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CAC Nasdaq· Camden National Corp
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CAC Nasdaq· Camden National Corp
Earnings report Q3 2023

CAC Reports Decrease in Net Income and Diluted EPS for Q3 2023

Segments of revenue

CAC's revenue for the third quarter of 2023 decreased compared to the same period last year. The company's net income for the quarter was $9.8 million, representing a decrease of $4.5 million or 31% from the third quarter of 2022. Diluted EPS also decreased by $0.30, or 31%, to $0.67 for the third quarter of 2023 compared to the same period last year. Adjusted net income (non-GAAP) for the quarter, when excluding the loss on sale of securities, was $14.0 million, a decrease of 2% from the third quarter of 2022. Adjusted EPS was $0.96, a decrease of 1% from the same period last year.

Strengths

Despite the decrease in net income and diluted EPS, CAC's management highlights the impact of the sale of investment securities on the third-quarter operating results. The company reinvested $30.0 million of the proceeds into investments yielding 6.06%, which is expected to enhance future net interest margin and earnings. Additionally, the estimated earn-back period on tangible book value dilution resulting from the loss on sale of investments is less than three years, indicating potential future growth.

Challenges

CAC faced challenges in the third quarter of 2023, as evidenced by the decrease in net income and diluted EPS compared to the same period last year. The loss on sale of securities, amounting to $5.3 million, impacted the company's financial performance. Furthermore, the decrease in net income for the nine months ended September 30, 2023, compared to the same period in 2022, indicates ongoing challenges in maintaining profitability.

Noteworthy

It is worth noting that CAC experienced a decrease in net income and diluted EPS for the nine months ended September 30, 2023, compared to the same period in 2022. The company attributes this decrease to the loss on sale of securities and the impact of charge-offs for commercial loans. However, the decrease in the allowance for credit losses (ACL) by $1.1 million suggests that the charge-offs were considered isolated incidents rather than a trend.

Summary

CAC's financial performance in the third quarter of 2023 showed a decrease in net income and diluted EPS compared to the same period last year. The sale of investment securities and charge-offs for commercial loans impacted the company's results. However, management remains optimistic about the repositioning adjustments made to the balance sheet, which are expected to enhance future net interest margin and earnings. CAC will need to address the challenges it faces in order to improve its profitability in the coming quarters.

Source documents

Form 10-Q  filed on Nov 07, 2023
86 pages scanned

Reference data

Company financials Q3 revenue 38.1M
Analyst estimates Q3 EPS beat by 6.25%
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