Executive Summary

Adjusted results were solid amid Northway integration: adjusted net income rose 6% QoQ to $16.0M and adjusted diluted EPS was $0.95 as core NIM expanded 11 bps to 2.68% while reported NIM reached 3.04% on $5.0M of purchase accounting accretion .
GAAP results were pressured by merger-related items: GAAP net income was $7.3M ($0.43 EPS) due to $7.5M pretax M&A costs and a $6.3M onetime CECL build for acquired non‑PCD loans, partially offset by a $2.4M tax benefit from DTA revaluation .
Balance sheet scaled to ~$7.0B in assets after the Northway deal; asset quality remained strong (NPLs 0.15%, annualized NCOs 0.08%), and loan-to-deposit fell to 87% from 89% in Q4 .
Management signaled continued core NIM expansion (2–5 bps in Q2), ~$5M quarterly accretion, cost saves ramp (35% of Northway opex; ~75% in 2025), and low single-digit 2025 loan growth; sensitivity of ~$1.5M PPNR benefit per 25 bps Fed cut supports upside if easing resumes .

What Went Well and What Went Wrong

What Went Well

Core profitability momentum: “adjusted net income of $16.0 million... core net interest margin expanded 11 bps to 2.68%,” positioning for “solid earnings growth” as cost saves kick in .
Integration execution: Closed Northway Jan 2, completed systems/branch conversion mid‑March; tracking 35% cost saves with 75% realized in 2025 . CEO: “we successfully completed our systems and branch integration… bringing more than 28,000 new customers… we believe we are positioned well” .
Credit quality: NPLs 0.15%; loans 30–89 dpd 0.07%; ACL/loans increased 9 bps to 0.96% without signs of systemic stress .

What Went Wrong

GAAP earnings optics: GAAP EPS fell to $0.43 on $7.5M M&A costs and $6.3M onetime CECL for acquired non‑PCD loans, despite a $2.4M DTA tax benefit .
Expense elevation pre-synergies: Non-interest expense +57% QoQ to $44.5M as CAC operated two franchises most of the quarter; GAAP efficiency ratio deteriorated to 74.0% before normalizing on a non-GAAP basis .
Fee income softness/seasonality: Non-interest income fell 8% QoQ on lower mortgage banking, absence of Q4 debit card bonus, and lower derivative income .

Financial Results

Metric	Q1 2024	Q3 2024	Q4 2024	Q1 2025
Net Interest Income ($M)	$31.27	$33.59	$35.41	$48.86
Non-Interest Income ($M)	$10.32	$11.41	$12.17	$11.20
Total Revenue ($M) (NII + Non-Interest)	$41.60	$44.99	$47.58	$60.05
GAAP Net Income ($M)	$13.27	$13.07	$14.67	$7.33
GAAP Diluted EPS ($)	$0.91	$0.90	$1.00	$0.43
Adjusted Diluted EPS ($) (Non‑GAAP)	$0.86	$0.94	$1.03	$0.95
Net Interest Margin (FTE) %	2.30%	2.46%	2.57%	3.04%
Core NIM (FTE) %	2.30%	—	2.57%	2.68%
GAAP Efficiency Ratio %	65.78%	64.23%	59.62%	74.02%
Non‑GAAP Efficiency Ratio %	65.21%	62.39%	58.51%	58.72%

KPIs and Asset Quality

KPI	Q1 2024	Q3 2024	Q4 2024	Q1 2025
Loans ($B)	$4.12	$4.12	$4.12	$4.89
Deposits ($B)	$4.55	$4.58	$4.63	$5.60
Total Assets ($B)	$5.79	$5.75	$5.81	$6.96
Loan-to-Deposit Ratio %	—	—	89%	87%
NPLs / Loans %	0.14%	0.17%	0.16%	0.15%
Loans 30–89 DPD / Loans %	0.05%	0.03%	0.05%	0.07%
Net Charge‑offs / Avg Loans (ann.) %	0.02%	0.03%	0.04%	0.08%
ACL / Loans %	0.86%	0.86%	0.87%	0.96%
CET1 / Tier1 / Total RBC / Leverage %	—	—	—	10.78 / 12.09 / 13.13 / 8.58
Common Equity Ratio %	8.66%	9.22%	9.15%	9.19%
TCE Ratio % (Non‑GAAP)	7.12%	7.69%	7.64%	6.49%

Notes on non-GAAP and adjustments: Q1’25 included $5.0M purchase accounting net accretion (36 bps to NIM), $7.5M pretax M&A costs, $6.3M CECL build for acquired non‑PCD loans, and a $2.4M one‑time tax benefit (DTA revaluation) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Core NIM (FTE)	Q2 2025	—	Expect +2–5 bps QoQ to ~2.70%–2.75%	New color
Purchase Accounting Accretion	2025 (per quarter)	—	~$5M per quarter baseline	New color
Operating Expense (ex‑M&A, CDI)	Near-term 2025	—	~$34–35M per quarter; more take-out in 2H25	New/clarified
Cost Saves (Northway)	2025	35% of Northway opex; 75% realized in 2025	Reaffirmed timeline & magnitude	Maintained
Loan Growth	FY 2025	Low single-digit	Low single-digit; pipelines building	Maintained
Rate Sensitivity	Per 25 bps Fed cut	—	+~$1.5M PPNR benefit	New color
Effective Tax Rate	Ongoing	—	~20.6%	New/clarified
Dividend	Q1 2025	$0.42 declared in Q4’24	$0.42 declared; payable Apr 30, 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24 and Q4’24)	Current Period (Q1’25)	Trend
Integration/M&A	Q3: Announced Northway merger; targeted strong EPS accretion . Q4: Closed Jan 2; conversion planned mid‑Mar .	Integration completed mid‑Mar; on track for 35% cost saves; likely under $13.5M merger costs .	Executed / Synergy ramping
NIM trajectory	Q3 NIM +10 bps to 2.46% ; Q4 +11 bps to 2.57% .	NIM 3.04% (+47 bps QoQ); core NIM +11 bps to 2.68% .	Improving
Fee income	Q3 +7% QoQ; mortgage/derivatives uptick . Q4 included debit card bonus .	-8% QoQ on seasonality and derivative downtick; expected to build through 2025 .	Seasonal dip; rebuild expected
Credit quality	Strong across metrics .	Still strong; ACL/loans +9 bps to 0.96% due to macro prudence .	Stable/prudent
Technology/digital	Continued investments .	Fully deployed online account opening platform; supports market expansion .	Advancing
Macro/tariffs	Not highlighted prior.	CEO cites tariffs/policy adding uncertainty; selective growth posture .	Rising caution
Capital	Q3/Q4 well above reqs; TCE ~7.6–7.7% .	CET1 10.78%; TCE 6.49% post‑deal; plan to rebuild .	Lower TCE post‑deal; rebuilding

Management Commentary

“We reported adjusted net income of $16.0 million… our net interest margin expanded to 3.04%… core net interest margin expanded 11 basis points to 2.68%… we believe we are positioned well for solid earnings growth moving forward.” — Simon Griffiths, CEO .
“Because the integration did not occur until mid-March 2025, our first quarter results largely reflect us effectively running 2 franchises… we fully expect that cost synergies will begin to materialize in the second quarter.” — Michael Archer, CFO .
“$5 million of net accretion income from purchase accounting… contributed 36 bps of NIM expansion… core NIM expanded 11 bps… total funding cost 1.94%.” — CFO .
“We are on track to achieve 35% cost saves (75% in 2025)… likely under our pretax merger cost target of $13.5 million.” — CEO .
“We have not observed any material signs of credit deterioration… increased loan loss reserve levels by $2.6 million to account for… macro risk.” — CFO .

Q&A Highlights

Margin outlook: Core NIM expected to rise a further 2–5 bps in Q2 (to ~2.70–2.75%) .
Purchase accounting accretion: ~$5M per quarter is a reasonable midpoint; could vary with prepayments .
Rate sensitivity: ~+$1.5M PPNR per 25 bps Fed cut; company is slightly liability‑sensitive but positioned to benefit from cuts .
Expenses: Core operating expense run‑rate ~$34–35M/quarter near‑term; more takeout into 2H25 as wind‑downs complete .
Growth: Low single‑digit loan growth for 2025; pipelines healthy—Residential ~$83M, Commercial ~$97M .

Estimates Context

Results vs S&P Global consensus (company reports both GAAP and non‑GAAP; S&P EPS “actual” aligns with adjusted EPS; revenue definitions may differ for banks):

EPS (Primary): Q1’25 consensus $0.39* vs “actual” $0.95* — significant beat driven by accretion, core NIM expansion, and scale from Northway; GAAP EPS was $0.43 .
Revenue: Q1’25 consensus $57.78M* vs S&P “actual” $50.63M*; company‑reported total revenue (NII + non‑interest) was $60.05M, reflecting purchase accounting accretion included in NII .
Values retrieved from S&P Global.*

Key Takeaways for Investors

Core earnings power is inflecting: core NIM expansion, synergy realization (35% of Northway opex), and modest loan growth should lift adjusted EPS through 2025, with additional upside if the Fed eases (~$1.5M per 25 bps cut) .
Near-term optics may remain noisy as purchase accounting accretion normalizes and M&A costs roll through, but the non‑GAAP efficiency ratio has already stabilized (~59%), indicating underlying discipline .
Capital remains comfortably above requirements; TCE dipped to 6.49% post‑deal but management expects accelerated rebuild on the combined franchise’s earnings capacity .
Asset quality remains a strength (NPLs 0.15%, low delinquencies, low NCOs) despite a prudent reserve build; credit remains a limited swing factor near‑term .
Stock reaction catalysts: sustained core NIM expansion, visible cost saves in Q2–Q4, fee income seasonality normalizing, and ongoing proof points from New Hampshire expansion (deposit retention, cross‑sell) .
Watch revenue definition differences across data sources when benchmarking to consensus; for banks, “revenue” methodologies can diverge versus company NII+fee totals .
Dividend maintained at $0.42 (4.0%–4.15% annualized yield basis referenced prices) supports income profile while capital rebuild progresses .

Additional Context and Disclosures

Northway effects (Q1): $5.0M net accretion to NII (36 bps NIM), $7.5M pretax M&A costs, $6.3M CECL provision for acquired non‑PCD loans, $2.4M DTA tax benefit .
Dividend: $0.42 payable Apr 30, 2025 to holders of record Apr 15, 2025 .
Company hosted results call on May 6, 2025; full integration of Northway was completed mid‑March .

S&P Global estimates note

EPS and revenue consensus figures and “actual” values marked with an asterisk are sourced from S&P Global and may reflect differing definitions versus company‑reported GAAP/non‑GAAP. Values retrieved from S&P Global.*

Sources: Q1’25 press release/8‑K and supplemental tables ; Q1’25 earnings call transcript ; Prior quarters’ press releases ; Dividend PR .

CAMDEN NATIONAL CORP (CAC)·Q1 2025 Earnings Summary