Closing Price ($) | Shares Out (MM) | Market Cap ($MM) |
$45.52 | 16 | $710 |
10-Q | 2018-09-30 | Quarter: 2018-09-30 |
10-Q | 2018-06-30 | Quarter: 2018-06-30 |
10-Q | 2018-03-31 | Quarter: 2018-03-31 |
10-K | 2017-12-31 | Annual: 2017-12-31 |
10-Q | 2017-09-30 | Quarter: 2017-09-30 |
10-Q | 2017-06-30 | Quarter: 2017-06-30 |
10-Q | 2017-03-31 | Quarter: 2017-03-31 |
10-K | 2016-12-31 | Annual: 2016-12-31 |
10-Q | 2016-09-30 | Quarter: 2016-09-30 |
10-Q | 2016-06-30 | Quarter: 2016-06-30 |
10-Q | 2016-03-31 | Quarter: 2016-03-31 |
10-K | 2015-12-31 | Annual: 2015-12-31 |
8-K | 2019-01-29 | Earnings, Exhibits |
8-K | 2019-01-22 | Other Events, Exhibits |
8-K | 2018-12-21 | Officers |
8-K | 2018-12-19 | Officers |
8-K | 2018-12-18 | Other Events, Exhibits |
8-K | 2018-10-30 | Earnings, Exhibits |
8-K | 2018-09-25 | Other Events, Exhibits |
8-K | 2018-08-01 | Regulation FD, Exhibits |
8-K | 2018-07-31 | Officers, Exhibits |
8-K | 2018-07-31 | Earnings, Exhibits |
8-K | 2018-06-26 | Other Events, Exhibits |
8-K | 2018-06-20 | Regulation FD, Exhibits |
8-K | 2018-05-15 | Regulation FD, Exhibits |
8-K | 2018-04-24 | Officers, Exhibits |
8-K | 2018-03-27 | Other Events, Exhibits |
8-K | 2018-01-30 | Officers |
BAC | Bank of America |
SHG | Shinhan Financial Group |
FHB | First Hawaiian |
EGBN | Eagle Bancorp |
LKFN | Lakeland Financial |
SBSI | Southside Bancshares |
BFST | Business First Bancshares |
CVCY | Central Valley Community Bancorp |
BOCH | Bank of Commerce Holdings |
CART | Carolina Trust Bancshares |
Part I. Financial Information |
Item 1. Financial Statements |
Note 1 - Basis of Presentation |
Note 2 - Recent Accounting Pronouncements |
Note 3 - Eps |
Note 4 - Investments |
Note 5 - Loans and Allowance for Loan Losses |
Note 6 - Regulatory Capital Requirements |
Note 7 - Income Taxes |
Note 8 - Employee Benefit Plans |
Note 9 - Borrowings |
Note 10 - Repurchase Agreements |
Note 11 - Fair Value Measurement and Disclosure |
Note 12 - Commitments, Contingencies and Derivatives |
Item 2. Management's Discussion and Analysis of Financial Condition |
Item 3. Quantitative and Qualitative Disclosure About Market Risk |
Item 4. Controls and Procedures |
Part II. Other Information |
Item 1. Legal Proceedings |
Item 1A. Risk Factors |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. Defaults Upon Senior Securities |
Item 4. Mine Safety Disclosures |
Item 5. Other Information |
Item 6. Exhibits |
EX-31.1 | exhibit311q318.htm |
EX-31.2 | exhibit312q318.htm |
EX-32.1 | exhibit321q318.htm |
EX-32.2 | exhibit322q318.htm |
Balance Sheet | Income Statement | Cash Flow |
---|---|---|
MAINE | 01-0413282 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
2 ELM STREET, CAMDEN, ME | 04843 |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer ¨ | Accelerated filer x |
Non-accelerated filer ¨ | Smaller reporting company ¨ |
Emerging growth company ¨ |
PAGE | ||
PART I. FINANCIAL INFORMATION | ||
ITEM 1. | FINANCIAL STATEMENTS | |
Consolidated Statements of Condition (unaudited) - September 30, 2018 and December 31, 2017 | ||
Consolidated Statements of Income (unaudited) - Three and Nine Months Ended September 30, 2018 and 2017 | ||
Consolidated Statements of Comprehensive Income (unaudited) - Three and Nine Months Ended September 30, 2018 and 2017 | ||
Consolidated Statements of Changes in Shareholders’ Equity (unaudited) - Nine Months Ended September 30, 2018 and 2017 | ||
Consolidated Statements of Cash Flows (unaudited) - Nine Months Ended September 30, 2018 and 2017 | ||
Notes to the Unaudited Consolidated Financial Statements | ||
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK | |
ITEM 4. | CONTROLS AND PROCEDURES | |
PART II. OTHER INFORMATION | ||
ITEM 1. | LEGAL PROCEEDINGS | |
ITEM 1A. | RISK FACTORS | |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | |
ITEM 4. | MINE SAFETY DISCLOSURES | |
ITEM 5. | OTHER INFORMATION | |
ITEM 6. | EXHIBITS | |
SIGNATURES |
CONSOLIDATED STATEMENTS OF CONDITION (unaudited) | ||||||||
(In thousands, except number of shares) | September 30, 2018 | December 31, 2017 | ||||||
ASSETS | ||||||||
Cash and due from banks | $ | 48,124 | $ | 44,057 | ||||
Interest-bearing deposits in other banks | 50,218 | 58,914 | ||||||
Total cash, cash equivalents and restricted cash | 98,342 | 102,971 | ||||||
Investments: | ||||||||
Available-for-sale securities, at fair value | 780,343 | 789,899 | ||||||
Held-to-maturity securities, at amortized cost (fair value of $90.6 million and $94.9 million, respectively) | 92,933 | 94,073 | ||||||
Other investments | 16,901 | 23,670 | ||||||
Total investments | 890,177 | 907,642 | ||||||
Loans held for sale, at fair value | 10,158 | 8,103 | ||||||
Loans | 2,908,843 | 2,782,439 | ||||||
Less: allowance for loan losses | (23,526 | ) | (24,171 | ) | ||||
Net loans | 2,885,317 | 2,758,268 | ||||||
Goodwill | 94,697 | 94,697 | ||||||
Other intangible assets, net of amortization | 4,411 | 4,955 | ||||||
Bank-owned life insurance | 89,312 | 87,489 | ||||||
Premises and equipment, net | 41,277 | 41,891 | ||||||
Deferred tax assets | 25,738 | 22,776 | ||||||
Other assets | 52,155 | 36,606 | ||||||
Total assets | $ | 4,191,584 | $ | 4,065,398 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Liabilities | ||||||||
Deposits: | ||||||||
Demand | $ | 564,113 | $ | 478,643 | ||||
Interest checking | 932,972 | 855,570 | ||||||
Savings and money market | 996,790 | 985,508 | ||||||
Certificates of deposit | 446,414 | 475,010 | ||||||
Brokered deposits | 280,466 | 205,760 | ||||||
Total deposits | 3,220,755 | 3,000,491 | ||||||
Short-term borrowings | 409,732 | 541,796 | ||||||
Long-term borrowings | 10,738 | 10,791 | ||||||
Subordinated debentures | 59,028 | 58,911 | ||||||
Accrued interest and other liabilities | 73,806 | 49,996 | ||||||
Total liabilities | 3,774,059 | 3,661,985 | ||||||
Commitments and Contingencies | ||||||||
Shareholders’ Equity | ||||||||
Common stock, no par value: authorized 40,000,000 shares, issued and outstanding 15,584,526 and 15,524,704 on September 30, 2018 and December 31, 2017, respectively | 158,019 | 156,904 | ||||||
Retained earnings | 292,741 | 266,723 | ||||||
Accumulated other comprehensive loss: | ||||||||
Net unrealized losses on available-for-sale debt securities, net of tax | (26,221 | ) | (10,300 | ) | ||||
Net unrealized losses on cash flow hedging derivative instruments, net of tax | (3,373 | ) | (5,926 | ) | ||||
Net unrecognized losses on postretirement plans, net of tax | (3,641 | ) | (3,988 | ) | ||||
Total accumulated other comprehensive loss | (33,235 | ) | (20,214 | ) | ||||
Total shareholders’ equity | 417,525 | 403,413 | ||||||
Total liabilities and shareholders’ equity | $ | 4,191,584 | $ | 4,065,398 |
CONSOLIDATED STATEMENTS OF INCOME (unaudited) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(In thousands, except number of shares and per share data) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Interest Income | ||||||||||||||||
Interest and fees on loans | $ | 32,813 | $ | 29,350 | $ | 94,014 | $ | 84,835 | ||||||||
Interest on U.S. government and sponsored enterprise obligations (taxable) | 4,408 | 4,177 | 13,019 | 12,788 | ||||||||||||
Interest on state and political subdivision obligations (nontaxable) | 659 | 686 | 1,989 | 2,079 | ||||||||||||
Interest on deposits in other banks and other investments | 677 | 497 | 1,902 | 1,362 | ||||||||||||
Total interest income | 38,557 | 34,710 | 110,924 | 101,064 | ||||||||||||
Interest Expense | ||||||||||||||||
Interest on deposits | 5,255 | 3,027 | 13,463 | 8,568 | ||||||||||||
Interest on borrowings | 2,021 | 1,665 | 6,099 | 4,302 | ||||||||||||
Interest on subordinated debentures | 858 | 858 | 2,556 | 2,553 | ||||||||||||
Total interest expense | 8,134 | 5,550 | 22,118 | 15,423 | ||||||||||||
Net interest income | 30,423 | 29,160 | 88,806 | 85,641 | ||||||||||||
Provision for credit losses | 354 | 817 | 840 | 2,797 | ||||||||||||
Net interest income after provision for credit losses | 30,069 | 28,343 | 87,966 | 82,844 | ||||||||||||
Non-Interest Income | ||||||||||||||||
Debit card income | 2,173 | 2,061 | 6,228 | 5,887 | ||||||||||||
Service charges on deposit accounts | 1,910 | 1,852 | 5,679 | 5,632 | ||||||||||||
Mortgage banking income, net | 1,758 | 2,076 | 4,758 | 5,566 | ||||||||||||
Income from fiduciary services | 1,339 | 1,229 | 4,029 | 3,831 | ||||||||||||
Brokerage and insurance commissions | 615 | 600 | 1,950 | 1,601 | ||||||||||||
Bank-owned life insurance | 606 | 603 | 1,823 | 1,750 | ||||||||||||
Other service charges and fees | 596 | 589 | 1,564 | 1,558 | ||||||||||||
Net gain on sale of securities | 664 | 827 | 695 | 827 | ||||||||||||
Other income | 731 | 462 | 1,971 | 2,107 | ||||||||||||
Total non-interest income | 10,392 | 10,299 | 28,697 | 28,759 | ||||||||||||
Non-Interest Expense | ||||||||||||||||
Salaries and employee benefits | 13,143 | 12,145 | 38,433 | 36,240 | ||||||||||||
Furniture, equipment and data processing | 2,575 | 2,429 | 7,710 | 7,204 | ||||||||||||
Net occupancy costs | 1,614 | 1,599 | 5,112 | 5,234 | ||||||||||||
Consulting and professional fees | 958 | 714 | 2,878 | 2,412 | ||||||||||||
Debit card expense | 833 | 662 | 2,339 | 2,034 | ||||||||||||
Regulatory assessments | 447 | 574 | 1,447 | 1,607 | ||||||||||||
Other real estate owned and collection costs, net | 239 | 258 | 565 | 558 | ||||||||||||
Amortization of intangible assets | 182 | 473 | 544 | 1,417 | ||||||||||||
Other expenses | 3,175 | 2,971 | 9,337 | 8,705 | ||||||||||||
Total non-interest expense | 23,166 | 21,825 | 68,365 | 65,411 | ||||||||||||
Income before income tax expense | 17,295 | 16,817 | 48,298 | 46,192 | ||||||||||||
Income tax expense | 3,238 | 5,478 | 9,204 | 14,543 | ||||||||||||
Net Income | $ | 14,057 | $ | 11,339 | $ | 39,094 | $ | 31,649 | ||||||||
Per Share Data | ||||||||||||||||
Basic earnings per share | $ | 0.90 | $ | 0.72 | $ | 2.50 | $ | 2.03 | ||||||||
Diluted earnings per share | $ | 0.90 | $ | 0.72 | $ | 2.50 | $ | 2.02 | ||||||||
Weighted average number of common shares outstanding | 15,580,782 | 15,515,189 | 15,565,355 | 15,505,698 | ||||||||||||
Diluted weighted average number of common shares outstanding | 15,638,986 | 15,589,008 | 15,621,400 | 15,580,072 | ||||||||||||
Cash dividends declared per share | $ | 0.30 | $ | 0.23 | $ | 0.85 | $ | 0.69 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net Income | $ | 14,057 | $ | 11,339 | $ | 39,094 | $ | 31,649 | ||||||||
Other comprehensive (loss) income: | ||||||||||||||||
Net change in unrealized losses on available-for-sale securities: | ||||||||||||||||
Net change in unrealized losses on available-for-sale securities, net of tax of $887, $142, $4,376 and ($784), respectively | (3,240 | ) | (262 | ) | (15,963 | ) | 1,458 | |||||||||
Net reclassification adjustment for net losses (gains) included in net income, net of tax of ($59), $289, ($66) and $289, respectively(1) | 216 | (538 | ) | 240 | (538 | ) | ||||||||||
Net change in unrealized losses on available-for-sale securities, net of tax | (3,024 | ) | (800 | ) | (15,723 | ) | 920 | |||||||||
Net change in unrealized losses on cash flow hedging derivatives: | ||||||||||||||||
Net change in unrealized losses on cash flow hedging derivatives, net of tax of ($127), $43, ($556) and $243, respectively | 462 | (80 | ) | 2,031 | (452 | ) | ||||||||||
Net reclassification adjustment for effective portion of cash flow hedges, net of tax of ($38), ($128), ($143) and ($432), respectively(2) | 139 | 238 | 522 | 802 | ||||||||||||
Net change in unrealized losses on cash flow hedging derivatives, net of tax | 601 | 158 | 2,553 | 350 | ||||||||||||
Reclassification of amortization of net unrecognized actuarial loss and prior service cost, net of tax of ($31), ($23), ($94) and ($69), respectively(3) | 115 | 42 | 347 | 128 | ||||||||||||
Other comprehensive (loss) income | (2,308 | ) | (600 | ) | (12,823 | ) | 1,398 | |||||||||
Comprehensive Income | $ | 11,749 | $ | 10,739 | $ | 26,271 | $ | 33,047 |
(1) | Reclassified into the consolidated statements of income within net gain on sale of securities. |
(2) | Reclassified into the consolidated statements of income within interest on borrowings and subordinated debentures. |
(3) | Reclassified into the consolidated statements of income within salaries and employee benefits and other expenses. |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited) | |||||||||||||||||||
Common Stock | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | |||||||||||||||||
(In thousands, except number of shares and per share data) | Shares Outstanding | Amount | Retained Earnings | ||||||||||||||||
Balance at December 31, 2016 | 15,476,379 | $ | 156,041 | $ | 249,415 | $ | (13,909 | ) | $ | 391,547 | |||||||||
Net income | — | — | 31,649 | — | 31,649 | ||||||||||||||
Other comprehensive income, net of tax | — | — | — | 1,398 | 1,398 | ||||||||||||||
Stock-based compensation expense | — | 1,135 | — | — | 1,135 | ||||||||||||||
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings | 39,198 | (615 | ) | — | — | (615 | ) | ||||||||||||
Cash dividends declared ($0.69 per share) | — | — | (10,748 | ) | — | (10,748 | ) | ||||||||||||
Balance at September 30, 2017 | 15,515,577 | $ | 156,561 | $ | 270,316 | $ | (12,511 | ) | $ | 414,366 | |||||||||
Balance at December 31, 2017 | 15,524,704 | $ | 156,904 | $ | 266,723 | $ | (20,214 | ) | $ | 403,413 | |||||||||
Cumulative-effect adjustment (Note 2) | — | — | 198 | (198 | ) | — | |||||||||||||
Net income | — | — | 39,094 | — | 39,094 | ||||||||||||||
Other comprehensive loss, net of tax | — | — | — | (12,823 | ) | (12,823 | ) | ||||||||||||
Stock-based compensation expense | — | 1,405 | — | — | 1,405 | ||||||||||||||
Exercise of stock options and issuance of vested share awards, net of repurchase for tax withholdings | 59,822 | (290 | ) | — | — | (290 | ) | ||||||||||||
Cash dividends declared ($0.85 per share) | — | — | (13,274 | ) | — | (13,274 | ) | ||||||||||||
Balance at September 30, 2018 | 15,584,526 | $ | 158,019 | $ | 292,741 | $ | (33,235 | ) | $ | 417,525 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | ||||||||
Nine Months Ended September 30, | ||||||||
(In thousands) | 2018 | 2017 | ||||||
Operating Activities | ||||||||
Net Income | $ | 39,094 | $ | 31,649 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Originations of mortgage loans held for sale | (157,736 | ) | (148,661 | ) | ||||
Proceeds from the sale of mortgage loans | 159,740 | 155,086 | ||||||
Gain on sale of mortgage loans, net of origination costs | (4,126 | ) | (4,323 | ) | ||||
Depreciation and amortization expense | 2,845 | 2,789 | ||||||
Investment securities amortization and accretion, net | 2,428 | 2,350 | ||||||
Purchase accounting accretion, net | (1,484 | ) | (2,204 | ) | ||||
Stock-based compensation expense | 1,405 | 1,135 | ||||||
Provision for credit losses | 840 | 2,797 | ||||||
Amortization of intangible assets | 544 | 1,417 | ||||||
Net (gain) loss on sale of premises and equipment | (34 | ) | 11 | |||||
Net gain on sale of investment securities | (695 | ) | (827 | ) | ||||
Net increase in other real estate owned valuation allowance and gain on disposition | — | (60 | ) | |||||
Increase in other assets | (5,444 | ) | (93 | ) | ||||
Increase in other liabilities | 16,170 | 1,325 | ||||||
Net cash provided by operating activities | 53,547 | 42,391 | ||||||
Investing Activities | ||||||||
Proceeds from the sale and maturity of available-for-sale securities | 135,282 | 124,548 | ||||||
Purchase of available-for-sale securities | (148,842 | ) | (127,684 | ) | ||||
Proceeds from maturities of held-to-maturity securities | 750 | — | ||||||
Net increase in loans | (126,860 | ) | (153,629 | ) | ||||
Purchase of bank-owned life insurance, net of death benefit proceeds | — | (7,000 | ) | |||||
Purchase of Federal Home Loan Bank stock | (9,391 | ) | (8,304 | ) | ||||
Proceeds from sale of Federal Home Loan Bank stock | 16,943 | 6,947 | ||||||
Purchase of premises and equipment | (2,879 | ) | (2,378 | ) | ||||
Proceeds from the sale of premises and equipment | 749 | 137 | ||||||
Proceeds from the liquidation of equity investment | 205 | — | ||||||
Recoveries of previously charged-off loans | 361 | 442 | ||||||
Proceeds from the sale of other real estate owned | — | 641 | ||||||
Net cash used by investing activities | (133,682 | ) | (166,280 | ) | ||||
Financing Activities | ||||||||
Net increase in deposits | 220,376 | 128,131 | ||||||
Net (repayments of) proceeds from borrowings less than 90 days | (132,098 | ) | 33,841 | |||||
Repayments of Federal Home Loan Bank long-term advances | — | (20,000 | ) | |||||
Repayments of wholesale repurchase agreements | — | (5,000 | ) | |||||
Exercise of stock options and issuance of restricted stock, net of repurchase for tax withholdings | (290 | ) | (615 | ) | ||||
Cash dividends paid on common stock | (12,482 | ) | (10,740 | ) | ||||
Net cash provided by financing activities | 75,506 | 125,617 | ||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (4,629 | ) | 1,728 | |||||
Cash, cash equivalents, and restricted cash at beginning of period | 102,971 | 87,707 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 98,342 | $ | 89,435 | ||||
Supplemental information | ||||||||
Interest paid | $ | 21,434 | $ | 15,383 | ||||
Unsettled purchases of investment securities | — | 13,954 | ||||||
Income taxes paid | 8,926 | 11,559 | ||||||
Transfer from loans to other real estate owned | 55 | — |
AFS: | Available-for-sale | HPFC: | Healthcare Professional Funding Corporation, a wholly-owned subsidiary of Camden National Bank | |
ALCO: | Asset/Liability Committee | HTM: | Held-to-maturity | |
ALL: | Allowance for loan losses | IRS: | Internal Revenue Service | |
AOCI: | Accumulated other comprehensive income (loss) | LIBOR: | London Interbank Offered Rate | |
ASC: | Accounting Standards Codification | LTIP: | Long-Term Performance Share Plan | |
ASU: | Accounting Standards Update | Management ALCO: | Management Asset/Liability Committee | |
Bank: | Camden National Bank, a wholly-owned subsidiary of Camden National Corporation | MBS: | Mortgage-backed security | |
BOLI: | Bank-owned life insurance | MSPP: | Management Stock Purchase Plan | |
Board ALCO: | Board of Directors' Asset/Liability Committee | N.M.: | Not meaningful | |
CCTA: | Camden Capital Trust A, an unconsolidated entity formed by Camden National Corporation | OCC: | Office of the Comptroller of the Currency | |
CDs: | Certificate of deposits | OCI: | Other comprehensive income (loss) | |
Company: | Camden National Corporation | OREO: | Other real estate owned | |
CMO: | Collateralized mortgage obligation | OTTI: | Other-than-temporary impairment | |
DCRP: | Defined Contribution Retirement Plan | SBM: | SBM Financial, Inc., the parent company of The Bank of Maine | |
EPS: | Earnings per share | SERP: | Supplemental executive retirement plans | |
FASB: | Financial Accounting Standards Board | Tax Act: | Tax Cuts and Jobs Act of 2017, enacted on December 22, 2017 | |
FDIC: | Federal Deposit Insurance Corporation | TDR: | Troubled-debt restructured loan | |
FHLB: | Federal Home Loan Bank | UBCT: | Union Bankshares Capital Trust I, an unconsolidated entity formed by Union Bankshares Company that was subsequently acquired by Camden National Corporation | |
FHLBB: | Federal Home Loan Bank of Boston | U.S.: | United States of America | |
FRB: | Federal Reserve System Board of Governors | 2003 Plan: | 2003 Stock Option and Incentive Plan | |
FRBB: | Federal Reserve Bank of Boston | 2012 Plan: | 2012 Equity and Incentive Plan | |
GAAP: | Generally accepted accounting principles in the United States |
• | Service charges on deposit accounts: Deposit-related fees, include, but are not limited to, overdraft income, service charge income, and other fees generated by the depositor relationship with the Bank. For each depositor relationship, an agreement and related disclosures outline the terms of the contract between the depositor and the Bank, including the assessment of fees and fee structure for its various products. The contract is day-to-day and can be closed by the customer or the Bank at any time. As such, the Company recognizes revenue at the time of the transaction as the performance obligation has been met. |
• | Debit card interchange income: The Bank has separate contracts with intermediaries and earns interchange revenue and incurs related expenses on debit card transactions of its deposit customers. Income earned and expenses incurred by the Bank are dependent on its depositors' debit card usage, including depositor spend, transaction type and merchant. The rates earned are determined by the intermediaries. The Company determined that although the contract for which revenues are directly earned is with the intermediary rather than the depositor, that an underlying contract with each depositor is required for the generation of debit card interchange income and it is the depositors' debit card usage that drives the revenues earned and related expenses incurred. The contract with the depositor is day-to-day and can be closed by the customer or the Bank at any time. As such, the Company recognizes revenue at the time of the transaction as the performance obligation has been met. |
• | Fiduciary services income: The Company, through the Bank's wealth management and trust services department, doing business as Camden National Wealth Management, earns fees for its investment management and related services for its clients. Fees earned for its services are largely dependent on assets under management as of the last day of the month and do not contain performance clauses. Should the applicable services contract be terminated by either party, fees for services are earned up to the effective date of contract termination. As such, fiduciary services income is earned and recognized daily. |
• | Investment program income: Under an investment program offered by the Bank, doing business as Camden Financial Consultant (“Program”), its clients are provided access to brokerage, advisory and insurance products offered through an unaffiliated third party, LPL Financial LLC1 ("LPL Financial"). Certain Bank employees are registered securities representatives and/or registered investment advisor representatives of LPL Financial who operate in such capacity under Camden Financial Consultants to provide clients with brokerage, investment advisory and insurance related services. The Bank receives a portion of the commissions and fees received by LPL Financial from the sale of investment products and investment advisory services in accordance with the terms of the contract between the two parties. |
• | The Company's equity investments are no longer designated and accounted for as AFS securities, with the change in fair value recognized within AOCI, net of tax. Instead, the change in fair value of equity investments with a readily determinable fair value are to be recognized within net income. For the three and nine months ended September 30, 2018, the Company recognized an unrealized gain of $11,000 and an unrealized loss of $13,000, respectively, for the change in fair value of its equity investments within other income on the Company's consolidated statements of income. The recognition for the change in fair value within net income was applied prospectively, and the Company recorded a cumulative-effect adjustment as of January 1, 2018 for its equity investments to reclassify the unrealized gain of $198,000, net of tax, previously recognized within AOCI to retained earnings. |
• | The Company used the "exit price" notion when measuring the fair value of financial instruments for disclosure purposes only. The Company previously used the "entry price" notion for purposes of measuring its loans held for investment for disclosure purposes only. The change in valuation methodology has been applied prospectively as it does not have a material effect on the comparability of the disclosure. |
• | The Company no longer discloses the method or significant assumptions used to estimate the fair value for its financial instruments measured at amortized cost on its consolidated statements of condition for which fair value is provided for disclosure purposes only. |
1 | Securities are offered through LPL Financial, Member FINRA/SIPC. Camden Financial Consultants and the Bank are not registered broker/dealers and are not affiliated with LPL Financial. The investment products sold through LPL Financial are not insured by Bank deposits and are not insured by the Federal Deposit Insurance Corporation ("FDIC"). These products are not obligations of the Bank and are not endorsed, recommended or guaranteed by the Bank or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible. |
• | An entity need not reassess whether any expired or existing contract are or contain leases. As such, the Company will not reassess expired or existing contracts to assess whether or not these contracts are or contain a lease within the scope of ASU 2016-02. |
• | An entity need not reassess the lease classification for any expired or existing leases. As such, all existing leases that were classified as operating leases in according with Topic 840, Leases (“Topic 840”), will be classified as operating leases, and all existing leases that were classified as capital leases in accordance with Topic 840 will be classified as finance leases. |
• | An entity need not reassess initial direct costs for any existing leases. Accordingly, the Company does not expect to reassess direct costs for any of its existing leases. |
• | An entity may elect to apply hindsight to leases that existed during the period from the beginning of the earliest period presented in the financial statements until the effective date. As such, the Company will apply hindsight to determine the lease term (i.e., the entity should consider the outcome of lessee options to extend or terminate the lease and decisions to purchase the underlying asset) as well as to assess the impairment of right-of-use assets. |
• | ASU 2018-11 provided another transition method in addition to the modified retrospective method provided for within ASU 2016-02. ASU 2018-11 allows companies initially to apply the new leases standards at the date of adoption and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Accordingly, the Company will utilize the optional transition method provided for within ASU 2018-11, and will continue to apply the disclosure requirements under Topic 840, for the comparative periods that are presented. |
• | A change in the Company's assessment of its ALL and allowance on unused commitments as it will transition from an incurred loss model to an expected loss model, which may result in an increase in the ALL upon adoption and may negatively impact the Company and Bank's regulatory capital ratios. |
• | May reduce the carrying value of the Company's HTM investment securities as it will require an allowance on the expected losses over the life of these securities to be recorded upon adoption. |
• | Changes to the considerations when assessing AFS debt securities for OTTI, including (i) no longer considering the amount of time a security has been in an unrealized loss position and (ii) no longer considering the historical and implied volatility of a security and recoveries or declines in the fair value after the balance sheet date, as well as the presentation of OTTI as an allowance rather than a permanent write-down of the debt security. |
• | Changes to the disclosure requirements to reflect the transition from an incurred loss methodology to an expected credit loss methodology, as well as certain disclosures of credit quality indicators in relation to the amortized cost of financing receivables disaggregated by year of origination (or vintage). |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income | $ | 14,057 | $ | 11,339 | $ | 39,094 | $ | 31,649 | ||||||||
Dividends and undistributed earnings allocated to participating securities(1) | (39 | ) | (46 | ) | (110 | ) | (134 | ) | ||||||||
Net income available to common shareholders | $ | 14,018 | $ | 11,293 | $ | 38,984 | $ | 31,515 | ||||||||
Weighted-average common shares outstanding for basic EPS | 15,580,782 | 15,515,189 | 15,565,355 | 15,505,698 | ||||||||||||
Dilutive effect of stock-based awards(2) | 58,204 | 73,819 | 56,045 | 74,374 | ||||||||||||
Weighted-average common and potential common shares for diluted EPS | 15,638,986 | 15,589,008 | 15,621,400 | 15,580,072 | ||||||||||||
Earnings per common share(1): | ||||||||||||||||
Basic EPS | $ | 0.90 | $ | 0.72 | $ | 2.50 | $ | 2.03 | ||||||||
Diluted EPS | $ | 0.90 | $ | 0.72 | $ | 2.50 | $ | 2.02 |
Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
September 30, 2018 | |||||||||||||||
AFS Investments (carried at fair value): | |||||||||||||||
Obligations of states and political subdivisions | $ | 4,778 | $ | 44 | $ | (4 | ) | $ | 4,818 | ||||||
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises | 479,836 | 350 | (19,888 | ) | 460,298 | ||||||||||
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises | 320,543 | — | (13,932 | ) | 306,611 | ||||||||||
Subordinated corporate bonds | 8,589 | 65 | (38 | ) | 8,616 | ||||||||||
Total AFS investments | $ | 813,746 | $ | 459 | $ | (33,862 | ) | $ | 780,343 | ||||||
HTM Investments (carried at amortized cost): | |||||||||||||||
Obligations of states and political subdivisions | $ | 92,933 | $ | 58 | $ | (2,441 | ) | $ | 90,550 | ||||||
Total HTM investments | $ | 92,933 | $ | 58 | $ | (2,441 | ) | $ | 90,550 | ||||||
December 31, 2017 | |||||||||||||||
AFS Investments (carried at fair value): | |||||||||||||||
Obligations of states and political subdivisions | $ | 7,232 | $ | 103 | $ | — | $ | 7,335 | |||||||
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises | 510,176 | 597 | (7,471 | ) | 503,302 | ||||||||||
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises | 279,575 | 14 | (6,790 | ) | 272,799 | ||||||||||
Subordinated corporate bonds | 5,484 | 173 | — | 5,657 | |||||||||||
Equity investments(1) | 554 | 252 | — | 806 | |||||||||||
Total AFS investments | $ | 803,021 | $ | 1,139 | $ | (14,261 | ) | $ | 789,899 | ||||||
HTM Investments (carried at amortized cost): | |||||||||||||||
Obligations of states and political subdivisions | $ | 94,073 | $ | 1,077 | $ | (237 | ) | $ | 94,913 | ||||||
Total HTM investments | $ | 94,073 | $ | 1,077 | $ | (237 | ) | $ | 94,913 |
(1) | As of December 31, 2017, equity investments were classified as AFS investments. Effective January 1, 2018, these investments were reclassified to other investments on the consolidated statements of condition as they are no longer eligible to be classified as AFS upon adoption of ASU 2016-01. Refer to Note 2 for further details. |
Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
September 30, 2018 | |||||||||||||||||||||||
AFS Investments: | |||||||||||||||||||||||
Obligations of states and political subdivisions | $ | 1,516 | $ | (4 | ) | $ | — | $ | — | $ | 1,516 | $ | (4 | ) | |||||||||
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises | 120,098 | (2,544 | ) | 328,180 | (17,344 | ) | 448,278 | (19,888 | ) | ||||||||||||||
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises | 123,951 | (2,220 | ) | 181,524 | (11,712 | ) | 305,475 | (13,932 | ) | ||||||||||||||
Subordinated corporate bonds | 5,051 | (38 | ) | — | — | 5,051 | (38 | ) | |||||||||||||||
Total AFS investments | $ | 250,616 | $ | (4,806 | ) | $ | 509,704 | $ | (29,056 | ) | $ | 760,320 | $ | (33,862 | ) | ||||||||
HTM Investments: | |||||||||||||||||||||||
Obligations of states and political subdivisions | $ | 67,328 | $ | (1,755 | ) | $ | 12,546 | $ | (686 | ) | $ | 79,874 | $ | (2,441 | ) | ||||||||
Total HTM investments | $ | 67,328 | $ | (1,755 | ) | $ | 12,546 | $ | (686 | ) | $ | 79,874 | $ | (2,441 | ) | ||||||||
December 31, 2017 | |||||||||||||||||||||||
AFS Investments: | |||||||||||||||||||||||
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises | $ | 221,466 | $ | (2,393 | ) | $ | 233,971 | $ | (5,078 | ) | $ | 455,437 | $ | (7,471 | ) | ||||||||
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises | 102,612 | (696 | ) | 164,389 | (6,094 | ) | 267,001 | (6,790 | ) | ||||||||||||||
Total AFS investments | $ | 324,078 | $ | (3,089 | ) | $ | 398,360 | $ | (11,172 | ) | $ | 722,438 | $ | (14,261 | ) | ||||||||
HTM Investments: | |||||||||||||||||||||||
Obligations of states and political subdivisions | $ | 9,317 | $ | (57 | ) | $ | 9,436 | $ | (180 | ) | $ | 18,753 | $ | (237 | ) | ||||||||
Total HTM investments | $ | 9,317 | $ | (57 | ) | $ | 9,436 | $ | (180 | ) | $ | 18,753 | $ | (237 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Proceeds from sales of investments | $ | 22,830 | $ | 20,269 | $ | 32,728 | $ | 20,269 | ||||||||
Gross realized gains | — | 841 | 31 | 841 | ||||||||||||
Gross realized losses | (275 | ) | (14 | ) | (275 | ) | (14 | ) |
Amortized Cost | Fair Value | ||||||
AFS Investments | |||||||
Due in one year or less | $ | 7,933 | $ | 7,907 | |||
Due after one year through five years | 94,474 | 91,482 | |||||
Due after five years through ten years | 193,165 | 184,931 | |||||
Due after ten years | 518,174 | 496,023 | |||||
$ | 813,746 | $ | 780,343 | ||||
HTM Investments | |||||||
Due in one year or less | $ | 4,610 | $ | 4,609 | |||
Due after one year through five years | 1,529 | 1,538 | |||||
Due after five years through ten years | 19,960 | 19,670 | |||||
Due after ten years | 66,834 | 64,733 | |||||
$ | 92,933 | $ | 90,550 |
Cost | Unrealized Gains | Unrealized Losses | Fair Value / Carrying Value | ||||||||||||
September 30, 2018 | |||||||||||||||
Equity securities - bank stock (carried at fair value)(1) | $ | 544 | $ | 239 | $ | — | $ | 783 | |||||||
FHLBB (carried at cost) | 10,744 | — | — | 10,744 | |||||||||||
FRB (carried at cost) | 5,374 | — | — | 5,374 | |||||||||||
Total other investments | $ | 16,662 | $ | 239 | $ | — | $ | 16,901 | |||||||
December 31, 2017 | |||||||||||||||
FHLBB (carried at cost) | $ | 18,296 | $ | — | $ | — | $ | 18,296 | |||||||
FRB (carried at cost) | 5,374 | — | — | 5,374 | |||||||||||
Total other investments | $ | 23,670 | $ | — | $ | — | $ | 23,670 |
(1) | Effective January 1, 2018, these investments were reclassified to other investments on the consolidated statements of condition as they are no longer eligible for AFS classification upon adoption of ASU 2016-01. Refer to Note 2 for further details. |
September 30, 2018 | December 31, 2017 | ||||||
Residential real estate | $ | 941,488 | $ | 858,369 | |||
Commercial real estate | 1,215,979 | 1,164,023 | |||||
Commercial | 368,837 | 373,400 | |||||
Home equity | 325,452 | 323,378 | |||||
Consumer | 20,258 | 18,149 | |||||
HPFC | 36,829 | 45,120 | |||||
Total loans | $ | 2,908,843 | $ | 2,782,439 |
September 30, 2018 | December 31, 2017 | ||||||
Net unamortized fair value mark discount on acquired loans | $ | 4,757 | $ | 6,207 | |||
Net unamortized loan origination costs | (1,411 | ) | (963 | ) | |||
Total | $ | 3,346 | $ | 5,244 |
Residential Real Estate | Commercial Real Estate | Commercial | Home Equity | Consumer | HPFC | Total | ||||||||||||||||||||||
For The Three and Nine Months Ended September 30, 2018 | ||||||||||||||||||||||||||||
ALL for the three months ended: | ||||||||||||||||||||||||||||
Beginning balance | $ | 5,779 | $ | 10,310 | $ | 4,303 | $ | 2,616 | $ | 260 | $ | 400 | $ | 23,668 | ||||||||||||||
Loans charged off | (115 | ) | — | (150 | ) | (157 | ) | (28 | ) | (209 | ) | (659 | ) | |||||||||||||||
Recoveries | 37 | 4 | 117 | — | 3 | 1 | 162 | |||||||||||||||||||||
Provision (credit)(1) | 59 | 268 | (302 | ) | 116 | 38 | 176 | 355 | ||||||||||||||||||||
Ending balance | $ | 5,760 | $ | 10,582 | $ | 3,968 | $ | 2,575 | $ | 273 | $ | 368 | $ | 23,526 | ||||||||||||||
ALL for the nine months ended: | ||||||||||||||||||||||||||||
Beginning balance | $ | 5,086 | $ | 11,863 | $ | 4,171 | $ | 2,367 | $ | 233 | $ | 451 | $ | 24,171 | ||||||||||||||
Loans charged off | (231 | ) | (512 | ) | (448 | ) | (381 | ) | (70 | ) | (209 | ) | (1,851 | ) | ||||||||||||||
Recoveries | 52 | 19 | 237 | 44 | 8 | 1 | 361 | |||||||||||||||||||||
Provision (credit)(1) | 853 | (788 | ) | 8 | 545 | 102 | 125 | 845 | ||||||||||||||||||||
Ending balance | $ | 5,760 | $ | 10,582 | $ | 3,968 | $ | 2,575 | $ | 273 | $ | 368 | $ | 23,526 | ||||||||||||||
ALL balance attributable to loans: | ||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 619 | $ | 23 | $ | — | $ | 114 | $ | — | $ | — | $ | 756 | ||||||||||||||
Collectively evaluated for impairment | 5,141 | 10,559 | 3,968 | 2,461 | 273 | 368 | 22,770 | |||||||||||||||||||||
Total ending ALL | $ | 5,760 | $ | 10,582 | $ | 3,968 | $ | 2,575 | $ | 273 | $ | 368 | $ | 23,526 | ||||||||||||||
Loans: | ||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 5,184 | $ | 5,007 | $ | 1,548 | $ | 373 | $ | — | $ | — | $ | 12,112 | ||||||||||||||
Collectively evaluated for impairment | 936,304 | 1,210,972 | 367,289 | 325,079 | 20,258 | 36,829 | 2,896,731 | |||||||||||||||||||||
Total ending loans balance | $ | 941,488 | $ | 1,215,979 | $ | 368,837 | $ | 325,452 | $ | 20,258 | $ | 36,829 | $ | 2,908,843 | ||||||||||||||
For The Three and Nine Months Ended September 30, 2017 | ||||||||||||||||||||||||||||
ALL for the three months ended: | ||||||||||||||||||||||||||||
Beginning balance | $ | 4,481 | $ | 12,848 | $ | 4,275 | $ | 2,094 | $ | 182 | $ | 514 | $ | 24,394 | ||||||||||||||
Loans charged off | (238 | ) | (69 | ) | (369 | ) | (11 | ) | (28 | ) | (193 | ) | (908 | ) | ||||||||||||||
Recoveries | 26 | 25 | 59 | 1 | 9 | 5 | 125 | |||||||||||||||||||||
Provision (credit)(1) | 273 | (8 | ) | 256 | 93 | 32 | 156 | 802 | ||||||||||||||||||||
Ending balance | $ | 4,542 | $ | 12,796 | $ | 4,221 | $ | 2,177 | $ | 195 | $ | 482 | $ | 24,413 | ||||||||||||||
ALL for the nine months ended: |