Camden National Corporation · NASDAQ:CAC
Camden National — Investor Presentation (June 2018)
28 slides from Camden National's investor presentation, Jun 20, 2018
Slide 1: Investor Meeting
Investor Meeting Gregory Dufour | President & Chief Executive Officer Deborah Jordan | Chief Operating & Financial Officer June 20, 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 • $4.1 billion in assets • 60 branches (Maine) • 3 loan offices (2 in New Hampshire and 1 in Massachusetts) • Market cap of approximately $715 million • Average daily share volume of approximately
Slide 4: Q1 2018 Financial Highlights
Q1 2018 Financial Highlights Strong earnings performance • Net income of $12.8 million • Return on tangible equity: 17.35%(a) • Return on assets: 1.28% • Efficiency ratio: 58.76%(a) • Tangible common equity ratio: 7.59%(a) Solid growth • Total loans of $2.8 billion; LTM growth of 5% • Total deposits
Slide 5: Performance to Northeast Bank Peer Group
Performance to Northeast Bank Peer Group 3/31/2018 Performance Ratios (%) CAC Peer Median Peer Average ROAA 1.26 1.05 1.05 ROAE 12.74 11.63 11.19 Net Interest Margin (Reported) 3.10 3.14 3.14 Efficiency Ratio (Reported) 58.76 60.48 58.62 Loans / Deposits 92.19 101.22 100.15 Capital Ratios (%) Total
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 $1.4 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 8: Focused on Building Market Share and Key Market Expansion
Focused on Building Market Share and Key Market Expansion Strong Market Share: State of Maine • Mortgage originations: 2nd (7.2% market share for the first quarter of 2018) • Deposit market share: 2nd Core (10.6% market share as of 6/30/17) Market High Growth Maine Counties: York and Cumberland • Mo
Slide 9: Deposit Opportunity in Maine
Focused on Building Market Share: Deposit Opportunity in Maine Q1 2018 STATE OF MAINE Deposits and Funding ($ in millions) Market Rank Institution Deposits Branches Share % 1 Toronto-Dominion Bank $ 3,761 44 13.5 Borrowings 2 Camden National Corp. 2,957 61 10.6 24% 3 Bangor Bancorp MHC 2,792 56 10.0
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 Q1 2018 Fee Income Diversification Millions $0 $1 $2 $3 Service charges 26% Wealth management & brokerage 22% Debit card income 22% Mortgage banking income 16% Other income 14% Fee income is 23% of total revenue (net interest income plus fee income) 10
Slide 12: 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% $41 57.53% 58.00% 57.75% 57.05% 56.76% 55.72% $40 $38 $20 $35 44 44 64 61 60 $0 $32 2015 2016 2017 1Q17 2Q17 3Q17 4Q17 1Q18 2013 2014 2
Slide 13: Balanced Loan Mix & Strong Credit Culture
Balanced Loan Mix & Strong Credit Culture Q1 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. Insurance Residential 3. Assisted Living (relationship B) Mortgages 31
Slide 14: Prudent Investments
Prudent Investments Q1 2018 Investments FRB/FHLB Stock SBAs 2% Agency/Sub. 3% Notes/Other 1% Municipals 11% WAL Shock Agency CMO 30% Rate Shock WAL +100bps 5.07 +200bps 5.24 +300bps 5.35 MBS 54% Average Investments: $926 million Average Yield (FTE): 2.35% Weighted Average Life (WAL): 4.58 13
Slide 15: Yield and Funding Trends
Yield and Funding Trends Total Loan and Earning Asset Yields Total Funding and Deposit Costs 0.72% 4.28% 4.30% 4.25% 4.23% 4.23% 4.26% 0.62% 4.15% 0.59% 0.60% 0.60% 0.53% 0.49% 3.77% 3.78% 3.75% 3.76% 3.74% 3.75% 0.42% 3.67% 0.36% 0.32% 0.32% 0.30% 0.31% 0.28% 2016 2017 1Q17 2Q17 3Q17 4Q17 1Q18 2016
Slide 16: Net Interest Margin
Net Interest Margin Annual Quarterly 3.28% 3.19% 3.20% 3.15% 3.16% 3.16% 3.10% 0.17% 0.09% 0.08% 0.09% 0.10% 0.09% 0.06% Interest Rate Risk Estimated Changes In Net Interest Income(b) Year 1 +200bp 0.2% 3.11% 3.10% 3.06% 3.06% 3.07% 3.12% 3.04% -100bp (2.2)% Year 2 +200bp 8.9 % -100bp (5.4)% 2016 20
Slide 17: Shareholder Value Long-Term Metrics
Shareholder Value Long-Term Metrics TBV Per Share(a) $19.57 $9.65 • TBV per share 15 year CAGR of 4.8% • Consistent dividend of 30%+ of annual earnings '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Q1 '18 • $65 million in share buybacks since 2003 Dividends as % of Net Income 30% 30% '
Slide 18: Shareholder Value Total Return
Shareholder Value 15 Year Total Return • Stock price appreciation of 199.33% • Average dividend yield of 2.77% 400% 366% 350% 328% 300% 250% 214% 200% 181% 150% 100% 50% 0% Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 -50% CAC SNL U.
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 55 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) Q1 2018 Q4 2017 Q3 2017 Q2 2017 Q1 2017 Loans $2,789 $2,782 $2,748 $2,736 $2,645 Investment Securities 914 908 916 932 943 Total Assets 4,113 4,065 4,040 4,036 3,938 Deposits 3,026 3,000 2,956 2,941 2,937 Borrowings 622 611 609 642 557 Shareholders’
Slide 23: Financial Highlights: Net Income and Key Ratios
Financial Highlights Net Income and Key Ratios Q1 2018 Q4 2017 Q3 2017 Q2 2017 Q1 2017 GAAP Net Income (Loss) $12.8 ($3.2) $11.3 $10.2 $10.1 (in millions) Diluted Earnings per Share $0.82 ($0.20) $0.72 $0.66 $0.64 Return on Tangible Equity(1) 17.35% (1.00%) 14.85% 13.96% 14.37% Return on Assets 1.28
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 Three Months Ended March 31, 2018 Top 15 Lenders Originations Rank % of Total Bangor Savings Bank 738 1 9.1% Camden National Bank 579 2 7.2% Residential Mortgage Services Inc. 429 3 5.3% TD Bank, N.A. 377 4 4.7% Quicken Loans 375 5 4.6% Kennebec Savings Bank 311 6 3.9% Key
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% 14.05% 13.87% 14.09% 14.14% $0.82 $0.72 $0.66 $0.64 7.98% 7.74% 7.79% 7.66% 7.59% $0.23 $0.23 $0.23 $0.25 $0.25 1Q17 2Q17 3Q17 4Q17 (2) 1Q18 1Q17 2Q17 3Q17 4Q17 (2) 1Q18 $(0.20) Total RBC Ratio Tangible Common Equity Ratio(1