Camden National Corporation · NASDAQ:CAC
Camden National — Piper Jaffray New England Bank Symposium (September 2017)
27 slides from Camden National's conference presentation, Sep 28, 2017
Slide 1: Piper Jaffray New England Bank Symposium
Piper Jaffray New England Bank Symposium Gregory Dufour | President & Chief Executive Officer Deborah Jordan | Chief Operating & Financial Officer September 28, 2017 0
Slide 2: Forward Looking Statements
Forward Looking Statements 1 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 ar
Slide 3: Camden National Corporation
Camden National Corporation • Camden National is the largest bank headquartered in Northern New England • $4.0 billion in assets • 60 branches (Maine) and 2 loan offices (New Hampshire and Massachusetts) • Market cap over $650 million • Average daily share volume of 41,000 • Analyst Coverage • Piper
Slide 4: 2nd Quarter 2017 Financial Highlights
2nd Quarter 2017 Financial Highlights • Strong earnings performance o Net income of $10.2 million o Return on tangible equity: 13.96%(a) o Return on assets: 1.03% o Efficiency ratio: 56.76%(a) o Tangible common equity ratio: 7.79%(a) • Solid growth o Total loans $2.7 billion; YTD annualized growth r
Slide 5: Strong Performance to Northeast Bank Peer Group
Strong Performance to Northeast Bank Peer Group 4 Source: SNL Financial. Camden National Corporation’s peer group consists of the following: Arrow Financial Corporation (AROW), Bar Harbor Bankshares (BHB), Berkshire Hills Bancorp, Inc. (BHLB), Boston Private Financial Holdings, Inc. (BPFH), Brooklin
Slide 6: Why Camden National?
Why Camden National? Organic franchise growth, opportunistic acquisitions 5 Credit: • Strong credit culture and history • Disciplined structure and process • Low charge-offs Culture: • Experienced, consistent leadership • Strong community-spirit • Continued branch optimization • Simple product sets
Slide 7: Focused on Building Market Share: Asset Growth History
Focused on Building Market Share: Asset Growth History 6 [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [C LLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2
Slide 8: Focused on Building Market Share: Market Expansion
Focused on Building Market Share: Market Expansion The Bank of Maine (SBM Financial) • October 2015 – simultaneous close and conversion • Deposits: $687 million • Loans: $615 million • Expansion into high growth Southern Maine market • Widens mortgage banking reach to Massachusetts • Positions bank
Slide 9: 2017 Expansion Strategies
2017 Expansion Strategies Mortgage Banking • Expand origination staff – 3 new hires • Expand technology – MortgageTouch (April 2017) Commercial Banking • Expand lending staff – 2 new hires • Targeting an LPO in Portsmouth, NH Wealth Management • Expand business development team – 2 new hires • Expan
Slide 10: Focused on Building Market Share: Deposit Opportunity in Maine
Focused on Building Market Share: Deposit Opportunity in Maine 9 Source: SNL Financial. Deposit market share data as of June 2016. Average Funding: $3.5 billion Average Funding Cost: 0.60% Average Deposit Cost: 0.32% Q2 2017 Deposits and Funding STATE OF MAINE ($ in millions) Rank Institution Deposi
Slide 11: Focused on Growing and Diversifying Revenue
Focused on Growing and Diversifying Revenue Fee income is 25% of total revenue (net interest income plus fee income) 10 [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] $0 $1 $2 $3 $4 $5 Other income Mortgage banking income Wealth management & brokerage Debit card income Service charges M
Slide 12: Focused on Improving Productivity and Creating Efficiencies
Focused on Improving Productivity and Creating Efficiencies 11 57.45% 62.78% 61.58% 61.13% 57.53% 56.76% 52% 54% 56% 58% 60% 62% 64% $0 $20 $40 $60 $80 $100 2012 2013 2014 2015 2016 Q2 2017 M il li o n s Expenses and Efficiency ratio(1) Operating Expenses Efficiency Ratio [CELLRANGE ] [CELLRANGE ] [
Slide 13: Balanced Loan Mix & Strong Credit Culture
Balanced Loan Mix & Strong Credit Culture 12 Q2 2017 Average Loans: $2.7 billion Average Yield: 4.23% • Internal lending limit of $37 million • Four credit relationships over $25 million 1. Assisted Living 2. Insurance 3. Hospital 4. Business Office • Commercial Diversification $318 million Nonresid
Slide 14: Investments
Investments Average Investments: $945 million Average Yield: 2.49% Duration: 3.9 Q2 2017 Investments 13 SBAs 2% Municipals 11% MBS 54% Agency CMO 30% Agency/Sub. Notes/Other 1% FRB/FHLB Stock 3%
Slide 15: Net Interest Margin and Interest Rate Risk
Net Interest Margin 14 Estimated Changes In Net Interest Income(1) Year 1 +200bp (1.3)% -100bp (1.9)% Year 2 +200bp 3.8 % -100bp (7.7)% Interest Rate Risk (1) Assumes flat balance sheet, no change in asset/funding mix, and a parallel and pro rata shift in rates over a 12 month period. 3.16% 3.15% 3.
Slide 16: Shareholder Value Long-Term Metrics
Shareholder Value Long-Term Metrics 15 (a) 2005 and 2011, special dividend of $0.50 per share. (b) The increase in 2015 due to reduction in net income related to merger and acquisition costs of $7.2 million, after tax. (c) 2006 issuance of trust preferred and share buyback. Dividends as % of Net Inc
Slide 17: Shareholder Value 15 Year Total Return
-50% 0% 50% 100% 150% 200% 250% 300% 350% Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 CAC SNL U.S. Bank $1B-$5B S&P 500 CAC Peer Group Index Shareholder Value 15 Year Total Return 16 Source: SNL Financial • Stock price appreciation
Slide 18: 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 • 3rd overall deposit market share in Maine • #2 mortgage originator in Ma
Slide 19: Appendix
amaen NATIONAL CORPORATION Appendix
Slide 20: Seasoned Management Team
Seasoned Management Team 19 Name Position Age Years of Banking Experience Year joined Camden Greg Dufour President and CEO 57 30+ 2001 Debbie Jordan, CPA COO & CFO 51 20+ 2008 Joanne Campbell EVP Risk Management 55 30+ 1996 Edmund Hayden EVP Chief Credit Officer 61 30+ 2015 Tim Nightingale EVP Senio
Slide 21: Financial Highlights: Balance Sheet
Financial Highlights 20 (in million’s) Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Loans $2,736 $2,645 $2,595 $2,592 $2,585 Investment Securities 932 943 898 906 922 Total Assets 4,036 3,938 3,864 3,904 3,910 Deposits 2,941 2,937 2,829 2,889 2,773 Borrowings 642 557 600 559 690 Shareholders’ Equity 407
Slide 22: Net Income and Key Ratios
Net Income and Key Ratios Financial Highlights 21 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016(a) Net Income (in millions) $10.2 $10.1 $10.9 $10.9 $9.6 Diluted Earnings per Share $0.66 $0.64 $0.70 $0.70 $0.62 Return on Tangible Equity(b) 13.96% 14.37% 15.26% 15.61% 14.50% Return on Assets 1.03% 1.05% 1.1
Slide 23: Historical Credit Metrics
Historical Credit Metrics Note: Peer Group defined as publicly traded banks and thrifts headquartered in the United States with total assets between $1.5 billion and $7.0 billion, excluding merger targets. Source: SNL Financial 22 NPAs / Assets NCOs / Average Loans Loan Loss Reserves / Gross Loans N
Slide 24: Profitability Trends
Profitability Trends Note: Peer Group defined as publicly traded banks and thrifts headquartered in the United States with total assets between $1.5 billion and $7.0 billion, excluding merger targets. Source: SNL Financial 23 ROAA ROAE Net Interest Margin Efficiency Ratio 2.50% 2.75% 3.00% 3.25% 3.5
Slide 25: Mortgage Banking Activity
Mortgage Banking Activity 24 Source: MRS, Inc. Data obtained from registry of deeds throughout the state of Maine. Top 15 Lenders Originations Rank % of Total Bangor Savings Bank 1,813 1 9.2% Camden National Bank 1,295 2 6.6% Residential Mortgage Services Inc. 1,043 3 5.3% TD Bank, N.A. 957 4 4.9% K
Slide 26: Market Overview
Market Overview Sources: SNL Financial, U.S. Census, Bureau of Economic Analysis, me.gov, nh.gov, detma.org 25 Maine New Hampshire Massachusetts Population in Millions (Jun 2017) 1.33 1.34 6.86 Population Increase (Apr 2010-Jul 2016) 0.2% 1.4% 4.0% Projected Population Change (2017-2022) 0.3% 1.3% 3
Slide 27: Capital Position and Payout
Capital Position and Payout 26 $0.62 $0.70 $0.70 $0.64 $0.66 $0.20 $0.20 $0.23 $0.23 $0.23 2Q16 3Q16 4Q16 1Q17 2Q17 EPS (Diluted) Dividend Per Share 32% 29% 33% 36% 35% 12.94% 13.60% 14.04% 14.05% 13.87% 7.42% 7.66% 7.71% 7.74% 7.79% 2Q16 3Q16 4Q16 1Q17 2Q17 Total RBC Ratio Tangible Common Equity Ra
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