Q3 2025 Camden National Corp Earnings Call
Yeah.
All participants will be in listen only mode today's presentation.
During the presentation, we will conduct a question and answer session.
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I'll now turn the call over to Renee Smith.
<unk>, Vice President Chief experience and marketing officer.
Thank you and good afternoon, and welcome to Camden National Corporation's Conference call for the third 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 included in our third quarter 2025 earnings release issued this morning and in other reports we file with the SEC.
All of these materials in public filings are available on our Investor Relations website at Camden National Bank.
Camden National Corporation trades on NASDAQ under the symbol C E C L.
In addition, today's presentation includes a 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 I am pleased to introduce our host President and Chief Executive Officer.
Simon Griffith.
Good afternoon, everyone and thank you and I.
Today represents a pivotal moment in Camden, National's continued growth and success earlier today, we announced record third quarter earnings of $21 2 million.
Setting a new high watermark for the organization.
This achievement represents a 51% increase in earnings over the previous quarter.
Really important pretax pre provision income for the third quarter rose, 19% over the prior quarter signaling the momentum across our franchise.
This significant achievement underscores the strength of our successful execution of the Norway financial integration strategy. Following our acquisition of oil play that we closed early this year on January 2nd on the value of our expanded capabilities made possible by the dedication of our team and the continued trust of our customers.
Holders.
Our strong quarterly earnings continue to support the rebuilding of capital levels. Following the northwest acquisition, while enhancing long term shareholder value. This progress is reflected in our tangible common equity ratio, which grew 32 basis points in the third quarter to 7.09% on a 6% increase.
Tangible book value in the quarter, reaching $28 42 per share as of September 30th.
Speaker #1: For the third quarter, rose 19% over the prior quarter, signaling the momentum across our franchise. This significant achievement underscores the strength of our successful execution in the North Way.
We are well positioned for continued tangible book value accretion through core earnings.
Disciplined capital deployment strategy focused on dividends.
Speaker #1: Financial integration strategy. Following our acquisition of Northway that we closed earlier this year on January 2, and the value of our expanded capabilities made possible by the dedication of our team and the continued trust of our customers and shareholders.
Several key performance indicators continued to trend positively this quarter.
Our net interest margin expanded by 10 basis points to 316% on non-GAAP efficiency ratio improved to 52, 5% and we reported a return on average tangible equity of 19, 1% for the third quarter.
Speaker #1: Our strong quarterly earnings continued to support the rebuilding of capital levels following the Northway acquisition , while enhancing long term shareholder value . This progress is reflected in our tangible common equity ratio , which grew 32 basis points in the third 6:45 .09 percent and a 6% increase in tangible book value in the quarter , reaching $28.42 per share .
These results reaffirm our commitment to delivering top tier financial performance drew.
Driven by sustainable growth and operational excellence.
We delivered robust annualized loan growth of 4% this quarter.
Reflecting our continued commitment to profitable organic expansion and strategic investments in talent acquisition.
Speaker #1: As of September 30, we are well positioned for continued tangible book value accretion through core earnings and a disciplined capital deployment strategy focused on dividends.
I will scale combined with deep local expertise and the communities. We serve remains a key competitive advantage, enabling us to build lasting relationships and unlock new business opportunities.
Speaker #1: Several key performance indicators continue to trend positively this quarter. Our net interest margin expanded by ten basis points to 3.16%. Our non-GAAP efficiency ratio improved to 52.5%.
Our committed loan pipeline was robust as of September 30th totaling $116 million and our customers continue to demonstrate resilience.
Despite broader economic uncertainties.
Speaker #1: And we reported a return on average , tangible equity of 19.1% for the third quarter . These results reaffirm our commitment to delivering top tier financial performance , driven by sustainable growth and operational excellence .
In the third quarter average core deposits grew 2%.
Reflecting the benefit of seasonal deposit inflows and continued customer confidence and franchise strength.
During the third quarter saving deposit balances grew 5% continuing the momentum from recent quarters.
Speaker #1: We delivered robust annualized loan growth of 4% this quarter, reflecting our continued commitment to profitable organic expansion and strategic investments in talent acquisition.
This product continues to be a strong vehicle for development of new and growth of existing customer relationships.
Speaker #1: Our scale, combined with deep local expertise in the communities we serve, remains a key competitive advantage, enabling us to build lasting relationships and unlock new business opportunities.
Credit trends remained strong underscoring the quality of our underwriting a vigilant vigilant risk management approach.
We continue to address issues swiftly and prudently as reflected in key credit metrics, including a 14 basis point decrease in nonperforming assets in the third quarter to just 12 basis points of total assets at September 30th.
Speaker #1: Our committed loan pipeline was robust as of September 30th, totaling $116 million, and our customers continue to demonstrate resilience despite broader economic uncertainties.
Last quarter, we proactively disclose the reserve of $6 million for syndicated loan participation involving a telecommunications services company that entered bankruptcy.
Speaker #1: In the third quarter, average core deposits grew 2%, reflecting the benefit of seasonal deposit inflows and continued customer confidence. Additionally, franchise strength during the third quarter resulted in saving deposit balances growing 5%, continuing the momentum from recent quarters.
In the third quarter of 2025, we charged off $10 7 million of the $12 2 million carrying value of this loan.
We remain confident in the overall health of our well diversified low.
Loan portfolio.
We sustained strong momentum in our noninterest income this quarter.
Speaker #1: This product continues to be a strong vehicle for the development of new and growth of existing customer relationships. Credit trends remain strong, underscoring the quality of our underwriting and vigilant risk management approach.
With assets under management and administration, reaching a record high of $2 4 billion Baidu.
Baidu Sheree and brokerage fee income for the nine months ending September 32025 grew organically by 16% year over year.
Speaker #1: We continue to address issues swiftly and prudently, as reflected in key credit metrics, including a 14 basis point decrease in non-performing assets in the third quarter to just 12 basis points of total assets at September 30.
Reflecting strong client engagement and demand for our trusted advisory services.
Some are mortgage activity was robust contributed to another solid quarter of mortgage banking income.
Speaker #1: Last quarter, we proactively disclosed and reserved $6 million for a syndicated loan participation involving a telecommunications services company that entered bankruptcy in the third quarter of 2025.
We continue to identify meaningful opportunities to deepen relationships within our existing customer base.
Particularly as we focus on advice driven engagement and expand Treasury management services into the New Hampshire market.
Speaker #1: We charged off $10.7 million of the $12.2 million carrying value of this loan. We remain confident in the overall health of our loan portfolio.
Our.
<unk> agenda strategic investments are focused on attracting and retaining a digitally engaged customer base.
Speaker #1: We sustained strong momentum in our non-interest income this quarter with assets under management and administration reaching a record high of 2.4 billion badusha and brokerage fee income for the nine months ending September 30th , 2025 grew organically by 16% year over year , reflecting strong client engagement and demand for our trusted advisory services .
Since launching our enhanced digital account opening platform in January of this year, we have seen a 131% increase in consumer accounts originated digitally.
We continue to introduce tools like Roundup savings in digital financial literacy resources digital engagement among customers under 45 has grown 11% year over year measured by monthly logins.
Speaker #1: Some are mortgage activity was robust , contributing to another solid quarter of mortgage banking income . We continue to identify meaningful opportunities to deepen relationships within our existing customer base , particularly as we focus on advice driven engagement and expand treasury management services into the New Hampshire market .
We are also advancing automation across the enterprise to drive operational excellence excellence and elevate service delivery.
Over 143 box in production, we have processed more than 5 million items saving over 74000 cumulative hours since implementation freeing up capacity to focus on high value customer interactions.
Speaker #1: Our innovation agenda and strategic investments are focused on attracting and retaining a digitally engaged customer base. Since launching our enhanced digital account opening platform in January of this year, we have seen a 131% increase in consumer accounts originated digitally.
Our deep community roots continued to drive customer loyalty and long term growth.
Mark 150, <unk> anniversary, we hosted a half day community Wellbeing day in September closing office says to support volunteerism across the region.
600 employees contributed over $1900 across 65 nonprofit organizations. In addition to that annual paid volunteer time.
Speaker #1: We continue to introduce tools like round-up savings and digital financial literacy resources. Digital engagement among customers under 45 has grown 11% year over year, measured by monthly logins.
Our record breaking third quarter performance energy Energizes us as we look ahead.
Speaker #1: We are also advancing automation across the enterprise to drive operational excellence and elevate service delivery . With over 143 bots in production , we have processed more than 5 million items , saving over 74,000 cumulative hours since implementation , freeing up capacity to focus on high value customer interactions .
These outstanding results reflect the dedication of nearly 700 teammates and their unwavering commitment to serving our customers and executing our strategy.
The momentum we have built positions us well to carry this success through the remainder of 2025 and beyond.
With a strong foundation in our focused approach we remain confident in our ability to deliver exceptional outcomes and create meaningful long term value for our shareholders.
Speaker #1: Our deep community roots continue to drive customer loyalty and long term growth . To mark our 150th anniversary , we hosted a half day Community Wellbeing Day in September , closing offices to support volunteerism across the region .
With that I'd like to hand over to Mike to provide some financial highlights regarding the quarter.
Thank you Simon and good afternoon, everyone. We're very pleased with our third quarter 2025 financial results. They signify the earnings power and future potential Okay International.
Speaker #1: More than 600 employees contributed over 1900 hours across 65 nonprofit organizations . In addition to their annual paid volunteer time . Our record breaking third quarter performance energy energizes us as we look ahead .
Having completed the acquisition of North way, finding agile and successfully executed the integration and cost takeout plans.
For the third quarter, we reported net income of $21 2 million diluted earnings per share of $1 25.
Speaker #1: These outstanding results reflect the dedication of nearly 700 teammates and their unwavering commitment to serving our customers and executing our strategy. The momentum we have built positions us well to carry this success through the remainder of 2025 and beyond.
Both representing increases of 51% over the second quarter of 2025.
On a non-GAAP basis pre tax pre.
Pre provision income reached $29 5 million for the third quarter, an increase of 19% over the prior quarter.
Speaker #1: With a strong foundation and a focused approach, we remain confident in our ability to deliver exceptional outcomes and create meaningful, long-term value for our shareholders.
Strong revenue growth for the third quarter of 5% on a linked quarter basis, coupled with continued expense discipline and achievement of synergies from the north of the acquisition resulted in an improvement across several key financial metrics, including a return on average assets of one point to 1% and a non-GAAP return on average tangible equity.
Speaker #1: And with that, I'd like to hand over to Mike to provide some financial highlights regarding the quarter.
Speaker #2: Thank you, Simon, and good afternoon, everyone. We are very pleased with our third quarter 2025 financial results, as they signify the earnings power and future potential of Camden National.
<unk> just over 19% for the quarter.
Speaker #2: Having completed the acquisition of Northway Financial and successfully executed the integration and cost takeout plans for the third quarter, we reported net income of $21.2 million and diluted earnings per share of $1.25.
Average loan growth of 1% and net interest margin expansion of 10 basis points during the third quarter.
Excuse me expansion of 10 basis points.
Three 6% in the third quarter fueled our net interest income growth of 4% between quarters.
Speaker #2: Both representing increases of 51% over the second quarter of 2025. On a non-GAAP basis, pre-tax pre-provision income reached $29.5 million for the third quarter, an increase of 19% over the prior quarter.
Our asset yield increased four basis points during the third quarter to $4 nine 8% driven by steady repricing and origination of new assets in the current interest rate environment.
At the same time, our funding cost improved by six basis points during the quarter to one 9% driven by seasonal deposit market flows as average deposits increased 2% during the third quarter.
Speaker #2: Strong revenue growth for the third quarter of 5% on a linked quarter basis , coupled with continued expense , discipline and achievement of synergies from the Northway acquisition , resulted in improvement across several key financial metrics , including a return on average assets of 1.21% and a non-GAAP return on average , tangible equity just over 19% for the quarter .
Relieving pressure on more costly borrowings.
With a liability sensitive interest rate risk position, we are well positioned for future fed rate cuts.
We continue to see favorable favorable momentum in noninterest income revenue, reaching $14 1 million in the third quarter, an increase of 8% over the second quarter include.
Speaker #2: Average loan growth of 1% and net interest margin expansion of ten basis points during the third quarter. Excuse me, expansion of ten basis points due to 3.16% in the third quarter fueled our net interest income growth of 4% between quarters.
Included within noninterest income this quarter was a net gain of $275000 from the sale of two non branch properties adjusting.
Adjusting for this nonrecurring net gain noninterest income grew 3% on a linked quarter basis and totaled $13.
Speaker #2: Our asset yield increased four basis points during the third quarter to 3.45%, driven by steady repricing, the origination of new assets, and the current interest rate environment.
Reported noninterest expense for the third quarter was $35 9 million, our third quarter operating expenses reflect our expected cost savings and synergies from the North way acquisition. As we look forward. We are estimating fourth quarter noninterest expense of 36 to $36 5 million.
Speaker #2: At the same time , our funding costs improved by six basis points during the 12:45 point 9% , driven by seasonal deposit market flows as average deposits increased 2% during the third quarter , relieving pressure on more costly borrowings with a liability sensitive interest rate .
For the third quarter of 2025, we reported a provision for credit losses of $3 million down from $6 9 million in the previous quarter.
Speaker #2: Risk position . We are well positioned for future fed rate cuts . We continue to see favorable , favorable momentum in non-interest income revenue reaching 14.1 million in the third quarter , an increase of 8% over the second quarter .
As Simon noted in his comments, we recorded a charge off of $10 7 million in the third quarter for the syndication, though when we previously disclosed last quarter.
Speaker #2: Included within non-interest income this quarter was a net gain of $675,000 from the sale of two non-branch properties. Adjusted for this non-recurring net gain, non-interest income grew 3% on a linked quarter basis and totaled $13.5 million.
At June 30, we carried a specific reserve of $6 million on this loan and upon charge off we were recognizing additional provision expense of $4 $7 million this quarter.
This additional provision expense was partially offset by changes in our macroeconomic outlook and a decrease in our committed unfunded loan pipeline during the quarter.
Speaker #2: Reported net non-interest expense for the third quarter was $35.9 million. Our third quarter operating expenses reflect our expected cost savings and synergies from the Northway acquisition.
As of September 30th the allowance totaled $45 5 million and covered five five times total nonperforming loans.
Speaker #2: As we look forward, we are estimating fourth quarter non-interest expense of $36 million to $36.5 million for the third quarter of 2025. We reported a provision for credit losses of $3 million, down from $6.9 million in the previous quarter.
As shown in our earnings release, our credit quality metrics at quarter end remained solid.
This concludes our comments and we'll now open the call up for questions.
Thank you we will now.
Ill begin the question and answer session to ask a question Press Star then one on your touch time to find coupons, if youre using a speakerphone. Please pick up your handset before pressing the changed.
Speaker #2: The Simon noted in his comments we recorded a charge off of 10.7 million during the third quarter for the syndication loan . We previously disclosed last quarter at June 30th , we carried a specific reserve of 6 million on this loan , and upon charge off , we were recognized an additional provision expense of 4.7 million this quarter .
To withdraw your question Press Star then two.
And at this time, we will pause momentarily to.
Campbell our roster.
Okay.
Speaker #2: This additional provision expense was partially offset by changes in our macroeconomic outlook and a decrease in our committed unfunded loan pipeline during the quarter.
The first question comes from Steve Moss with Raymond James Your line is open. Please go ahead.
Good afternoon.
Oh.
Maybe just start on loan growth here.
Speaker #2: As as of September 30th , the allowance told the 45.5 million and covered five and a half times total nonperforming loans , as shown in our earnings release .
Afternoon Simon.
Good quarter for commercial real estate growth and I hear you Simon in terms of the pipeline being robust.
Speaker #2: Our credit quality metrics at quarter end remained solid. This concludes our comments, and we'll now open the call up for questions.
Kind of curious where is loan pricing and kind of.
Are you seen a pickup in activity and maybe more opportunities in your markets. These days.
Speaker #3: Thank you . We will now begin the question and answer session . To ask a question , press star . Then one on your touch tone phone keypad .
Yes. Thanks for the question, Steve I'd say overall, we have seen some nice momentum in a number of our businesses commercial.
Speaker #3: If you're using a speakerphone, please pick up your handset before pressing the keys to withdraw your question. Press star, then 2, and at this time, we'll pause momentarily to assemble our roster.
Suddenly small business and home equity.
Which is up about 54% year over year, certainly part of that story is coming out of the new Hampshire market and that's something we've been talking about now it's a tremendous market. We've got some great to stakeholders and we've made some recent hires in the market on the pricing front, you know suddenly being some softening in the last 60 90 days, but still holding up.
Speaker #3: First question comes from Steve Moss with Raymond James. Your line is open. Please go ahead.
Speaker #4: Good afternoon. Maybe we'll just start on loan growth here. Afternoon, Simon. You know, it was a good quarter for commercial real estate growth.
Fairly strong so I think this is a nice opportunity, we probably see a little bit of a softening of our loan volumes in the back.
Quarter compared to sort of what we saw in the third quarter, but still lots of good momentum.
Speaker #4: And I hear you , Simon , in terms of the pipeline being robust , just kind of curious , where is loan pricing and kind of , you know , are you seeing a pickup in activity maybe more opportunities in your markets these days ?
We're really pleased with some of those businesses and how theyre performing.
Okay, Great and then in terms of the margin here.
Good step up as expected.
Speaker #1: Yeah . Thanks for the question , Steve . I'd say overall , you know , we have seen some nice momentum and a number of our businesses , commercial , certainly small business and home equity , which is up about 54% year over year .
That is obviously cut in September here, probably getting another rate cut tomorrow, just kind of curious as to how you guys are thinking about the margin going forward in.
Some of the dynamics, Jeff our assets repricing higher here.
Speaker #1: Certainly, part of that story is coming out of the New Hampshire market, and that's something we've been talking about now. It's a tremendous market.
Sure Steve.
So we are well positioned certainly for the fed rate cuts in our base model, we do have that cut in tomorrow and when and for December.
Speaker #1: We've got some great stakeholders and we've made some recent hires in the market on the pricing front , certainly been some softening in the last 60 , 90 days , but still holding up , you know , fairly strong .
Certainly from there of course young <unk>.
Depends on the yield curve and kind of where we go but I think in our base model where have margin expansion of 510 basis points next quarter, a lot of that coming from the cost of fund side of the house.
Speaker #1: So I think this is a nice opportunity. You know, we probably see a little bit of softening of loan volumes in the back.
Speaker #1: You know, the fourth quarter compared to sort of what we saw in the third quarter, but still lots of good momentum. And, you know, I'm really pleased with some of those businesses and how they're performing.
We do think.
Probably some of the on the asset side the expansion probably will start to slow down almost I'll call it more flattish as.
Speaker #4: Okay , great . And then in terms of the margin here , you know . Good step up as expected . You know , fed is obviously cut in September here .
We continue to put new loans on at higher rates, but that's being offset a little bit by just the repricing down on some of the variable rate.
Speaker #4: Probably getting another rate cut tomorrow. Just kind of curious as to how you guys are thinking about the margin going forward and some of the dynamics you have for assets repricing higher here?
Our loans.
It's really I think for lease Renard based model for now we're thinking that a lot of that benefit from the cost of funds.
Got you okay.
Speaker #2: Sure . Yeah . So you know , we are well positioned certainly for the fed rate cuts . And you know , in our base model we do have that cut in tomorrow .
Great that color so.
As we think about each rate cut I realize the one in December is kind of late and obviously.
With the September one was late for this quarter.
Speaker #2: And one in for December. Certainly, from there, of course, you know depends on the yield curve kind of where we go. But I think in our base model, we have margin expansion up 5 to 10 basis points next quarter, a lot of that coming from, you know, the cost of funds side of the house.
Is it roughly kind of like I guess five to seven basis points per rate cut and how to think about it.
Yes, I think we identified we are modeling somewhere around three to four annualized but yes. Okay.
Mark.
Speaker #2: You know , we do think probably some of the on the asset side , the the expansion probably will start to slow down almost I'll call it a little more flattish as we we continue to put new loans on at higher rates .
Got it Okay and then in terms of just.
The activity Simon you mentioned hiring in new Hampshire, just kind of curious.
How many people you've hired.
Speaker #2: But that's being offset a little bit by just the repricing down of some of the variable rate loans . So really I think for at least for our base model , for now , we're thinking that all that benefits from the cost of funds .
How youre thinking about investment I realize you know we're heading into the fourth quarter planning season for next year, but just color around that and kind of how youre thinking about it.
Senses for next year.
Okay.
Yes, Thanks, and I think that's been a key message from us and our focus as a management team really just disciplined expense management and obviously the very pleased with the efficiency ratio coming in at just under 55% and I think it reflects how we think about expenses and reinvesting in self funding a lot of those investments.
Speaker #4: Got you. Okay. I appreciate that color. So as we think about each rate cut, I realize the one in December is kind of late.
Speaker #4: And obviously , you know , the September 1st was late for this quarter . Is it roughly kind of like , I guess 5 to 7 basis points per rate cut , kind of how to think about it .
Speaker #2: Yeah , I think we had we were modeling somewhere around 3 to 4 annualized , but yeah , I think that's kind of not part .
<unk> invested in a couple of commercial bankers continue to build out the teams fill in key areas.
Im also looking from from our home equity perspective, and a mortgage perspective to continue to make sure we cover the market and make investments where they make sense and I think that continues on a steady pace next year I think it's something that we just continue want to keep building on.
Speaker #4: Got it . Okay . And then in terms of just , you know , the activity , Simon , you mentioned hiring in New Hampshire .
Speaker #4: Just kind of curious , you know , how many people you've hired . You know , how you're thinking about investment ? I realize , you know , we're heading to the fourth quarter planning season for next year .
To be very strategic in those investments and as I say make sure will continue to be disciplined in our approach.
Speaker #4: But just color around that and kind of how you're thinking about expenses for next year.
Okay great.
I appreciate all the color here.
Speaker #1: Yeah . Thanks . And you know , I think that's been a key message from us and a focus as a management team really just disciplined expense management .
Ill step back thanks.
Nice quarter. Thank you.
Thanks, Steve.
Right now trying to tame until Monday with <unk>. Your line is open. Please go ahead.
Speaker #1: And obviously, we are very pleased with the efficiency ratio coming in at just under 55%. I think this reflects how we think about expenses, reinvesting, and self-funding.
Yeah.
Good afternoon, guys hope, you're I hope you're doing well.
Speaker #1: A lot of those investments. We have invested in a couple of commercial bankers who continue to build out the teams and fill in key areas.
Just wanted to circle back on the expense question I think Mike You said your guide for next quarter is like 36% to $36 5 million just kind of wondering what some of the dynamics are in the step up on a quarter over quarter basis, and as you look across 26 do you think kind of.
Speaker #1: Also, looking from a home equity perspective and a mortgage perspective to continue to make sure we cover the market and make investments where they make sense.
The 3% to 4% annual growth rate is reasonable.
Speaker #1: And I think that continues , you know , in a steady pace next year . I think it's , you know , something that we just continue to want to keep building on .
Okay.
Yeah, Thanks, Dan for the question.
Speaker #1: But be very strategic in those investments. And, as I say, make sure we continue to be disciplined in our approach.
Yes. So good question there we will.
As we think about the fourth quarter.
I think there is some some stuff on the people side of the house just in terms of some incentives and how the year shakes out Damon that were thinking that some of our operating expenses could pick up a notch also as part of just the acquisition North way. They just had a legacy.
Speaker #4: Okay , great . Appreciate all the color here . And I'll I'll step back . Thank you . Next quarter . Thank you .
Speaker #1: Thanks , Steve .
Speaker #3: We now turn to Damian Del Monte with KBW. Your line is open. Please go ahead.
Contract with an individual there that there's some accounting for that to be done at year end. So I wouldn't call that necessarily a recurring expense per se is directly tied to the performance of the boley asset which has done very well this year.
Speaker #5: Good afternoon guys . Hope you're I hope you're doing well . Just wanted to circle back on the on the expense question . I think , Mike , you said your guide for next quarter is like 36 to 36.5 million .
Speaker #5: Just kind of wondering what some of the dynamics are on the step up on a quarter over quarter basis . And as you look across 26 , you think kind of , you know , the 3 to 4% annual growth rate is reasonable .
So there are some some additional expense that we are anticipating could run through in the fourth quarter. So really those two factors are the primary drivers for kind of our outlook currently for the fourth quarter as.
And as we think about going into next year I would just say.
Speaker #2: Yeah . Thanks for the question . Yeah . So good . Good question . There . We as we think about the fourth quarter , you know , I think there's some some stuff on the people side of the House just in terms of some incentives and how the year shakes out .
So certainly in the planning phase, but Simon just mentioned that that efficiency ratio and paying particular attention to that and we're trying to manage to a mid <unk> ish.
And that space is kind of where we want to be so we will continue to do that because we think about our outlook for expenses.
Speaker #2: Damon , that we're thinking that some of our operating expenses could pick up a notch . Also , as part of just the acquisition of Northway , they just had a legacy , you know , contract with an individual .
Got you great appreciate that color.
And then with regards to the margin I appreciate the commentary around the core margin. There as you think about like the fair value accretion that that gets run through each quarter.
Speaker #2: There that there's some accounting for that has to be done at year end . So I wouldn't call that necessarily a recurring expense per se , that's directly tied to the performance of the asset , which is done very well this year .
Do you see that kind of slowing down are tailing off here in the fourth quarter and as we go through 'twenty six or does it kind of stay elevated like we've seen in the last couple of quarters.
Speaker #2: And so there's some some additional expense that we are anticipating could run through in the fourth quarter . So really those two factors are the primary drivers for kind of our outlook for the fourth quarter .
I mean, I think it's pretty for $5 5 million to a pretty good number for us all the way nicely.
Certainly for next quarter, I think if it becomes a bit of a refi boom or if the long end comes down a little bit more we could see that potentially accelerate in 'twenty six we're not certainly not baking that into our base model. If you will but I think that four and a half to $5 million is a pretty solid run rate for us at least for now.
Speaker #2: As we think about going into next year , I would just say we're you know , we're still in the planning phase , but as Simon just mentioned , that that efficiency ratio and paying particular attention to that , you know , trying to manage to mid 50s ish , you know , some something in that space is kind of where we want to be .
Speaker #2: So we'll continue to do that as we think about our outlook for expenses.
<unk>.
Okay great.
Speaker #5: Gotcha. Great. I appreciate that color. And then, with regard to the margin, I appreciate the commentary around the core margin there.
I guess, just lastly, you know what the charge offs, obviously release some reserves there youre down 91 basis points, just kind of wondering how you think about that level.
Speaker #5: As you think about the fair value accretion that gets run through each quarter, do you see that kind of slowing down or tailing off here in the fourth quarter?
When you consider the outlook for growth in.
That kind of being offset by the <unk>.
Healthy credit quality overall, I mean, do you think you kind of keep it in this low 90 range or do you think you need to kind of build it back up a bit.
Speaker #5: And as we go through Q2, does it kind of stay elevated like we've seen in the last couple of quarters?
Speaker #2: I mean , I think it's pretty , you know , four and a half to 5 million is a pretty good number for us all .
Yeah. Thanks, David we feel very comfortable about in that range I think it represents our confidence in the underlying portfolio and.
Speaker #2: In honestly . You know , certainly for next quarter , I think if you know , it becomes a bit of a refi boom or , you know , if the long end comes down a little bit more , we could see that potentially accelerate in 26 .
This is <unk>.
Suddenly.
I felt very good about the overall credit this year in terms of the portfolio that we have in the diversified we have a very strongly diversified portfolio and.
Speaker #2: We're not certainly not baking that into our base model , if you will . But I think that four and a half to 5 million is a pretty solid run rate for us , at least for now .
I don't think that leads us to feeling good about the ACL in the current kind of guided range.
Great. That's all that I had thank you.
Speaker #5: Okay , great . And then I guess lastly , with the charge off , obviously released some reserves there , you're down to 91 basis points .
Thanks, David.
Let me now turn to Matthew Breese with Stephens. Your line is open. Please go ahead.
Speaker #5: Just kind of wondering how you think about that level when you consider the outlook for growth . And you know , that kind of being offset by the , the , the healthy credit quality overall .
Hey, good afternoon.
And then just a related question it feels like you've cleaned up the problems syndicated credits this quarter.
Speaker #5: I mean , do you think you kind of keep do you think you need to kind of build it back up a bit ?
And I guess I'm curious does that provision that we saw more indicative of what you expect going forward and are we back to more or less kind of normal course of business for Camden from a credit perspective overall from here.
Speaker #5: Thanks .
Speaker #1: Yeah . Thanks , Damon . We feel very comfortable about in that range . You know , I think it represents our confidence in the in the underlying portfolio and , you know , this is , you know , we've certainly , you know , felt very good about the the overall credit this year in terms of the portfolio that we have and the diversity .
Yeah, I mean, I might answer that Matt just in terms of I think that low 90 91.
Speaker #1: You know , we have a very strongly diversified portfolio . And and I think that leads us to to feeling good about the ACL in the current kind of guided range .
Yes.
That space, plus or minus a basis point or two I think that's a good good spot for us I think we feel comfortable there so certainly with <unk>.
Speaker #5: Great. That's all that I had. Thank you.
Loan growth of course from where more provision will be had.
Speaker #2: Thanks , Damon .
But I think overall I mean, I think that's a good good proxy of where it would be that 91 basis points. If you were to go back and look at that compared to where we were at year end pre acquisition to few basis points higher I think it reflects a similar macroeconomic outlook for us right now.
Speaker #3: We now go to Matthew Breeze with Stephens. Your line is open. Please go ahead.
Speaker #6: Hey good afternoon . Maybe just a related question . You know , it feels like you cleaned up the problem . Syndicated credit this quarter , and I guess I'm curious , is that provision that we saw more indicative of what you expect going forward ?
I would say based on just kind of our current thinking I think it's pretty pretty fair spot because we know the world can turn pretty fast, but yes.
Speaker #6: And are we back to more or less kind of normal course of business for Camden from a credit perspective ? Overall , from here ?
I think right now that's kind of what we're thinking.
Got it Okay, and then what is the blended <unk>.
The blended loan yields on the pipeline and.
Speaker #2: Yeah , I mean , I might answer that , Matt , just in terms of , you know , I think that low 90s , 91 , you know , kind of that , that space plus or minus the basis point or two , I think that's a good , good spot for us .
And I heard your comments, Mike loud and clear on the NIM.
But it feels like if we get a few more rate cuts, which seems like it's on the table it feels like they're structurally more tailwind.
Speaker #2: I think we feel comfortable there . So certainly with , you know , loan growth , of course , more provision will be had .
To the NIM.
Beyond the next six to nine days it just feels like.
Speaker #2: But I think overall I mean I think that's a good , good proxy of where to be that 91 basis points . If you were to go back and look at that compared to where we were at year end , pre acquisitions of few basis points higher , I think it reflects a similar macroeconomic outlook for us right now .
Some some parts of loan yield repricing, and then room to reprice deposits a bit lower so I would feel net net like a year from now.
A bit higher but wanted to hear your thoughts on that.
Yeah, I think that's I think that's fair, Matt I mean, I think for the five to 10 basis points for next quarter.
Speaker #2: And I would say, based on just kind of our current thinking, I think it's a pretty fair spot. We know the world can turn pretty fast, but I think right now that's kind of what we're thinking.
I mean, I think that the.
A pretty good range for us I mean, certainly I think there's some opportunity there will be we could outperform that as well thus far in the cycle, we've been pretty aggressive on pricing down some of the deposits and funding.
Speaker #6: Got it . Okay . And then what is the blended rate ? The blended loan yields on the pipeline . And and I heard your comments , Mike , loud and clear on the Nim .
I think as we gear up for tomorrow.
Internal discussions around that or just changing and we won't be shouldnt be thoughtful. If you know in terms of the customer base and trying to balance that with growth in deposits as well. So I think as we continue on this path and I wanted to say on the on the way up we're below 40% beta I would say on the on the way down at least right now we're probably.
Speaker #6: But it feels like if we get a few more rate cuts, which seems like it's on the table, it feels like there are structurally more tailwinds to the NIM.
Speaker #6: You know , beyond the next 6 to 9 days . It just feels like , you know , some , some positive colonial repricing .
Speaker #6: And then run the reprice deposits a bit lower . So I would feel net net like a year from now , the Nim is up a bit higher , but wanted to hear your your thoughts on that .
Inching, a little bit higher than that and I think we could settle in 35 to 40, when it's Ralph and Dan just kind of how we're thinking about it yes really just trying to you on that I think I think from here, we probably you know maybe if we don't move as fast, but certainly our full expectation is to is to move and get get that funding funding benefit.
Speaker #2: Yeah , I think that's I think that's fair , Matt . I mean I , I think for , you know , the 5 to 10 basis points for next quarter , I mean , I think that's a a pretty good range for us .
Speaker #2: I mean , certainly I think there's some , some opportunity there where we , we could outperform that as well . You know , thus far .
Got it Okay and then just two other ones for me I was hoping you can help us out with kind of early reads on loan growth for 2026.
Speaker #2: And the cycle , you know we've been pretty aggressive on pricing down some of the deposits and funding . I think as we you know , even gear up for tomorrow , you know , internal discussions around that are , you know , just just changing .
And then within that Simon you pointed this out but consumer and home equity, even though it's a small portfolio has been growing nicely, maybe some thoughts there and to what extent, we might see that type of growth continue.
Speaker #2: We want to certainly be thoughtful with, you know, in terms of the customer base and trying to balance that with growth and deposits as well.
Yeah, Thanks, Matt I mean suddenly loan growth as I talked about earlier I think.
Speaker #2: So I think as we continue on this path , and I want to say on the on the way up , we're low 40s , beta , I would say on the on the way down , at least right now , we're probably inching a little bit higher than that .
Fourth quarter flat to up 2% feels about the right sort of guide and then sort of mid mid single digit Smith.
I think as sort of where we're heading next year, obviously with a lot of that opportunity I talked about earlier, certainly in new Hampshire market.
Speaker #2: And, but I think we could settle in the range of $35 to $40 when it's all said and done. It's kind of how we're thinking about it.
Speaker #2: It's really just trying to tee . I think . I think from here we probably , you know , maybe we don't move as fast , but certainly our full expectation is to is to move and get get that funding , funding benefit .
And suddenly I said.
Residential has been very strong for us as well as home equity commercial small business thats on the areas that have nice momentum.
The home equity business, you know I think it's just a great relationship product for US I think we really like the.
Speaker #6: Got it . Okay . And then just two other ones . For me . I was hoping you could help us out with kind of early reads on loan growth for 2026 .
Opportunity there to really connect and deepen relationships. We've also expanded the number of stakeholders that are able to originate home equity is that's been a big opening up of that door. So I. Certainly think this issue has been exceptional growth up 54%, but it may not be as high as that but certainly I think forward momentum from here and a lot of that growth actually.
Speaker #6: And then within that , Simon , you pointed this out , but consumer and home equity , even though it's a smaller portfolio has been growing nicely , maybe some thoughts there .
Speaker #6: And to what extent might we see that type of growth continue?
Speaker #1: Yeah . Thanks , Matt . I mean certainly loan growth as I talked about earlier , you know , I think fourth quarter flat to up 2% feels about the right sort of guide .
On the home equity side is in the main market. So I think some of that opportunity next year could be in the new Hampshire market and certainly that would continue that forward trajectory.
Speaker #1: And then sort of , you know , mid mid-single digits mid , you know , I think is sort of where we're heading next year obviously with a lot of that opportunity I talked about earlier , certainly in our New Hampshire market .
[laughter].
Great and then just last one is on fee income for next year. It feels like we've hit an inflection point on a couple of areas brokerage and insurance being one but then also service charges have been up nicely to.
Speaker #1: And , you know , certainly I said , you know , residential has been very strong for us as well as home equity , commercial , small business .
To what extent might we see some of these positive trends continue into next year.
Speaker #1: There's certainly areas that have nice momentum. The home equity business, you know, I think it's just a great relationship product for us.
Yes, we're really proud of the fee income growth, particularly in the CFC side of our business.
Speaker #1: I think we really like the opportunity to connect and deepen relationships. We've also expanded the number of stakeholders that are able to originate home equities.
The brokerage side of the business I mean fixed up 15% and suddenly.
Speaker #1: That's been a big opening up of that door . So I certainly think , you know , this this year has been exceptional growth .
Overall, 11% organic growth in assets under management, which is which is great and we talked about hitting $2 4 billion. So that momentum is really positive. We continue to invest in those businesses I think it's just a tremendous opportunity and also in the wealth business we've mentioned.
Speaker #1: I mean , up 54% . But , you know , it may not be as high as that , but certainly I think forward momentum from here and a lot of that growth actually on the home equity side is in the in the main market .
Speaker #1: So I think some of that opportunity next year could be in the New Hampshire market, and certainly that would continue that forward trajectory.
<unk> mentioned I think on the last call. We've added a couple of folks into that business and there's opportunities down the road to potentially expand into the into the new Hampshire market as well on the wealth side.
Speaker #6: Great. And then just last one is on fee income for next year. It feels like we've hit an inflection point on a couple of areas.
So we do have brokerage coverage.
Modest wealth coverage. So I think those are areas that I think makes a lot of sense for us and really connecting and partnering those businesses into the commercial business the mortgage business and really creating that full relationship opportunity. So I think it's a business where again just love to sort of current growth trajectory and you know.
Speaker #6: You know, brokerage and insurance being one. But then also, service charges have been up nicely. To what extent might we see some of these positive trends continue into next year?
Speaker #1: Yeah , we're really proud of the the fee income growth , particularly in the CFC side of our business . The brokerage side of the business .
Just keep investing in it through that lens of self funding and having that I too all fishery, which as you know as you know as a management team very important to us.
Speaker #1: I mean , you know , up 15% . And , you know , certainly , you know , overall , 11% organic growth in assets under management , which is which is great .
Yeah got it okay, great I appreciate it I'll leave it there. Thank you.
Speaker #1: And we talked about , you know , hitting 2.4 billion . So that momentum is is really positive . We continue to invest in those businesses .
Thanks, Matt.
As we have no further questions. This concludes our question and answer session.
Speaker #1: I think it's just a tremendous opportunity. And also in the wealth business we've mentioned, I think on the last call, we've added a couple of folks into that business, and there are opportunities down the road to potentially expand into the New Hampshire market as well.
I would now like to turn the conference back over to Simon Moroney.
For any final final remarks.
Thank you for your time today and continued interest in Camden National Corporation, we truly appreciate your support throughout the year and wish you a productive close to the year on a restful holiday season take care everyone.
Speaker #1: On the wealth side . So we do have brokerage coverage , but not not , you know , modest wealth coverage . So I think those are areas that I think make a lot of sense for us .
Okay.
Speaker #1: And really connecting and partnering those businesses into the commercial business , the mortgage business and really creating that full relationship opportunity . So , you know , I think it's a business .
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker #1: We're going to just love the sort of current growth trajectory . And , you know , just keep investing in it . But but through that lens of self-funding and having that eye to our efficiency , which is , you know , as you know , as a management team , really important to us .
Speaker #6: Yeah . Got it . Okay , great . I appreciate it . Leave it there . Thank you .
Speaker #1: Thanks , Matt .
Speaker #3: As we have no further questions, this concludes our question and answer session. I would now like to turn the conference back over to Simon Griffiths for any final remarks.
Speaker #1: Thank you for your time today and continued interest in Camden Corporation. We truly appreciate your support throughout the year and wish you a productive close to the year and a restful holiday season.
Speaker #1: Take care everyone !