Q2 2025 Camden National Corp Earnings Call

Unknown Executive: 2nd Quarter 2025 Earnings Conference Call.

Operator: My name is Elliot and I'll be your operator for today's call. All participants will be in list learning mode during today's presentation.

Good day and welcome to Camden National Corporation's second quarter 2025 earnings conference call.

My name is Elliot, and I'll be your operator for today's call.

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All participants will be in listen-only mode during today's presentation.

Following the presentation, we'll conduct your question-and-answer session.

Rene Smyth: I'll now turn the call over to Rene Smyth, Executive Vice President, Chief Experience and Marketing Officer. Thank you.

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Or not in the call over to Rene Smyth, Executive Vice President, Chief Experience and Marketing Officer.

Simon Griffiths: Good afternoon and welcome to Camden National Corporation's conference call for the second quarter of 2025.

Simon Griffiths: Joining us this afternoon are members of Camden National Corporation's executive team, Simon Griffiths, President and Chief Executive Officer, and Mike Archer, Executive Vice President and Chief Financial Officer. Please note that today's presentation contains forward-looking statements and actual results could differ materially from what is on today's call. Cautionary language regarding these forward-looking statements is contained in our second quarter 2025 earnings release issued this morning and in other reports we file with the SEC.

Simon Griffiths: All of these materials and public filings are available on our investor relations website at camdennational.bank.

Thank you, good afternoon, and welcome to Camden National Corporation's conference call for the second quarter of 2025. Joining us this afternoon are members of Camden National Corporation's executive team: Simon Griffith, President and Chief Executive Officer, and Mike Archer, Executive Vice President and Chief Financial Officer. Please note that today's presentation contains forward-looking statements, and actual results could differ materially from what is discussed on today's call. Cautionary language regarding these forward-looking statements is contained in our second quarter 2025 earnings release issued this morning and in other reports we file with the SEC.

Simon Griffiths: Camden National Corporation trades on the NASDAQ under the symbol CAC. In addition, today's presentation includes discussion of non-GAAP financial measures, any references to non-GAAP financial measures are intended to provide meaningful insights, and are reconciled with GAAP in our earnings release, which is also available on our investor relations website.

All of these materials and public filings are available on our Investor Relations website at Camden National Bank.

Simon Griffiths: I am pleased to introduce our host, President and CEO, Simon Griffiths. Good afternoon, everyone. And thank you, Rene. We appreciate you taking the time to join us today. We're pleased to report on our strong performance in our first full quarter as a unified organization, following the acquisition of Northway Financial earlier this year, which bolstered our presence in the New Hampshire market. This quarter marked the beginning of unlocking the financial potential of our combined franchise with pre-tax, pre-provision income, excluding one-time merger-related expenses rising 13% from the prior quarter. Earlier this morning we reported strong quarterly earnings of $14.1 million, resulting in diluted earnings per share of 83 cents.

And CEO Simon Griffith.

Good afternoon, everyone, and thank you, Renee. We appreciate you taking the time to join us today.

We're pleased to report on our strong performance in our first full quarter as a unified organization, following the acquisition of Northway Financial earlier this year, which bolstered our presence in the New Hampshire market.

This quarter, Mark, the beginning of unlocking the financial potential of our combined franchise, with pre-tax, pre-provisioning income, excluding one-time merger-related expenses, rising 13% from the prior quarter.

Simon Griffiths: On a non-GAAP basis, adjusted earnings were $15.2 million or 89 cents per share. Our strong quarterly earnings accretion continues to rebuild our capital levels following the completion of the Northway Acquisition and to enhance shareholder value. This is evidenced by the expansion of our Tangible Common Equity Ratio to 6.77% at June 30th and a 3% increase in Tangible Book Value during the second quarter reaching $26.90 per share. These outstanding results reflect early success in realising cost synergies from the Northway acquisition and the ability to drive solid revenue growth, underscoring the strategic value of the acquisition for all our constituents, customers, employees, communities and shareholders.

Earlier this morning, we reported strong quarterly earnings of $14.1 million, resulting in diluted earnings per share of 83 cents.

On a non-GAAP basis, adjusted earnings were $15.2 million or 89 cents per share.

A strong quarterly earnings accretion continues to rebuild our capital levels following the completion of the Northway acquisition and to enhance shareholder value.

This is evidenced by the expansion of a tangible common equity ratio to 6.77% at June 30th and a 3% increase in tangible book value during the second quarter, reaching $66.90 per share.

Simon Griffiths: Several of our key performance indicators continue to trend positively. Net interest margin expanded by an additional two basis points, and our non-gap efficiency ratio improved to 55.5%. We believe these outcomes demonstrate that we are well positioned to sustain interest margin expansion and earnings growth through the second half of 2025. As reported, one commercial borrower filed for bankruptcy during the second quarter, resulting in the need for additional provisioning on this loan.

These outstanding results reflect early success in realizing cost synergies from the Northway acquisition and the ability to drive solid revenue growth, underscoring the strategic value of the acquisition for all our constituents: customers, employees, communities, and shareholders.

Several of our key performance indicators continue to trend positively.

Net interest margin expanded by an additional 2 basis points, and our non-GAAP efficiency ratio improved to 55.5%.

We believe these outcomes demonstrate that we are well-positioned to sustain interest margin expansion and earnings growth.

Through the second half of 2025.

Simon Griffiths: We are actively engaged with a small group of other lenders involved in this loan and anticipate resolution later this year.

As reported, one commercial borrower filed for bankruptcy during the second quarter, resulting in the need for additional provisioning on this loan.

Simon Griffiths: In a few minutes, Mike will provide more details on our provision of loan loss reserve levels for the second quarter. We remain confident in the overall health of our loan portfolio and that this is not a broader trend across our well-diversified loan portfolio as evidenced by our continued strong asset quality metrics. Our second quarter performance reflects the continued benefits of our strategic investments, both digital and talent-focused, across the organisation, along with the disciplined execution of proactive deposit gathering and management. While average deposits were down 1% on a linked quarter basis due to seasonal trends, we have seen encouraging growth more recently as the summer months are upon us.

We are actively engaged with the small group of other lenders involved in this loan and anticipate resolution later this year.

In a few minutes, Mike will provide more details on our provision and loan loss reserve levels for the second quarter.

We remain confident in the overall health of our loan portfolio and that this is not a broader trend across the board. Our well-diversified loan portfolio is evidenced by continued strong asset quality metrics.

A second quarter performance reflects the continued benefits of our strategic investments, both digital and talent-focused, across the organization, along with the disciplined execution of proactive deposit gathering and management.

Simon Griffiths: While average loans remained stable during the quarter, we grew ending loan balances in both the consumer and commercial business. Our commercial team remains highly engaged, leveraging strong, long-standing relationships and increased visibility in the high-growth markets of southern New Hampshire and Maine. with inconsistent pipeline activity across our markets, signaling strong demand and sustained momentum. And at the same time, we remain firmly committed to our underwriting discipline. During the quarter, we achieved robust growth in home equity loan balances in our high yield savings account, which requires a consumer checking account, a checking account, helping us expand and deepen relations.

While average deposits were down 1% on a link-quarter basis due to seasonal trends, we have seen encouraging growth more recently as the summer months are upon us.

While average loans remain stable, during the quarter, we grew ending loan balances in both the consumer and commercial businesses.

Our commercial team remains highly engaged, leveraging strong, long-standing relationships and increased visibility in the high-growth markets of Southern New Hampshire and Maine.

We're seeing consistent pipeline activity across our markets, signaling strong demand and sustained momentum. At the same time, we remain firmly committed to our underwriting discipline.

Simon Griffiths: We also achieved significant success in growing and diversifying our fee revenue. Our fiduciary and brokerage fee income organically grew 16% year over year. Our growing wealth management team is realizing substantial operational efficiencies from its new platform, which was implemented last year. We continue to see strong opportunities to expand our services within our existing customer base, particularly as we prioritize advice-driven conversations and extend our treasury management services into the New Hampshire market. We continue to advance our innovation agenda with strategic investments to modernize our mobile app, aimed at attracting and retaining a digitally savvy customer base.

During the quarter, we achieved robust growth in home equity loan balances and in our high-yield savings account, which requires a consumer checking account. A checking account helps us expand and deepen relationships.

We also achieved significant success in growing and diversifying our fee revenue.

Fee and brokerage fee income organically grew 16% year-over-year.

Our growing wealth management team is realizing substantial operational efficiencies from its new platform, which was implemented last year.

We continue to see strong opportunities to expand our services within our existing customer base.

Particularly, as we prioritize advice-driven conversations and extend our Treasury Management Services into the New Hampshire market.

Simon Griffiths: This quarter we successfully launched both our Roundup feature and Zogo, a digital financial literacy program. The response has been strong. Within the first 60 days, customers completed over 140,000 Roundup transactions, automatically directing spare change into savings and charitable giving accounts, and engaging in more than 13,000 learning activities through our financial education tools. We are proud of our second quarter financial performance reflects the dedication of our 700 plus united teammates and their unwavering focus on serving our customers and executing our strategy. Their efforts have fuelled strong results and built momentum we expect to carry through the second half of 2025 and beyond.

We continue to advance our innovation agenda with strategic investments to modernize our mobile app, aimed at attracting and retaining a digitally savvy customer base. This quarter, we successfully launched both our Roundup feature and Zogo, a digital financial literacy program. The response has been strong within the first 60 days. Customers completed over 140,000 Roundup transactions, automatically directing spare change into savings and charitable giving accounts, and engaging in more than 13,000 learning activities through our financial education tool.

Focus on serving our customers and executing our strategy.

Simon Griffiths: We are well positioned to continue delivering exceptional outcomes and unlocking meaningful, long-term value for shareholders.

Their efforts are fueled by strong results and built momentum. We expect to carry this through the second half of 2025 and beyond.

Michael Archer: With that, I'll hand over to Mike to provide some additional financial highlights regarding the quarter. Thank you, Simon. And good afternoon, everyone. Our second quarter operating results gave us a first look at our earnings power as a larger organization, having completed the acquisition of Northway Financial, and much of our integration in the first quarter this year. As we enter the second half of the year, I'm pleased to report that we remain on track to deliver the financial targets outlined as part of the acquisition, including achieving our targeted cost reduction. The second quarter, we reported gap net income of $14.1 million and diluted earnings per share of $0.83, representing increases of 92% and 93%, respectively, over the previous quarter.

We are well positioned to continue delivering exceptional outcomes and unlocking meaningful long-term value for shareholders.

With that, I'll hand it over to Mike to provide some additional financial highlights regarding the quarter.

Thank you, Simon, and good afternoon everyone. In our second quarter, our operating results give us a first look at our earnings power as a larger organization, having completed the acquisition of Northway Financial and much of our integration in the first quarter of this year.

As we enter the second half of the year, I'm pleased to report that we remain on track to deliver the financial targets.

Outlined as part of the acquisition, including achieving our targeted cost reductions?

For the second quarter, we reported a GAAP net income of $14.1 million and diluted earnings per share of $0.83, representing increases of 92% and 93%, respectively, over the previous quarter.

Michael Archer: on a non-GAAP basis, pre-tax, pre-provision, net income, excluding M&A-related costs, totaled $26.1 million over the second quarter and increased 13% over the previous quarter. This increase highlights the improvement in our efficiency ratio during the second quarter, which reached 55.5%, our lowest level since the second quarter of 2022. Total revenues for the second quarter grew 4% over the last quarter to $62.3 million, driven by both net interest income and non-interest income. Net Interest Margin and Non-GAAP Core Net Interest Margin each expanded two basis points during the second quarter to $306 and $270 respectively. We continue to focus on driving core net interest margin expansion and anticipate further expansion in the third quarter, as we'll benefit from seasonal deposit flows and continued steady expansion of our earning assets.

On a non-GAAP basis, pre-tax pre-provision net income excluding M&A-related costs totaled $26.1 million for the second quarter, an increase of 13% over the previous quarter.

This increase highlights improvement in our efficiency ratio during the second quarter, which reached 55.5%, our lowest level since the second quarter of 2022.

Total revenues for the second quarter grew 4% over the last quarter to $62.3 million, driven by both net interest income and non-interest income growth.

And interest margin and non-GAAP core interest margin each expanded 2 basis points during the second quarter to 306 and 270, respectively.

Michael Archer: Non-interest income reached $13.1 million for the second quarter, which beat our guidance provided last year. They're currently estimating a range for non-interest income for the third quarter of $12-13 million. Reported non-interest expense for the second quarter was $37.6 million, which was 15% lower than the first quarter. Non-interest expense, excluding M&A costs for the second quarter, was $36.2 million. a 2% decrease compared to the prior quarter. For the third quarter, we'll currently anticipate non-interest expenses, excluding M&A costs and CDI amortization, to land closer to $34 million, as we realize a full quarter of cost-to-energy savings from the Northway acquisition.

We continue to focus on driving core and net interest margin expansion in anticipation of further expansion in the third quarter, as we will benefit from seasonal deposit flows and continued steady expansion of our earning asset yield.

Not interest income reached $13.1 million for the second quarter, which beat our guidance provided last quarter.

We are currently estimating a range for non-interest income for the third quarter of $12 million to $13 million.

Reported in our interest expense for the second quarter was $37.6 million, which was 15% lower than the first quarter.

Not an interest expense, including M&A costs for the second quarter, was $36.2 million, a 2% decrease compared to the prior quarter.

Michael Archer: Weighing on our reported financial results for the second quarter were elevated provision expenses of $6.9 million.

For the third quarter, we're currently anticipating non-interest expenses. Excluding M&A costs and CDI amortization, the land is closer to $34 million. As we realize the full quarter of cost synergy savings from the Northway acquisition,

Michael Archer: during the second quarter, a borrower under a syndicated loan in which Camden Ladies and gentlemen, we've lost connection with our speaker. Thank you for your patience as we reconnect them. This is Mike. Sorry for the disconnection there. We'll jump back into the meeting here. Weighing on the reported financial results for the second quarter were elevated provision expenses of $6.9 million.

Weighing on our reported financial results for the second quarter, we're elevated. Provision expenses of $6.9 million.

During the second quarter, a borrower under a syndicated loan, in which Camden...

We've lost connection with our speaker. Thank you for your patience as we reconnect them.

1.

This is Mike. Sorry for the disconnection there. We'll jump back into the meeting here.

Michael Archer: During the second quarter, a borrower under our syndicated loan, in which Camden's participation totaled $12 million, entered bankruptcy, and we placed the loan on non-accrual status. As of June 30, we carried an allowance on this credit of $6 million. which represents our best estimate of the potential loss as of the end of the second quarter. This credit was the driver of the elevated provision expense and the increase in our allowance coverage ratio of 12 basis points during the second quarter to 1.08% at June 30. As noted in our earnings release earlier today, we currently anticipate that this credit will be fully resolved later this month.

Weighing on the reported financial results for the second quarter, we're elevated for vision. Expenses of $6.9 million.

During the second quarter, a borrower under our syndicated loan, in which candidate participation totaled $12 million, entered bankruptcy, and we placed the loan on non-accrual status.

Allowance on this credit is $6 million.

Which represents our best estimate of the potential loss. As of the end of the second quarter,

This credit was the driver of the elevated provision expense in the increase. Our allowance coverage ratio of 12 basis points during the second quarter.

To 1.08% at June 30.

Michael Archer: Overall, our credit trends across the broader loan portfolio remain very strong. Pass-through loans account for eight basis points of total loans at June 30. Net charge-off for two basis points of average loans to a second quarter, and non-performing loans for 37 basis points of total loans at June. We experienced nice long growth during the quarter of 1% coming primarily from commercial and home equity. Our loan pipelines were robust at June 30 with 150 million committed loan pipelines. representing a 40% increase over the last quarter.

As noted in our earnings release earlier today, we currently anticipate that this credit will be fully resolved later this year.

Overall, our credit trends across the broader loan portfolio will remain very strong.

Past two loans accounted for 8 basis points of total loans at June 30.

Net charge-offs for 2 basis points of average loans in the second quarter, and non-performing loans are 37 basis points of total loans at June 30th.

The experience was nice. There was a long growth during the quarter of 1%, coming primarily from commercial and home equity loans.

Our loan pipelines were robust at June 30, with $150 million committed loan pipelines.

Michael Archer: Lastly, our capital position remains very strong, supported by growing ratios as we rebuild capital following the Norquay acquisition earlier this year. Our TCE ratio grew to 6.77% at June 30, an increase of 28 basis points from the previous quarter, and our regulatory capital ratios continue to be well in excess of requirements and continue to build as well. We anticipate strong capital generation in the second half of the year, driven by the full realization of synergies and sustained revenue.

Representing a 40% increase over the last quarter.

Lastly, our capital position remains very strong, supported by growing ratios, as we rebuild capital following the Northway acquisition earlier this year.

Our TC ratio grew to 6.77% at June 30th, an increase of 28 basis points from the previous quarter. Our regulatory capital ratios continue to be well in excess of requirements and are also continuing to build.

Michael Archer: This concludes our comments.

Anticipate strong capital generation in the second half of the year, driven by the full realization of synergies and sustained revenue growth.

Unknown Executive: We'll now open it up to call for questions. Thank you.

This concludes our comments. We'll now open up the call for questions.

Operator: If you would like to ask a question, please press star followed by one on your cell phone keypad. If you would like to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally.

Thank you. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If you would like to withdraw your question, please press star followed by 2.

When preparing to ask your question, please ensure your device is unmuted locally.

Steve Moss: Our first question comes from Steve Moss with Raymond James. Your line is open, please go ahead. Good afternoon, guys. Maybe just starting here on the credit front. Hey, Mike, just start on the credit front here. Just curious, what type of CNI loan was it? And did the placement on non-approval here this quarter also impact net interest? Yeah, so that was one of our just C&I loans, it was a syndication fee. You know, as mentioned in the comments, we're working with a small group of vendors on that, and certainly, you know, our credit team is working very closely and diligently trying to work through the resolution there.

Our first question comes from Steve Moss with Raymond James. Your line is open. Please go ahead.

Uh, good afternoon, guys.

Maybe just starting here on the credit front.

Am I just starting on the credit front here? Just curious. What type of CNI loan was it, and did the placement on? Not a cool here. This quarter also impact, uh, net interest income.

Um, yeah, so that was one of our CNI loans. It was a syndication fee.

You know, as mentioned in the comments, we were working with a small group of other vendors on that, um, in terms of the.

Steve Moss: And as we mentioned, we do anticipate. that full resolution here a little bit later this year, it did impact net interest income for the quarter. Overall, it was about a basis point of net interest margin, core margin for the quarter. I'm sorry, I should have been more specific, just curious as to what kind of industry the borrower is active in. Steve, yeah, you know, I'd characterize it as a service company. OK. Got it, yeah.

You know, our credit team is working very closely and diligently to work through the resolution there. And, as we mentioned, you anticipate.

That will be resolved here a little bit later this year. It did impact net interest income for the quarter overall. It was about a basis point of net interest margin for the quarter.

I'm sorry, maybe I should have been more specific. Just curious as to what kind of industry.

The borrower is active in.

Steve: Yeah, you know, it's characterized as a service company.

Okay.

Steve Moss: And then in terms of the loan pipeline here, just curious color around the drivers of the improvement of the pipeline and kind of what's the coupon you're seeing on new origination. Yeah, I'll take that, Steve. And just, just talking just just to go back a click here, you know, I think obviously, we've mentioned the, the one loan, but, you know, I think we still feel very confident around our credit position. And, you know, when you look at non accruals, the 15 basis points have absent that loan, it really is flat quarter over quarter. So we feel very good about that.

Got you?

And then in terms of the loan pipeline here, just curious about the color around the drivers of the improvement in the pipeline and kind of what's the coupon you're seeing on new originations.

Michael Archer: And, you know, as we push into this quarter, we are seeing a pickup. Now, particularly on the commercial side, we're seeing a lot of activity. We're also seeing some some great results in the home in the home equity front, we grew 16.7 million in the second quarter and balances as compared to 18 million all of last year. So that's, you know, very positive momentum there, which, which I think is really good to see. So, you know, we're seeing a nice balance across CNI, small loans, business loans, mortgages, actually quite quite resilient as well. So it's a broad based sort of pickup.

Yeah, I'll take that to Steve and just, uh, just talking just just to go back and click here, you know, I think obviously we've mentioned the, uh, the, the 1 loan. But, uh, you know, I think we still feel very confident around our credit position. And, uh, you know, when you look at non across the 15 basis points have absent that loan. It really is flat quarter over quarter. So we feel very good about that and you know as we push into this quarter, we are seeing a pick up you know, particularly on the commercial side we're seeing a lot of activity. Uh we're also seeing some some great

Michael Archer: And, you know, we certainly as we say, we've got a very, very positive pipeline.

Results. Uh, in the home, in the home equity front. We grew 16.7 million in the second quarter imbalances as compared to 18 million all of last year. So that's um you know very uh positive momentum there which which I think is is really good to see. So you know we're seeing a nice balanced across cni, small loans business loans mortgages actually quite quite resilient as well, so it's a, it's a broad-based sort of pickup. Um, and you know, we certainly, as we say we've got a very, very positive pipeline.

Stephen Moss: Okay, got it. And in terms of the the margin expansion here, just kind of thinking about the asset repricing, obviously originations help here too. You know, to think about as a couple basis points, a quarter, I'm just kind of curious how you guys are thinking about that dynamic. I was going to say, Stephen, I think, you know, we do see continued momentum back end of this year, obviously contingent, you know, in terms of the Fed, but we see, you know, plus minus 5-10 basis points for the next quarter, depending obviously on where the Fed goes.

Okay. Yeah, and in in in terms of the the margin of expansion here, just kind of thinking about the as to price. And obviously, the originations help here too. You know, do you think about it as a couple basis points a quarter? Um, just kind of curious how how you guys are thinking about that. Uh, dynamic.

You know, we do see continued momentum in the back end of this year, obviously contingent, you know, in terms of the Fed. But we see, you know, plus or minus 5 to 10 basis points for the next quarter, depending on obviously where the Fed goes.

Stephen Moss: Okay, great.

Stephen Moss: Appreciate all the call and I'll step back in the queue.

Okay, great. I appreciate all the call, and I'll step back in the queue.

Unknown Executive: Thank you.

Thanks.

Matthew Breese: We now turn to Matthew Breese with Stephens. Your line is open. Please go ahead.

Matthew Breese: Good afternoon. Just on the C&I credit, a couple from me here, you know, you're actively involved with other lenders on the note, can you give us some sense for the ultimate size of this loan? And then what is your exposure, you know, overall to syndicated loans? So our total exposure, Matt, is 12 million at quarter end. I can certainly say there are five or six other banks in this group, and total exposure is around the 200 million mark. just in terms of unfunded there, Matt, there's a small piece of remaining exposure out there. I think it's around a million dollars or so maybe a little bit over.

We now turn to Matthew Breeze with Stevens. Your line is open, please go ahead.

Good afternoon.

Um, just on the scene, CNI credit.

Here you noted you're actively involved with other lenders on the note. Can you give us some sense of the ultimate size of this loan? And then what is your exposure? You know, overall this is indicated ones.

So I totally exposed. Matt is, uh, $122 million at quarter end.

Um, you know, I can certainly say there are 5 or 6 other banks in this group, um, and total exposure for the, uh, is around the $200 million mark.

Matthew Breese: But in that And the $200 million, are those, you know, how would you characterize those in terms of, you know, geography? Are they mostly local? Are they national? What kind of, broadly speaking, what kind of businesses are they attached to? It's a mix, you know, from from national to large regional, local. and there's no other signs of deterioration in the broader book. No, we feel we feel very good. I mean, again, just coming back to my earlier points, Matt. None occur all the 15 basis points of I mean, you know, that's that's pretty much flat quarter over quarter delinquencies.

It just turns the unfunded there. Matt, there's a small piece of remaining exposure out there, but I think it's around a million dollars or so—maybe a little bit over. Um, but it's in that neighborhood.

And the 200 million, are those, you know, how would you characterize those in terms of geography? Are they mostly local or are they national? What kind of, broadly speaking, what kind of businesses are they attached to?

It's a mix, you know, from national to large regional and local.

And there's no other assigned deterioration in the broader book.

No.

No, we thought we thought very good. I mean, again, just coming back to my idea points. Matt, um,

Matthew Breese: All right, bait basis points up one basis point from Q1 charge offs of two basis points annualized. You know, we feel very good about the overall book, but inevitably sometimes you have these you know, one-off situations and that's exactly what this is.

You know, none of us are 15 basis points of. I mean, you know, that's that's pretty much flat. Caught over quarter delinquencies, are 8 B, basis points up 1 basis point from q1 charge off to 2 basis points, annualized

Um, you know, we feel very good about the overall book, but, you know, inevitably sometimes you have these, uh, you know, one-off situations, and that's exactly what this is.

Matthew Breese: Got it. Okay.

Interesting, got it. Okay.

Matthew Breese: Mike, you've mentioned a couple of guidance items. I was hoping to kick the tires on the first one was just the income of 12 to 13 million next quarter. A little bit of a pullback and curious. as to where we might see that pullback occur. Yes, a couple. Good question, Matt. A couple things in there. One, just on the The mortgage side, there is some fair value accounting that's giving a bit of a pop, if you will, on just the pipeline loans, you know, at quarter end. The other item is within the BOLI, you would have seen a pop there as well.

um,

Mike, you've mentioned a couple of guidance items. I was hoping to kick the tires on the first one, which was the income of $12 to $13 million. Next quarter, a little bit of a pullback, and I'm curious.

As to where we might see that pullback occur.

Yeah, it’s a couple of good questions. Matt, a couple of things in there. 1, just on the...

The mortgage side, there is some fair value accounting that, you know, gives a bit of a pop, if you will, just the pipeline loans. Um,

Matthew Breese: And, you know, obviously, just with the acquisition from different securities supporting one of the underlying BOLI policies that it's more tied to the equity markets and just has more volatility, as you can imagine, in some of that. So a little bit, that's a little bit of my caution out there. That said, I think mortgage will be strong from a sales perspective, this this go around, if we peg that somewhere in the 750,000 to a million, so that can be, you know, pretty stable. My hope would be, we'd be in the 12 and a half to 13, kind of more in that range.

You know, at quarter end, um, the other item is within the bull, you would have seen the pop there as well. Um, in, you know, obviously, just with the acquisition, some different securities supporting one of the underlying volleyball policies that.

You know, it's more tied to the equity markets and just has more volatility, as you can.

With some of that. So a little bit, that's a little bit of my, my caution out there. That's it. I think mortgage will be strong from a sales perspective. This this go around. I think we've tagged that somewhere in the 750,000 to a million. So that could be, you know, pretty stable. Um,

Matthew Breese: But there's a couple items out there that are a little less in our control, if you will, from a valuation perspective. Got it. Okay.

I hope we would be in the 12.5 to 13 kind of more on that range. But there are a couple of items out there that are a little less in our control, if you will, from an evaluation perspective.

Matthew Breese: And then on expenses, I think you had said $34 to $35 million for the rest of the year. At that point, at year-end, have you kind of done all you can from Northway, and should we expect a little bit of growth from the year-end figure, whether it's $34 or $35? Just trying to get some sense for the inflection point on expenses at year-end. Yeah, I mean, so we're targeting something closer to 34 million for the third quarter, Matt. We anticipate that we'll, you know, have certainly the high majority, vast majority. the cost synergies by that point.

Got it. Okay. And then on expenses, I think you would have said $34 million to $35 million for the rest of the year.

Um,

At that point at year-end, have you kind of done all you can from Northway and two weeks back? A little bit of growth from the year-end figure, whether it's 3,435. Just trying to get some sense for the inflection point.

On expenses that you're in.

Yeah, I mean, so we're targeting something closer to $34 million for the third quarter. Mad. Um, yeah, we anticipate that we'll, you know, have the maturity of the high majority—vast majority of.

Matthew Breese: There could be some items that continue to fall out there, but certainly the, you know, the material significant items who would have gained most of that benefit as we, you know, close down the third quarter, possibly into the early fourth. But, you know, all things considered, I do think we'll see the most of that in the third quarter. There's a little bit of lumpiness just in the second quarter that is in our numbers in terms of some of the expenses. We just have annual equity grants for board members, directors that flush through and so it's a little bit higher than maybe you would have otherwise expected.

The cost synergies. By that point, there could be some items that continue to fall out there. But certainly the, you know, the material significant items who would have gained most of that benefit is we, you know, quote down the third quarter, possibly into the early fourth. But the all things all things considered. Um, I do think well, we'll see the most of that in the third quarter. There's a little bit of lumpiness, just in the second quarter, that is in our numbers in terms of some of the expenses. Um, we just have annual

Matthew Breese: But again, that's just more of a seasonality factor. and something that we've always had. Understood.

Equity grants for board members and directors that, you know, flush through. And so, it's a little bit higher than maybe you would have otherwise expected. But that, again, that's just more of a seasonality factor, and something that we've always had.

Stephen Moss: Okay. Yeah, Simon, just just on the credit piece, the stock is down 11% today, it feels like it's mostly tied to the increase in non accruals and a bit of a mismatch, you know, between, you know, your commentary today.

Simon Griffiths: So just curious, if the stock kind of stays here, would you be interested in the buyback, you know, as soon as the window opens up?

Simon Griffiths: That's all I had. Yeah, I mean, certainly I, you know, I think in the in the context of the credit and the comments, you know, I think, you know, we're very well positioned. But the second half of the year, you know, I think we see a lot of positives. We're starting to really see the traction, which we hope for with the New Hampshire franchise. We're certainly picking up a lot of the momentum in the commercial volume in New Hampshire, which I think is is is really is really positive. You know, we have a buyback open as an option for us, if that makes sense.

Match, you know, between, you know your commentary today. So, just curious, if, if, if, if the stock kind of stays here, would you be interested in the buyback? You know, as soon as the window opens up, that's all I have. Thank you.

Yeah. I mean, certainly I, you know, I think in the in the context of the credit and the comments, you know, I think uh, you know, we're very well positioned for the second half of the year. Um, you know, I think we see a lot of positives with funds to really see the traction, uh, which we hope for with the New Hampshire franchise. We're certain picking up a lot of the momentum in the commercial volume in New Hampshire. Uh, which I think is uh, is is really is really positive. Um, you know, we have

Simon Griffiths: So certainly that optionality is there. You know, we certainly feel very good about the core kind of net interest margins we've talked about. And I think that the continued focus on the team with a trajectory to focusing on getting to three percent, I think, is certainly some of the team are very committed to. So I think that's a real positive for us. We've got cost discipline, I think, in place and really landing the commitments we made around the integration. So you put all those pieces together. I think the back half of the year is looks very positive.

Simon Griffiths: And, you know, we're excited as a management team to continue to execute on the integration and opening up the markets in New Hampshire and obviously the organic growth we have in the main market.

A buyback open, uh, and there's an option for us if, if that makes sense. So, certainly that optionality is there? Um, you know, we certainly feel very good about the core kind of net interest margins. We've talked about and I think that the continued focus on the team uh with a trajectory to to to focusing on getting to 3%. I think is certainly some of the team are very committed to. So I think that's a real positive for us. We've got the cost discipline, I think in place and really Landing. Uh, the commitments we made around the integration. So you put all those pieces together, I think the back half of the year is looks very positive. You know and uh you know uh we're we're we're excited as a management team to continue to execute uh on the the integration and opening up the markets in New Hampshire and and obviously the organic growth. We have in the main markets.

Unknown Executive: I'll leave it there.

Unknown Executive: I appreciate you taking all my questions.

Unknown Executive: Thank you.

I'll leave it there. I appreciate you taking all my questions. Thank you.

Matt Rank: As another reminder, if you'd like to ask a question, please press star 1 on your telephone keypad now. We now turn to Damon DelMonte with KBW. Your line is open, please go ahead.

That's another reminder. If you'd like to ask a question, please press *1 on your telephone keypad now.

We now turn to Damon Del Monte with KBW. Your line is open; please go ahead.

Matt Rank: Hey everybody, this is Matt Rank filling in for Damon DelMonte. Hope everybody's doing okay today.

Hey everybody, this is Matt Rank filling in for Damon Delonte. Hope everybody's doing okay today. Um, just as...

Simon Griffiths: I don't know what that noise was, but just as a follow-up on the fee-income side of things, I'm just kind of hoping to see how early wealth management conversations are going in New Hampshire and what you think that business and franchise could maybe grow to over the next year. Yeah, I think it's, you know, we've added, particularly in the main footprint, we've added a couple of wealth folk. So we see that potential with some investing into a core market where we've got Strong relationships and certainly continuing to build that out and seeing some very nice growth both within our brokerage business but also with our wealth franchise.

I don't know what that noise was. But, um, yeah. Just as a follow-up on the fee income side of things, um, just kind of hoping to see how early wealth management conversations are going in New Hampshire. And, um, what you think that business and franchise could maybe grow to over the next year.

Yeah, I think it's, you know, we've added, particularly in the main footprint, um, we've added a couple of wealth folk. Um, so we see, you know, that potential with some investing into our core market, where we've got.

Simon Griffiths: We've certainly started to take a step into the New Hampshire market. We're certainly right now focused more on the lending side, the commercial, as I said earlier in my earlier comments, very positive results. Home equity, of course, as I talked about, we're seeing a lot of traction there, which is exciting. That wasn't a product that the Northway team had, so that's certainly been a real asset to our customers. With those loans, we're bringing in deposits as well and seeing a lot of traction on that side. I think that helps the funding side, which is real positive.

Strong relationships and certainly continue to build that out and and seen some very nice growth both within our brokerage business with also with our wealth franchise. Um, you know, we've certainly got started to take a, you know, step into the New Hampshire Market. We're certainly right now focused more on the lending side, the commercial, you know, as I said earlier, my earlier, comments, very positive results, home equity of course, is, you know, as I, as I talked about, we're seeing a lot of traction there, which is exciting. And that wasn't a product that the Northway team had. So that's, I think bringing a real asset to, to our customers and, with those

Simon Griffiths: I think the wealth picture for us is really probably more to build into next year but certainly going to continue to invest and have the potential, I think, some very attractive markets there to continue to build out the wealth team. That's not a this year thing. I think that's a next year thing. Okay, got it.

Loans, we're bringing, we're bringing in deposits as well and seeing a lot of traction on that side. So you know, I think that helps the funding side which is, which is real positive. So I think the sort of the wealth picture for us is really, probably more, you know, we build into next year, but certainly going to continue to invest and, you know, have the potential. I think some very attractive markets there to continue to build out the wealth team. Uh, that's not a a this year thing. I think that's that's the next year thing.

Simon Griffiths: And then just one follow up, you, you mentioned a new wealth platform, new mobile app, I was just curious if you're investing in any other technologies that you think could drive, you know, efficiencies or maybe revenue generation opportunities. Thanks. Yeah, we, you know, thanks for the question. And certainly that has gone well. And the team, I think the wealth team feel very good about both the operational efficiencies, but also the improved customer experience from the mobile app. So that's just sort of very real positive. As you know, from previous calls, we've talked about the Terafina platform, the new online account opening platform has been very positive, we're seeing a lot of traction there.

Okay, got it. And then just, uh, one follow-up. You, uh, mentioned a new wealth platform and a new mobile app. I was just curious if you're investing in any other technologies that you think could drive, you know, efficiencies or maybe revenue generation opportunities. Um,

thanks.

Simon Griffiths: Just under 10% now of our accounts are coming in through that platform, which is which is really positive. And, and I think a great customer experience, we'll continue to leverage that platform and build that platform out. We've also had some great innovations recently, we've rolled out some fabulous new innovations around Roundup, Roundup to Save, Roundup to Donate, we're seeing a lot of energy and traction, as I referenced in my comments. And I think that's real possible, as well as a learning platform, and starting to see a lot of engagement from our young customers around that.

Simon Griffiths: So I think it's a very digital forward strategy.

Yeah, we've you know, thanks for the question and uh, certainly that has gone well and and the team, I think the wealth teams feel very good about both the the operational efficiencies, but also the improved customer experience from the mobile app. So that's just sort of very real positive. Uh, as you, you know, from previous calls. We've talked about the terrafina platform. The new online account opening platform has been very positive, we're seeing a lot of traction there, uh, just under 10%. Now of our counts are coming in through that platform which is which is really positive. And uh and I think a great customer experience will continue to leverage that platform and build that platform out. We've also had some great Innovations recently. We've rolled out some fabulous new Innovations around around up Round Up to say Round Up to donate. We're seeing a lot of energy and traction as I referenced in my comments and uh I think that's real possible as well as a a learning platform and stand.

Matt Rank: We've got other pieces in the pipeline, which we're not ready to talk about. But I think, you know, when you start to put all these pieces together, I think it's driving engagement, driving account acquisition, which of course, is going to be crucial to funding and, and just the overall health and growth of the bank. So I feel very good about the digital strategy and the momentum that we have. Great, thank you. I'll step back.

A lot of engagement from my younger customers around that. So, I think it's a very digital-forward strategy. We've got other pieces in the pipeline, which we're not ready to talk about. But I think, you know, when you start to put all these pieces together, I think it's driving engagement and driving account acquisition, which, of course, is going to be crucial to funding and just the overall health and growth of the banks. So, I feel very good about the digital strategy and the momentum that we have.

Great. Thank you. I'll step back.

Simon Griffiths: We have no further questions, so I'll now hand back to Simon Griffiths for any final remarks. Thank you for your time today and your continued interest in Camden National Corporation. We appreciate your support and wish you a productive and restful summer. Thanks everyone.

Thank you for your time today and your continued interest in Camden National Corporation. We appreciate your support and wish you a productive and restful summer. Thanks, everyone.

Unknown Executive: Ladies and gentlemen, today's call is now concluded. We'd like to thank you for your participation. You may now disconnect your lines. Transcript by Rev.com Page of

Ladies and gentlemen, the space call is now concluded. We'd like to thank you for your participation. You may now disconnect your lines.