CAMDEN, Maine, April 28, 2015 – Camden National Corporation (NASDAQ: CAC; “Camden National” or the “Company”), a $2.8 billion bank holding company headquartered in Camden, Maine, reported net income for the first quarter of 2015 of $5.6 million and diluted earnings per share ("EPS") of $0.75.
The Company reported core operating earnings1 and core diluted EPS1 for the first quarter of 2015 of $6.3 million and $0.84 per share, respectively, representing an increase of 12% and $0.10 per share over the first quarter of 2014. The Company's core return on average shareholders' equity1 and average assets1 for the first quarter of 2015 was 10.25% and 0.91%, respectively.
“We're very pleased with our financial results to start 2015," said Gregory A. Dufour, president and chief executive officer of the Company. "Our core operating earnings and core diluted EPS grew 12% and 14%, respectively, over the same period last year, and is the result of strong loan growth seen throughout 2014 and into the first quarter of 2015."
Dufour added, "We have much to be excited about already in 2015. In addition to a strong start financially, we announced on March 30, 2015 that the Company entered into a definitive agreement with SBM Financial, Inc. to merge The Bank of Maine into Camden National Bank. This merger will make Camden National the strongest banking franchise in Northern New England while remaining headquartered in Maine."
The Merger of Camden National and SBM Financial, Inc.
On March 30, 2015, Camden National Corporation, the parent company of Camden National Bank, and SBM Financial, Inc. ("SBM"), the parent company of The Bank of Maine, announced the signing of a definitive agreement under which SBM will merge into Camden National and The Bank of Maine will merge into Camden National Bank, creating Maine’s largest community bank. The combined organization will operate under the Camden National Bank name and brand.
Upon completion of the transaction, Camden National will have a combined network of 68 branches and three specialized lending locations. The transaction complements Camden National’s existing footprint and expands the Company’s presence in the higher growth Southern Maine market.
While this investment is expected to dilute Camden National's tangible book value by 14%, we expect to earn back that dilution in five years and report earnings per share accretion in the mid-teens beginning in 2016. The anticipated closing date for the merger is October 2015, subject to shareholder and regulatory approval.
First Quarter 2015 Financial Highlights
- Core operating earnings increased $657,000, or 12%, over core earnings for the first quarter of 2014.
- Core diluted EPS increased $0.10 per share, or 14%, over core diluted EPS for the first quarter of 2014.
- Net interest income on a fully-taxable basis increased $1.2 million, or 6%, over the first quarter of 2014 driven by average loan growth of $189.8 million, or 12%.
- Asset quality continues to improve as non-performing assets to total assets of 0.67% at March 31, 2015 hit pre-2008 recessionary level.
- The Company announced it entered into a definitive merger agreement with SBM, the parent company of The Bank of Maine, with an anticipated closing date in October 2015.
This press release and the documents incorporated by reference herein contain certain statements that may be considered forward-looking statements under the Private Securities Litigation Reform Act of 1995, including certain plans, expectations, goals, projections, and statements, which are subject to numerous risks, assumptions, and uncertainties. Forward-looking statements can be identified by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “plan,” “target,” or “goal,” or future or conditional verbs such as “will,” “may,” “might,” “should,” “would,” “could” and other expressions which predict or indicate future events or trends and which do not relate to historical matters. Forward-looking statements should not be relied on, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of Camden National. These risks, uncertainties and other factors may cause the actual results, performance or achievements of Camden National to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.
Some of the factors that might cause these differences include, but are not limited to the following: the ability of Camden National to successfully close its merger with SBM in October 2015; the ability of Camden National to obtain the requisite regulatory approval for the SBM merger without having to agree to material divestitures of assets, or the imposition of other adverse regulatory conditions; the ability of Camden National to successfully integrate SBM and The Bank of Maine following closing of the transaction; continued weakness in the regional and local economies within the New England region and Maine, which could result in a deterioration of credit quality, an increase in the allowance for loan losses, or a reduced demand for Camden National’s credit or fee-based products and services; changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; competitive pressures resulting from continued industry consolidation and the increased financial services provided by non-banks; volatility in the securities markets that could adversely affect the value or credit quality of Camden National’s assets, impairment of goodwill, the availability and terms of funding necessary to meet Camden National’s liquidity needs, and could lead to impairment in the value of securities in Camden National’s investment portfolio; and changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as Financial Accounting Standards Board, and other accounting standard setters. Additional factors that could also cause results to differ materially from those described above can be found in Camden National’s Annual Report on Form 10-K, as updated by our Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission ("SEC"). All of these factors should be carefully reviewed, and readers should not place undue reliance on these forward-looking statements.
These forward-looking statements were based on information, plans and estimates at the date of this press release, and Camden National does not promise and assumes no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.
Use of Non-GAAP Financial Measures
In addition to evaluating the Company's results of operations in accordance with accounting principles generally accepted in the United States ("GAAP"), management supplements this evaluation with certain non-GAAP financial measures, such as the efficiency, tangible assets and equity, and core return ratios, core operating earnings, core basic and diluted EPS, tangible book value per share, and tax-equivalent net interest income. Management believes these non-GAAP financial measures help investors in understanding the Company's operating performance and trends and allow for better performance comparisons to other banks. 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. Reconciliation to the comparable GAAP financial measure can be found in this document or the Form 8-K related to this document, all of which can be found on Camden National's website at www.CamdenNational.com.
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.
Additional Information and Where to Find It
In connection with the proposed merger, Camden National will file with the SEC a Registration Statement on Form S-4 that will include a Proxy Statement of SBM and Camden National and a Prospectus of Camden National, as well as other relevant documents concerning the proposed merger. Investors and stockholders are urged to read the Registration Statement and the Proxy Statement/Prospectus regarding the proposed merger when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. A free copy of the Registration Statement and Proxy Statement/Prospectus, as well as other filings containing information about Camden National and The Bank of Maine, when they become available, may be obtained at the SEC’s Internet site (www.sec.gov). Copies of the Registration Statement and Proxy Statement/Prospectus (when they become available) and the filings that will be incorporated by reference therein may also be obtained, free of charge, from Camden National’s website at www.CamdenNational.com or by contacting Camden National Investor Relations at (207) 236-8821 or by contacting SBM Investor Relations at (207) 518-5607.
Participants in Solicitation
Camden National and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Camden National in connection with the proposed merger. Information about the directors and executive officers of Camden National is set forth in the proxy statement for Camden National’s 2015 annual meeting of stockholders, as filed with the SEC on a Schedule 14A on March 12, 2015. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction and a description of their direct and indirect interests, by security holdings or otherwise, may be obtained by reading the Proxy Statement/Prospectus and other relevant documents regarding the proposed merger to be filed with the SEC (when they become available). Free copies of these documents may be obtained as described in the preceding paragraph.
About Camden National Corporation
Camden National Corporation is the holding company employing more than 480 Maine residents for two financial services companies including Camden National Bank and the wealth management company, Acadia Trust, N.A. Camden National Bank is a full-service community bank with a network of 44 banking offices throughout Maine and a commercial loan office in Manchester, New Hampshire. Acadia Trust offers investment management and fiduciary services with offices in Portland, Bangor and Ellsworth. Located at Camden National Bank, Camden Financial Consultants offers full-service brokerage and insurance services. Learn more at www.CamdenNational.com. Member FDIC.