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November 2, 2023

Camden National Q3 earnings slide on sale of securities, higher interest rates

entry to brick building File Photo / Renee Cordes Camden National Bank's branch network includes this location in Portland

Camden National Corp. (Nasdaq: CAC), the $5.8 billion parent company of Camden National Bank, on Tuesday reported third-quarter net income of $9.8 million and diluted earnings per share of 67 cents, both decreases of 21% compared to the second quarter of 2023.

The company's third-quarter operating results included the impact from the sale of $66.7 million of securities that resulted in a pre-tax loss of $5.3 million. The company said it sold the investments to reposition a portion of its balance sheet in response to rising interest rates.

Although net income decreased $2.6 million from the second-quarter total, excluding the $5.3 million pre-tax loss on sale of securities, net income increased 13%.

"The continued strength of our capital and operating earnings allowed us to execute an investment restructure strategy that repositions us for the future, while still reporting positive quarterly earnings," said Gregory Dufour, the company’s president and CEO, said in a news release.

person in suit and purple tie
Greg Dufour

For the nine months ended Sept. 30, the company reported net income of $34.9 million and diluted earnings per share of $2.39, decreases of 24% and 23%, respectively, compared to the nine months ended Sept. 30, 2022. 

The decrease in earnings between periods reflects the sharp rise in interest rates between periods and the impact of a prolonged inverted yield curve, as well as the $5.3 million pre-tax loss on the sale of investment securities and a write-off of a $1.8 million Signature Bank corporate bond in the first quarter of 2023. 

Excluding the impact of the investment loss and corporate bond write-off, adjusted net income for the nine months was $40.6 million and adjusted diluted earnings per share was $2.77, decreases of 12% and 11%, respectively, compared to the same period in 2022.

Other highlights

As of Sept. 30, total assets were $5.8 billion, an increase of 1% since June 30 and an increase of 2% since Dec. 31, 2022.

person with glasses and open-necked shirt
Simon Griffiths

Camden National said that residential real estate loan production grew 3% during the first nine months of 2023, compared to the same period in 2022.

The company sold 45% of residential mortgages it originated through the nine months ended Sept. 30, compared to 21% for the same period in 2022.

As of Sept. 30, the retail and commercial loan portfolio pipelines totaled $49.5 million and $29.5 million, respectively.

Earlier this year, Camden National announced that Dufour would retire at the end of the year and be succeeded by Simon Griffiths, a top executive of Boston-based Citizens Bank. 

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