Camden National Corporation

My name is Elliot and I'll be your operator for today's call. All participants will be in listen-only mode during today's 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. Good afternoon and welcome to the Camden National Corporation's conference call for the first quarter of 2025. 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 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 contained in our first quarter 2025 earnings release issued this morning and in other reports we filed 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 a discussion of non-GAAP financial measures And 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.

Thank you, Renee, and good afternoon, everyone. We appreciate you joining our call today. And thank you for your patience and flexibility with today's earnings call. When you come through it, we had a very solid quarter financially, highlighted by core net income of $16 million and by strong fundamentals and continued momentum within our core operations. In a few minutes, we will discuss our financial results in more detail, and Mike will provide details of our purchase accounting before we turn to Q&A. Before we dive into our numbers, I want to take a moment to reflect on our historic accomplishments this quarter. On January 2nd, we successfully closed our merger with Northway Financial and welcomed over 28,000 new customers into our network and over 100 new team members to our franchise. 74 days later, we successfully completed the full systems integration and we are now operating on one platform. As a quarter end, Camden National Bank grew to 73 branches across Maine and New Hampshire and reached $7 billion in assets. I'm incredibly proud of the many team members across both companies who worked tirelessly to make this a smooth and successful transition. Their dedication, obsession with the customer experience, and focus on the cultural alignment are commendable. I'm pleased to report that we are on track to achieve our previously reported annual cost saving goal of 35% of Northway's operating expenses. And we expect to realize 75% of this goal during 2025. We anticipate cost savings to begin materializing in the second quarter of 2025. We are also on target to likely come in under our pre-tax merger cost target of $13.5 million. We have a well-established history of prudently managing expenses and will continue to do so as a combined company to drive shareholder value. We are confident that meaningful revenue synergies will emerge over time, driven by expanded capabilities and customer reach. While this growth will build gradually, we're excited about the long-term opportunities it will unlock, and we are well underway in benefiting from the deal's strategic and financial merits. Earlier this morning, we reported gap net income of $7.3 million, or 43 cents, of diluted earnings per share for the first quarter of 2025. Excluding merger-related costs and other non-recurring items, non-gap core net income increased 6% over the fourth quarter of 2024, while non-gap core diluted EPS decreased 8% between periods. We are very pleased with our first quarter performance and believe we are well prepared to face current market uncertainty. Our franchise's strength and soundness can be seen in our reported net interest margin, which reached 3.04% for the first quarter and benefited from the impact of purchase accounting. However, more importantly, we saw our core net interest margin expand another 11 basis points from last quarter to 2.68% for the first quarter of 2025. When we combine our core net interest margin momentum With the benefit of cost savings from the acquisition that will begin to materialize next quarter, we believe we are well positioned for solid core earnings growth moving forward. Asset quality and a well diversified portfolio remain core strengths of our organization. As of March 2025, we continue to have strong confidence in the overall health of our loan portfolio. Our credit and special assets teams maintain active oversight and have not observed any material signs of credit deterioration across sectors or industries. Thanks to the proactive and disciplined approach of our experienced lending and credit teams, we are well positioned in all economic environments. We are able to identify and address any potential risks and early and head on an approach that has consistently protected both the bank and our customers. The increase in our allowance to loan ratio of nine basis points to 0.96% was not a reflection of growing concern within our credit portfolio, but rather the prudent move to add reserves due to the macro environment and level of uncertainty that persisted at quarter end. We believe this positions us well, regardless of how the macro factors play out. Our growing commercial team remains diligent and benefits from deep and solid relationships. Recently, we've seen momentum in our pipeline with solid activity throughout our markets. However, we remain selective and measured. Our mortgage pipeline is strong, while inventory remains low, echoing national trends. From a business perspective, the combined impacts of tariffs and other potential federal government action has increased economic uncertainty. While it is too early to tell, most of our clients have not seen an immediate impact. while others are taking a wait-and-see approach, which may temper our loan growth in the short term. We continue to invest in and monetize our technology investments. In January, we fully launched our online consumer and business account opening platform. Through strategic marketing throughout the high-growth New Hampshire and Maine markets, we have successfully welcomed new customers. Our human-backed approach will allow us to penetrate these markets further and grow our customer relationships. Looking ahead, we continue to celebrate Camden National Bank's 150th anniversary this year. We remain focused on delivering our long-term strategy of deepening customer relationships through advice-based conversations and bolstering our New Hampshire presence in our growing contiguous market. Our current capital position and strong capital generation capabilities give us confidence in our ability to perform across a range of economic scenarios. The expansion of our footprint enhances access to stable, low-cost core deposit base, further strengthening our balance sheet. At the same time, our business development teams are actively pursuing opportunities to leverage our scale technology, expanded advisory capabilities, and larger balance sheet to drive growth across a broader customer base. We are well positioned to generate consistent results and support our clients regardless of the broader market or economic conditions. We remain committed to our long-standing strategic pillars of soundness, profitability, and growth, which drive sustainable, long-term performance. I will now turn it over to Mike to provide more details about our first quarter financial results.