Camden National Q1 2025 Earnings Report

Camden National EPS Results

• Actual EPS: $0.95
• Consensus EPS: $0.99
• Beat/Miss: Missed by -$0.04
• One Year Ago EPS: N/A

Camden National Revenue Results

• Actual Revenue: $60.05 million
• Expected Revenue: $57.63 million
• Beat/Miss: Beat by +$2.43 million
• YoY Revenue Growth: N/A

Camden National Announcement Details

• Quarter: Q1 2025
• Date: 5/6/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, May 6, 2025
• Conference Call Time: 2:00PM ET

Camden National (NASDAQ:CAC) operates as the bank holding company for Camden National Bank that provides various commercial and consumer banking products and services for consumer, institutional, municipal, non-profit, and commercial customers in Maine, New Hampshire, and Massachusetts. The company accepts checking, savings, time, and brokered deposits, as well as deposits with the certificate of deposit account registry system. Its loan products include non-owner-occupied commercial estate loans, owner-occupied commercial real estate loans, unsecured fully-guaranteed commercial loans backed by the small business administration, loans secured by one-to four-family properties, and consumer and home equity loans. The company also provides brokerage and insurance services through its financial offerings consisting of college, retirement, estate planning, mutual funds, strategic asset management accounts, and variable and fixed annuities. Further, it offers a range of fiduciary and asset management, wealth management, investment management, financial planning, and trustee services. Camden National Corporation was founded in 1875 and is headquartered in Camden, Maine.

Camden National Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Good day, and welcome to Camden National Corporation's First Quarter twenty twenty five Earnings Conference Call. 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 will conduct a question and answer session. I'll now turn the call over to Renee Smith, Executive Vice President, Chief Experience and Marketing Officer.

[Renée Smyth, Executive VP, Chief Experience & Marketing Officer at Camden National Bank]

Thank you. Good afternoon, and welcome to the Camden National Corporation's conference call for the first quarter of twenty twenty five. 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 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 twenty twenty five earnings release issued this morning and in other reports we filed with the SEC.

[Renée Smyth, Executive VP, Chief Experience & Marketing Officer at Camden National Bank]

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. 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 Griffiths.

[Simon Griffiths, CEO, President & Director at Camden National]

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 £16,000,000 led 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 and A.

[Simon Griffiths, CEO, President & Director at Camden National]

Before we dive into our numbers, I want to take a moment to reflect on our historic accomplishments this quarter. On January 2, 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. Seventy four days later, we successfully completed the full systems integration, and we are now operating on one platform. As of quarter end, Camden National Bank grew to 73 branches across Maine and New Hampshire and reached €7,000,000,000 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.

[Simon Griffiths, CEO, President & Director at Camden National]

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 Norway'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 twenty twenty five. We are also on target to likely come in under our pretax merger cost target of £13,500,000 We have a well established history of prudently managing expenses and we'll 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.

[Simon Griffiths, CEO, President & Director at Camden National]

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 GAAP net income of 7,300,000.0 or $0.43 of diluted earnings per share for the first quarter of twenty twenty five. Excluding merger related costs and other nonrecurring items, non GAAP core net income increased 6% over the fourth quarter of twenty twenty four, while non GAAP 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.

[Simon Griffiths, CEO, President & Director at Camden National]

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 twenty twenty five. 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.

[Simon Griffiths, CEO, President & Director at Camden National]

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 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.

[Simon Griffiths, CEO, President & Director at Camden National]

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.

[Simon Griffiths, CEO, President & Director at Camden National]

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 Canada National Bank's one hundred and fiftieth anniversary this year.

[Simon Griffiths, CEO, President & Director at Camden National]

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 capability 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.

[Simon Griffiths, CEO, President & Director at Camden National]

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.

[Michael Archer, Executive VP & CFO at Camden National]

Thank you, Simon, and good afternoon, everyone. With the closing of the Northway acquisition on January 2, our reported first quarter financial results include the combined results of the two franchises. Because the integration did not occur until mid March twenty twenty five, our first quarter results largely reflect us effectively running two franchises. And we fully expect that cost synergies will begin to materialize in the second quarter. Within our GAAP earnings for the first quarter of twenty twenty five are the impact of purchase accounting for the Northway acquisition, which we'll discuss in more detail in a few minutes.

[Michael Archer, Executive VP & CFO at Camden National]

For the first quarter of twenty twenty five, we reported GAAP net income of $7,300,000 and GAAP diluted EPS of $0.43 Within our GAAP within our reported GAAP earnings was a pretax charge of $7,500,000 for acquisition related costs, a pretax charge of $6,500,000 for onetime loan loss provisions associated with the acquired loan portfolio and unfunded commitments and a onetime tax benefit of $2,400,000 from the revaluation of Camden legacy deferred tax assets. Excluding the impact of these items, net of tax, the company reported adjusted net income of $16,000,000 and adjusted diluted EPS of $0.95 On a linked quarter basis, adjusted net income was higher by nearly 1,000,000 or 6%, while adjusted diluted EPS was down $08 or 8%, which reflects the impact of the issuance of nearly 2,300,000.0 shares for the acquisition of Northway. Overall, we had a great start to the year and remain on track to deliver on our financial commitments, which includes strong EPS accretion and profitability as we move forward. We reported a net interest margin of 3.04% for the first quarter, which was 47 basis points higher than reported in the previous quarter. Included within net interest income this quarter was $5,000,000 of net accretion income for purchase accounting, which contributed 36 basis points to net interest margin expansion quarter over quarter.

[Michael Archer, Executive VP & CFO at Camden National]

On Page three of the earnings supplement we filed this morning with our earnings release, we outlined the impact of purchase accounting on net interest income for the first quarter. Adjusting for the impact of this net accretion income, our core net interest margin expanded 11 basis points on a linked quarter basis to 2.68% for the first quarter, continuing the positive momentum we've seen over the past twelve months. Our core net interest margin expansion highlights our success in lowering funding costs as the Fed lowered interest rates during the second half of twenty twenty four. In the first quarter of twenty twenty five, we saw the full benefit of those actions flow through to our funding costs. As we combine Canada and Northways' strong low cost deposit franchises, we see the full power of our funding base with a total funding cost of 1.94% for the first quarter of twenty twenty five.

[Michael Archer, Executive VP & CFO at Camden National]

While the Fed's future path for rates is less clear, we are well balanced in our interest rate risk position as a combined franchise and anticipate being able to continue to capitalize on future Fed rate cuts if and when they occur. Asset quality continues to be one of Camden's strengths. Camden Northway had very similar credit cultures with limited historical charge offs. At 03/31/2025, nonperforming loans were just 15 basis points of total loans and delinquent loans were just seven basis points of total loans. Net charge offs for the first quarter of twenty twenty five are eight basis points of average loans on an annualized basis.

[Michael Archer, Executive VP & CFO at Camden National]

Our reported provision expense for the first quarter of twenty twenty five totaled 9,400,000.0 We designated 88% of Northway's acquired loan portfolio as non purchase credit deteriorated or non PCD, which speaks to the credit quality of the acquired loan portfolio. We designated the remaining acquired loans as PCD. We were required to establish a reserve on non PCD loans through provision expense on the acquisition date, resulting in a onetime charge to provision expense of 6,300,000.0 Additionally, as we closed out the quarter, we increased our loan loss reserve levels by $2,600,000 to account for the heightened macroeconomic risk. At 03/31/2025, our loan loss reserve coverage ratio stood at 96 basis points compared to 87 basis points at year end. At this level, our loan loss reserve represents 6.4 times non performing loans at March 31.

[Michael Archer, Executive VP & CFO at Camden National]

Details of our allowance build during the quarter can be found on Page five of the earnings supplement. Noninterest income for the first quarter of twenty twenty five was $11,200,000 Noninterest income was lower by 8% on a linked quarter basis, which reflects the timing and seasonality within our fee income base. As we transition out of the winter months and integrate Northways customers into our products and services, we anticipate non interest income will continue to build throughout the year as it has historically done for us. Non interest expense for the first quarter of twenty twenty five totaled $44,500,000 including $7,500,000 of acquisition related costs, core deposit intangible amortization expense of 1,500,000.0 Excluding acquisition related costs and CDI amortization expense, total operating expenses were $35,400,000 for the first quarter compared to $27,800,000 for the fourth quarter of twenty twenty four. As stated earlier, we fully expect cost savings to accelerate in the second quarter and continue to build throughout the remainder of the year.

[Michael Archer, Executive VP & CFO at Camden National]

We reported an income tax benefit of $1,200,000 for the first quarter of twenty twenty five. With the Northway acquisition, our expected income allocation across states has shifted, requiring us to revalue Canada's legacy deferred tax assets. This resulted in a onetime tax benefit of $2,400,000 during the quarter. We estimate our current effective tax rate at 20.6% and we should trend closer to that this next quarter. As we shift to the balance sheet, we will first start with an update on purchase accounting for the Northway acquisition.

[Michael Archer, Executive VP & CFO at Camden National]

In total, we issued approximately 2,300,000.0 shares as consideration for Northway, which resulted in a purchase price of $96,500,000 Further details can be found on Pages two and four of the earnings supplement. Loans totaled $4,900,000,000 at March 31, including $775,700,000 of acquired Northway loans, net of the fair value mark of $96,700,000 as of the acquisition date. Organic loan balances were flat during the first quarter, which was expected given the level of seasonality within our markets. Our loan pipelines are healthy and we have seen them continue to build recently. Deposits totaled $5,600,000,000 at 03/31/2025, including $971,700,000 of acquired Northway deposits, net of the fair value mark as of the acquisition date.

[Michael Archer, Executive VP & CFO at Camden National]

Like loans, organic deposit balances were relatively flat in the first quarter. Overall, we were pleased with the balances staying flat in the first quarter given the seasonality within our markets and the expected drawdown during the first quarter of '60 '2 million and temporary deposits are replaced with us in the fourth quarter. We continue to monitor Northway's legacy customer base for attrition. And to date, we have been very pleased with the results. We're very pleased with where our capital ratio stand at March 31 after having just completed the acquisition in the first quarter.

[Michael Archer, Executive VP & CFO at Camden National]

By all accounts, our book and regulatory capital ratios came in either at or above our initial projections at announcement, which largely has to do with our strong second half of twenty twenty four. We fully expect to rebuild capital at an accelerated pace given the earnings power of the combined franchise moving forward. Lastly, I wanted to quickly mention that we filed the shelf registration statement in March. We did this solely for capital planning and preparedness purposes. This concludes our comments.

[Michael Archer, Executive VP & CFO at Camden National]

We'll now open the call up for questions.

[Operator]

Thank you. We will now begin the question and answer session. First question comes from Steve Moss with Raymond James. Your line is open. Please go ahead.

[Steve Moss, Director at Raymond James Financial]

Hi, good afternoon.

[Simon Griffiths, CEO, President & Director at Camden National]

Hi, Steve.

[Steve Moss, Director at Raymond James Financial]

Maybe, Mike, starting off with you on the margin here. Just curious as to how you're thinking about core margin expectations for the second quarter, if we could continue to see a little bit more of a bump up in that margin here.

[Michael Archer, Executive VP & CFO at Camden National]

Yes. Great question, Steve. Yes, that's our thought. We do think we'll continue to see a level of just core net interest margin expansion from here. We're kind of pegging it in maybe additional two to five basis points, so in that 2.7%,

[Michael Archer, Executive VP & CFO at Camden National]

two point seven

[Michael Archer, Executive VP & CFO at Camden National]

five % range on a core basis.

[Steve Moss, Director at Raymond James Financial]

Okay, great. And then in terms of the purchase accounting accretion, you ended up with bigger marks here. Just curious if there's a little bit more of a step up from the call it 5.1 ish million of accretion we saw this quarter?

[Michael Archer, Executive VP & CFO at Camden National]

Yes. It's another great question, Steve. I mean, I think the reality is that that 5,000,000 on a net basis feels like a good midpoint for us. Certainly, you know, there's there's, you know, potential for things to slow. But overall, when we looked at what went through this quarter, 5,000,000 feels like a pretty pretty good number.

[Michael Archer, Executive VP & CFO at Camden National]

Certainly, if we see acceleration of the yield curve from the longer end kinda come down, that could that could certainly accelerate prepays as you know and get some additional benefit there. But I think I think all intents and purposes, 5,000,000 is a pretty good solid number for us.

[Steve Moss, Director at Raymond James Financial]

Okay. Great. And then in terms of, you know, you mentioned you're well positioned for rate cuts. Just curious like how what do you project in terms of benefit from a 25 basis point Fed rate cut here going forward? Or if you're a little more liability sensitive or a little more neutral these days?

[Simon Griffiths, CEO, President & Director at Camden National]

Steve, thanks for the question. Yes, we're a little bit liability sensitive, but we certainly predict forecast. We certainly see some strength on the quarter point rate cut and we forecast around 1.2 million for a quarter point rate cut as a benefit. So that certainly would be accretive to us going forward in addition to the underlying core NIM momentum that we have. I think that's some part of the story.

[Simon Griffiths, CEO, President & Director at Camden National]

And I'll just expand that. I think on the expense side, we talked in the opening remarks about the strength of the expense discipline that the management team has and the philosophy we've shown and feel confident around the 35% expense takeout, which starts obviously in the second quarter. So I think you put those pieces together. I think the outlook for the next nine months through the end of the year is quite positive. Obviously, a lot going on right now in the macroeconomic environment, but I think we're very well set up, very stable from a credit perspective as well.

[Simon Griffiths, CEO, President & Director at Camden National]

And I think those pieces are giving a lot of confidence to the management team.

[Steve Moss, Director at Raymond James Financial]

Right. And Simon, I hear you in terms of the crosswinds with regard to the economy. Your pipeline headed the right way is definitely encouraging, especially the activity continuing here now. Just kind of curious, as you think about loan growth here, maybe where are you seeing the most the best activity on the commercial side? And is it still kind of like low single digit type loan growth for the current year?

[Simon Griffiths, CEO, President & Director at Camden National]

Yes. Low single digit loan growth still is where we're holding to Steve. We are seeing some nice momentum on the residential side. Current pipeline is at 83,000,000 That's total pipeline. Commercial as well, we've seen particularly picking up over the last, I'd say, last month or so.

[Simon Griffiths, CEO, President & Director at Camden National]

We're up to $97,000,000 pipeline, which is pretty strong, Steve. I think it's certainly one of the strongest numbers I've seen in my time here. So I think those pieces are playing very positively. We're seeing nice momentum in the home equity space, business banking, commercial holding up well, and it's a nice balanced picture across the geographies. Of course, we continue now to see momentum over New Hampshire, Southern New England.

[Simon Griffiths, CEO, President & Director at Camden National]

And I think the scale we've added from the team coming over from Norway is really sort of adding to the opportunities there and seeing, I think, a lot of exciting opportunities for the team to tap into.

[Steve Moss, Director at Raymond James Financial]

Okay, great. Really appreciate the color there. I'll step back in the queue and let others who ask questions here. Thanks.

[Simon Griffiths, CEO, President & Director at Camden National]

Thanks, Steve.

[Operator]

Our next question comes from Matthew Breese with Stephens. Your line is open. Please go ahead.

[Matt Breese, Managing Director & Research Analyst at Stephens Inc]

Hey, good afternoon.

[Matt Breese, Managing Director & Research Analyst at Stephens Inc]

Was hoping to talk

[Matt Breese, Managing Director & Research Analyst at Stephens Inc]

a little bit about the other areas of the P and L. Maybe starting with fee income. You know, standalone Camden was was coming in, you know, the fourth quarter at around 12,000,000 of fees. Northway was a little over a million. At what point do we get on that kind of $13,000,000 quarterly run rate for fees?

[Matt Breese, Managing Director & Research Analyst at Stephens Inc]

And is that a fair estimation?

[Michael Archer, Executive VP & CFO at Camden National]

Yeah. I think I think that's a good good question, Matt. Certainly. I would just maybe just back up a moment. I think part, you a little bit of the disconnect maybe being seen is we had a really strong Camden standalone fourth quarter on the fee income base.

[Michael Archer, Executive VP & CFO at Camden National]

Overall, that's certainly a function of the timing. We had our annual debit card bonus in the fourth quarter. We also benefited as well from some derivative income and some other items that kind of are a little less predictable. But I think as we move forward here, as we think about fee income, I think we're thinking for this next quarter as we see mortgage banking pick up. And to Simon's comments earlier, we're seeing the production and the pipelines build there.

[Michael Archer, Executive VP & CFO at Camden National]

We are kind of anticipating that we could be in the $12,000,012,500,000 range for the second quarter. And then to your comment, as we make our way to the end of the year, we would definitely, I think, my mind, approaching that $12,500,000.013000000 dollars from there.

[Matt Breese, Managing Director & Research Analyst at Stephens Inc]

Yes. And similar question I appreciate all that. Similar question for expenses. You know, just kinda putting the two franchises together, the 35 cost saves plus a little bit of inflation, is it fair to assume, you know, on a core basis, you know, we're looking at, you know, call it $3,435,000,000 in quarterly expenses over the next year. Is that the right bogey?

[Matt Breese, Managing Director & Research Analyst at Stephens Inc]

Or is there more on the cost save front than we talked about in the deal deck?

[Simon Griffiths, CEO, President & Director at Camden National]

Yes. That feels very much in line, 34.5 to 30 5 million dollars before, obviously, M and A costs and CDI amortization. But I think that's certainly a good kind of estimate. Mike, do you want to add?

[Michael Archer, Executive VP & CFO at Camden National]

Yes. I would just I think to Simon's comment, I think that's the near term. As we get to this back half of '25. We anticipate further just take out occurring. I mean, the function of this is just it takes time to get the systems wind down and other bills and some of the just the things behind the scenes, if you will.

[Michael Archer, Executive VP & CFO at Camden National]

But I think as we approach the second half is really when we expect the full benefit of the cost saves to start kicking in as we start to work our way to the fourth quarter and approaching 2026 math. But I would definitely think that 34%, thirty five % is a good spot for us, certainly in the for for '20, excuse me, for '25 and and beyond there, there might be some additional opportunity.

[Michael Archer, Executive VP & CFO at Camden National]

Okay.

[Matt Breese, Managing Director & Research Analyst at Stephens Inc]

And then maybe, Simon, I was hoping you could

[Matt Breese, Managing Director & Research Analyst at Stephens Inc]

touch just on how overall integration is is going. Know, Camden hasn't done a whole bank deal in in some time. How is it going on the, you know, employee integration retention fund, the client disruption front? And, you know, is this something we might see more of, meaning whole bank deals out of Camden?

[Simon Griffiths, CEO, President & Director at Camden National]

Yes. Thanks for that question. I think I'm just very, very proud of the management team and the partnership across the organization. The overall conversion, I think, went exceptionally well. The customer, employee, client, you just look across the board, and we just saw just a very smooth transition.

[Simon Griffiths, CEO, President & Director at Camden National]

We've seen particularly very strong retention on the employee side, which I think is just been exceptional. Client feedback has been very positive. Engagement in our products has been very, very high. In fact, we've been told that we've had some best in class early engagement in some an activation around our online and usage, which is very good. Deposits, which I think is a good indicator, have been strong through the quarter and good very, very good retention of deposits.

[Simon Griffiths, CEO, President & Director at Camden National]

And then we've I think just other all other indicators have been positive. So overall, I think the team did a fabulous job and really put just put a great foot forward and very proud of the work we did. In terms of going forward, as I've said previously, Matt, we certainly do have an appetite to do additional M and A deals. And as always, it's really finding the right deal that really is accretive to the business, is a good fit from a culture perspective, certainly have a lean towards contiguous markets. And those core pieces, I think, remain consistent in terms of our sort of philosophy.

[Simon Griffiths, CEO, President & Director at Camden National]

But yes, I it went very well. And really now, I think it's starting to now take a breath or maybe I think we've taken a breath and now sort of get on the front foot of really activating the two franchises and creating awareness of the product set, the capabilities that we have. And I'm pretty excited around that and the opportunities that's going to present.

[Matt Breese, Managing Director & Research Analyst at Stephens Inc]

Excellent. I appreciate all that. I'll step back. Thank you.

[Simon Griffiths, CEO, President & Director at Camden National]

Thanks, Matt.

[Operator]

We now turn to Damon DelMonte with KBW. Line is open. Please go ahead.

[Damon Delmonte, Managing Director at Keefe, Bruyette & Woods (KBW)]

Hey, good afternoon guys. Hope everybody is doing well and thanks for taking my questions. Just a question on the loan growth outlook. I think Simon you said you guys are sticking with kind of that low single digit guide for the year. Does that contemplate any type of runoff from the Northway side?

[Damon Delmonte, Managing Director at Keefe, Bruyette & Woods (KBW)]

Are there some credits that you guys might want to exit and kind of move on from that could or maybe are factored in that growth number or they're not factored in that number?

[Simon Griffiths, CEO, President & Director at Camden National]

No, no. Thanks for the question, David. Not factored in. And I think across the I think Mike said earlier, very similar credit philosophy over there, strong portfolio of loans and we feel really good. And look, we're certainly there's obviously a lot in front of us from a macroeconomic perspective, and I think we're certainly seeing some pockets of strength.

[Simon Griffiths, CEO, President & Director at Camden National]

We've been talking to a lot of our clients, Damon, and there's certainly there are certainly areas of positivity, but there's also obviously some concerns. But there's an underlying, I think, appetite from the to invest. And we certainly could see I think the low single digit remains a really good kind of outlook right now, but you can certainly see a potential for that to improve as more certainty reaches into the market. But I think right now that's a really good forecast.

[Damon Delmonte, Managing Director at Keefe, Bruyette & Woods (KBW)]

Got it. Okay. And then kind of trying to draw the connection between the growth and the level of provisioning going forward and where your reserve is. You guys called out that you added to the reserve given the economic uncertainty. So if we don't see a material change in kind of way things are progressing right now, should we expect kind of a little bit higher provisioning going forward to keep building that reserve off the 96 basis points?

[Simon Griffiths, CEO, President & Director at Camden National]

Yes. I mean, I think, obviously, we're taking sort of a look at where things progress over the next ninety days. I mean I think as we always have just a really thoughtful kind of approach to provisioning and we put in some provisioning just based on the macroeconomic environment and that potential for recession, which is certainly across the board somewhere in that 40% to 70% likelihood being forecasted by sort of most groups. I think it's potential that that would be something we'd look at in the second quarter and continue to make sure we are well reserved and represent that potential risk. But I think we took an early kind of bite at that just to be conservative and cautious given just the outlook macroeconomic outlook.

[Damon Delmonte, Managing Director at Keefe, Bruyette & Woods (KBW)]

Got it. Okay. That's all that I had. Everything else was asked and answered. So thank you.

[Simon Griffiths, CEO, President & Director at Camden National]

Thanks, Damon.

[Operator]

As

[Operator]

we have no further questions, this concludes our question and answer session. I would now like to turn the conference back over to Simon Griffiths for any closing remarks.

[Simon Griffiths, CEO, President & Director at Camden National]

I just want to thank you all for your time today and interest in Camden National Corporation. We wish you all a great rest of your day. Thanks, everyone.

[Operator]

Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Renée Smyth, Executive VP, Chief Experience & Marketing Officer
• Simon Griffiths, CEO, President & Director
• Michael Archer, Executive VP & CFO

Analysts

• Steve Moss, Director at Raymond James Financial
• Matt Breese, Managing Director & Research Analyst at Stephens Inc
• Damon Delmonte, Managing Director at Keefe, Bruyette & Woods (KBW)