CAMDEN NATIONAL CORP Q4 FY2024 earnings call

• Merger with Northway Financial closed on January 2, 2025, with combined assets ~$7 billion and 73 branches in Maine and New Hampshire, on track to meet merger-related financial targets.
• Fourth quarter 2024 GAAP net income $14.7M, up 12% QoQ; non-GAAP net income $15.1M, up 9% QoQ.
• Net interest margin expanded 11 basis points to 2.57% (excluding 3 basis points non-recurring items); deposit costs decreased 18 basis points QoQ.
• Deposit base grew 1% in Q4; high yield savings product reached $201M in deposits.
• Assets under administration at $2.1B, up 12% YoY.
• Completed transformation of online consumer business account opening process, with bots processing 1.7 million transactions in December.
• Northway Financial's 2024 results in line with projections: assets $1.2B, loans $872M, deposits $972M.

No detailed breakdown of product segments by revenue contribution provided. Overall, Camden National had strong fourth quarter 2024 financials with GAAP net income of $14.7 million, up 12% from the third quarter, and non-GAAP net income of $15.1 million, up 9% from the third quarter. Net interest margin expanded 11 basis points to 2.57%. Deposit base grew 1% in the fourth quarter, with high yield savings product reaching $201 million in deposits. Assets under administration were $2.1 billion, up 12% from December 2023.

• Core net interest margin expected around 2.60% with plus or minus 5 basis points.
• Anticipate modest outflow of deposits in Q1 but see underlying strength from Fed cuts in Q4 2024.
• Northway integration ongoing, evaluating balance sheet opportunities.
• Bullish on 2025 with focus on New Hampshire market, digital capabilities, and wealth management momentum.

• Potential impact of market changes on interest rates and deposit costs.
• Uncertainties in purchase accounting and finalizing due diligence on Northway's credit portfolio.
• Seasonal deposit runoff and potential outflows in Q1.

Q: Lending activity and integration of Northway.

A: Simon Griffiths stated they continue to see low-single-digit growth, are selective across markets, have strong commercial momentum in New Hampshire, and the New Hampshire team had 18% growth in 2024 with expansion to 8 commercial lenders in 2025.

Q: Investments in franchise.

A: Simon Griffiths mentioned focus on wealth management, digital capabilities, new account opening to enhance customer experience, and balancing investments with driving efficiencies.

Q: Margin expansion and Northway margin impact.

A: Simon Griffiths noted core margin expected around 2.60%, with plus or minus 5 basis points, and Mike Archer mentioned Northway integration expected to lift margins, with core margin potentially reaching around 2.85-2.90% or higher over time.

Q: CECL day 2 provision and M&A outlook.

A: Michael Archer said they're still working through purchase accounting, no material surprises expected from Northway's credit portfolio; Simon Griffiths stated M&A focus on contiguous markets with right fit deals, currently heads down on Northway integration but open to future deals in right geographies