Camden National Corporation

Good day and welcome to Camden National Corporation's third quarter 2024 earnings conference call. My name is Lydia and I'll be your operator for today's call. All participants will be in a listener only mode during today's presentation and following the presentation, we'll conduct a question and answer session. If you require operator assistance at any time during the call, please press start and 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 third quarter of 2024. 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, 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 third 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. Good afternoon, everyone. We appreciate you joining our call today. I'll provide a few comments on our most recent quarter and then turn it over to Mike to discuss our third quarter financial performance. We will then open up the call for Q&A. The third quarter marked a significant event for Camden National as we announced on September 10th we would acquire Northway Financial, a strong community bank franchise in New Hampshire. The combination provides Camden National a unique opportunity to strengthen its competitive position and build market share in northern New England in a high growth contiguous market. We have filed all the bank regulatory applications for approvals required for the merger, which we expect to be completed in the first quarter of 2025. Both Camden National and Northway teams are highly engaged in planning the integration of our companies and preparing for a seamless transition for customers and employees. As we dive deep into our preparation, we remain convinced that this merger represents a rare opportunity to combine two high quality and culturally aligned franchises to build a premier Northern New England bank. In the midst of this significant transaction, we produced strong operating results during the third quarter. Earlier this morning, we reported net income of 13.1 million or 90 cents diluted earnings per share for the third quarter of 2024, an increase of 9% and 11% respectively over the second quarter of 2024. Excluding the merger and acquisition costs incurred through September 30th, 2024, on a non-GAAP basis, net income for the third quarter of 2024 was $13.6 million, and EPS was $0.94, an increase of 14% and 16% respectively over the second quarter of 2024. Our strong third quarter financial performance is highlighted by a 10 basis point increase in net interest margin over the previous quarter. disciplined expense management with continued franchise investment and strong asset quality, which are the hallmarks of Canada National. These results demonstrate the strength of our franchise, and we believe they also represent critical momentum and improving operating environment as short-term interest rates are forecasted to drive lower over the coming quarters. In September, our team swiftly adjusted our rate book and develop proactive strategies to preserve and enhance our solid customer base during the downward changing rate environment. We proactively responded to the Fed funds rate cut in mid-September through both front and back book pricing changes. Our strong customer relationships continue to serve us well with a 1% increase in deposits compared to the previous quarter. We continue to see a strong commercial pipeline and welcome two strategic commercial lenders in New Hampshire and one in the Lewiston Auburn market to expand our presence in these high growth markets. As we actively seek new commercial customers, we remain committed to our prudent customer due diligence and a disciplined pricing strategy to maintain our risk management approach. We continue to make strategic investments in our business while managing operating expenses and driving positive operating leverage. During the third quarter of 2024, our revenues increased 5% over the previous quarter. Non-interest expense increased modestly by 3% when excluding M&A expenses. Non-interest income for the third quarter increased 7% over the previous quarter, and we benefited from seasonal mortgage activity, lower interest rates, which drove increased activity and greater saleable business into the secondary markets. Our asset quality remains strong as of September 30th. We continue to monitor our loan portfolio actively and to date, we have not seen any signs of credit deterioration across any pockets or industries. Our lending and credit teams work to proactively manage any loan at the first sign of any challenge. This proactive approach has served and continues to serve us and our customers well. On September 30th, 2024, past due loans were just three basis points of total loans down from five basis points the last quarter, and non-performing loans were 17 basis points of loans down from 23 basis points at June 30th. While asset quality remained strong across the board, we maintained an allowance for losses of 0.86% of total loans at September 30th, 2024, consistent with the previous quarter. We continue to believe this reserve level is appropriate as we balance current macroeconomic conditions the forecasted path ahead, and our current asset quality metrics. The strategic transformation of our account opening process is on track and scheduled for a year-end launch. We have successfully completed development and are in the midst of full end-to-end testing. This will allow complete account opening and funding within minutes from mobile and online devices and is a first step towards enhancing our deposit account opening process across all channels. Our customers will be able to experience the convenience of our digital experience with the security and ease of human backed service excellence. As I laid out, we continue to lean into our strengths, including exceptional talent, execution capabilities, and risk management expertise. This allows us to serve our customers effectively against a complex backdrop and deliver key results for our shareholders. Looking ahead, we are very excited about the future opportunities as we merge with Northway to enhance our market position and increase our scale and capabilities. We are confident the combined entity will provide meaningful value creation for shareholders and strong pro forma profitability. Our expanded customer base will benefit from our strategic technology investments, business diversification, and larger balance sheet, which we believe will provide a more robust platform for future earnings growth. We look forward to providing you with additional details as we move through the regulatory approval process and closing. Now Mike will provide more details about our financial results.