Camden National Corporation (NASDAQ:CAC) Q4 2022 Results Conference Call January 31, 2023 3:00 PM ET

Company Participants

Greg Dufour - President and CEO

Mike Archer - EVP and CFO

Conference Call Participants

Steve Moss - Raymond James

Damon DelMonte - KBW

Matthew Breese - Stephens Inc

Operator

Good day, and welcome to Camden National Corporation's Fourth Quarter 2022 Earnings Conference Call. My name is [Fouram] and I will be your operator for today's call. [Operator Instructions]

Please note that this presentation contains forward-looking statements, which involve significant risks and uncertainties that may cause actual results to vary materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in such forward-looking statements are described in the company's earnings press release, the company's 2021 annual report on Form 10-K and other filings with the SEC.

The company does not undertake any obligation to update any forward-looking statements to reflect circumstances or events that occur after the forward-looking statements are made. Any references in today's presentation to non-GAAP financial measures are intended to provide meaningful insights and are reconciled with GAAP in your press release.

Today's presenters are Greg Dufour, President and Chief Executive Officer; and Mike Archer, Executive Vice President and Chief Financial Officer. Please note that this event is being recorded.

At this time, I would like to turn the conference over to Greg Dufour. Please go ahead, sir.

Greg Dufour

Thank you, and welcome everyone to Camden National Corporation's Fourth Quarter 2022 Earnings Call. For the fourth quarter of 2022, we reported net income of $15.4 million or earnings per diluted share of $1.05, which was 8% better than the third quarter of ‘22. This resulted in total annual earnings for 2022 of $61.4 million, an 11% decrease from our record earnings of $69 million recorded in 2021 and a 9% decrease in diluted earnings per share over the same period. We were pleased with our fourth quarter performance in several areas. Non-interest income, excluding a $903,000 pre-tax security loss was $10.7 million and was on the higher end of our expectations. The security loss record in the fourth quarter is part of a balance sheet restructuring that Mike described during his comments. Operating expenses of $27 million in the quarter was as we expected, and resulted in a 56.4% non-GAAP efficiency ratio. Finally, our provision for credit losses was $466,000, down from $2.8 million recorded in the third quarter. At our earnings call last quarter, we signaled we could see our allowance from provision levels begin to stabilize should asset quality remain strong and no significant changes in the economic outlook occurring during the fourth quarter. We're pleased to see this materialize as asset quality remained very strong by all measures to close the year. We ended the year with an allowance to total loans of 0.92%, 92 basis points and our reserve levels covering non-performing assets 7.2 times. We feel that we are well positioned at those levels on our current loan portfolio.