Camden National
Annual Report 2022

Plain-text annual report

Embracing Change & Changing Outcomes ANNUAL REPORT 2022 A strong Customers, employees, and resilient communities make us who we are and continue to shape our positive outlook for the future. foundation FOUNDED IN 1875 58 BANKING CENTERS 630+ EMPLOYEES $5.7 BILLION IN ASSETS $1.7 BILLION IN ASSETS UNDER ADMINISTRATION 2 LOAN PRODUCTION OFFICES 24/7 LIVE PHONE SUPPORT HEADQUARTERED IN CAMDEN, ME Camden National Bank Camden National Wealth Management BANGOR ELLSWORTH AUGUSTA CAMDEN LEWISTON PORTLAND PORTSMOUTH 2022 RECOGNITION & Awards Best Places to Work in Maine BEST COMPANIES GROUP 2022 Customer Experience Leader in U.S. Retail Banking & 2022 Customer Experience Leader in U.S. Commercial Small Business Banking COALITION GREENWICH “Lender at Work for Maine” Award FINANCE AUTHORITY OF MAINE 2022 List of World’s Best Banks; Ranked in Top 15 FORBES *All data presented as of December 31, 2022. BRAINTREE Embracing Change & Changing Outcomes SINCE OUR FOUNDING IN 1875, we’ve been on a journey frequently fueled by change and the resulting opportunities to learn and grow stronger as a company. In this report, you’ll see the grit and tenacity of the people behind Camden National Corporation and our wholly owned subsidiary, Camden National Bank, and their ability to excel in changing times by embracing opportunities to expand our impact on the lives and communities of those that we serve. We’ve kept a pulse on customer behavior and expecta- tions, and our innovative approach to digital banking reflects the changing ways customers access their accounts. We lis- tened and learned, and in 2022, we took our digital experi- ence to the next level with the rollout of our online Money Manager tool, which empowers customers with a tangible way to improve their financial well-being through detailed spend analysis and the ability to create budgets. In addition to bringing new creative products to market, our employees continue to inspire us with their dedication to our customers and each other. Under the guidance of our employee-led diversity council, we reflected our commit- ment to diversity by formally adopting Diversity as a core value, and we adopted a diversity statement that reflects our team’s commitment to an inclusive and respectful workplace that welcomes and celebrates different perspectives. That spirit of inclusiveness and respect extends to the contributions we are making in our communities. In 2022, we celebrated the milestone of reaching over $700,000 of unre- stricted funds donated to local homeless shelters through our unique Hope@Home program. We also partnered with the Finance Authority of Maine (FAME) on 68 loans totaling approximately $32 million. This helped create 115 new Maine jobs while retaining an additional 884 jobs. These efforts led us to be recognized by FAME with the “Lender at Work for Maine” award for the 12th time. A continued source of stability and expertise has come from the dedication and commitment of our board of directors, which we expanded in 2022 with the addition of Rebecca Hatfield and Robert Merrill. As a company, we focus on delivering consistent, sustainable financial performance. While uncertainty remains, we have delib- erately positioned the company to withstand an array of economic conditions, and our strong performance in 2022 provides a solid foundation for our future growth. We want to thank our team, customers, community, and shareholders for their ongoing trust and support. We know the world changes fast, and here at Camden Nation- al Bank, that means opportunities for continual innova- tion, creativity, and growth. Lawrence J. Sterrs CHAIR, BOARD OF DIRECTORS Gregory A. Dufour PRESIDENT & CEO OUR CORE Values HONESTY & INTEGRITY above all else TRUST built on fairness SERVICE that creates remarkable experiences RESPONSIBILITY to use our resources for the greater good EXCELLENCE through hard work and lifelong learning DIVERSITY realized through inclusion and respect Changing banking for the better Keeping up with our customers’ rapidly changing needs has meant investing in tools to elevate hands-on, secure banking while also leaning into the skills and experience of our people to provide in-person expertise at key financial moments. Delivering next-level digital banking We’re investing in our digital banking platforms to make it easier for customers to safely manage finances—when and where it’s most convenient for them. Adding Money Manager to our already-convenient online and mobile banking service offerings is an investment in our customers’ financial well-being, empowering them to track their spending, link accounts that they have elsewhere, and create a budget—all under one login. BY THE NUMBERS 19 MILLION digital banking logins, a 5% increase over 2021 Rewarding our customers Customers earned over $537,000 in cash-back rewards by using their Camden National Bank VISA® debit card, and received nearly $319,000 in ATM rebates. Serving our customers, day and night 274,000 CONTACTS WERE MADE through our 24/7 live phone support. 2 MILLION TELLER-ASSISTED TRANSACTIONS Enhanced our online security This year, we switched our domain from .com to .bank. CamdenNational.bank 2% INCREASE in mobile app usage 9% INCREASE in total mobile deposits 74,130 ZELLE® TRANSACTIONS totaling over $21 million “I just love the convenience of 24/7 banking and the ability to check balances and activity at any time is very comforting.” JONATHAN P. Zelle and Zelle-related marks are wholly owned by Early Warning Services, LLC, and are used herein under license. *All data presented for the year ended December 31, 2022. “I am very excited that while pursuing my own passion, I have also become a piece of something bigger—the revitalization of my community.” CHRISTY CAIN, OWNER, OLIVE PIT BREWING COMPANY, LISBON, ME GUIDING BUSINESSES NO MATTER THE SIZE Understanding that owning a business takes grit and resourcefulness, we roll up our sleeves alongside our neighboring businesses to support them with robust digital tools, including BusinessTouch™—our online application with automatic decision-making—and guidance from real experts right in their community. SUPPORTING CUSTOMERS THROUGH HOMEOWNERSHIP Our local mortgage specialists, complemented by our easy and secure online application, MortgageTouch®, help customers keep pace with an unpredictable housing market with a fast application process and speedy, tailored responses from start to finish. PROVIDING HIGHLY PERSONALIZED GUIDANCE Our locally based Wealth Management team continues to partner with clients to foster, oversee, and enhance their personal wealth by creating highly personalized strategies tailored to their long-term goals. Creating a positive impact We’re dedicated to building healthier, more resilient, and more inclusive communities throughout our footprint. By investing in the communities we serve, we believe that together we can create positive change. FOCUSING OUR GIVING Youth and Education $30,000 Olympia Snowe Women’s Leadership Institute $30,000 Midcoast Recreation Facility $17,500 Big Brothers Big Sisters of Southern and Mid Maine $10,000 Junior Achievement of Maine Health and Wellness $50,000 LifeFlight Foundation $25,000 Northern Light Health Foundation Economic Development $50,000 Maine Lobster Association $15,000 New American Loan Fund Arts $25,000 Farnsworth Art Museum $10,000 Portland Public Library Art Exhibit 15% OF OUR 2022 DONATIONS were directed to organizations that provide diversity and social inclusion through advocacy programs, support services, and awareness-raising initiatives. *All data presented for the year ended December 31, 2022. We strive to enrich the lives of our children and believe every child is entitled to quality education. We support organizations that inspire and encourage academic success and mental and social well-being. We were the proud sponsor of the David Minter exhibit at the Portland Public Library. MEANINGFUL VOLUNTEERISM We encourage all our employees to engage in the community and causes that are meaningful to them. 12% OF EMPLOYEES sit on a nonprofit board, providing hands-on expertise. NEARLY 9,000 EMPLOYEE volunteer hours at more than 280 local nonprofits. In honor of their commitment, we gave an additional $29,250 TO 106 NONPROFITS chosen by our employees. HELPING COMMUNITY MEMBERS FIND A SAFE PLACE TO CALL HOME Through our unique Hope@Home program, we donate $100 to a local homeless shelter every time someone finances a new home through us. Since 2015, we’ve donated more than $700,000 in unrestricted funding to local homeless shelters. “Unrestricted funding, like we receive from Camden National Bank’s Hope@Home program, allows Knox County Homeless Coalition (KCHC) to operate with a ‘do the right thing’ philosophy. As we face some of the most acute needs our area has experienced in decades, funding of this sort supports the work we do within the community—even before someone is able to sign up for our services.” MOLLY FEENEY, DIRECTOR OF SOCIAL SERVICES AT KCHC MORE THAN 2,000 PERSONAL CARE ITEMS were collected and donated by employees to shelters across the region, along with 650 towels that we donated on behalf of each Camden National Bank employee. SHINING A LIGHT ON NONPROFIT LEADERSHIP Through our Leaders & Luminaries program, we recognize the impact and importance of outstanding nonprofit board leadership in our communities. This year we awarded four amazing directors each with $5,000 in grants for their respective nonprofit organizations. Since 2011, we’ve given a total of $220,000 to 58 nonprofits through the program. AMY FORD, BOARD MEMBER OF THE PORTLAND COMMUNITY SQUASH, which aims to make an accessible community center that holistically supports and unites its members, received a $5,000 grant for the nonprofit as a 2022 Leaders & Luminaries awardee. Providing access and opportunities Our 630+ employees are at the core of our success and the key to our future. We strive to ensure our employees’ work environment supports their growth, utilizes their skills and passions to make a difference, and recognizes their diverse talents, backgrounds, and perspectives. $970,000 in health savings account contributions $1.4 MILLION in 401(k) contributions $25,000 in wellness reimbursements $35,000+ in tuition reimbursements OFFERING SPACE TO LEARN AND GROW We understand the importance of providing development opportunities so employees can enhance their careers and skill sets. 21 high-potential leaders participated in our unique HORIZONS 100 AND 200 leadership development programs. 13,300 compliance and regulatory classes focused on employee training and development. *All data presented for the year ended December 31, 2022. Horizons participants at the Northern New England School of Banking. CELEBRATING OUR EXCEPTIONAL TEAM In September, we recognized our employees’ achievements and contributions at our annual Employee Appreciation Night. We presented 11 EMPLOYEES WITH COMMITMENT AWARDS for their outstanding dedication to customers, communities, fellow employees, and shareholders. “Being recognized as the 2022 Officer of the Year was such an honor! It has been a privilege to serve my community and work with our customers to build lasting relationships.” TERRI TOWER, OFFICER OF THE YEAR, VICE PRESIDENT, BANKING CENTER MANAGER, BELFAST, ME “The inclusive, supportive, fair nature of the company, as well as the ability to learn something new every day and the great group of stakeholders I get to work with, has made my time with Camden National Bank a truly enjoyable experience.” JEANNE ANDREASEN, EMPLOYEE OF THE YEAR, SENIOR DEPOSIT & PAYMENT SERVICES SPECIALIST, REMOTE Diversity realized through inclusion and respect. FOSTERING INCLUSION AND RESPECT In 2022, we adopted a new core value and diversity statement, created by our diversity council, to ensure that diversity becomes embedded in our culture with the same importance as our existing core values. 67% 50% 42% 8% 8% of our workforce identifies as female of our executive team identifies as female of our board of directors identifies as female of our board of directors identifies as racially diverse of our board of directors identifies as LGBTQ+ Our diversity council hosted the 2022 Spring Leadership Conference designed for leaders throughout the organization. OUR DIVERSITY STATEMENT “At Camden National Bank, we endeavor to change lives for the better and provide stability and resiliency within our communities, welcoming customers and employees where they are in their journey. Our friendly approach fosters an inclusive environment for people of all backgrounds and experiences that encourages fresh perspectives and insists on a respectful workplace culture where everyone belongs.” Employees represented Camden National Bank at the Portland Pride parade. Financial overview For 2022, Camden National Corporation reported net income of $61.4 million and $4.17 diluted earnings per share. While down from record earnings last year by 11% and 9%, respectively, this was attributable to dynamic market shifts between years, which drove lower residential mortgage banking activity as interest rates rose sharply, an increase in provision expense as concerns of a slowing economy mounted, and the abatement of loan income earned in 2021 and 2020 from the Small Business Administration Paycheck Protection Program (SBA PPP) that was issued in response to the COVID-19 pandemic. Adjusting for income tax expense, provision expense, and SBA PPP loan income (non-GAAP)*, earnings in 2022 grew 7% over 2021 led by record revenue growth and prudent expense management, as highlighted by maintaining an efficiency ratio (non-GAAP) of 56% for 2022. Our results continue to reflect our disciplined and thoughtful approach throughout the bank. Our key credit quality metrics in both commercial and consumer portfolios remain resilient, despite the macroeconomic pressures created by rapidly rising interest rates and growing concern of a recession in the near term. Asset quality continues to be a source of strength, with non-performing loans of 0.13% of total loans and non-performing assets of 0.09% of total assets as of December 31, 2022. We increased our cash dividend paid per share 9% over last year to $1.62 for 2022. Over the past five years, the company’s annual cash dividend has increased 12% on a compounded basis. The increase reflects our ability to generate long-term, sustainable earnings and our commitment to deliver meaningful returns to our shareholders. In 2022, our annualized dividend yield reached 4.03%, based on our closing stock price of $41.69, on December 30, 2022 (the last business day of the year). On December 31, 2022, all of our regulatory capital ratios were well in excess of regulatory capital requirements. Our capital and loan reserve levels, along with our strong credit quality, position us for continued success in light of current market conditions that are both dynamic and volatile. MAINTAINING STRONG AND TRANSPARENT GOVERNANCE In changing times, we recognize the importance of sound and effective corporate governance for responsible growth. Our board of directors are our customers, advocates, and advisors, which makes us a more robust financial institution and community leader. Our directors possess the highest personal and professional ethics, integrity, and values, and rigorously pursue opportunities to add long-term value for our customers, shareholders, employees, and the communities we serve. ELEVATING OUR COMMITMENT TO SOCIAL RESPONSIBILITY We’re working to enrich the lives of our customers, employees, and neighbors so that together we can build an inclusive and sustainable community. Please see our 2022 Environmental, Social, and Governance (ESG) Report, available at www.CamdenNational.bank/corporate-responsibility, for more details on our evolving and expanding corporate responsibility approach. “Behind our company's guiding core values is a rigorous governance structure that upholds our high standards and adapts to new and emerging risks.” LAWRENCE J. STERRS, BOARD CHAIR *This is a non-GAAP measure. A reconciliation of non-GAAP to GAAP financial measures can be found in the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2023. OUR FINANCIAL HIGHLIGHTS FOR 2022 INCLUDE: STRONG FINANCIAL RETURNS Return on average equity and return on average tangible equity (non-GAAP) each increased over last year, producing strong returns on capital for our shareholders of 13.15% and 16.71%, respectively. STRONG LOAN GROWTH Loans grew 17% in 2022 led by residential real estate loan growth of 30%, commercial loan growth of 18%, and commercial real estate loan growth of 9%. SOLID DEPOSIT GROWTH Deposits grew 5% in 2022 led by combined interest and non-interest checking growth of 10%. $186.8 $187.2 $188.4 $169.7 0.25% 0.22% 0.13% 0.09% 2019 2020 2021 2022 Non-Performing Assets to Total Assets $1.62 $1.48 $1.32 $1.23 2019 2020 2021 2022 Revenues1 ($ Millions) 1 Revenue is the sum of net interest and non-interest income 2019 2020 2021 2022 Cash Dividends Declared Per Share (NASDAQ: CAC) BOARD OF DIRECTORS EXECUTIVE MANAGEMENT Lawrence J. Sterrs CHAIRMAN AND CEO, UNITY FOUNDATION S. Catherine Longley EVP & COO, THE JACKSON LABORATORY Gregory A. Dufour PRESIDENT & CEO, CAMDEN NATIONAL CORPORATION AND CAMDEN NATIONAL BANK Timothy P. Nightingale EVP, CHIEF CREDIT OFFICER Ann W. Bresnahan CIVIC LEADER Marie J. McCarthy CHIEF OPERATIONS OFFICER, L.L. BEAN Michael R. Archer, CPA EVP, CHIEF FINANCIAL OFFICER Heather D. Robinson, CPA, SHRM-SCP EVP, CHIEF HUMAN RESOURCE OFFICER Craig N. Denekas TRUSTEE, CHAIRMAN AND CEO, LIBRA FOUNDATION Robert D. Merrill PRESIDENT, MERRILL FURNITURE Joanne T. Campbell, CRCM EVP, ENTERPRISE RISK MANAGEMENT & CHIEF RISK OFFICER Patricia A. Rose EVP, RETAIL & MORTGAGE BANKING Gregory A. Dufour PRESIDENT & CEO, CAMDEN NATIONAL CORPORATION AND CAMDEN NATIONAL BANK David C. Flanagan PRESIDENT, VIKING LUMBER, INC. James H. Page, Ph.D. CHANCELLOR EMERITUS, THE UNIVERSITY OF MAINE SYSTEM William H. Martel EVP, CHIEF TECHNOLOGY OFFICER Ryan A. Smith EVP, COMMERCIAL BANKING Robin A. Sawyer, CPA RETIRED VICE PRESIDENT OF CORPORATE FINANCE AND CORPORATE CONTROLLER, WEX INC. Jennifer L. Mirabile, CFP, CWS EVP, MANAGING DIRECTOR OF CAMDEN NATIONAL WEALTH MANAGEMENT Renée D. Smyth EVP, CHIEF EXPERIENCE & MARKETING OFFICER Rebecca Hatfield PRESIDENT & CEO, AVESTA HOUSING Carl J. Soderberg PRESIDENT, SODERBERG COMPANY, INC. 2 Elm Street, Camden, ME 04843 CamdenNational.bank For You 24/7: 800-860-8821 Member FDIC | Equal Housing Lender 

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