Fourth Quarter Net Interest Margin Expansion and Solid Earnings Set the Stage Heading Into 2025
Camden National Corporation (NASDAQ: CAC; “Camden National” or the “Company”) today reported earnings for the quarter ended December 31, 2024, of $14.7 million and diluted earnings per share (“EPS”) of $1.00, an increase of 12% and 11%, respectively, over the third quarter of 2024.
On January 2, 2025, the Company announced the successful closing of its merger with Northway Financial, Inc. (“Northway”), the parent company of Northway Bank. The all-stock transaction was originally announced on September 10, 2024. As of the closing, the combined institution had total assets of approximately $7.0 billion and 73 branches in Maine and New Hampshire. The conversion of Northway's banking products and services to Camden National systems is expected to occur in mid-March 2025.
Excluding the merger and acquisition costs incurred in the fourth quarter of 2024, on a non-GAAP basis, core net income for the fourth quarter of 2024 was $15.1 million and core diluted EPS was $1.03, an increase of 9% and 8%, respectively, over the third quarter of 2024.
“We are pleased with our fourth quarter and full-year financial performance. These results reflect our team's collective efforts and commitment to serving our customers and communities,” said Simon Griffiths, president and chief executive officer of Camden National Corporation. “We enter 2025 with tremendous momentum across our franchise, highlighted by our fourth quarter financial results, which included core earnings growth of 9% for the quarter and signs of profitability returning to historical levels as our return on average assets surpassed 1%. As we enter 2025, we are excited to welcome our neighbors from Northway and bolster our franchise in New Hampshire. We remain confident in our plan to build the premier Northern New England community bank, and our strong 2024 financial performance provides us a solid foundation to do so.”
For the year ended December 31, 2024, the Company reported net income of $53.0 million and diluted EPS of $3.62, each an increase of 22% over the year ended December 31, 2023. On a non-GAAP basis, core net income for the year ended December 31, 2024, was $53.4 million and core diluted EPS was $3.65, each an increase of 1% over the year ended December 31, 2023.
FOURTH QUARTER 2024 HIGHLIGHTS*
— Our net interest margin for the fourth quarter of 2024 was 2.57%, an increase of 11 basis points over the third quarter of 2024.
— For the fourth quarter of 2024, our return on average assets was 1.01%, our return on average equity was 10.99%, and, on a non-GAAP basis, our return on average tangible equity was 13.50%. Excluding merger and acquisition costs, on a non-GAAP basis, our core return on average assets was 1.04% and our core return on average tangible equity was 13.88%.
— For the fourth quarter of 2024, our efficiency ratio on a GAAP and non-GAAP basis was 59.62% and 58.51%, respectively, showing continued momentum.
— At and for the quarter ended December 31, 2024, asset quality remained strong without any signs of systemic stress. Loans 30-89 days past due at December 31, 2024, remained low and were 0.05% of total loans, an increase of 2 basis points from September 30, 2024. Non-performing loans at December 31, 2024, were 0.16% of total loans, an improvement of 1 basis point compared to September 30, 2024.
— At December 31, 2024, our capital position remained strong and well in excess of regulatory capital ratios. Our common equity ratio was 9.15%, and on a non-GAAP basis, our tangible common equity ratio was 7.64%, a slight decrease of 7 and 5 basis points, respectively, from September 30, 2024.
FINANCIAL CONDITION
As of December 31, 2024, total assets were $5.8 billion compared to $5.7 billion as of September 30, 2024.
Cash balances totaled $215.0 million at December 31, 2024, an increase of 54% since September 30, 2024. The increase is temporary, and we anticipate cash balances decreasing to prior period levels in the first quarter of 2025, in part as a result of the Company taking actions in early January 2025 to pay-off higher cost term borrowings of Northway and expected normal deposit outflows in the first quarter of each year due to seasonality within our markets.
Investments totaled $1.1 billion on December 31, 2024, a decrease of 2% since September 30, 2024. In the fourth quarter of 2024, the decrease in investment balances was due to the shifts in the interest rate environment, this led to a $17.7 million decrease in the fair value of our available-for-sale (“AFS”) investment portfolio. As of December 31, 2024 and September 30, 2024, the duration of the Company's total investment portfolio was 5.2 years and 5.3 years, respectively. The duration of the AFS investment portfolio for both December 31, 2024 and September 30, 2024, was 4.3 years.
Loans totaled $4.1 billion on December 31, 2024, remaining largely consistent with reported balances as of September 30, 2024. During the fourth quarter of 2024, a few larger loan payoffs muted our commercial and commercial real estate loan growth. At December 31, 2024, our committed commercial and commercial real estate loan pipelines totaled $45.4 million. Within our retail loan business, we continue to sell the majority of our residential mortgage production. Our funded residential mortgage production for the fourth quarter was 14% higher than the previous quarter, and we sold 58% of our total fourth quarter residential mortgage production. Our committed retail loan production at December 31, 2024, totaled $41.8 million.
As of and for the quarter ended December 31, 2024, the Company's asset quality remained very strong across all key metrics. At December 31, 2024, loans 30-89 days past due were 0.05% of total loans, non-performing assets were 0.11% of total assets, and annualized net charge-offs for the fourth quarter of 2024 were 0.04% of average loans. We continue to review our loan portfolio regularly for any potential concerns, and as of December 31, 2024, we have not identified any signs of systemic stress or elevated risks across our loan portfolio. The Company's allowance for credit losses (“ACL”) on loans increased by 1 basis point in the fourth quarter of 2024 to 0.87%. At December 31, 2024, the ACL was 5.5 times the total non-performing loans, increasing from 5.1 times as of September 30, 2024.
Deposits totaled $4.6 billion on December 31, 2024, an increase of 1% since September 30, 2024. On a non-GAAP basis, core deposits grew 2% in the fourth quarter of 2024 to $3.9 billion, primarily driven by the continued growth within savings deposits of 7% in the quarter and a temporary deposit of $61.8 million deposited by one large customer relationship that we anticipate being drawn down in the first quarter of 2025.
As of December 31, 2024, the Company's regulatory capital ratios were each well in excess of regulatory capital requirements. The Company's common equity ratio was 9.15%, and, on a non-GAAP basis, its tangible common equity ratio was 7.64%, a decrease of 7 and 5 basis points, respectively, from September 30, 2024.The decrease in the common equity ratio and tangible common equity ratios was driven by the shift in the interest rate curve, which drove down the valuation on the Company's AFS investment portfolio between quarters.
The Company announced a cash dividend of $0.42 per share, representing an annualized dividend yield of 3.93%, based on the Company's closing share price of $42.74 as reported by NASDAQ on December 31, 2024, payable on January 31, 2025, to shareholders of record on January 15, 2025.
*2024 financial information does not include Northway, which the Company acquired on January 2, 2025.
FINANCIAL OPERATING RESULTS (Q4 2024 vs. Q3 2024)
Net income for the fourth quarter of 2024 was $14.7 million, an increase of $1.6 million, or 12%, compared to the third quarter of 2024. The increase was driven by the strong revenue growth of 6% in the fourth quarter and lower operating expenses of 2% between periods. Excluding merger and acquisition costs related to the acquisition of Northway in January of 2025, on a non-GAAP basis, core net income for the fourth quarter of 2024 grew by $1.3 million, or 9%, over the third quarter of 2024.
Net interest income for the fourth quarter of 2024 increased $1.8 million, or 5%, to $35.4 million, compared to the third quarter of 2024. The increase was driven by net interest margin expansion of 11 basis points between quarters to 2.57% for the fourth quarter. Our improved net interest margin between periods reflects the macroeconomic shift in short-term interest rates during the second half of 2024 and our ability to effectively lower deposit rates, which resulted in our average cost of funds declining 19 basis points between quarters to 2.16% for the fourth quarter of 2024.
Provision expense of $809,000 was recorded for the fourth quarter of 2024, consisting of a provision for loan losses of $746,000 and a provision for unfunded commitments of $63,000. The Company increased its ACL to loans coverage ratio 1 basis point to 0.87% for the fourth quarter of 2024.
Non-interest income for the fourth quarter of 2024 was $12.2 million, reflecting an increase of $760,000, or 7%, over the third quarter of 2024. The growth between periods was primarily driven by the recognition of our annual Visa bonus in the fourth quarter of 2024, which drove the increase in debit card income of $384,000 and an increase in back-to-back loan swap fee income of $232,000.
Non-interest expense for the fourth quarter of 2024 was $28.4 million, a decrease of $536,000, or 2%, compared to the third quarter of 2024. The primary drivers for the decline were lower salaries and employee benefits costs of 3% and lower Northway merger and acquisition costs. During the first quarter of 2025, we anticipate higher merger and acquisition costs as we integrate Northway with the Company following the closing of the Northway acquisition on January 2, 2025. Our GAAP efficiency ratio for the fourth quarter of 2024 was 59.62% and our non-GAAP efficiency ratio was 58.51%, compared to 64.23% and 62.39% for the third quarter of 2024, respectively.
NORTHWAY ACQUISITION
On January 2, 2025, the Company completed its previouslyannounced acquisition of Northway in an all-stock transaction. At the effective time of the Merger, each share of Northway's common stock was converted into the right to receive 0.83 shares of the Company's common stock, which resulted in the issuance of approximately 2.3 million shares to Northway's shareholders. The total consideration paid by the Company was approximately $96.5 million, based on the Company's January 2, 2025 closing price of $42.25 per share as reported by Nasdaq.
Q4 2024 CONFERENCE CALL
Camden National will host a conference call and webcast at 3:00 p.m., Eastern Time, on Tuesday, January 28, 2025, to discuss its fourth quarter 2024 financial results and outlook. Participants should dial into the call 10 – 15 minutes before it begins. Information about the conference call is as follows:
Live dial-in (Domestic): (833) 470-1428Live dial-in (All other locations): (929) 526-1599Participant access code: 416800Live webcast: https://events.q4inc.com/attendee/658938636
A link to the live webcast will be available on Camden National's website under “About – Investor Relations” at CamdenNational.bank 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 Northern New England's largest publicly traded bank holding company, with approximately $7.0 billion in assets. Founded in 1875, Camden National Bank has 73 branches in Maine and New Hampshire, is a full-service community bank offering the latest digital banking, complemented by award-winning, personalized service. Additional information is available at 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, pandemics and natural disasters; legislative and regulatory changes that adversely affect the business in which Camden National is engaged; turmoil and volatility in the financial services industry, including failures or rumors of failures of other depository institutions which could affect Camden National's ability to attract and retain depositors, and could affect the ability of financial services providers, including the Company, to borrow or raise capital; actions taken by governmental agencies to stabilize the financial system and the effectiveness of such actions; changes to regulatory capital requirements in response to recent developments affecting the banking sector; 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, 2023, as updated by other filings with the Securities and Exchange Commission (“SEC”). Further, statements regarding the potential effects of the war in Ukraine, conflict in the Middle East 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. This release may also contain forward-looking statements relating to the Company's acquisition of Northway. Factors that could cause actual results to differ materially include the following: the reaction to the transaction of the companies' customers, employees and counterparties; customer disintermediation; expected synergies, cost savings and other financial benefits of the proposed transaction might not be realized within the expected timeframes or might be less than projected; credit and interest rate risks associated with Camden's and Northway's respective businesses, customers, borrowings, repayment, investment and deposit practices; and other risks. 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: core net income; core diluted earnings per share; core return on average assets; core return on average equity; pre-tax, pre-provision income; return on average tangible equity and core return on average tangible equity; the efficiency and tangible common equity ratios; tangible book value per share; core deposits and average core deposits. 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 measures 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. Reconciliations to the comparable GAAP financial measures 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 is presented for illustrative purposes only.
Selected Financial Data(unaudited) At or For The At or For The Three Months Ended Year Ended(Inthousands,exceptnumberofshares and per share data) December 31, September 30, December 31, December 31, December 31, 2024 2024 2023 2024 2023Financial Condition DataLoans $ 4,115,259 $ 4,116,729 $ 4,098,094 $ 4,115,259 $ 4,098,094Total assets 5,805,138 5,745,180 5,714,506 5,805,138 5,714,506Deposits 4,633,167 4,575,226 4,597,360 4,633,167 4,597,360Shareholders' equity 531,231 529,900 495,064 531,231 495,064Operating Data and Per Share DataNet income $ 14,666 $ 13,073 $ 8,480 $ 53,004 $ 43,383Core net income (non-GAAP)(1) 15,086 13,800 12,410 53,432 52,980Pre-tax, pre-provision income non-GAAP)(1) 19,211 16,093 10,849 65,056 55,936Diluted EPS 1.00 0.90 0.58 3.62 2.97Core diluted EPS (non-GAAP)(1) 1.03 0.95 0.85 3.65 3.63Profitability RatiosReturn on average assets 1.01% 0.91% 0.59% 0.92% 0.76%Core return on average assets (non-GAAP)(1) 1.04% 0.96% 0.87% 0.92% 0.93%Return on average equity 10.99% 10.04% 7.20% 10.36% 9.30%Core return on average equity (non-GAAP)(1) 11.30% 10.48% 10.53% 10.45% 11.35%Return on average tangible equity (non-GAAP)(1) 13.50% 12.40% 9.18% 12.83% 11.83%Core return on average tangible equity (non-GAAP)(1) 13.88% 12.94% 13.40% 12.94% 14.42%GAAP efficiency ratio 59.62% 64.23% 71.96% 63.24% 65.75%Efficiency ratio (non-GAAP)(1) 58.51% 62.39% 63.48% 62.36% 61.52%Net interest margin (fully-taxable equivalent) 2.57% 2.46% 2.40% 2.46% 2.46%Asset Quality RatiosACL on loans to total loans 0.87% 0.86% 0.90% 0.87% 0.90%Non-performing loans to total loans 0.16% 0.17% 0.18% 0.16% 0.18%Loans 30-89 days past due to total loans 0.05% 0.03% 0.12% 0.05% 0.12%Annualized net charge-offs to average loans 0.04% 0.03% 0.04% 0.03% 0.03%Capital RatiosCommon equity ratio 9.15% 9.22% 8.66% 9.15% 8.66%Tangible common equity ratio (non-GAAP)(1) 7.64% 7.69% 7.11% 7.64% 7.11%Tier 1 leverage capital ratio 9.90% 9.84% 9.40% 9.90% 9.40%Total risk-based capital ratio 15.11% 14.85% 14.36% 15.11% 14.36%
(1) This is a non-GAAP measure, please see “Reconciliation of non-GAAP to GAAP Financial Measures (unaudited).”
Consolidated Statements of Condition Data(unaudited)(Inthousands) December 31, September 30, December 31, % Change % Change 2024 2024 2023 Dec 2024 Dec 2024 vs. Sep 2024 vs. Dec 2023ASSETSCash, cash equivalents and restricted cash $ 214,963 $ 139,512 $ 99,804 54% 115%Investments:Trading securities 5,243 5,141 4,647 2% 13%Available-for-sale securities, at fair value 593,749 603,211 625,808 (2)% (5)%Held-to-maturity securities, at amortized cost 517,778 526,251 544,931 (2)% (5)%Other investments 22,514 22,513 15,394 -% 46%Total investments 1,139,284 1,157,116 1,190,780 (2)% (4)%Loans held for sale, at fair value 11,049 11,706 10,320 (6)% 7%Loans:Commercial real estate 1,711,964 1,707,923 1,672,306 -% 2%Commercial 382,785 382,507 403,901 -% (5)%Residential real estate 1,752,249 1,762,395 1,763,378 (1)% (1)%Consumer and home equity 268,261 263,904 258,509 2% 4%Total loans 4,115,259 4,116,729 4,098,094 -% -%Less: allowance for credit losses on loans (35,728) (35,414) (36,935) 1% (3)%Net loans 4,079,531 4,081,315 4,061,159 -% -%Goodwill and core deposit intangible assets 95,112 95,251 95,668 -% (1)%Other assets 265,199 260,280 256,775 2% 3%Total assets $ 5,805,138 $ 5,745,180 $ 5,714,506 1% 2%LIABILITIES AND SHAREHOLDERS' EQUITYLiabilitiesDeposits:Non-interest checking $ 925,571 940,702 $ 967,750 (2)% (4)%Interest checking 1,483,589 1,445,828 1,553,787 3% (5)%Savings and money market 1,511,589 1,466,541 1,364,401 3% 11%Certificates of deposit 532,424 553,481 609,503 (4)% (13)%Brokered deposits 179,994 168,674 101,919 7% 77%Total deposits 4,633,167 4,575,226 4,597,360 1% 1%Short-term borrowings 500,621 516,336 485,607 (3)% 3%Junior subordinated debentures 44,331 44,331 44,331 -% -%Accrued interest and other liabilities 95,788 79,387 92,144 21% 4%Total liabilities 5,273,907 5,215,280 5,219,442 1% 1%Commitments and ContingenciesShareholders' EquityCommon stock, no par value 116,425 116,072 115,602 -% 1%Retained earnings 509,452 500,927 481,014 2% 6%Accumulated other comprehensive loss:Net unrealized loss on debt securities, net of tax (104,015) (91,349) (107,409) 14% (3)%Net unrealized gain on cash flow hedging derivative instruments, net of tax 8,958 4,506 6,096 99% 47%Net unrecognized gain (loss) on postretirement plans, net of tax 411 (256) (239) (261)% (272)%Total accumulated other comprehensive loss (94,646) (87,099) (101,552) 9% (7)%Total Shareholders' equity 531,231 529,900 495,064 -% 7%Total liabilities and shareholders' equity $ 5,805,138 $ 5,745,180 $ 5,714,506 1% 2%
Consolidated Statements of Income Data(unaudited) For the % Change Dec % Change Dec Three Months Ended 2024 vs. Sep 2024 vs. Dec 2024 2023(Inthousands,exceptpersharedata) December 31, September 30, December 31, 2024 2024 2023Interest IncomeInterest and fees on loans $ 54,035 $ 55,484 $ 51,287 (3)% 5%Taxable interest on investments 6,925 6,622 6,638 5% 4%Nontaxable interest on investments 461 462 654 -% (30)%Dividend income 408 389 273 5% 49%Other interest income 1,662 764 945 118% 76%Total interest income 63,491 63,721 59,797 -% 6%Interest ExpenseInterest on deposits 23,408 25,051 22,838 (7)% 2%Interest on borrowings 4,134 4,549 3,700 (9)% 12%Interest on junior subordinated debentures 540 534 550 1% (2)%Total interest expense 28,082 30,134 27,088 (7)% 4%Net interest income 35,409 33,587 32,709 5% 8%Provision for credit losses 809 239 569 238% 42%Net interest income after provision for credit losses 34,600 33,348 32,140 4% 8%Non-Interest IncomeDebit card income 3,553 3,169 3,466 12% 3%Service charges on deposit accounts 2,136 2,168 2,102 (1)% 2%Income from fiduciary services 1,834 1,817 1,653 1% 11%Mortgage banking income, net 933 973 1,032 (4)% (10)%Brokerage and insurance commissions 1,441 1,414 1,188 2% 21%Bank-owned life insurance 720 709 500 2% 44%Net loss on sale of securities – – (4,975) -% N.M.Other income 1,549 1,156 1,020 34% 52%Total non-interest income 12,166 11,406 5,986 7% 103%Non-Interest ExpenseSalaries and employee benefits 15,973 16,545 15,404 (3)% 4%Furniture, equipment and data processing 3,660 3,578 3,605 2% 2%Net occupancy costs 1,971 1,890 1,939 4% 2%Debit card expense 1,344 1,368 1,345 (2)% -%Regulatory assessments 804 784 839 3% (4)%Consulting and professional fees 786 788 1,193 -% (34)%Merger and acquisition costs 432 727 – (41)% N.M.Amortization of core deposit intangible assets 139 139 148 -% (6)%Other real estate owned and collection costs, net 50 94 67 (47)% (25)%Other expenses 3,205 2,987 3,306 7% (3)%Total non-interest expense 28,364 28,900 27,846 (2)% 2%Income before income tax expense 18,402 15,854 10,280 16% 79%Income Tax Expense 3,736 2,781 1,800 34% 108%Net Income $ 14,666 $ 13,073 $ 8,480 12% 73%Per Share DataBasic earnings per share $ 1.01 $ 0.90 $ 0.58 12% 74%Diluted earnings per share 1.00 0.90 0.58 11% 72%
Consolidated Statements of Income Data(unaudited) For the % Change Dec Year Ended 2024 vs. Dec 2023(Inthousands,exceptpersharedata) December 31, December 31, 2024 2023Interest IncomeInterest and fees on loans $ 214,650 $ 195,379 10%Taxable interest on investments 27,381 24,267 13%Nontaxable interest on investments 1,849 2,927 (37)%Dividend income 1,630 1,061 54%Other interest income 4,047 2,612 55%Total interest income 249,557 226,246 10%Interest ExpenseInterest on deposits 95,806 78,884 21%Interest on borrowings 19,166 12,949 48%Interest on junior subordinated debentures 2,132 2,150 (1)%Total interest expense 117,104 93,983 25%Net interest income 132,453 132,263 -%(Credit) provision for credit losses (404) 2,100 (119)%Net interest income after (credit) provision for credit losses 132,857 130,163 2%Non-Interest IncomeDebit card income 12,657 12,613 -%Service charges on deposit accounts 8,444 7,839 8%Income from fiduciary services 7,270 6,669 9%Brokerage and insurance commissions 5,535 4,650 19%Mortgage banking income, net 3,230 2,921 11%Bank-owned life insurance 2,806 2,349 19%Net loss on sale of securities – (10,310) N.M.Other income 4,597 4,303 7%Total non-interest income 44,539 31,034 44%Non-Interest ExpenseSalaries and employee benefits 64,073 60,009 7%Furniture, equipment and data processing 14,364 13,377 7%Net occupancy costs 7,912 7,674 3%Debit card expense 5,287 5,126 3%Consulting and professional fees 3,583 4,520 (21)%Regulatory assessments 3,258 3,413 (5)%Merger and acquisition costs 1,159 – N.M.Amortization of core deposit intangible assets 556 592 (6)%Other real estate owned and collection costs, net 201 42 N.M.Other expenses 11,543 12,608 (8)%Total non-interest expense 111,936 107,361 4%Income before income tax expense 65,460 53,836 22%Income Tax Expense 12,456 10,453 19%Net Income $ 53,004 $ 43,383 22%Per Share DataBasic earnings per share $ 3.63 $ 2.98 22%Diluted earnings per share 3.62 2.97 22%
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, September 30, December 31, December 31, September 30, December 31, 2024 2024 2023 2024 2024 2023AssetsInterest-earning assets:Interest-bearing deposits in other $ 130,405 $ 48,914 $ 44,577 4.49% 4.66% 6.70%banks and other interest-earning assetsInvestments – taxable 1,150,351 1,138,979 1,186,959 2.61% 2.53% 2.39%Investments – nontaxable(1) 61,929 61,864 89,029 3.77% 3.78% 3.72%Loans(2):Commercial real estate 1,707,914 1,706,509 1,661,720 5.36% 5.41% 4.87%Commercial(1) 359,954 375,944 388,907 6.29% 6.51% 6.25%Municipal(1) 15,237 17,186 14,430 5.30% 5.17% 4.13%Residential real estate 1,766,143 1,780,665 1,765,099 4.45% 4.53% 4.35%Consumer and home equity 267,065 264,178 256,073 7.52% 7.96% 7.86%Total loans 4,116,313 4,144,482 4,086,229 5.19% 5.29% 4.96%Total interest-earning assets 5,458,998 5,394,239 5,406,794 4.61% 4.69% 4.39%Other assets 315,181 317,319 305,159Total assets $ 5,774,179 $ 5,711,558 $ 5,711,953Liabilities & Shareholders' EquityDeposits:Non-interest checking $ 948,015 $ 934,403 $ 985,458 -% -% -%Interest checking 1,449,281 1,440,374 1,547,438 2.29% 2.56% 2.53%Savings 726,179 679,118 622,094 1.06% 0.95% 0.17%Money market 779,893 760,977 756,407 3.09% 3.46% 3.14%Certificates of deposit 537,922 565,063 583,738 3.67% 3.85% 3.49%Total deposits 4,441,290 4,379,935 4,495,135 1.91% 2.09% 1.87%Borrowings:Brokered deposits 170,638 156,618 120,920 4.93% 5.25% 5.24%Customer repurchase agreements 182,017 190,936 197,920 1.58% 1.92% 1.68%Junior subordinated debentures 44,331 44,331 44,331 4.84% 4.79% 4.92%Other borrowings 325,000 336,899 271,316 4.17% 4.28% 4.19%Total borrowings 721,986 728,784 634,487 3.74% 3.90% 3.66%Total funding liabilities 5,163,276 5,108,719 5,129,622 2.16% 2.35% 2.10%Other liabilities 80,144 84,617 115,157Shareholders' equity 530,759 518,222 467,174Total liabilities & shareholders' equity $ 5,774,179 $ 5,711,558 $ 5,711,953Net interest rate spread (fully-taxable equivalent) 2.45% 2.34% 2.29%Net interest margin (fully-taxable equivalent) 2.57% 2.46% 2.40%
(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, December 31, December 31, December 31, 2024 2023 2024 2023AssetsInterest-earning assets:Interest-bearing deposits in other banks and other interest-earning assets $ 68,633 $ 33,676 4.86% 5.50%Investments – taxable 1,159,910 1,203,445 2.56% 2.17%Investments – nontaxable(1) 61,992 100,614 3.78% 3.68%Loans(2):Commercial real estate 1,699,655 1,659,078 5.29% 4.83%Commercial(1) 378,257 398,948 6.44% 5.99%Municipal(1) 15,859 16,702 4.94% 4.04%Residential real estate 1,773,149 1,748,076 4.47% 4.09%Consumer and home equity 262,251 253,877 7.82% 7.56%Total loans 4,129,171 4,076,681 5.20% 4.80%Total interest-earning assets 5,419,706 5,414,416 4.62% 4.19%Other assets 315,335 292,910Total assets $ 5,735,041 $ 5,707,326Liabilities & Shareholders' EquityDeposits:Non-interest checking $ 929,443 $ 1,020,045 -% -%Interest checking 1,464,651 1,614,598 2.48% 2.30%Savings 657,529 675,478 0.71% 0.12%Money market 766,596 717,478 3.31% 2.68%Certificates of deposit 567,182 453,723 3.80% 2.85%Total deposits 4,385,401 4,481,322 2.00% 0.42%Borrowings:Brokered deposits 152,918 184,709 5.18% 4.74%Customer repurchase agreements 185,299 191,646 1.73% 1.49%Junior subordinated debentures 44,331 44,331 4.81% 4.85%Other borrowings 365,989 246,058 4.36% 4.11%Total borrowings 748,537 666,744 3.90% 3.58%Total funding liabilities 5,133,938 5,148,066 2.28% 1.83%Other liabilities 89,290 92,543Shareholders' equity 511,813 466,717Total liabilities & shareholders' equity $ 5,735,041 $ 5,707,326Net interest rate spread (fully-taxable equivalent) 2.34% 2.36%Net interest margin (fully-taxable equivalent) 2.46% 2.46%
(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 At or for the At or for the At or for the At or for the Year Ended Nine Months Ended Six Months Ended Three Months Ended Year Ended December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023Non-accrual loans:Residential real estate $ 1,891 $ 2,497 $ 2,497 $ 2,473 $ 2,539Commercial real estate 559 130 79 205 386Commercial 1,927 2,057 4,409 1,980 1,725Consumer and home equity 452 666 810 1,000 798Total non-accrual loans 4,829 5,350 7,795 5,658 5,448Accruing troubled-debt restructured loans prior to adoption of ASU 2022-02 1,631 1,645 1,846 1,973 1,990Total non-performing loans 6,460 6,995 9,641 7,631 7,438Other real estate owned – – – – -Total non-performing assets $ 6,460 $ 6,995 $ 9,641 $ 7,631 $ 7,438Loans 30-89 days past due:Residential real estate $ 558 $ 216 $ 400 $ 797 $ 1,290Commercial real estate 689 239 678 92 740Commercial 393 578 539 537 2,007Consumer and home equity 621 358 628 618 922Total loans 30-89 days past due $ 2,261 $ 1,391 $ 2,245 $ 2,044 $ 4,959ACL on loans at the beginning of the period $ 36,935 $ 36,935 $ 36,935 $ 36,935 $ 36,922Provision (credit) for loan losses 53 (693) (976) (1,164) 1,174Charge-offs:Residential real estate – – – – 18Commercial real estate – – – – 58Commercial 1,784 1,157 763 309 1,560Consumerand home equity 99 83 55 36 91Total charge-offs 1,883 1,240 818 345 1,727Total recoveries (623) (412) (271) (187) (566)Net charge-offs 1,260 828 547 158 1,161ACL on loans at the end of the period $ 35,728 $ 35,414 $ 35,412 $ 35,613 $ 36,935Components of ACL:ACL on loans $ 35,728 $ 35,414 $ 35,412 $ 35,613 $ 36,935ACL on off-balance sheet credit exposures(1) 2,806 2,743 2,787 2,325 2,353ACL, end of period $ 38,534 $ 38,157 $ 38,199 $ 37,938 $ 39,288Ratios:Non-performing loans to total loans 0.16% 0.17% 0.23% 0.19% 0.18%Non-performing assets to total assets 0.11% 0.12% 0.17% 0.13% 0.13%ACL on loans to total loans 0.87% 0.86% 0.86% 0.86% 0.90%Net charge-offs to average loans (annualized)Quarter-to-date 0.04% 0.03% 0.04% 0.02% 0.04%Year-to-date 0.03% 0.03% 0.03% 0.02% 0.03%ACL on loans to non-performing loans 553.07% 506.28% 367.31% 466.69% 496.57%Loans 30-89 days past due to total loans 0.05% 0.03% 0.05% 0.05% 0.12%
(1) Presented within accrued interest and other liabilities on the consolidated statements of condition.
Reconciliation of non-GAAP to GAAP Financial Measures(unaudited)Core Net Income; Core Diluted Earnings per Share; Core Return on Average Assets; and Core Return on Average Equity: For the For the Three Months Ended Year Ended(In thousands, except number of shares, per share December 31, September 30, December 31, December 31, December 31,data and ratios) 2024 2024 2023 2024 2023Core Net Income:Net income, as presented $ 14,666 $ 13,073 $ 8,480 $ 53,004 $ 43,383Adjustment for net loss on sale of securities – – 4,975 – 10,310Adjustment for Signature Bank bond (recovery) write-off – – – (910) 1,838Adjustment for merger and acquisition costs 432 727 – 1,159 -Tax impact of above adjustments(1) (12) – (1,045) 179 (2,551)Core net income $ 15,086 $ 13,800 $ 12,410 $ 53,432 $ 52,980Core Diluted Earnings per Share:Diluted earnings per share, as presented $ 1.00 $ 0.90 $ 0.58 $ 3.62 $ 2.97Adjustment for net loss on sale of securities – – 0.34 – 0.71Adjustment for Signature Bank bond (recovery) write-off – – – (0.06) 0.13Adjustment for merger and acquisition costs 0.03 0.05 – 0.08 -Tax impact of above adjustments(1) – – (0.07) 0.01 (0.18)Core diluted earnings per share $ 1.03 $ 0.95 $ 0.85 $ 3.65 $ 3.63Core Return on Average Assets:Return on average assets, as presented 1.01% 0.91% 0.59% 0.92% 0.76%Adjustment for net loss on sale of securities -% -% 0.35% -% 0.18%Adjustment for Signature Bank bond (recovery) write-off – -% – (0.02)% 0.03Adjustment for merger and acquisition costs 0.03% 0.05% -% 0.02% -Tax impact of above adjustments(1) -% -% (0.07)% -% (0.04)Core return on average assets 1.04% 0.96% 0.87% 0.92% 0.93%Core Return on Average Equity:Return on average equity, as presented 10.99% 10.04% 7.20% 10.36% 9.30%Adjustment for net loss on sale of securities -% -% 4.22% -% 2.21%Adjustment for Signature Bank bond (recovery) write-off – -% – (0.18)% 0.39%Adjustment for merger and acquisition costs 0.32% 0.56% -% 0.23% -%Tax impact of above adjustments(1) (0.01)% (0.12)% (0.89)% 0.04% (0.55)%Core return on average equity 11.30% 10.48% 10.53% 10.45% 11.35%
(1) Assumed a 21% tax rate for eligible costs.
Pre-Tax, Pre-Provision Income: For the For the Three Months Ended Year Ended(In thousands) December 31, September 30, December 31, December 31, December 31, 2024 2024 2023 2024 2023Net income, as presented $ 14,666 $ 13,073 $ 8,480 $ 53,004 $ 43,383Adjustment for provision (credit) for credit losses 809 239 569 (404) 2,100Adjustment for income tax expense 3,736 2,781 1,800 12,456 10,453Pre-tax, pre-provision income $ 19,211 $ 16,093 $ 10,849 $ 65,056 $ 55,936
Efficiency Ratio: For the For the Three Months Ended Year Ended(Dollars in thousands) December 31, September 30, December 31, December 31, December 31, 2024 2024 2023 2024 2023Non-interest expense, as presented $ 28,364 $ 28,900 $ 27,846 $ 111,936 $ 107,361Adjustment for merger and acquisition costs 432 727 – 1,159 -Adjusted non-interest expense $ 27,932 $ 28,173 $ 27,846 $ 110,777 $ 107,361Net interest income, as presented $ 35,409 $ 33,587 $ 32,709 $ 132,453 $ 132,263Adjustment for the effect of tax-exempt income(1) 162 165 199 637 901Non-interest income, as presented 12,166 11,406 5,986 44,539 31,034Adjustment for net loss on sale of securities – – 4,975 – 10,310Core net interest income plus non-interest income $ 47,737 $ 45,158 $ 43,869 $ 177,629 $ 174,508GAAP efficiency ratio 59.62% 64.23% 71.96% 63.24% 65.75%Non-GAAP efficiency ratio 58.51% 62.39% 63.48% 62.36% 61.52%
(1) Assumed a 21% tax rate.
Return on Average Tangible Equity and Core Return on Average Tangible Equity: For the For the Three Months Ended Year Ended(Dollars in thousands) December 31, September 30, December 31, December 31, December 31, 2024 2024 2023 2024 2023Return on Average Tangible Equity:Net income, as presented $ 14,666 $ 13,073 $ 8,480 $ 53,004 $ 43,383Adjustment for amortization of core deposit intangible assets 139 139 148 556 592Tax impact of above adjustment(1) (29) (29) (31) (117) (124)Net income, adjusted for amortization of core deposit intangible assets $ 14,776 $ 13,183 $ 8,597 $ 53,443 $ 43,851Average equity, as presented $ 530,759 $ 518,222 $ 467,174 $ 511,813 $ 466,717Adjustment for average goodwill and core deposit intangible assets (95,179) (95,319) (95,739) (95,389) (95,962)Average tangible equity $ 435,580 $ 422,903 $ 371,435 $ 416,424 $ 370,755Return on average equity 10.99% 10.04% 7.20% 10.36% 9.30%Return on average tangible equity 13.50% 12.40% 9.18% 12.83% 11.83%Core Return on Average Tangible Equity:Core net income (see “Core Net Income” table above) $ 15,086 $ 13,647 $ 12,410 $ 53,432 $ 52,980Adjustment for amortization of core deposit intangible assets 139 139 148 556 592Tax impact of above adjustment(1) (29) (29) (31) (117) (124)Core net income, adjusted for amortization of core deposit intangible assets $ 15,196 $ 13,757 $ 12,527 $ 53,871 $ 53,448Core return on average tangible equity 13.88% 12.94% 13.38% 12.94% 14.42%
(1) Assumed a 21% tax rate.
Tangible Book Value Per Share and Tangible Common Equity Ratio: December 31, September 30, December 31, 2024 2024 2023(In thousands, except number of shares and per share data)Tangible Book Value Per Share:Shareholders' equity, as presented $ 531,231 $ 529,900 $ 495,064Adjustment for goodwill and core deposit intangible assets (95,112) (95,251) (95,668)Tangible shareholders' equity $ 436,119 $ 434,649 $ 399,396Shares outstanding at period end 14,579,339 14,577,218 14,565,952Book value per share $ 36.44 $ 36.35 $ 33.99Tangible book value per share 29.91 29.82 27.42Tangible Common Equity Ratio:Total assets $ 5,805,138 $ 5,745,180 $ 5,714,506Adjustment for goodwill and core deposit intangible assets (95,112) (95,251) (95,668)Tangible assets $ 5,710,026 $ 5,649,929 $ 5,618,838Common equity ratio 9.15% 9.22% 8.66%Tangible common equity ratio 7.64% 7.69% 7.11%
Core Deposits:(Dollars in thousands) December 31, September 30, December 31, 2024 2024 2023Total deposits $ 4,633,167 $ 4,575,226 $ 4,597,360Adjustment for certificates of deposit (532,424) (553,481) (609,503)Adjustment for brokered deposits (179,994) (168,674) (101,919)Core deposits $ 3,920,749 $ 3,853,071 $ 3,885,938
Average Core Deposits: For the For the Three Months Ended Year Ended(Dollars in thousands) December 31, September 30, December 31, December 31, December 31, 2024 2024 2023 2024 2023Total average deposits, as presented(1) $ 4,441,290 $ 4,379,935 $ 4,495,135 $ 4,385,401 $ 4,481,322Adjustment for average certificates of deposit (537,922) (565,063) (583,738) (567,182) (453,723)Average core deposits $ 3,903,368 $ 3,814,872 $ 3,911,397 $ 3,818,219 $ 4,027,599
(1) Brokered deposits are excluded from total average deposits, as presented on the Average Balance, Interest and Yield/Rate analysis table.
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