Camden National (CAC)2025-05-08 16:40Acquisition and Integration - The Company completed the acquisition of Northway Financial, Inc. on January 2, 2025, in an all-stock transaction valued at $96.5 million, issuing 2.3 million shares, representing 14% of its outstanding shares[31][32]. - The acquisition added 17 branches in New Hampshire, increasing the Company's total to 73 branches and assets to $7.0 billion as of March 31, 2025[33]. - The Company generated $59.1 million of provisional goodwill from the Northway acquisition, reflecting expected synergies from operational integration[35]. - The fair value of identified assets acquired totaled $1.183 billion, with total liabilities assumed at $1.121 billion, resulting in net identified assets of $62.6 million[36]. - The Company incurred $7.5 million in non-recurring merger-related costs during the three months ended March 31, 2025[34]. - The acquisition was structured as a tax-free reorganization for federal income tax purposes, maintaining the tax basis of the acquired assets[46]. - The Company expects the expanded presence in New Hampshire to drive profitability and shareholder value through growth opportunities and broader product offerings[33]. Financial Performance - Total revenues for the three months ended March 31, 2025, were $60,054,000, compared to $56,538,000 for the same period in 2024, representing an increase of approximately 8.9%[52]. - Net income for the three months ended March 31, 2025, was $16,047,000, up from $7,558,000 in 2024, indicating a significant increase of approximately 112.8%[52]. - Total non-interest income for the three months ended March 31, 2025, was $11,196,000, an increase of 8.5% from $10,322,000 in 2024[159]. - Debit card interchange income rose to $3,233,000 in Q1 2025, up 12.8% from $2,866,000 in Q1 2024[159]. - Net income for the three months ended March 31, 2025, was $7,326,000, a decrease of 44.8% compared to $13,272,000 in the same period of 2024[161]. - Basic and diluted earnings per share (EPS) for Q1 2025 were both $0.43, down from $0.91 in Q1 2024[161]. Loan Portfolio and Credit Quality - The total loan portfolio as of March 31, 2025, was $4.885 billion, an increase from $4.115 billion as of December 31, 2024, representing a growth of approximately 18.7%[72]. - Commercial loans increased to $2.555 billion as of March 31, 2025, up from $2.095 billion at the end of 2024, marking a growth of about 22%[72]. - Retail loans also saw an increase, rising to $2.331 billion as of March 31, 2025, compared to $2.021 billion at the end of 2024, which is an increase of approximately 15.4%[72]. - The total amount of loans past due over 90 days and accruing was $7,087,000 as of March 31, 2025, compared to $5,855,000 as of December 31, 2024, reflecting an increase of 20.9%[97]. - The total allowance for credit losses (ACL) on loans was $46.7 million, an increase from $35.7 million as of December 31, 2024, reflecting a provision for loan losses of $8.9 million during the first quarter[86]. - The Company reported charge-offs totaling $1.1 million for the first quarter of 2025, compared to $345,000 in the same period of 2024[86]. - The Company’s total exposure to the lessors of residential buildings and nonresidential buildings industries was both 13% of total loans as of March 31, 2025[89]. - The risk category of loans by portfolio segment indicates that Grades 1 through 6 represent low to moderate risks, while Grades 8 to 10 indicate increasing levels of credit risk[93]. Securities and Investments - The fair value of the Company's trading securities as of March 31, 2025, was $4.9 million, down from $5.2 million as of December 31, 2024[53]. - The total amortized cost of AFS debt securities as of March 31, 2025, was $898,145,000, with an estimated fair value of $836,130,000, reflecting unrealized losses of $67,345,000[54]. - The Company sold AFS debt securities for proceeds of $56,432,000 during the three months ended March 31, 2025, with no gross realized gains or losses recognized[57]. - The total AFS debt securities with gross unrealized losses as of March 31, 2025, amounted to $497,221,000, with total unrealized losses of $67,345,000[58]. - The Company’s AFS debt securities are primarily comprised of high credit quality obligations, with a history of zero to near-zero credit loss[58]. - The estimated fair value of HTM debt securities as of March 31, 2025, is $478,172,000, compared to a carrying amount of $516,682,000, indicating a fair value discount of approximately 7.4%[186]. Capital and Regulatory Compliance - As of March 31, 2025, Camden National Corporation's total risk-based capital ratio was 13.13%, exceeding the minimum requirement of 10.50%[150]. - The Tier 1 risk-based capital ratio for Camden National Corporation was 12.09%, above the minimum requirement of 6.00%[150]. - The common equity Tier 1 risk-based capital ratio was 10.78%, surpassing the minimum requirement of 4.5%[150]. - The Company and Bank's regulatory capital ratios exceeded the capital conservation buffer requirements as of March 31, 2025[150]. - The Company actively monitors its regulatory capital and risk-weighted assets to adapt to changes in GAAP and regulatory standards[153]. Derivatives and Risk Management - The Company manages economic risks, including interest rate, liquidity, and credit risk primarily through the management of its assets and liabilities[126]. - The Company utilizes interest rate swaps as part of its interest rate risk management strategy to stabilize interest income and expense[127]. - The total notional amount of derivatives not designated as hedging instruments was $396.886 million as of March 31, 2025, with a fair value of $13.122 million[136]. - The Company recognized a total loss of $(96) thousand from derivative financial instruments not designated as hedging instruments for the three months ended March 31, 2025[139]. - The Company seeks to minimize counterparty credit risk through credit approvals, limits, monitoring procedures, and obtaining collateral where appropriate[140]. Goodwill and Intangible Assets - The carrying value of goodwill increased to $153,770,000 as of March 31, 2025, up from $94,697,000 at the end of 2024, due to the acquisition of Northway which generated $59,073,000 of goodwill[106]. - The carrying value of core deposit intangible assets was $47,000,000 as of March 31, 2025, reflecting an increase from $415,000 at the end of 2024 due to the acquisition of Northway[107]. - The company conducts an annual impairment test of goodwill, with no indications of impairment noted for the three months ended March 31, 2025[183].