Camden National Corporation Q4 FY2025 earnings call

• Recorded fourth quarter earnings of $22.6 million, a 6% increase from the prior quarter.
• Net interest margin expanded 13 basis points to 3.29%, non-GAAP efficiency ratio below 52%, and return on average assets at 1.3%.
• Successfully assimilated the Northway franchise, with regulatory capital levels above internal targets and a loan loss reserve of 91 basis points of total loans.
• Implemented digital strategy: introduced Family Wallet and saw a 19% year-over-year increase in digital engagement among customers 45 and under.
• Utilized an automation platform with over 143 bots, processing over 5 million tasks, freeing up capacity for higher-value customer interactions.
• Achieved 15% organic growth in assets under administration in wealth and brokerage divisions, reaching $2.4 billion as of 12/31/2025.

Camden National Corporation reported fourth quarter earnings of $22.6 million, a 6% increase from the prior quarter. Key financial indicators included a 13 basis point expansion in net interest margin to 3.29%, a non-GAAP efficiency ratio below 52%, and a return on average assets of 1.3%. Loans grew organically by 2% for the year, with home equity lending showing 6% growth in the quarter and 18% organic growth for the year. Deposits saw growth, with savings balances up 5% in the fourth quarter and 28% organically for the year.

• Anticipated 2026 deposit balances to be relatively flat with the fourth quarter, though recent deposit relationship wins present opportunities.
• Noninterest income estimated to range from $12 million to $13 million in 2026.
• First quarter operating expenses expected to range from $36 million to $37 million.
• Announced a share repurchase program to repurchase up to 850,000 shares, approximately 5% of outstanding shares.

• Potential impact of Fed rate cuts on funding costs and margin expansion.
• A $3 million charge-off from a commercial real estate office loan, though the loan portfolio remains well-diversified and credit metrics are strong.
• Softness in certain commercial real estate segments like office, but overall portfolio in good condition.

Q: About margin and deposit costs A: Mike Archer discussed expected core margin expansion, with funding cost improvement around 7-10 basis points for the first quarter, noting yield compression and the impact of recent Fed rate cuts.

Q: On loan growth and pipeline A: Simon Griffiths mentioned solid residential and commercial pipelines, expecting loan growth to be flat to up 2% in the quarter, with mid-single digits expected for the rest of the year.

Q: On capital buyback A: Mike Archer stated the focus is on returning capital and building capital first, with repurchasing being opportunistic.

Q: On fair value accretion and loan growth A: Mike Archer mentioned a $5.3 million accretion for the quarter, and Simon Griffiths talked about talent hiring for growth.

Q: On provision and credit cycle A: Mike Archer said the $3 million provision was due to one-off credits, with the reserve at 91 basis points and net charge-offs normalizing.

Q: On deposit growth and operating expenses A: Simon Griffiths expected low to mid-single-digit deposit growth, and Mike Archer mentioned an efficiency ratio mid-fifties as the outlook.

Q: On tax rate and commercial real estate charge-off A: Mike Archer said the tax rate may increase, and Simon Griffiths detailed the commercial real estate charge-off situation.

Q: On deposit repricing and M&A A: Mike Archer discussed CD repricing, and Simon Griffiths talked about M&A focus on contiguous markets similar to Northway.