Camden National Corporation · NASDAQ:CAC
Camden National — 2018 KBW Community Bank Investor Conference
28 slides from Camden National's conference presentation, Aug 1, 2018
Slide 1: 2018 KBW Community Bank Investor Conference
2018 KBW Community Bank Investor Conference Gregory Dufour | President & Chief Executive Officer Deborah Jordan | Chief Operating & Financial Officer August 1, 2018 0
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains certain statements that may be considered forward-looking statements under the Private Securities Litigation Reform Act of 1995 and other federal securities laws, including certain plans, exceptions, goals, projections, and statements, which are
Slide 3: Camden National Corporation
Camden National Corporation • Camden National is the largest bank headquartered in Northern New England • $4.2 billion in assets • 60 branches (Maine) • 3 loan offices (2 in New Hampshire and 1 in Massachusetts) • Market cap of approximately $725 million • Average daily share volume of approximately
Slide 4: Q2 2018 Financial Highlights
Q2 2018 Financial Highlights Strong earnings performance • Net income of $12.2 million • Return on tangible equity: 16.23%(a) • Return on assets: 1.19% • Efficiency ratio: 58.39%(a) • Tangible common equity ratio: 7.59%(a) Solid growth • Total loans of $2.9 billion; LTM growth of 5% • Total deposits
Slide 5: Performance to Northeast Bank Peer Group
Performance to Northeast Bank Peer Group 6/30/2018 Performance Ratios (%) CAC Peer Median Peer Average ROAA 1.24 1.04 1.08 ROAE 12.50 11.71 11.42 Net Interest Margin (Reported) 3.10 3.15 3.15 Efficiency Ratio 58.57 58.78 57.59 Loans / Deposits 94.24 102.01 101.77 Capital Ratios (%) Total Risk Based
Slide 6: Why Camden National?
Why Camden National? Organic franchise growth, opportunistic acquisitions Focused: Consistent Performance: • Gaining market share • Profitability achieved through • Adherence to strategic plan organic growth • Opportunistically reviewing • Improved productivity complementary acquisitions • Disciplin
Slide 7: Focused on Building Market Share: Asset Growth History
Focused on Building Market Share: Asset Growth History Total Assets $ in Billions Organic Growth: $1.2 billion $4.1 Acquired Growth: $1.7 billion $3.9 15 Year CAGR: 8.4% $3.7 $2.8 $2.6 $2.6 $2.3 $2.2 $2.3 $2.3 $1.8 $1.7 $1.7 $1.5 $1.4 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 8: Focused on Building Market Share and Key Market Expansion
Focused on Building Market Share and Key Market Expansion Strong Market Share: State of Maine • Mortgage originations: 2nd (7.6% market share for the first half of 2018) • Deposit market share: 2nd Core (10.6% market share as of 6/30/17) Market High Growth Maine Counties: York and Cumberland • Mortg
Slide 9: Focused on Building Market Share: Deposit Opportunity in Maine
Focused on Building Market Share: Deposit Opportunity in Maine Q2 2018 STATE OF MAINE Deposits and Funding ($ in millions) Market Rank Institution Deposits Branches Share % 1 Toronto-Dominion Bank $ 3,761 44 13.5 2 Camden National Corp. 2,957 61 10.6 Borrowings 3 Bangor Bancorp MHC 2,792 56 10.0 24%
Slide 10: Building Market Share Through Customer Interactions
Focused on Building Market Share Through Customer Interactions In person: 60 banking centers 2.8 million transactions 74 ATMs 1.4 million transactions Technology Advancement. Recently introduced: Online: • MortgageTouchTM Web & Mobile Banking • TreasuryLinkTM 85,000 customers • Pay Up Over the phone
Slide 11: Focused on Growing and Diversifying Revenue
Focused on Growing and Diversifying Revenue YTD 2018 Fee Income Diversification Millions $0 $1 $2 $3 $4 $5 Service charges 26% Debit card income 22% Wealth management & brokerage 22% Mortgage banking income 16% Other income 14% Fee income is 24% of total revenue (net interest income plus fee income)
Slide 12: Focused on Improving Productivity and Creating Efficiencies
Focused on Improving Productivity and Creating Efficiencies Expense and Efficiency ratio(1) Deposits per Branch $100 $47 Millions Millions $80 $44 61.13% $60 58.76% 58.39% $41 57.53% 57.75% 57.05% 56.76% 55.72% $40 $38 $20 $35 44 44 64 61 60 $0 $32 2015 2016 2017 2Q17 3Q17 4Q17 1Q18 2Q18 2013 2014 2
Slide 13: Balanced Loan Mix & Strong Credit Culture
Balanced Loan Mix & Strong Credit Culture Q2 2018 • Internal lending limit of $37 million Home Equity/ Commercial • Four credit relationships over $25 million Consumer 15% 12% Business Type: 1. Assisted Living (relationship A) 2. Assisted Living (relationship B) 3. Insurance Residential Mortgages 4.
Slide 14: Prudent Investments
Prudent Investments Q2 2018 Investments FRB/FHLB SBAs 3% Agency/Sub. Stock 3% Notes/Other 1% Municipals 11% WAL Shock Agency CMO 31% Rate Shock WAL +100bps 4.96 +200bps 5.12 +300bps 5.24 MBS 52% Average Investments: $933 million Average Yield (FTE): 2.43% Weighted Average Life (WAL): 4.59 13
Slide 15: Yield and Funding Trends
Yield and Funding Trends Total Loan and Earning Asset Yields Total Funding and Deposit Costs 0.84% 4.43% 4.28% 4.30% 4.25% 4.23% 4.23% 4.26% 0.72% 0.62% 0.59% 0.60% 0.60% 3.90% 3.78% 3.75% 3.76% 3.74% 3.75% 3.77% 0.49% 0.48% 0.42% 0.36% 0.32% 0.32% 0.31% 0.28% 2016 2017 2Q17 3Q17 4Q17 1Q18 2Q18 2016
Slide 16: Net Interest Margin
Net Interest Margin Annual Quarterly 3.28% 3.19% 3.16% 3.16% 3.20… 3.10% 3.10% 0.17% 0.09% 0.10% 0.09% 0.06% 0.06% Interest Rate Risk Estimated Changes In Net Interest Income(b) Year 1 +200bp 0.0% 3.11% 3.10% 3.06% 3.07% 3.12% 3.04% 3.04% -100bp (0.7)% Year 2 +200bp 8.7 % -100bp (2.2)% 2016 2017 2Q1
Slide 17: Shareholder Value Long-Term Metrics
Shareholder Value Long-Term Metrics TBV Per Share(a) $19.94 $9.65 • TBV per share 15 year CAGR of 4.8% • Consistent dividend of 30%+ of '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Q2 annual earnings '18 • $65 million in share buybacks since 2003 Dividends as % of Net Income 38% 30% '
Slide 18: Shareholder Value Year Total Return
Shareholder Value 15 Year Total Return • Stock price appreciation of 149.33% • Average dividend yield of 2.76% 350% 300% 288% 280% 250% 200% 200% 167% 150% 100% 50% 0% Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 -50% CAC SNL U.S. Ba
Slide 19: Investment Summary
Investment Summary Proven Management Team • Delivered on previous acquisition commitments • Diverse experience from community and large bank perspectives Strong Market Share and Brand Recognition • 140+ year operating history • 2nd overall deposit market share in Maine • #2 mortgage originator in Ma
Slide 20: Appendix
a Caden. NATIONAL CORPORATION Appendix
Slide 21: Seasoned Management Team
Seasoned Management Team Years of Banking Year joined Name Position Age Experience Camden Greg Dufour President and CEO 58 30+ 2001 Debbie Jordan, CPA COO & CFO 52 20+ 2008 Joanne Campbell EVP Risk Management 56 30+ 1996 Edmund Hayden EVP Chief Credit Officer 62 30+ 2015 SVP Managing Director of Jen
Slide 22: Financial Highlights: Balance Sheet
Financial Highlights Balance Sheet (in million’s) Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 Loans $2,868 $2,789 $2,782 $2,748 $2,736 Investment Securities 918 914 908 916 932 Total Assets 4,194 4,113 4,065 4,040 4,036 Deposits 3,056 3,026 3,000 2,956 2,941 Borrowings 661 622 611 609 642 Shareholders’
Slide 23: Financial Highlights: Net Income and Key Ratios
Financial Highlights Net Income and Key Ratios Q2 2018 Q1 2018 Q4 2017 Q3 2017 Q2 2017 GAAP Net Income (Loss) $12.2 $12.8 ($3.2) $11.3 $10.2 (in millions) Diluted Earnings per Share $0.78 $0.82 ($0.20) $0.72 $0.66 Return on Tangible Equity(1) 16.23% 17.35% (1.00%) 14.85% 13.96% Return on Assets 1.19
Slide 24: Historical Credit Metrics
Historical Credit Metrics NPAs / Assets NCOs / Average Loans 3.00% 1.25% 2.50% 1.00% 2.00% 0.75% 1.50% 0.50% 1.00% 0.25% 0.50% 0.00% 0.00% '09 '10 '11 '12 '13 '14 '15 '16 '17 Q1 '18 '09 '10 '11 '12 '13 '14 '15 '16 '17 Q1 '18 Loan Loss Reserves / Gross Loans Nonaccrual Loans / Loans 2.50% 3.00% 2.50%
Slide 25: Profitability Trends
Profitability Trends ROAA ROAE 1.40% 14.00% 1.20% 12.00% 1.00% 10.00% 0.80% 8.00% 0.60% 6.00% 0.40% 4.00% 0.20% 2.00% 0.00% 0.00% '09 '10 '11 '12 '13 '14 '15 '16 '17 Q1 '18 '09 '10 '11 '12 '13 '14 '15 '16 '17 Q1 '18 Net Interest Margin Efficiency Ratio 4.00% 70.00% 3.75% 65.00% 3.50% 60.00% 3.25% 55
Slide 26: Mortgage Banking Activity
Mortgage Banking Activity Six Months Ended June 30, 2018 Top 15 Lenders Originations Rank % of Total Bangor Savings Bank 1,813 1 9.8% Camden National Bank 1,402 2 7.6% Residential Mortgage Services Inc. 1,037 3 5.6% TD Bank, N.A. 814 4 4.4% Kennebec Savings Bank 791 5 4.3% Quicken Loans 783 6 4.2% K
Slide 27: Market Overview
Market Overview Maine New Hampshire Massachusetts Population in Millions 1.33 1.34 6.86 (Dec 2017) Population Increase 0.3% 1.8% 4.9% (2010-2018) Projected Population Change 0.4% 1.4% 3.0% (2018-2023) Median Household Income $55,679 $75,742 $77,248 (2018) Demographics Projected HH Income Change 8.9%
Slide 28: Capital Position and Payout
Capital Position and Payout Capital Position EPS and Dividend Payout 14.32% 14.33% 13.87% 14.09% 14.14% $0.82 $0.78 $0.72 $0.66 7.98% 7.79% 7.66% 7.59% 7.59% $0.30 $0.23 $0.23 $0.25 $0.25 2Q17 3Q17 4Q17 (2) 1Q18 2Q18 2Q17 3Q17 4Q17 (2) 1Q18 2Q18 $(0.20) Total RBC Ratio Tangible Common Equity Ratio(1
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