Camden National Corporation

presentation. Following the presentation, we'll conduct a question and answer session. If you require operator assistance at any time during the call, please press star then zero. I'll now turn the call over to Renee Smith, Executive Vice President, Chief Experience and Marketing Officer.

Thank you, Lydia. Good afternoon and welcome to Camden National Corporation's conference call for the second quarter of 2024. 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, 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 2024 earnings release issued this morning and in other reports we file with the SEC. All of these materials and public filings are available on our investor relations website at camdennational.bank. Camden National Corporation trades on the NASDAQ under the symbol CAC. In addition, today's presentation includes discussions 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 Camden National Corporation's host, President and Chief Executive Officer, Simon Griffiths.

Thank you, Renee, and good afternoon, everyone. We appreciate you joining our call today. I will provide a few comments on our most recent quarter, and then I'll turn it over to Mike to dive into our second quarter financial performance, and then we'll open up for Q&A. I'm pleased to report, as we mark the halfway point through 2024, we continue to execute well in the uncertain environment. Despite microeconomic headwinds, we remain committed to executing our long-term strategy of optimizing our balance sheet and deepening customer relationship through advice-based conversations and exceptional customer experience. Our team is building momentum and leveraging process automation and innovative solutions to deliver stellar advice to our loyal customer base. Earlier this morning, we reported net income of 12 million or 81 cents earnings per diluted share for the second quarter of 2024. Highlights for the second quarter include a six basis point increase in net interest margin over the previous quarter. Disciplined execution expense control, which exceeded our expectations and guidance previously communicated for the second quarter. and continued strong asset quality demonstrated by favorable credit quality metrics, which benefit from our disciplined underwriting culture and keen asset management. Our reported net interest margin increase is a result of deposit cost pressure beginning to ease during the back half of the second quarter as we started to benefit from seasonal deposit flows in our markets. Our taking decisive action on certain high-cost, non-core deposit relationships and continued asset allocation remix as we utilize investment cash flows to fund loan growth. Mike will expand on the net interest margin discussion and drivers in a few minutes. Our team continues to focus on driving deposit growth both through new customer acquisition and by deepening relationships with our existing customers, including by leveraging data and analytics to make informed, swift decisions. As Fed rate cuts become increasingly likely, we are ready to quickly act to manage our funding costs. As we saw while interest rates were increasing, we expect the first 25 to 50 basis point rate cut likely will result in a lower beta than subsequent rate cuts as we balance customer needs and market competition. We remain focused on improving our operating leverage. During the second quarter of 2024, revenues increased 3% over the previous quarter, and non-interest expense remained flat. We continue to take disciplined actions to maintain and manage costs in response to net interest margin pressure, while also driving opportunities to increase the income and diversify our revenue base. Credit continues to perform in line with expectations, and by all measures, our credit metrics continue to perform better than pre-pandemic levels. We continue to manage credit rigorously, consistent with our disciplined credit culture. For the second quarter, we reported strong asset quality with just a marginal uptick in non-performing assets, which accounted for just 17 basis points of total assets as of June 30, 2024. Our commercial loan portfolio remains well balanced with no meaningful concentration risks. Our credit risk team continues to review our portfolio proactively and have not identified any systemic areas of concern. We continue to see moderate loan demand in our communities. Our residential mortgage pipeline has remained consistent quarter to quarter. And at the same time, we have seen a sizable uptick in our commercial loan pipeline, primarily driven by few larger commercial real estate opportunities. We are seeing nice momentum in fee income spurred by our focus and investment in wealth management and brokerage services. Combined, our wealth and brokerage services generated revenue of 3.3 million in the second quarter, an increase of 11% over the first quarter of this year. The increase is driven by sales activity and continued strength in the financial markets. We have crossed over $2 billion in assets under administration as of June 30th, 2024, representing an increase of 12% compared to June 30th, 2023. We are well positioned to expand our advisory distribution by leveraging our new wealth operating platform and mobile app as we stay committed to full relationship banking and growing and diversifying our fee income. We continue to make significant progress on digital roadmap and innovation ideation. Last quarter we shared, we invested in a new online deposit account opening platform, and I'm pleased to report that it remains on schedule to go live at year end. This new technology will enable customers to open, fund, and use deposit accounts within minutes, whenever and wherever they choose. We'll leverage this technology to steer into our omnichannel approach, which aims to provide a consistent customer experience across all digital and brick and mortar sales and marketing channels to provide a uniform customer experience. Our robotics automation team continues to surpass expectations. We recently celebrated processing over 2 million support service transactions through our digital platform. At our current velocity, we will process a million transactions every six months. Additionally, Our robotics automation reached a milestone with a newly developed API integration into our customer service workflow management tool. For the first time, this allows true end-to-end automation of predictable, repeatable customer service activities, creating real capacity across multiple internal departments. Further, our data analytics team partnered on AI beta pilot with a third party for data scientist emulation, simplifying the technical skills needed to request higher order analytic models. If successful, this has the potential to drive sophisticated analytics further into the hands of business units, and the pilot will be completed in Q4. We believe our investments in talent, technology, products, and services will continue to benefit as macroeconomic conditions improve and that our strong foundation will permit us to generate consistent, sustainable, and long-term performance as we remain focused on execution and involving the bank to meet customer and shareholder expectations. Now, Mike will provide some highlights from the second quarter.