|
0.13 %
|
ACL on loans to total
loans
|
|
0.92 %
|
|
0.95 %
|
|
0.92 %
|
|
0.90 %
|
|
0.97 %
|
Net charge-offs to
average loans (annualized)
|
|
|
|
|
|
|
|
|
|
|
Quarter-to-date
|
|
0.03 %
|
|
0.02 %
|
|
— %
|
|
0.03 %
|
|
0.03 %
|
Year-to-date
|
|
0.02 %
|
|
0.02 %
|
|
0.02 %
|
|
0.03 %
|
|
0.02 %
|
ACL on loans to
non-performing loans
|
|
723.25 %
|
|
723.60 %
|
|
588.28 %
|
|
470.32 %
|
|
494.95 %
|
Loans 30-89 days past
due to total loans
|
|
0.06 %
|
|
0.12 %
|
|
0.06 %
|
|
0.04 %
|
|
0.04 %
|
|
|
(1)
|
Presented within
accrued interest and other liabilities on the consolidated
statements of condition
|
Reconciliation of
non-GAAP to GAAP Financial Measures (unaudited)
|
|
|
Return on Average
Tangible Equity:
|
|
|
For
the
Three Months
Ended
|
|
For
the
Year
Ended
|
(In
thousands)
|
|
December
31,
2022
|
|
September
30,
2022
|
|
December
31,
2021
|
|
December
31,
2022
|
|
December
31,
2021
|
Net income, as
presented
|
|
$
15,351
|
|
$
14,267
|
|
$
16,491
|
|
$
61,439
|
|
$
69,014
|
Add: amortization of
core deposit intangible assets, net of tax(1)
|
|
123
|
|
123
|
|
130
|
|
494
|
|
517
|
Net income, adjusted
for amortization of core deposit intangible assets
|
|
$
15,474
|
|
$
14,390
|
|
$
16,621
|
|
$
61,933
|
|
$
69,531
|
Average equity, as
presented
|
|
$ 434,085
|
|
$ 452,815
|
|
$ 545,347
|
|
$ 467,245
|
|
$ 542,725
|
Less: average goodwill
and core deposit intangible assets
|
|
(96,336)
|
|
(96,493)
|
|
(96,965)
|
|
(96,572)
|
|
(97,211)
|
Average tangible
equity
|
|
$ 337,749
|
|
$ 356,322
|
|
$ 448,382
|
|
$ 370,673
|
|
$ 445,514
|
Return on average
equity
|
|
14.03 %
|
|
12.50 %
|
|
12.00 %
|
|
13.15 %
|
|
12.72 %
|
Return on average
tangible equity
|
|
18.18 %
|
|
16.02 %
|
|
14.71 %
|
|
16.71 %
|
|
15.61 %
|
|
|
|
|
|
|
|
|
|
|
|
(1) Assumed a 21% tax
rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency
Ratio:
|
|
|
For
the
Three Months
Ended
|
|
For
the
Year
Ended
|
(In
thousands)
|
|
December 31,
2022
|
|
September
30,
2022
|
|
December 31,
2021
|
|
December 31,
2022
|
|
December 31,
2021
|
Non-interest expense,
as presented
|
|
$
26,993
|
|
$
27,091
|
|
$
26,968
|
|
$ 106,849
|
|
$ 103,720
|
Less: prepayment fees
on borrowings
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(514)
|
Adjusted non-interest
expense
|
|
$
26,993
|
|
$
27,091
|
|
$
26,968
|
|
$ 106,849
|
|
$ 103,206
|
Net interest income, as
presented
|
|
$
36,982
|
|
$
37,813
|
|
$
36,797
|
|
$ 147,694
|
|
$ 137,436
|
Add: effect of
tax-exempt income(1)
|
|
237
|
|
242
|
|
224
|
|
937
|
|
988
|
Non-interest income, as
presented
|
|
9,782
|
|
9,954
|
|
12,101
|
|
40,702
|
|
49,735
|
Add: net loss on sale
of securities
|
|
903
|
|
—
|
|
—
|
|
912
|
|
—
|
Adjusted net interest
income plus non-interest income
|
|
$
47,904
|
|
$
48,009
|
|
$
49,122
|
|
$ 190,245
|
|
$ 188,159
|
GAAP efficiency
ratio
|
|
57.72 %
|
|
56.71 %
|
|
55.15 %
|
|
56.72 %
|
|
55.41 %
|
Non-GAAP efficiency
ratio
|
|
56.35 %
|
|
56.43 %
|
|
54.90 %
|
|
56.16 %
|
|
54.85 %
|
|
|
|
|
|
|
|
|
|
|
|
(1) Assumed a 21% tax
rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
Income Taxes and Provision, and Earnings before Income Taxes,
Provision and SBA PPP Loan Income:
|
|
|
For
the
Three Months
Ended
|
|
For
the
Year
Ended
|
(In
thousands)
|
|
December 31,
2022
|
|
September
30,
2022
|
|
December 31,
2021
|
|
December 31,
2022
|
|
December 31,
2021
|
Net income, as
presented
|
|
$
15,351
|
|
$
14,267
|
|
$
16,491
|
|
$
61,439
|
|
$
69,014
|
Add: provision
(credit) for credit losses
|
|
466
|
|
2,764
|
|
1,230
|
|
4,500
|
|
(3,190)
|
Add: income tax
expense
|
|
3,954
|
|
3,645
|
|
4,209
|
|
15,608
|
|
17,627
|
Earnings before income
taxes and provision for credit losses
|
|
$
19,771
|
|
$
20,676
|
|
$
21,930
|
|
$
81,547
|
|
$
83,451
|
Less: SBA PPP loan
income
|
|
(6)
|
|
(50)
|
|
(2,684)
|
|
(1,254)
|
|
(8,170)
|
Earnings before income
taxes and provision (credit) for credit losses and SBA PPP loan
income
|
|
$
19,765
|
|
$
20,626
|
|
$
19,246
|
|
$
80,293
|
|
$
75,281
|
|
Adjusted Yield on
Interest-Earning Assets:
|
|
|
For
the
Three Months
Ended
|
|
For
the
Year
Ended
|
|
|
December 31,
2022
|
|
September
30,
2022
|
|
December 31,
2021
|
|
December 31,
2022
|
|
December 31,
2021
|
Yield on
interest-earning assets, as presented
|
|
3.67 %
|
|
3.40 %
|
|
3.02 %
|
|
3.34 %
|
|
3.07 %
|
Add: effect of excess
liquidity on yield on interest-earning assets
|
|
0.01 %
|
|
— %
|
|
0.16 %
|
|
0.02 %
|
|
0.13 %
|
Less: effect of SBA
PPP loans on yield on interest-earning assets
|
|
— %
|
|
(0.01) %
|
|
(0.17) %
|
|
(0.02) %
|
|
(0.10) %
|
Adjusted yield on
interest-earning assets
|
|
3.68 %
|
|
3.39 %
|
|
3.01 %
|
|
3.34 %
|
|
3.10 %
|
|
Adjusted Net
Interest Margin (Fully-Taxable Equivalent):
|
|
|
For
the
Three Months
Ended
|
|
For
the
Year
Ended
|
|
|
December 31,
2022
|
|
September
30,
2022
|
|
December 31,
2021
|
|
December 31,
2022
|
|
December 31,
2021
|
Net interest margin
(fully-taxable equivalent), as presented
|
|
2.76 %
|
|
2.88 %
|
|
2.82 %
|
|
2.86 %
|
|
2.84 %
|
Add: effect of excess
liquidity on net interest margin (fully-taxable
equivalent)
|
|
— %
|
|
— %
|
|
0.15 %
|
|
0.01 %
|
|
0.13 %
|
Less: effect of SBA
PPP loans on net interest margin (fully-taxable
equivalent)
|
|
— %
|
|
— %
|
|
(0.18) %
|
|
(0.02) %
|
|
(0.10) %
|
Adjusted net interest
margin (fully-taxable equivalent)
|
|
2.76 %
|
|
2.88 %
|
|
2.79 %
|
|
2.85 %
|
|
2.87 %
|
Tangible Book
Value Per Share and Tangible Common Equity
Ratio:
|
|
|
December 31,
2022
|
|
September
30,
2022
|
|
December 31,
2021
|
(In thousands,
except number of shares and per share data)
|
|
Tangible Book
Value Per Share:
|
|
|
|
|
|
|
Shareholders' equity,
as presented
|
|
$
451,278
|
|
$
431,007
|
|
$
541,294
|
Less: goodwill and
core deposit intangible assets
|
|
(96,260)
|
|
(96,416)
|
|
(96,885)
|
Tangible shareholders'
equity
|
|
$
355,018
|
|
$
334,591
|
|
$
444,409
|
Shares outstanding at
period end
|
|
14,567,325
|
|
14,563,828
|
|
14,739,956
|
Book value per
share
|
|
$
30.98
|
|
$
29.59
|
|
$
36.72
|
Tangible book value per
share
|
|
$
24.37
|
|
$
22.97
|
|
$
30.15
|
Tangible Common
Equity Ratio:
|
Total assets
|
|
$
5,671,850
|
|
$
5,551,724
|
|
$
5,500,356
|
Less: goodwill and
core deposit intangible assets
|
|
(96,260)
|
|
(96,416)
|
|
(96,885)
|
Tangible
assets
|
|
$
5,575,590
|
|
$
5,455,308
|
|
$
5,403,471
|
Common equity
ratio
|
|
7.96 %
|
|
7.76 %
|
|
9.84 %
|
Tangible common equity
ratio
|
|
6.37 %
|
|
6.13 %
|
|
8.22 %
|
Core
Deposits:
|
(In
thousands)
|
|
December
31,
2022
|
|
September
30,
2022
|
|
December
31,
2021
|
Total
deposits
|
|
$
4,826,929
|
|
$
4,568,604
|
|
$
4,608,889
|
Less: certificates of
deposit
|
|
(300,451)
|
|
(279,603)
|
|
(309,648)
|
Less: brokered
deposits
|
|
(181,253)
|
|
(89,775)
|
|
(208,468)
|
Core
deposits
|
|
$
4,345,225
|
|
$
4,199,226
|
|
$
4,090,773
|
Average Core
Deposits:
|
|
|
For
the
Three Months
Ended
|
|
For
the
Year
Ended
|
(In
thousands)
|
|
December
31,
2022
|
|
September
30,
2022
|
|
December
31,
2021
|
|
December
31,
2022
|
|
December
31,
2021
|
Total average
deposits
|
|
$
4,591,431
|
|
$
4,531,019
|
|
$
4,398,947
|
|
$
4,472,063
|
|
$
4,096,411
|
Less: average
certificates of deposit
|
|
(289,476)
|
|
(290,043)
|
|
(315,908)
|
|
(295,586)
|
|
(333,352)
|
Average core
deposits
|
|
$
4,301,955
|
|
$
4,240,976
|
|
$
4,083,039
|
|
$
4,176,477
|
|
$
3,763,059
|
Total loans,
excluding SBA PPP loans:
|
(In
thousands)
|
|
December
31,
2022
|
|
September
30,
2022
|
|
December
31,
2021
|
Total loans, as
presented
|
|
$
4,010,353
|
|
$
3,860,680
|
|
$
3,431,474
|
Less: SBA PPP
loans
|
|
(632)
|
|
(685)
|
|
(35,953)
|
Total loans, excluding
SBA PPP loans
|
|
$
4,009,721
|
|
$
3,859,995
|
|
$
3,395,521
|
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SOURCE Camden National Corporation