Good day and welcome to Camden National Corporation's fourth quarter 2024 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. 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, Elliot. Good afternoon and welcome to Camden National Corporation's conference call for the fourth quarter of 2024. Joining this afternoon are members of Camden National Corporation's Executive Team, Simon Griffith, President and CEO, 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 fourth 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 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 and our earnings release, which is also available on our investor relations site. I am pleased to introduce our host, President and Chief Executive Officer, Simon Griffith.

Thank you, Renee. Good afternoon, everyone. We appreciate you joining our call today. I will provide a few comments on our most recent quarter and then turn it over to Mike to discuss our fourth quarter financial performance. We'll then open for Q&A. However, before discussing the fourth quarter, I want to remark on a transformational moment in Camden National's history. On January 2nd, we successfully closed our merger with Northway Financial in less than four months from our announcement in early September. The combined institution had total assets of approximately 7 billion and 73 branches in Maine and New Hampshire. This combination represents a powerful step forward in bolstering our New Hampshire presence in a growing, contiguous market, a publicly traded bank headquartered in northern New England. We are on track to successfully achieve the merger-related financial targets announced in September, meaningful growth opportunities, and swiftly expand our market presence. We have already identified opportunities to leverage our significant technology investments, larger amounts, more robust organization. It can only be described that in the midst of us, we produced another quarter with strong operating results. Earlier this morning, we reported gap net income of $14.7 million, or $1 of diluted earnings per share, for the fourth quarter of 2024, an increase of 12% and 11% over the third quarter of 2024. Excluding merger and acquisition costs incurred through December 31st, 2024, net income for fourth quarter of 24 was 15.1 million and eps was one dollar and three cents an increase of nine percent and eight percent eight percent respectively over the third quarter of 2024 fourth quarter financial performance was marked by another quarter of strong net interest margin expansion growing 11 basis points compared to the third quarter coupled with continued discipline expense management, and robust asset quality, which a Camden National's deposit costs lower response to recent Fed rate cuts in the second half of 2024, including the fourth quarter, and this directly translated into further net interest margin expansion quarter over quarter, all while continuing to grow our deposit base 1% in the fourth quarter. In particular, I would highlight the success in our high-yield savings product introduced earlier this year, which reached $201 million in deposits at December 31st, 2024, and has been a key catalyst for us to attract new deposits at the end of the year with strong momentum and a solid pipeline leading into 2025. We continue to see strong activity throughout our markets, but remain selective and measured. In particular, our pre-acquisition New Hampshire team realized 18% growth in their market during 2024 with a limited group of lenders. we are opportunistic as we enter 2025 as we have now expanded that group to eight commercial lenders in new hampshire with addition of the northway team strong momentum in fee income driven by strategic focus and investments in wealth management and brokerage services administration reached 2.1 billion as of december 31st 2024 reflecting a 12 increase compared to December 31st, 2023. With our new wealth operating platform and mobile app, we are well positioned to expand our advisor, distributing our commitment to full relationship banking and the growth and diversification of our fee income. Our overall asset quality, our credit special asset team continue to monitor our loan portfolio actively, and we have not seen any meaningful signs of credit deterioration across any sectors or industries at the end of 2024. Our experienced lending and credit team's proactive approach seeks to address potential challenges immediately, a strategy that has consistently benefited our organization and our customers. During the fourth quarter, we completed the strategic transformation of our online consumer and business account opening process. After a successful soft launch in December, it was broadly available in early January. This completes the first step towards enhancing our deposit account opening process across all channels. We have already begun to leverage the platform's operational efficiencies and enhanced fraud protection capabilities. This platform will assist us in welcoming new customers in our expanded geography with a seamless account opening platform backed by human-backed service excellence. Our technology momentum continues to prevail forward with our investments in process automation, which enhances operational efficiency by streamlining repetitive tasks. These efforts increase productivity, reduce errors, improve compliance, and provide greater agility in responding to market changes. In December, we celebrated our box processing a record 1.7 million transactions that humans used to perform. Notably, less than 13,000 of the transactions were sent to manual review, or less than 1% of the total. Looking ahead, we are very excited to celebrate our 150th anniversary. Over the past century and a half, we have built a legacy of trust, innovation, and dedication, continually evolving to meet the needs. team effort from all my incredibly experienced and caring colleagues, hard work, dedication and commitment to our customers and each other make these results possible, delivering greater value for our shareholders and support.

We'll provide more details. ...performance of 2024, total of $14.7 million and $15.1 million. ...within our... ...before merger later, fourth quarter of 2024, total of $12.2 million. as a result of recognition of the annual Visa Debit Card bonus, $7,000, customer relationship. Overall, we're very pleased with our deposit activity, normal seasonal outflows, begin during the back half. Capital ratios continue to exceed regulatory requirements. In the fourth quarter, our CET1 capital ratio and total risk-based capital ratio, each grew 26 basis points to 13.09% and 15.11%. annual common equity 7.64 percent close the acquisition of northway financial on january 2nd 2025 canada national 0.3 million shares thank you we will now begin the question and answer session

to ask a question you you may press star then one on your touchtone phone keypad if you are using a speakerphone please pick up your handset before pressing the keys to withdraw your question please press star then two at this time we'll pause momentarily to assemble our roster our first question comes from steve moss with raymond james your line is open please go ahead uh good afternoon um maybe just starting here with uh lending activity you guys saw for the quarter here um you know i hear you guys on the paydowns just kind of curious how the lending environment is shaking out here uh going forward and kind of what your thoughts

are uh as you integrate northway momentum in the home equity business as well i continue to focus on that right balance between growth uh credit quality investing in the markets that we have we also talked about as you as we mentioned in the script uh we have a nice team now in the new hampshire market they had a strong year uh last year and certainly uh can see a very strong outlook uh ahead for 2025 in the new hampshire market as we continue to assimilate and uh work with the former northway team so i think that's another real area strength for us but uh you know certainly uh some nice momentum but uh continue to be selective okay great appreciate that and simon you know you mentioned the investments uh you've made in the franchise over the past year um whether it's wealth management or you know the online platform online account openings just kind of curious here for 2025 you know what type of investments you're looking to do and how

we kind of think about uh expenses for you in 25. oh sure uh so just in terms of the investments you made the franchise you know you made you mentioned wealth management growth uh and the the opportunities you have there you also have the online uh account openings just kind of curious uh you know how you're thinking about investments for the upcoming year and where you want to invest and how you're thinking about expense growth momentum there in the wealth business and we talked about that

momentum in my opening remarks uh but the new account opening um opportunity i think it's self-funding that we make is is continues to be a great and then in terms of um the margin here

just you know kind of curious you had you know healthy margin expansion here this quarter mike i hear you on the three bits of non-recurring items i'm ensuring that assuming it's from the prepays on loans just kind of curious you know underlying core margin expansion do you expect that will continue and then kind of is there any range you have early for the north way close in terms of where the margin settles out on the gap basis i'm assuming like the height yeah let me just focus on some underlying strength from that shake out okay great i appreciate all the all the color

here guys in the next quarter i'll step back in queue our next question comes from damon del monte with kbw your line is open please go ahead hey good afternoon guys hope you're both doing well So just wanted to kind of circle back on the commentary, Simon, on loan growth. I think you're kind of hopeful for like low single digit growth here in 25. Does that contemplate any type of maybe runoff or workout of some of the acquired loans that you might not want to keep around? Or was that just, you know, kind of organic growth on a standalone basis? Got it. OK. And then, Mike, could you just repeat some of your final commentary on some of the actions you took? post-closing of the transaction, I think you had said you would pay down some borrowings that they had, and I didn't hear what you said on the securities portfolio.

Holding on to, we also sold about really, again, just not kind of what we were looking for and the opportunity just to optimize from a yield current market perspective and really just bring down the duration as well. So just a couple of small plays and we'll continue to evaluate going forward.

And then just from like a pro forma earning asset base, is something in the like six and a half billion range reasonable? Yeah. Sorry. Pro forma earning assets, you know, like for first quarter. That's all that I had. Thank you very much.

As a reminder, if you'd like to ask a question, please press star one on your telephone keypad now. You now turn to Matthew Breeze with Stephens. Your line is open. Please go ahead. Hey, good afternoon.

I was hoping just to follow up on a couple of the deal questions since it's closed. The first one is, do you have what the Cecil Day 2 provision was? Where you landed, the deal's closed. Okay. And then going back to the original deal deck, understanding that the core NIM sounds like it's in the 260 range. I think you also had about $3 million a quarter in accretable yield. So that's about 15 to 20 BIPs of kind of accretion on the NIM. So is it fair to say that the reported NIM is probably in the 270 range all in, 280 range all in when it's said and done? And then I don't suppose you have anything related to goodwill or intangibles created dollar wise i'm sorry if i missed this if we think about the core nim and your overall balance sheet versus the curve it feels feels like your balance sheet relative to the curve should be pretty well positioned in the current environment um as you think about you know beyond the first quarter and i'm referring to the core nim to what extent might we see more expansion throughout 2025 and you know throw out a bogey you know when do you think you can get above a three percent core name again i think the you know honestly the future for us looks

looks pretty pretty strong as we look out a few borders but um you know i think if i were to guess on when we hit three the only thing i'd be sure of is i'll probably be wrong um probably not as quick as i want matter or any of us want but uh i think that the trajectory is certainly a positive and then just one for you simon um you know pretty shortly after you took the the reins at the helm.

We had a nice deal announced and closed in short order. What do you think on the M&A front from here? When are you ready to pursue whole bank deals again? And if you are ready, what kind of geographies are you looking at? That's all I had. Thank you.

But, you know, certainly we have an appetite, but not an appetite for deal's sake. So, you know, definitely be the right deal at the right time. And, you know, but we certainly, I think, have the, know support of the management team and the expertise and the skill set to clearly execute on these uh deals and i think we can leverage that going forward when the right opportunity arises perfect i'll leave it there thank you for taking my questions as a final reminder if you'd like to ask a question please press star one now we'll pause for a moment as we have no further questions this concludes our question and answer session i would like to turn the conference back over to

Simon Griffiths for any closing remarks. Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.