Camden National (CAC) 30 Jul 242024 Q2 Earnings call transcript

Good day, and welcome to Camden National Operations Second Quarter 2024 Earnings Conference Call. My name is Lydia, and I will be your operator for today's call. [Operator Instructions]. I'll now turn the call over to Renee Smyth, Executive Vice President, Chief Experience and Marketing Officer.

Thank you, Lydia. to of Corporation's XXXX. welcome the Call and Quarter Second afternoon, Camden Conference National for Good

Chief Mike Joining Camden Financial team and National this Officer. Corporation's Officer; us afternoon executive Simon are Griffiths, President, Executive Vice Archer, members of Executive Chief and President

materially this Cautionary in Please differ issued language earnings and forward-looking is presentation contained regarding second reports with results today's discussed quarter we release is that the forward-looking statements these what note actual in other SEC. on our XXXX and morning contains could from today's call. file statements

are All camdennational.bank. on of these materials and Investor public at filings website available Relations our

Camden National CAC. Corporation symbol trades on under the NASDAQ the

today's earnings Investor Relations to are also insights addition, measures. and our includes measures release financial available with on provide non-GAAP Any non-GAAP in GAAP which meaningful In reconciled references is our discussions are presentation website. of financial intended to

Simon Executive I am and President pleased Chief to host, introduce Griffiths. Corporation's National Officer, Camden

strategy joining advice-based afternoon, we relationship as recent optimizing Thank today. pleased up quarter, you, customer most to our long-term open point exceptional the we through over our XXXX, good to deepening the I'll I'm provide report, balance and and and our performance, and through I execute environment. macroeconomic of mark Q&A. to to customer Renee, headwinds, our committed appreciate then everyone. financial executing dive halfway Despite continue then turn sheet uncertain in well conversations experience. we remain and our few on second into to will for we'll it call a comments Mike you quarter We

favorable quarter loyal reported base. guidance management. expectations which increase stellar margin XXXX. execution include automation in of Highlights previously over from the interest earnings quarter a asset and million control, previous net advice our benefit or quarter. strong diluted X the Earlier expense leveraging which this for the culture team asset Our to solutions innovative underwriting process and second we quality for second and disciplined point to exceeded quarter share momentum communicated income demonstrated per and metrics, and continued $X.XX Disciplined credit of $XX by second morning, basis is deliver keen our and customer our for net the building quality

allocation interest as as the utilize result relationships certain are pressure taking investment we fund on deposit seasonal net increase reported we cash second a high-cost, during asset noncore the deposit our in beginning quarter deposit benefit as cost to growth. Our half action margin of started remix ease of flows back flows to to from continued decisive and markets loan

margin will in on Mike a drivers interest few expand the minutes. and net discussion

to focus through relationships to deepening driving informed, analytics new by with deposit acquisition leveraging and make Including data continues on team and our decisions. customer swift by growth, customers. existing Our both

increasingly cuts funding rate are we to to likely, Fed quickly costs. As ready act become manage our

We while were cuts first customer competition. remain than increasing, improving rates leverage. likely the focused to will in beta cut saw, we as XX basis subsequent As interest and needs rate operating XX point lower rate our balance result we a on we market expect

XXXX, During the noninterest over revenues the second of expense remained quarter quarter, increased flat. previous and X%

our while manage disciplined fee to also response and net take continue maintain margin base. interest opportunities revenue costs diversify and in to income to We actions increase pressure to driving

continue levels. expectations pre-pandemic better with by and to credit than measures, Credit to continues perform metrics perform all our in line

our continue rigorously We with to culture. consistent credit credit manage disciplined

nonperforming marginal For as accounted uptick just quality with XX of quarter, points assets, in just XXXX. June we a strong the basis reported assets asset of which for second total XX,

meaningful concentration balanced risk. well remains portfolio loan commercial no Our with

proactively to systemic areas any of concern. review continues and risk credit have identified Our our team portfolio not

see in demand loan We moderate communities. our continue to

a at our sizable And quarter-to-quarter. driven estate consistent remained commercial pipeline has by a have loan pipeline real larger seen mortgage uptick opportunities. few same in commercial we residential Our the primarily time,

of focus generated wealth XX% The an second by an and nice XXXX. XXXX, June financial million have sales fee administration spurred income of of increase investment June over on the in and XX, in compared quarter in services revenue in brokerage of continued increase over markets, strength are this in management quarter, momentum $X.X Combined, the increase and year. by as we is We of the driven seeing crossed a under billion $X first our to brokerage XX% XX, activity assets wealth representing services.

as relationship platform positioned well fee operating stay are and our our full mobile income. committed and expand app we to to our growing distribution and banking advisory new wealth We by leveraging diversifying

use continue shared This whenever we and on the to deposit we report pleased ideation. platform, deposit innovation online make quarter, it progress and road significant digital invested remains year-end. new and I'm minutes Last to schedule wherever for fund they opening to at open We and go new that customers choose. will accounts account to on live enable in map technology

will all brick-and-mortar customer experience which provide and leverage consistent a experience. sales to our approach across digital provide customer technology marketing We and steer into a uniform to this omnichannel to aims channels

team million robotics automation over expectations. processing to continues We digital Our X support service celebrated through platform. transactions surpass our recently

X process we every velocity, current million our will months. X At transactions

management a integration work for milestone automation into tool. Additionally, newly with API reached a our customer developed service our robotics

For end-to-end multiple repeatable true across time, this departments. creating internal service predictable, customer automation activities the capacity allows first real

to technical into for AI scientist and business pilot request to of analytics be will a Further, this data units models. in third partnered successful, hands on If analytic sophisticated beta, pilot our higher-order the the analytics completed simplifying with data the the QX. simulation, team skills further needed party potential drive has

to our investments permit benefit talent, execution sustainable products and technology, focused our consistent, customer conditions involving we and remain continue meet will and shareholder expectations. as generate performance and on We will bank services in to us believe and foundation that long-term the macroeconomic as improve strong to

the some from provide highlights will second Now quarter. Mike

EPS $XX earnings per This and Simon, reported the first income afternoon, of you, share of and through the of diluted months and for income diluted $X.XX of $X.XX and XXXX of everyone. second Thank year. quarter good of $XX.X net the million morning, we X million net

are $XX.X momentum pre-provision with pleased within real quarter results as which by non-GAAP business, pretax million, of linked on highlighted as income financial our core quarter second they was our reported We a our basis. X% demonstrate up

the strength in we proceeds As a a the loan grew recovered Signature to of recorded our bond. position $X our upon reserves the and capital of we this provision for quarter, of due tangible our solid released $XXX,XXX reminder, million during Bank our first With year, expense we of of quarter the sale portfolio as the negative second quarter. loan earnings

income first As tangible a and up per share the book second XX, of the points X stood of during XXXX. past Total non-GAAP XXXX revenues on million, interest to Net grew increased margin the of June increase X% quarter first XXXX, $XX.XX, of months. from to led basis, interest the $XX.X at quarter by an X% quarter basis XX% X.XX%. over over quarter XX X% for in our net the value second

seasonal for interest approximately a at the market. swap anticipate $XXX June, to see of we mature, we providing month, In rates. lift X partial normal million benefit points in deposits basis In current basis X a to balance and our also points interest X for sheet inflows rate month's from began full June,

totaled this interest to quarter the million, net aforementioned Looking with expansion an loan investment $XX.X anticipate third of factors, the originations margin redeployment XXXX to the we continued during due year. rates. Noninterest quarter cash support of of forward, over at the second current for quarter the of flows X% market along increase first new continued income

As Simon comments, noted are we in business our seeing wealth brokerage positive momentum his across and lines.

production. banking, sell to continue qualifying Regarding residential mortgage we mortgage our

production. through sold sold the XX% first For residential our our mortgage the second of X we And of quarter, production. we XX% months,

operating to while work operating we performance financial on our expenses driving focused organization. the of As continuing invest are way and positive the back levels, we to historical leverage in management

second Noninterest our for combination decrease $XX.X ratio were improved lower the quarter linked-quarter XXXX of a efficiency second growth this for the first from and quarter quarter expenses The the expense year. a non-GAAP million, noninterest basis. positive revenue of of on small

XX.XX% these range XXXX. quarter the ratio efficiency are the operating of second remainder quarter, quarterly we compared the XX.XX% quarter the million Our to million of on the our year. between XXXX of $XX.X expenses will was for first estimating to for results for Based now second for $XX

X Moving to less XX, grew the of June year. months as X% than quarter first sheet. of Total balance second billion $X.X X% loans this of the XXXX, through and the XXXX and in were

Our loan segment. loan been half for growth of mixed has across XXXX our the first

quarter quarter $X.X rate to current loan continue environment. We and our the in the during we were of in optimize during billion, manage the margin. The and half X% the took of X% net across actions year second June XXXX and decrease discipline of first Total decisive our XX, of decrease year. half products second interest pricing interest the deposits through a deposits reflects as of to first the maintain the XXXX, the

year, interest Through and $XXX million cost out high managed months the checking this part of as we approximately X the balance first municipal of CD of effort.

and savings we launched and results a being for towards product, been pleased the an which second money checking the products full In the us. is maintained loan growth also new quarter, relationship bank We've product second banking primary our in product savings includes deposit our driving us requiring XXXX. of are customers. in deposits quarter Our geared the the a that which X% customer with these high-yield account with of

of the total total loans end continued of XX, reflect in any stress charge-offs not loans and loans, loss the of systemic credit second of supported loss basis of they growth points of Our loan quarter for loans our X of confidence compared increased quarter combined modest asset loans. the as loans of signs annualized June excellent the nonperforming due quality points by with loans but quality, of with average to of of to strong, ratio we strength coverage X.XX% Nonperforming us quarter. which second X.XX% XXXX, our net net modestly last hold and loan do as portfolio. The reserve believe basis reserves quarter X the gave past asset quality total first was the including charge-offs loan loan of at metrics, to be within consistent

also Our strong. liquidity continue be capital to positions and

basis stock the as X.XX% capital. points increased of equity totaling common June the included from tangible shares XX of second $X.X non-GAAP which of of XX,XXX to quarter XX, repurchase ratio XXXX, million Our common

and questions. June up deposits Our open deposits. XX, call of the uninsured uncollateralized comments. XX.X% as uninsured total of and available Xx liquidity now uncollateralized This XXXX, for We'll our deposits were sources were our concludes and

Instructions]. [Operator

question James. first from comes Our with Steve Raymond Moss

here. here. margin with margin guidance the starting Start the off Maybe guidance

this expiring quarter or In terms then of for X a basis you the of X additional -- Mike, point -- and to said swap X points had month. from you expect lift full basis you benefit a the

points XX I am you about, basis upside call here in hearing forward correctly or it, of in the going margin third additional quarter? So thinking XX

No. No, Steve. question. Good

as basis points, a probably off additional ran that X is as think neighborhood the So quarter, quarter, about lift next there, function third the swap let's for for to of of the call we mentioned thinking $XXX margin what you activity flows occurring. of some of X.XX-ish as in the the that and just to other which well X.XX seasonal million we're loan X we're it,

if little that increases get we Curious flows definitely likely a think bit stabalize seasonal cost -- slow nice lift you could across the deposit more but the here like the in think a costs you costs, just get board. given of as your addition deposit it guys as And repricing. definitely I seeing are seeing the flows, just massive here, down seasonal to seeing you mean deposit on Okay. about

Yes.

of we continue move in or continue want asset but just off I as for funding the anticipate I to expansion say, we deposit up XXX -- landed around head June, terms then not continued costs, of I excuse we'll top hang think on do forward. -- costs. to just well my to a that X, point just yield have deposit for we'll XXX, costs, me, all-in so there, as basis the maybe

So as I deposit we're think flows. thinking we seasonal are do about benefit there. seeing our the

the of see still level of one as we well. I think a remix is questions

from off So Steve, a itself it, few go offset basis points we're a think be on, the could about X we that next level over X as on forward seasonal that the call or could months, flow. by and thinking remix up

rate how deposits funding that's thinking So we're moment. about and at cost this

sizable loan you Great. what And Okay. seeing like in That's -- opportunities that I is you moderate some guess, you're Simon, your I said. think helpful. demand, realty then, comments, but mentioned, commercial

larger you're of give commercial seeing. kind around real little opportunities color those Just you estate a can if curious

some seeing overall, we loan been I Yes. single-digit demand Thanks, nice consistent resi our also nice our side, -- We're nice demand quarter. particularly side. business real growth estate the the on across the mortgage a mean, continue and seeing and commercial side home Certainly to Steve. resi opportunities, in seeing that's third just the solid with see well. this We're quarter equity pickup low as pretty business. see on for in

to commit So lend which balance relationships, communities broadening of sheet, the think the to is leveraging we've to we overall, conscious, that that the focusing into that out it been being and continues Steve, serve I on communities. we're opportunities the theme quality leveraging continue have those obviously, articulating, we and and

multifamily as you industrial? in you're of the demand, where will. or the like seeing Got nature of you. projects to kind are if curious Just type And

mix. multifamily, -- hotel some have I -- multifamilies two particularly. couple it's those of a in mix. as things we've a seen some have of locations locations We've of of take definitely that come great couple of kind of couple definitely sort the probably a We It's hotels, Yes, high-quality through. well. had we a those

comes question from with Our next Matthew Stephen. Breese

was could offering first, I what program. folks does hoping long the bit a more it all criteria? savings about talk you meet Two, the I are guess, on rate so little program continue? that as that high-yield savings program given but cost thoughts balance low impact there. really at sheet, on still the expectation category, deposit overall, the least And three, level, particularly average what's in at a the just how for you some might

sure. off Yes, Matt. I there, start can

our -- the was say want rate The $XX that of yield quarter in X.XX% So the savings neighborhood to vast saying we of majority think from product. did for want growth -- put majority I the that to was that around the that as I X%. high-yield we for I I the mentioned, was certainly of high weighted the that Overall, on million. quarter.

it, around good and couple, trying we call as mean, really So X%, a selling said, have we're acquisition tiers we customer have that I marketing with as there had X.X% drive do traction. well. there out that along we're And and to product new X.X%,

heads to of down thinking months that and if here trying and the start have over of one the about as think also things the to when I of well is we're CDs start that to in off coming as to back the into the thoughtful money get reprice roll our a roll curve products, being the back look of ability happens.

trying to about very thoughtful certainly all we're those and balance we factors, So that.

Simon. Matt, this is

well. continue roll comment products one is to just see we of favorable, and Matt, relationships just into about that. leverage nice other to So the expand off and It's to these about add really that. as just which a continue retention, to the CD add to deep things XX% have I'll very

opportunity to deepen that mentioned. our as I for really opportunities engage look So seeing we're clients and

it the increases reprice really where inflection that slow, like start looking we're you all start point asset deposit that for appreciate while at color. cost Maybe feels to yields NIM, higher. I just to at

on As for forward NIMM get a, and you into much recapture? a of 'XX can the outlook call type ground Can lost at we based extend XXXX, to we X.XX on beyond look your it, and the back NIM how curve.

cuts X I think or there's in X there.

longer-term X some the trajectory quarters, thoughts the overall of just in the the not Just X but or on next 'XX. NIM,

a great question. it's Yes,

few ago. to Fed the as shape hope at to go margin certainly over back is. it. we coming to doesn't get think years us. think doesn't beneficial Certainly, months seen. the and curve be curve hopefully certainly fast cuts, yield we be we there assuming rate certainly matter going a there, that to Matt, of mean, I get How we that the down about comment quarters, will certainly That that with I were levels is your to end the what I long

as But know is. we've we're of that there, $XXX And top head I And years getting communicating get million comment something my back fast certainly, off really been don't us the do to steering we focused anticipate, want into. to your certainly we to the as how of anticipate on I quarters and is and that. it business, do that's now but we for want top are growing We're focused mind for margin, profitably, on optimizing to us. and you

wealth for income the effort rest well? the But fee appreciate I for that, additional where under us Outlook the that. the The mortgage on of to one just is have leverage. grow the assets help you're doing some as on update just year. to management, what Could within then point you that, management some just you last me business, front. banking

for the Thanks Matt. Yes. question,

the On quarter, the with $XX.X that, in very estimated And probably We've that much $XX might $XX.XX fee I what leisure that's we have certainly, a that bonus annual million line million the about will to in think reported little quarter. about in the come think an quarter. million, higher third the than income fee in $XX.XX fourth front, we this we for to million. come of got fourth quarter income to incentive due range

think I that for is business wealth to business. the continuing and the underlying invest So overall, in picture us

got some I nice think we've there. traction

out, I have reported, geography business, has brought for wealth the team. lead an that's We a we lot we we were that our momentum Garrett As on we given brokerage area us certainly and see over and momentum believe of he's the to that think in we certainly and with opportunity to that build given up just and XX% the side. starting nice

I be forward. area us that of to going for continue area can to a think and nice growth we an it's So look

further questions. have We no

over for the Griffiths like Simon this I'd our closing turn back to So any conference now to session. concludes question-and-answer comments.

I Corporation. you to day, thanks you. thank today time for and for National your Well, great a of rest in We Camden wish and want your your thank time. all you interest your

you now The Thank attending conference for today's has presentation. concluded.

You may now disconnect.