Sign in

You're signed outSign in or to get full access.

CN

CAMDEN NATIONAL CORP (CAC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 adjusted diluted EPS was $0.89 and GAAP diluted EPS was $0.83; versus S&P Global consensus EPS of $1.09*, results were a miss. S&P’s revenue actual of $55.4M also missed consensus $61.1M*, despite company-reported net interest + non-interest income totaling ~$62.3M, up 4% sequentially .*
  • Efficiency ratio improved materially: GAAP to 60.37% and non-GAAP to 55.47% (from 74.02% and 58.72% in Q1), driven by Northway synergy capture and lower merger costs .
  • Net interest margin expanded 2 bps to 3.06% (core NIM 2.70%); management guided another 5–10 bps potential expansion in Q3, contingent on rates .
  • A $12M syndicated C&I credit entered bankruptcy, elevating provision expense ($6.9M) and lifting NPLs to 0.37% of loans; management expects resolution later in 2025 .
  • Shares fell ~11% on the print, with concern around the NPL uptick; management flagged potential buyback optionality post-window .

What Went Well and What Went Wrong

What Went Well

  • Non-GAAP efficiency ratio improved to 55.47%, the best since Q2 2022, as merger costs declined and synergy realization progressed; pre-tax, pre-provision income rose 13% QoQ to $26.1M .
  • Net interest margin expanded to 3.06% (core 2.70%), with CFO targeting further core margin expansion in Q3 on seasonal deposit flows and earning asset yield momentum .
  • Loan pipelines strengthened: committed pipeline reached ~$149.5M (+40% QoQ), with home equity balances growing $16.7M in Q2 and strong commercial activity in ME/NH .
  • Tangible book value per share increased 3% QoQ to $26.90; TCE ratio rose to 6.77% .
  • Management emphasized digital wins (Round Up, Zogo) and wealth/brokerage fee growth (+16% YoY fiduciary/brokerage), indicating diversification of revenue .

Quotes:

  • “Pre-tax, pre-provision income… increased 13% over the prior quarter. This performance reflects achievement of cost synergies and solid revenue growth…” — CEO Simon Griffiths .
  • “We remain on track to deliver the financial targets outlined as part of the acquisition, including achieving our targeted cost reductions.” — CFO Mike Archer .

What Went Wrong

  • Consensus miss: S&P Global EPS consensus $1.09* vs actual $0.89*, and revenue consensus $61.1M* vs actual $55.4M*, reflecting elevated provisioning and an NPL-related NIM impact (~1 bp) .*
  • Credit event: a $12M syndicated C&I loan entered bankruptcy, raising provision to $6.9M and NPLs to 0.37% of loans (from 0.15% in Q1) .
  • Deposits declined 1% QoQ to $5.5B; loan-to-deposit ratio rose to 89% (from 87% in Q1), albeit with management citing normal seasonal outflows early in the quarter .
  • Non-interest income had valuation-related volatility (BOLI, mortgage pipeline fair value), prompting cautious Q3 guidance .

Financial Results

Core P&L and Margin Trends

MetricQ4 2024Q1 2025Q2 2025
Net Interest Income ($USD Millions)$35.409 $48.858 $49.209
Non-Interest Income ($USD Millions)$12.166 $11.196 $13.067
Provision for Credit Losses ($USD Millions)$0.809 $9.429 $6.920
Diluted EPS (GAAP, $)$1.00 $0.43 $0.83
Adjusted/Non-GAAP Diluted EPS ($)$1.03 $0.95 $0.89
Net Interest Margin (FTE, %)2.57% 3.04% 3.06%
Efficiency Ratio (GAAP, %)59.62% 74.02% 60.37%
Efficiency Ratio (Non-GAAP, %)58.51% 58.72% 55.47%

Estimates vs Actuals (S&P Global)

MetricQ2 2025 Consensus*Q2 2025 Actual*# of Estimates*
Primary EPS ($)1.0875*0.89*4*
Revenue ($USD Millions)61.10*55.36*1*

Values retrieved from S&P Global.

Note: Company-reported “total revenues” (net interest income + non-interest income) were ~$62.3M, up 4% QoQ ; S&P’s revenue taxonomy differs from bank reporting, hence the variance.*

Loan Composition (Period-End)

Category ($USD Millions)Q4 2024Q1 2025Q2 2025
Commercial Real Estate$1,711.964 $2,067.098 $2,089.977
Commercial$382.785 $487.409 $506.883
Residential Real Estate$1,752.249 $2,028.062 $2,018.332
Consumer & Home Equity$268.261 $302.517 $316.177
Total Loans$4,115.259 $4,885.086 $4,931.369

KPIs and Asset Quality

KPIQ4 2024Q1 2025Q2 2025
Non-Performing Loans / Total Loans (%)0.16% 0.15% 0.37%
ACL on Loans / Total Loans (%)0.87% 0.96% 1.08%
Net Charge-Offs to Avg Loans (Annualized, %)0.04% 0.08% 0.02%
Tier 1 Leverage Ratio (%)9.90% 8.58% 8.74%
Tangible Book Value per Share ($)$29.91 $26.02 $26.90

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Non-Interest Income ($USD Millions)Q3 2025Not specified$12–$13M Initiated range
Non-Interest Expense (ex-M&A & CDI, $USD Millions)Q3 2025Q2 run-rate $36.2M ~$34M Lowered (positive)
Net Interest Margin (FTE)Q3 2025Not specified+5–10 bps QoQ potential, rate-dependent Qualitative improvement
Dividend per Share ($)Q2/Q3 timing$0.42 in Q1 $0.42 declared, payable Jul 31, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Credit qualityStrong asset quality; NPLs 0.16%, ACL 0.87% (Q4) ; NPLs 0.15%, ACL 0.96% (Q1) One-off $12M syndicated C&I bankruptcy; NPLs 0.37%; ACL 1.08%; resolution expected later in 2025 Mixed (idiosyncratic event)
NIM trajectoryNIM expanded to 2.57% (Q4) ; core NIM momentum into Q1 at 2.68% NIM 3.06%; core 2.70%; guide +5–10 bps in Q3 Improving
Cost synergiesNorthway integration targeted savings; 75% in 2025 Efficiency improved; Q3 Opex ex-M&A & CDI targeted ~$34M Improving
Deposits/fundingCore deposits +2% in Q4, seasonal drawdown expected in Q1 Deposits -1% QoQ; seasonal outflows early; loan-to-deposit 89% Stable seasonality
Fee income diversificationVisa bonus, swaps (Q4) ; Q1 fee momentum despite volatility Non-interest income +17% QoQ; caution on BOLI/pipeline valuation Mixed (growth with volatility)
Digital initiativesOnline account opening deployed (Q1) Round Up/Zogo engagement; >140k Round Ups; >13k activities in 60 days Positive engagement
Capital/buybackStrong regulatory ratios (Q4, Q1) CET-1 10.88%; TCE 6.77%; buyback optionality acknowledged Building capital

Management Commentary

  • Strategy and synergies: “Early success in realizing cost synergies… positioning us for continued net interest margin expansion and earnings growth in the second half of 2025.” — CEO Simon Griffiths .
  • Margin outlook: “We do see continued momentum… plus minus 5, 10 basis points for the next quarter, dependent… on where the Fed goes.” — CEO Simon Griffiths .
  • Expense outlook: “Non-interest expenses… to land closer to $34 million [in Q3], as we realize a full quarter of cost synergy savings.” — CFO Mike Archer .
  • Credit event specifics: “A borrower under a syndicated loan… Camden’s participation totaled $12 million… we carried an allowance… of $6 million… the driver of elevated provision expense.” — CFO Mike Archer .

Q&A Highlights

  • Credit clarity: Analysts probed the $12M syndicated C&I credit; management characterized it as a “service company” and noted a ~1 bp NIM impact, with anticipated resolution later this year .
  • Margin trajectory: Management sees 5–10 bps sequential NIM expansion potential in Q3, subject to rate path .
  • Fee income and valuation sensitivity: CFO cautioned on BOLI and mortgage pipeline valuation volatility; guided Q3 non-interest income to $12–$13M .
  • Expense run-rate: Target Q3 non-interest expense (ex-M&A, CDI) closer to ~$34M, reflecting synergy capture .
  • Buyback tone: With stock down ~11% day-of, management acknowledged buyback optionality post-window .

Estimates Context

  • EPS: Adjusted EPS of $0.89 fell below S&P Global consensus of ~$1.09*, implying a miss. Drivers included elevated provision ($6.9M) and a one-off credit event impacting NIM modestly .*
  • Revenue: S&P Global revenue actual ~$55.4M vs consensus ~$61.1M*, a miss. Note that bank-reported “total revenues” (net interest + non-interest) was ~$62.3M (+4% QoQ), reflecting taxonomy differences in “revenue” definitions for banks .*
  • Revisions: Efficiency gains and margin expansion guidance could support upward adjustments to out-quarter margin assumptions; however, near-term models likely reflect higher credit costs and NPLs until resolution.*

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term headwind from an idiosyncratic C&I credit drove provisioning and an EPS/revenue miss vs S&P consensus*, but underlying margin/efficiency trends improved and management guides further NIM expansion .*
  • Cost synergies from Northway are flowing through: non-GAAP efficiency at 55.47% and Q3 Opex ex-M&A/CDI targeted ~$34M, improving operating leverage .
  • Loan growth and pipeline strength (+40% QoQ to ~$149.5M) coupled with home equity momentum support earning asset yield and core NIM expansion .
  • Deposits eased 1% QoQ (seasonal), pushing L/D to 89%; watch deposit pricing, seasonal inflows, and funding mix as margin sensitivity remains .
  • Capital rebuild continues (CET1 10.88%; TCE 6.77%); buyback optionality exists, but prudence around credit resolution likely dominates near-term capital deployment .
  • Trading: The ~11% post-earnings drop reflects credit/NPL optics; resolution of the syndicated credit and delivery on Q3 margin/Opex guidance are potential catalysts for sentiment repair .
  • Medium term: Digital/customer engagement and fee diversification (wealth/brokerage) plus ME/NH commercial expansion underpin a margin/efficiency-led EPS recovery trajectory if credit normalizes .