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CAMDEN NATIONAL CORP (CAC)·Q3 2025 Earnings Summary

Executive Summary

  • Record net income of $21.2M and diluted EPS of $1.25; EPS beat S&P Global consensus Primary EPS of $1.1825 while revenue of $62.4M was modestly below the $63.3M consensus, driven by NIM expansion and lower provision versus Q2, offset by a syndicated telecom loan charge-off *.
  • Net interest margin expanded 10 bps q/q to 3.16% and the non-GAAP efficiency ratio improved to 52.47% as Northway integration synergies flowed through; pre-tax, pre-provision income rose 19% q/q to $29.5M .
  • Asset quality remained strong (NPAs 0.12% of assets; ACL/loans 0.91%), with a $10.7M charge-off resolving the previously disclosed syndicated telecom participation; coverage stood at 5.5x NPLs .
  • Management guided Q4 non-interest expense to $36–$36.5M and expects another 5–10 bps of NIM expansion with Fed cuts, supported by deposit cost tailwinds; dividend maintained at $0.42/share payable Oct 31 .
  • Potential catalyst: continued core earnings momentum and margin tailwinds from rate cuts plus visible cost synergy realization; watch reliance on purchase accounting accretion (core NIM 2.82% vs reported 3.16%) .

What Went Well and What Went Wrong

What Went Well

  • “Record third quarter earnings of $21.2 million… and diluted EPS of $1.25, marking our strongest quarterly performance since 2021,” underscoring Northway integration success and operating leverage .
  • NIM up 10 bps to 3.16%, ROATCE at 19.14%, and non-GAAP efficiency ratio improved to 52.47% on synergy capture and disciplined expense management .
  • Non-interest income momentum (AUA reached $2.4B); mortgage activity robust; digital adoption surged (131% increase in digital account origination; 143 bots processed 5M+ items, saving 74k hours) .

What Went Wrong

  • Deposits fell 2% q/q (loan-to-deposit ratio rose to 93%), increasing reliance on wholesale funding; brokered deposits declined 41% q/q while short-term borrowings rose 25% q/q .
  • $10.7M charge-off on the previously reserved syndicated telecom loan pressured provision (additional $4.7M) and net charge-offs (0.89% annualized QTD), though overall credit metrics remain solid .
  • Revenue was modestly below consensus despite EPS beat, reflecting cadence of accretion, mixed loan growth (commercial down 5% q/q), and deposit dynamics *.

Financial Results

Income Statement Highlights

MetricQ3 2024Q2 2025Q3 2025
Net Income ($USD Millions)$13.073 $14.081 $21.194
Diluted EPS ($)$0.90 $0.83 $1.25
Total Interest Income ($USD Millions)$63.721 $79.323 $80.894
Net Interest Income ($USD Millions)$33.587 $49.209 $51.272
Non-Interest Income ($USD Millions)$11.406 $13.067 $14.125
Provision for Credit Losses ($USD Millions)$0.239 $6.920 $2.972
Non-Interest Expense ($USD Millions)$28.900 $37.596 $35.927

Margins, Efficiency, and Returns

MetricQ3 2024Q2 2025Q3 2025
Net Interest Margin (FTE) (%)2.46 3.06 3.16
Core NIM (FTE) (%) (non-GAAP)2.46 2.70 2.82
GAAP Efficiency Ratio (%)64.23 60.37 54.94
Non-GAAP Efficiency Ratio (%)62.08 55.47 52.47
ROAA (%)0.91 0.82 1.21
ROAE (%)10.04 8.77 12.75
ROATCE (%) (non-GAAP)12.40 13.71 19.14
Pre-tax, Pre-provision Income ($USD Millions)$16.093 $24.680 $29.470

Estimates vs Actuals (S&P Global)

MetricQ3 2024Q2 2025Q3 2025
Primary EPS Consensus Mean ($)*0.81251.08751.1825
Primary EPS Actual ($)*0.940.891.24
Revenue Consensus Mean ($USD)*43,909,67061,100,00063,250,000
Revenue Actual ($USD)*44,754,00055,356,00062,425,000
Primary EPS - # of Estimates*444
Revenue - # of Estimates*312
  • EPS: Q3 2025 beat; Q2 2025 missed; Q3 2024 beat. Revenue: Q3 2025 slight miss; Q2 2025 miss; Q3 2024 beat*.
  • Values retrieved from S&P Global.

Segment and Portfolio Mix

Loans ($USD Thousands)Q3 2024Q2 2025Q3 2025
Commercial Real Estate1,707,923 2,089,977 2,173,748
Commercial382,507 506,883 479,461
Residential Real Estate1,762,395 2,018,332 2,017,675
Consumer & Home Equity263,904 316,177 332,043
Total Loans4,116,729 4,931,369 5,002,927

Asset Quality KPIs

MetricQ3 2024Q2 2025Q3 2025
NPLs / Total Loans (%)0.13 0.37 0.17
NPAs / Total Assets (%)0.09 0.26 0.12
ACL / Total Loans (%)0.86 1.08 0.91
Net Charge-offs (annualized, QTD, %)0.03 0.02 0.89
30–89 Days Past Due / Total Loans (%)0.03 0.08 0.16
ACL Coverage of NPLs (x)6.62x 2.92x 5.46x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Non-Interest Expense ($)Q4 2025Run-rate operating expenses to continue to improve in 2H25 (no range) $36.0–$36.5M Increased specificity (range provided)
Net Interest Margin (FTE)Q4 2025Expected NIM expansion in 2H25 +5–10 bps sequential expansion; positioned for Fed cuts Maintained outlook with quantification
Accretion Contribution to NIIQ4 2025~$5.0M recognized in Q2 ~$4.5–$5.0M run-rate per quarter Maintained
Dividend per ShareQ3 2025$0.42 (paid July 31) $0.42 (payable Oct 31) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025 and Q2 2025)Current Period (Q3 2025)Trend
Margin outlook and rate sensitivityCore NIM up 11 bps in Q1; NIM expansion expected in 2H25 NIM +10 bps q/q to 3.16; guide +5–10 bps next quarter with Fed cuts, asset yield +4 bps, funding costs –6 bps Improving
Deposit trends/cost of fundsSeasonal inflows anticipated; efficiency improvements Average deposits +2% q/q; L/D 93%; cost of funds reduction driving NIM; deposit beta strategy evolving Mixed but supportive
Loan growth/home equityPipelines strong; Q2 loans +4% annualized; commercial robust Annualized loan growth ~4%; home equity +54% y/y; NH hiring to drive growth Accelerating in targeted areas
Digital & automationNew online account opening; core NIM benefits anticipated 131% increase in digital originations; 143 bots processed 5M+ items; 74k hours saved Strong adoption
Accretion relianceQ1/Q2 fair value accretion ~$5M per quarter Run-rate ~$4.5–$5.0M guided; core NIM 2.82% vs reported 3.16% Elevated; watch normalization
Asset quality/ACLNPLs rose in Q2 due to telecom credit; ACL 1.08% $10.7M charge-off completed; ACL 0.91% (comfortable range) Normalizing post cleanup

Management Commentary

  • CEO: “Record third quarter earnings of $21.2 million… and diluted EPS of $1.25… These financial results reflect the strength and resilience of our core franchise… With the successful acquisition and integration of Northway… we are well-positioned to accelerate growth” .
  • CFO: “We are well positioned for future Fed rate cuts… base model [assumes] a margin expansion up 5–10 basis points next quarter… driven… by cost of funds” .
  • CEO on digital/automation: “Since launching our enhanced digital account opening… we have seen a 131% increase… With over 143 bots in production… saving over 74,000 cumulative hours” .
  • CFO on credit: “Provision… $3 million… recorded a charge-off of $10.7 million… As of September 30, the allowance totaled $45.5 million and covered 5.5 times total non-performing loans” .

Q&A Highlights

  • Loan growth and pricing: Management sees “nice momentum” across commercial, small business, and home equity (up ~54% y/y), with some recent pricing softening but continued activity; NH market hiring underway .
  • Margin trajectory with Fed cuts: Base model embeds two cuts (Sept and Dec), driving +5–10 bps NIM sequentially, primarily via funding cost relief; asset-side repricing to flatten somewhat .
  • Expense outlook: Q4 NIE guided to $36–$36.5M, reflecting incentives and Northway legacy contract accounting tied to BOLI performance; target mid-50s efficiency longer term .
  • Fair value accretion: Run-rate ~$4.5–$5.0M per quarter expected; could accelerate if refi activity increases, but not in base case .
  • ACL level: Comfortable around low-90 bps given diversified portfolio; provision to track growth .

Estimates Context

  • Q3 2025 EPS beat consensus (Primary EPS $1.24 vs $1.1825); revenue slight miss ($62.4M vs $63.3M). Q2 2025 showed both EPS and revenue misses; Q3 2024 saw beats on both metrics*.
  • Implications: Models likely to incorporate guided NIE range ($36–$36.5M) and 5–10 bps NIM expansion, as deposit beta declines and cost synergies persist .
  • Values retrieved from S&P Global.

Key Takeaways for Investors

  • Strong quarter: EPS beat with record net income; operating momentum from NIM expansion and cost synergies; core earnings power improving .
  • Margin tailwinds: Management expects sequential NIM expansion with Fed cuts; watch deposit beta execution and funding mix .
  • Credit normalization: Telecom participation charge-off largely cleansed; ACL coverage robust; expect provision aligned with growth .
  • Revenue cadence: Slight revenue miss vs consensus amid mix and accretion dynamics; underlying fee momentum (wealth/brokerage, mortgage) supportive * .
  • Balance sheet: Deposits –2% q/q and L/D at 93% warrant monitoring; seasonal inflows aided averages, but funding optimization remains key .
  • Accretion sensitivity: Reported NIM benefits from purchase accounting accretion; core NIM at 2.82% indicates sustainable margin excluding accretion .
  • Dividend maintained: $0.42/share, reflecting confidence in capital rebuild post-Northway .

*Values retrieved from S&P Global.