Camden National Corporation Reports Record Quarterly Net Income of $12.8 Million

CAMDEN, Maine, April 24, 2018 /PRNewswire/ -- Camden National Corporation (NASDAQ: CAC; "Camden National" or the "Company"), a $4.1 billion bank holding company headquartered in Camden, Maine, reported net income for the first quarter of 2018 of $12.8 million and diluted earnings per share ("EPS") of $0.82 per share, representing increases over the first quarter of 2017 of 27% and 28%, respectively. For the three months ended March, 31, 2018, the Company's return on average assets was 1.28%, return on average equity was 12.91% and efficiency ratio¹ was 58.76%.

"We're very pleased to report first quarter 2018 net income growth of $2.7 million and diluted EPS growth of $0.18 per share over the same period last year," said Gregory A. Dufour, President and Chief Executive Officer of Camden National. "In the first quarter, we saw the benefit of the lower federal corporate income tax rate, which we estimate contributed $0.12 per diluted share to earnings for the first three months of 2018. Our strong first quarter results also reflect revenue² growth of $1.3 million and improved asset quality over the past year. Through our ongoing efforts, we were able to favorably resolve one large loan relationship that drove a negative credit loss provision for the first quarter of 2018. We are fortunate to have a highly experienced credit team that is focused on maximizing potential recoveries and protecting the Company's assets."

FIRST QUARTER 2018 FINANCIAL HIGHLIGHTS

• Net income for the first quarter of 2018 increased 27% to $12.8 million over the first quarter of 2017.
• Total loans at March 31, 2018 of $2.8 billion increased 5% over March 31, 2017 and low-cost deposits³ of $2.3 billion at March 31, 2018 increased 8% over the same period.
• First quarter 2018 efficiency ratio was 58.76%, compared to 58.00% for the first quarter of 2017.
• Non-performing assets to total assets ratio was 0.47% at March 31, 2018, compared to 0.50% at December 31, 2017 and 0.68% at March 31, 2017.

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FINANCIAL CONDITION

Total assets of $4.1 billion at March 31, 2018 increased 4% over March 31, 2017. Year over year, total loans increased $144.0 million, or 5%, to $2.8 billion driven by commercial loan growth of 8%, commercial real estate loan growth of 7% and residential real estate loan growth of 5%. The consumer and home equity loan portfolio over the same time period remained relatively flat.

The Company sold $47.1 million, or 55% of its residential mortgage production in the first quarter of 2018 and sold $231.5 million, or 55%, over the last 12-months.

Total deposits at March 31, 2018 grew $88.4 million, or 3%, to $3.0 billion over March 31, 2017 led by low-cost deposit growth of $178.3 million, or 8%, while borrowings increased $65.4 million, or 12%, over the same period. Average deposits (excluding brokered deposits) for the first three months of 2018 were $2.7 billion, representing an increase of $194.2 million, or 8%, over the same period last year, which was driven by average low-cost deposit growth of 9%.

At March 31, 2018, our loan-to-deposit ratio was 92%, compared to 90% at March 31, 2017.

The Company's capital position remained strong at March 31, 2018 with a total risk-based capital ratio of 14.32%, well in excess of regulatory requirements, and a tangible common equity ratio¹ of 7.59%.

ASSET QUALITY

The Company maintained strong asset quality across its loan portfolio throughout the first quarter of 2018 with non-performing loans to total loans of 0.69% at March 31, 2018, compared to 0.99% at March 31, 2017. Asset quality improvement over the past year led to a decrease in provision for credit losses of $1.1 million for the three months ended March 31, 2018 compared to the same period last year.

For the three months ended March 31, 2018, a negative credit loss provision of $497,000 was recognized primarily due to the favorable resolution of a large commercial real estate loan that was on non-accrual and credit quality improvement across our loan portfolio, which drove a 5 basis point decrease in the allowance for loan losses to total loans ratio since December 31, 2017.

OPERATING RESULTS

Net income for the first quarter of 2018 was $12.8 million, representing an increase over the first quarter of 2017 of $2.7 million, or 27%. The growth in net income between periods was driven by:

• A decrease in income tax expense of $1.3 million primarily due to a decrease in the Company's effective income tax rate as the federal corporate income tax rate was reduced under the Tax Cuts and Jobs Act of 2017 ("Tax Act"), which went into effect in 2018.
• A decrease in provision for credit losses of $1.1 million resulting from strong asset quality.
• An increase in net interest income of $1.0 million, or 4%, driven by an increase in average loans of $156.4 million, or 6%, and an increase in average deposits of $194.2 million, or 8%.
• Net interest margin on a fully-taxable equivalent basis, excluding loan and CD fair value mark accretion income and collection of previously charged-off loans, decreased 2 basis points to 3.04% for the first quarter of 2018, compared to the first quarter of 2017. The decrease between periods was due to the lower federal corporate income tax rate, effective January 1, 2018.
• An increase in non-interest income of $232,000, or 3%
• Partially offset by an increase in non-interest expense of $876,000, or 4%, due to (i) normal merit increases and continued wage inflation, an increase in headcount, and other personnel-related expenses; (ii) an increase in data processing costs due to recent technology investments and advancements over the past year; and (iii) an increase in recruiting, training, donation and marketing costs.

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FIRST QUARTER 2018 DIVIDEND

The Company declared a first quarter 2018 dividend of $0.25 per share, payable on April 30, 2018, to shareholders of record as of April 13, 2018. This distribution represents an annualized dividend yield of 2.25%, based on the March 29, 2018 (last business day) closing price of Camden National's common stock at $44.50 per share as reported by NASDAQ.

ANNUAL MEETING

Camden National has scheduled its annual meeting of shareholders for Tuesday, April 24, 2018, at 3:00 p.m. local time, at Point Lookout Resort and Conference Center, 67 Atlantic Highway, Northport, Maine 04849. The date for determining the Company's shareholders of record for the annual meeting was February 23, 2018.

CONFERENCE CALL

Camden National will host a conference call and webcast at 1:00 p.m., Eastern time, on Tuesday, April 24, 2018 to discuss its first quarter 2018 financial results and outlook. Participants should dial in to the call 10 - 15 minutes before it begins. Information about the conference call is as follows:

A link to the live webcast will be available on Camden National's website under "Investor Relations" at www.CamdenNational.com 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), headquartered in Camden, Maine, is the largest publicly traded bank holding company in Northern New England with $4.1 billion in assets and nearly 650 employees. Camden National Bank, its subsidiary, is a full-service community bank founded in 1875 that offers an array of consumer and business financial products and services, accompanied by the latest in digital banking technology to empower customers to bank the way they want. The Bank provides personalized service through a network of 60 banking centers, 74 ATMs, and lending offices in New Hampshire and Massachusetts, all complemented by 24/7 live phone support. This year marks the 8th time Camden National Bank has received the "Lender at Work for Maine" Award from the Finance Authority of Maine. Comprehensive wealth management, investment, and financial planning services are delivered by Camden National Wealth Management. To learn more, visit www.CamdenNational.com. Member FDIC.

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, 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, changes in the interest rate environment, changes in general economic conditions, operational risks including, but not limited to, cybersecurity, fraud and natural disasters, legislative and regulatory changes that adversely affect the business in which Camden National is engaged, changes in the securities markets and other risks and uncertainties disclosed from time to time in in Camden National's Annual Report on Form 10-K for the year ended December 31, 2017, as updated by other filings with the Securities and Exchange Commission ("SEC"). 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 adjusted net income, adjusted diluted EPS, adjusted return on average assets, adjusted return on average equity and average tangible equity; the efficiency and tangible common equity ratios; and tangible book value per share. 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. Reconciliation to the comparable GAAP financial measure 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.