Camden National (US:CAC)2025-11-06 15:34Acquisition 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[32][33]. - The acquisition added 17 branches in New Hampshire, increasing the Company's total to 72 branches and assets to $7.0 billion as of September 30, 2025[34]. - The Company recognized $56.8 million in goodwill from the Northway acquisition, reflecting expected synergies from operational integration[36]. - The Company incurred $9.2 million in non-recurring merger-related costs during the nine months ended September 30, 2025[35]. - The acquisition is expected to enhance profitability and shareholder value through growth opportunities and broader product offerings[34]. - The Company assumed customer repurchase agreements of $65.5 million through the acquisition of Northway on January 2, 2025[123]. Financial Performance - For the three and nine months ended September 30, 2025, the Company reported $3.8 million and $12.4 million, respectively, of net loan accretion attributable to fair value discounts on acquired loans[39]. - The Company reported total revenues of $65,398,000 for the three months ended September 30, 2025, compared to $59,084,000 for the same period in 2024, representing an increase of approximately 22.5%[51]. - Net income for the three months ended September 30, 2025, was $21,442,000, up from $16,624,000 in the same period of 2024, reflecting a growth of about 29.5%[51]. - The Company’s total net income available to common shareholders for the nine months ended September 30, 2025, was $42,601,000, compared to $38,326,000 in 2024, reflecting an increase of 5.9%[166]. - Diluted EPS for the nine months ended September 30, 2025, was $2.51, slightly down from $2.62 in 2024[166]. Loan and Asset Management - The total loans amounted to $5,002,927,000, an increase from $4,115,259,000 as of December 31, 2024, representing a growth of approximately 21.5%[71]. - The commercial loans segment reached $2,653,209,000, up from $2,094,749,000, indicating a growth of about 26.6%[71]. - The retail loans segment increased to $2,349,718,000 from $2,020,510,000, reflecting a growth of approximately 16.2%[71]. - The Company established an allowance for credit losses of $3.1 million on acquired PCD loans at the acquisition date[41]. - The allowance for credit losses (ACL) on loans decreased by $7.5 million to $45.5 million, primarily due to a $10.7 million partial charge-off of a syndicated commercial loan[85]. - The provision for loan losses, excluding acquired non-PCD loans, totaled $12.7 million, driven mainly by the partial charge-off of the syndicated commercial loan[86]. Securities and Investments - The fair value of the Company's trading securities as of September 30, 2025, was $5.6 million, an increase from $5.2 million as of December 31, 2024[52]. - The total amortized cost of AFS debt securities as of September 30, 2025, was $935,635,000, with a fair value of $889,765,000, indicating unrealized losses of $53,785,000[53]. - The Company transferred securities with a fair value of $520.3 million from AFS to HTM in 2022, with unrealized losses of $72.1 million at the time of transfer[54]. - The fair value of acquired bond investments at the acquisition date was estimated using quoted broker pricing and an independent third-party pricing service[44]. - The fair value of derivatives designated as hedging instruments was $8.5 million as of September 30, 2025, with notional amounts of $60 million[138]. Capital and Regulatory Compliance - As of September 30, 2025, the total risk-based capital ratio for Camden National Corporation was 13.47%, exceeding the minimum requirement of 10.50%[152]. - The Tier 1 risk-based capital ratio was 12.47%, above the minimum requirement of 8.50%[152]. - The common equity Tier 1 risk-based capital ratio stood at 11.17%, surpassing the minimum requirement of 7.00%[152]. - The Company and Bank's regulatory capital ratios met the requirements for being considered "well capitalized" as of both September 30, 2025, and December 31, 2024[152]. - The Company actively monitors its regulatory capital and risk-weighted assets in response to changes in GAAP and regulatory standards[155]. Credit Quality and Risk Assessment - The Company categorizes each portfolio segment into classes by credit risk characteristic, applying credit quality indicators to assess risk and adequacy of the ACL on loans[90]. - Performing loans include those that are current and those past due less than 90 days, while non-performing loans are those past due over 90 days and non-accrual loans[91]. - The overall risk assessment indicates a significant portion of loans are classified as Pass (Grades 1-6), reflecting a stable credit quality across various segments[94]. - The commercial real estate non-owner-occupied loans past due over 90 days totaled $4,456,000 as of September 30, 2025[96]. - The Company closely monitors its loan portfolio, placing loans on non-accrual status when payment is not expected as scheduled[96]. Other Comprehensive Income and Non-Interest Income - Total non-interest income within the scope of ASC 606 for the three months ended September 30, 2025, was $10,554 thousand, an increase of 16.3% from $9,076 thousand in the same period of 2024[163]. - The total amount of other comprehensive income (loss) for the nine months ended September 30, 2025, was $26,224 thousand, compared to $14,453 thousand for the same period in 2024, reflecting an increase of 81.5%[158]. - The debit card interchange income for the three months ended September 30, 2025, was $3,704 thousand, an increase of 16.8% from $3,169 thousand in the same period of 2024[163]. - The service charges on deposit accounts for the three months ended September 30, 2025, increased to $2,570 thousand, up 18.5% from $2,168 thousand in the same period of 2024[163].