管理層發言
Good day and welcome to Camden National Corporation's Second Quarter 2026 Earnings Conference Call. My name is Marina Toft, and I will be your operator for today's call. All participants will be in a listen-only mode during today's presentation. Following the presentation, we will conduct a question-and-answer session. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now turn the call over to Renée Smyth, Executive Vice President, Chief Experience and Marketing Officer.
Welcome to Camden National Corporation's second quarter 2026 Earnings Conference Call. With me today are Simon Griffiths, our President and Chief Executive Officer and Mike Archer, our Executive Vice President and Chief Financial Officer. Before we begin, please note that today's remarks include forward-looking statements and actual results could differ materially from what we discuss on the call. You can find cautionary language about these statements in our second quarter 2026 earnings release issued this morning and in our other SEC filings. All of these materials and public filings are available on our Investor website at camdennational.bank. Camden National Corporation trades on Nasdaq under the symbol CAC. We will also refer to non-GAAP financial measures during the call. These measures provide additional insight into our performance and reconciliations to GAAP are included in today's earnings release. With that, I will turn the call over to Simon.
Good afternoon, everyone, and thank you, Renée. Early this morning, we reported record quarterly net income of $23 million and record diluted earnings per share of $1.35 for the second quarter. Both net income and diluted EPS increased 5% from the first quarter, underscoring the earnings power we are building across the franchise. Our performance was broad-based. We delivered loan growth, expanded our committed loan pipeline, improved net interest margin and generated strong fee income growth. Through the first six months of the year, we produced record net income of $44.9 million and diluted EPS of $2.64 reflecting focused execution across our core businesses. These results demonstrate that our strategy is working. We are growing the franchise with purpose and investing in capabilities that strengthen our competitive position and improve how we serve our customers and communities. Our performance is also reflected in national recognition and customer trust. So far this year, Camden National Bank was named to Time Magazine's list of America's best companies and recognized by Forbes as one of America's best banks. These achievements reflect our financial discipline, customer focus, continued momentum and long-term stability. We enter the second half of the year with a resilient balance sheet. Total assets were $7 billion at quarter end. Credit quality metrics remained strong. Capital levels remained well above regulatory requirements, and tangible book value per share grew 7% since year-end. On the lending side, loans increased 1% during the quarter, or 3% on an annualized basis, led by growth in home equity and commercial loans. HELOC balances increased 23% year-over-year, supported by added depth among our HELOC lenders as well as by significant technology and process improvements which have reduced average funding time to 14 days. Forward-looking indicators are also encouraging. Our committed loan pipeline increased 45% from the prior quarter to $185.7 million, reflecting healthy customer demand, stronger banker productivity, and the benefit of recent additions to our commercial banking team. Since year-end, we have added four experienced commercial bankers to our team and we remain optimistic that we will be able to continue to selectively add proven talent. We remain encouraged by the pipeline while expecting third quarter loan growth to remain measured. We recently announced the appointment of Kate Brunell as Chief Credit Officer. Kate joins Camden National's leadership team with more than two decades of banking experience including senior credit leadership roles at TD Bank. Ryan Smith, with 14 years at Camden National and prior experience serving as both Chief Credit Officer and Director of Commercial Banking, will return to leading commercial banking. Barbara Raske will lead and expand our treasury management and government banking services, drawing on significant experience in corporate treasury. That added capacity is helping us strengthen relationships with small and middle-market businesses and expand our role as a primary banking partner for lending and treasury management solutions. On deposits, we continue to optimize our funding mix by reducing broker deposits and certificates of deposit while maintaining stable core customer deposits. Total deposits were $5.6 billion at quarter end, and our loan-to-deposit ratio was 90%. Our focus remains on durable relationship deposits supported by service, convenience, and thoughtful pricing rather than rate-driven volume. We are expanding financial advisory services to support customers through more stages of their financial lives and diversify revenue. Assets under administration across our wealth and brokerage businesses totaled $2 billion at quarter end, up 13% from the prior year, reinforcing the opportunity to broaden advisory relationships and build a more balanced earnings profile over time. Our AI-enabled transformation is gaining momentum, with multiple use cases now in production and digital enhancements tied to measurable business outcomes. These tools are helping us build a more efficient, responsive organization. From our recently refreshed website to new digital products, we are making banking easier for customers while creating more capacity for higher-value interactions. In short, we are executing well and making measurable progress across the company. Our teams are focused on sustaining high-quality growth and creating long-term value for our shareholders, customers, employees, and communities. With that strategic overview, I will turn it over to Mike to walk through the financial results in more detail.
Thanks, Simon, and good afternoon, everyone. As noted, we reported record net income for the second quarter of $23 million or $1.35 per diluted share. Profitability metrics remained strong again this quarter, with a return on average assets of 1.33%, return on average tangible equity of 18.47%, and a non-GAAP efficiency ratio of 53.2%. Revenues were up 5% on a linked quarter basis and we continue to manage operating expenses closely while continuing to invest in our franchise, driving strong pre-tax, pre-provision net revenue growth during the quarter to 5%. Net interest income totaled $52.9 million, up 1% on a linked quarter basis. Net interest margin increased by 2 basis points quarter-over-quarter to 3.26% for the second quarter, primarily reflecting lower funding costs. Over the same period, core net interest margin, which excludes net fair value mark accretion income, increased 5 basis points to 2.97%, aligning with the top of our guidance range provided last quarter. Net fair value mark accretion income was $4 million for the second quarter, down $335,000 from the first quarter. We continue to focus on improving our core net interest margin. We are currently estimating additional expansion in the third quarter of approximately 5 to 10 basis points, driven by normal seasonal deposit inflows that support a more favorable funding mix and the ongoing reinvestment of lower-yielding assets into current market rates. Noninterest income totaled $14.5 million, an increase of $2.5 million or 21% from the first quarter. The improvement was broad-based across all fee income categories as we continue to see nice momentum across our complementary business lines. Investment appreciation driven by market performance and death benefits with BOLI income totaling $491,000 contributed to our noninterest income this quarter. We are currently estimating a range for noninterest income for the third quarter of $13.5 million to $14 million. Turning to expenses, noninterest expense totaled $37.4 million, up 5% from the first quarter. The increase was primarily attributable to annual salary increases, the timing of our annual director equity reward grant, and the annual recognition event for top-performing sales team members. We are currently estimating a range for noninterest expense for the third quarter at $37 million to $38 million. On credit, our loan portfolio remained sound. Nonperforming loans were 24 basis points of total loans, past due loans were 15 basis points of total loans, and net charge-offs were 4 basis points of average loans on an annualized basis. Provision expense was $710,000, up from $553,000 in the first quarter, reflecting loan growth. Allowance for credit losses on loans was 0.91% of total loans at quarter end and the ACL coverage ratio was 3.8x nonperforming loans. Capital levels continue to expand nicely, driven by strong and growing earnings and balanced returns to our shareholders for the first six months of 2026. Our regulatory capital levels remain well above regulatory requirements at quarter end. Tangible book value per share increased 3% during the second quarter to $31.64 at June 30, 2026. For the first six months of 2026, we returned 41% of our first half net income to shareholders in the form of cash dividends and share repurchases. Year-to-date, we repurchased 85,100 shares at a weighted average price of $46.55 per share under our share repurchase program. Overall, the quarter reflected solid linked quarter revenue growth, disciplined expense management, strong credit metrics, and continued capital accretion. That concludes our prepared remarks. I will turn it back to the operator.
分析師問答
Thank you. We will now begin the question-and-answer session. To ask a question, please press *1 on your touch-tone phone keypad. If you use a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press *1. At this time, we will pause momentarily to assemble the roster. Your first question comes from the line of Steve Moss with Raymond James. Your line is open. Please go ahead.
Good afternoon.
Afternoon, Steve.
Maybe just starting off on the margin expansion here. Mike, you mentioned deposit inflows, but then you also mentioned lower-yielding assets repricing. I'm curious what you are seeing for cash flows from the loan portfolio or securities portfolio over the next six months and how to think about that repricing dynamic?
That's a great question, Steve. On the investment side, we internally model it around $35 million a quarter. On the loan side, we have another $170 million to $180 million, totaling around $200 million in rollover activity.
Okay. And that is $170 to $180 million on the loans per quarter?
Yes.
And so, to pick up on the roll-on, roll-off rate as we think about things: I am assuming loan pricing is probably in the low- to mid-sixes and picking up 150 to 200 basis points?
That's right. We are currently originating loans in the low sixes to about 6.5% on average.
Got you. In terms of the pipeline, it's good to see it strong. You mentioned Q3 loan growth to be measured. What factors are driving that outlook given the healthy pipeline?
Commercial activity has been strong, and we are seeing nice momentum across our geography. Home equity has been a significant growth engine for us. We have expanded the sales team and focused heavily on funding time, which is now 14 days on average. That has been an important driver. We are also having a strong residential mortgage year, which is positive. Overall, we are seeing a balanced story on loan growth, which reflects our strategy and focus in this area. We remain optimistic about the pipeline while expecting measured growth in the near term as we selectively add talent and manage credit and balance sheet considerations.
That dovetails with my next question on fee income. You're seeing good trends in debit card and service charges on deposits year-over-year. From your guidance, it sounds like you think this momentum is sustainable. What component was from price increases versus new customers? Any color on those dynamics?
Across fee income, it was a balanced story. We saw momentum in wealth management and brokerage, debit card, deposit-related fees, and mortgage banking. On wealth, we are building and expanding brokerage and advisory capabilities and seeing steady growth. On the debit side, we have focused on digital convenience and customer experience, including a new online portal that has received strong customer feedback. Those initiatives attract customers and drive debit income. So, multiple initiatives are moving in concert to strengthen fee income.
Okay. Great. Nice quarter here, and I will step back in the queue. Thank you very much, guys.
Appreciate it.
Thanks.
Your next question comes from the line of Matthew Breese with Stephens Inc. Your line is open. Please go ahead.
Good afternoon. Mike, I appreciate the margin outlook and some of the data on where new loan yields are coming in. As we think about fixed asset repricing and the roll-on, roll-off particularly on loan yields, when do you stop seeing the pronounced benefits to the NIM? Is that late 2027, 2028, or longer for you?
There are many caveats. It depends on the rate environment and the yield curve. Certainly through 2026 we expect to see benefits as investments run off and we reinvest at higher yields. One opportunity is reducing the investment book over time to help fund loan growth. On loan yields, we expect continued modest tick-ups in core yields of roughly 2 to 3 basis points per quarter in the near term. It's hard to forecast far into 2027 and 2028 given macro uncertainty, but our near-term outlook is for incremental improvement.
The team has focused on building yield through core fundamentals and relationship primacy. We're attracting broad relationships and leaning into treasury and other services that support C&I lending, which can come with stronger deposits. Business banking is a focus that helps manage deposit costs. There are many moving pieces that can shape the outlook through 2027 and 2028, but this remains a core focus for the management team as part of our growth strategy.
Great. Mike, just looking at fee income, was there a BOLI death benefit gain this quarter within that line item? I want to make sure I have everything in a row.
Yes, there was a BOLI-related component, but it was a smaller part of the overall increase. We do have BOLI income where the underlying securities are influenced by equity market performance. That exposure came with the Northway acquisition in 2025, so there is more volatility in that number. That volatility is one of the reasons we guided noninterest income for the third quarter to a lower range of $13.5 million to $14 million. The BOLI component contributed about $500,000 of incremental revenues this quarter.
Of that incremental revenue of about $500,000, how much was death benefit?
It was around $50,000, plus or minus $50,000. It was not overly significant.
Oh, okay. So the majority of this is core?
Yes. I would say the majority is core, though unrealized gains and losses are contributing to some volatility in that line.
Got it. Simon, maybe one for you on M&A: how are conversations going on that front and whether Camden is ready to pursue acquisitions? It's been sluggish year-to-date in the Northeast and Mid-Atlantic. Are you seeing that as well?
We continue to feel very positive about the Northway integration and the value it's driving. Oscar, James, and the team there have demonstrated great leadership, and we're focused on growing commercial business in that region. On potential acquisitions, we remain open to opportunities that are the right strategic fit—contiguous markets, cultural alignment, and clear synergy potential. Activity has been slower the last six to 12 months, but we would consider the right deal. We're disciplined, and there's no pressure on timing; our organic strategy remains a priority.
Great. I will leave it there. Thank you.
A kind reminder that if you would like to ask a question, please press *1 on your touch-tone keypad. If you use a speakerphone, please pick up your handset before pressing the keys. We will pause momentarily for any final questions. Your next question comes from the line of Daniel Cardenas with Brean Capital. Your line is open. Please go ahead.
Good afternoon, everyone. Just a quick follow-up on the M&A question. Given your desire to continue to build fee income, what is your appetite for nonbank acquisitions?
We are open to the right opportunity in the nonbank space, particularly where fee income can be meaningfully expanded. That said, pricing for those assets is generally high and there's a lot of competition, particularly on the wealth side. It's not a primary focus today, but we will have conversations when opportunities align with our strategy and valuation discipline.
Okay. Great. Thank you. I will step back.
As we have no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to Simon Griffiths for any closing remarks.
Thank you for your time today and your continued interest in Camden National Corporation. We are pleased with the progress we made in the second quarter and remain focused on executing with discipline, investing in growth, and delivering long-term value for our shareholders, customers, employees, and communities. We continue to appreciate your support. Have a great day.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.