Executive Summary

Q4 2024 delivered continued operating momentum: diluted EPS $1.00 (core $1.03), up 11% and 8% q/q respectively, driven by 11 bps NIM expansion to 2.57%, 6% revenue growth, and a 2% decline in opex .
Asset quality remained a key strength: NPLs 0.16% of loans, 30–89 dpd 0.05%, and ACL/loans 0.87%; coverage stood at 5.5x NPLs, all broadly stable/improving vs Q3 .
Northway transaction closed Jan 2, 2025; integration conversion slated for mid-March. Management reiterated core NIM trajectory around ~2.60% ±5 bps near term and flagged higher Q1’25 M&A costs as integration ramps .
Structural revenue tailwinds: lower deposit costs (deposit cost down ~18 bps q/q to 1.91%; total cost of funds down ~19 bps to ~2.15%–2.16%) and fee income lift (Visa bonus, swap fees) supported results; dividend maintained at $0.42 .

What Went Well and What Went Wrong

What Went Well

Net interest margin inflected higher again (2.57%, +11 bps q/q) as deposit repricing outpaced asset yields and short-end cuts flowed through; CFO cited ~3 bps nonrecurring benefit but underlying momentum intact .
Fee income momentum: Q4 non-interest income +7% q/q to $12.2M, aided by annual Visa bonus (~$407k) and higher loan swap fees ($232k) .
Technology and execution: new online consumer account opening rolled out; process automation “bots” processed a record 1.7M transactions in Dec with <1% manual review, supporting efficiency (58.5% non-GAAP) .

Management quotes:

“We produced another quarter with strong operating results… core earnings growth of 9%… ROAA surpassed 1%” .
“We proactively managed deposit costs lower… directly translated into further NIM expansion quarter-over-quarter” .

What Went Wrong

Loan growth muted by a few larger commercial/CRE payoffs; loans were essentially flat q/q at $4.12B, and commercial balances down y/y .
Securities AFS valuation headwind: AFS fair value fell $17.7M in Q4 on rate moves, contributing to a slight decline in common equity and TCE ratios q/q (CET1/TCE modestly lower on market marks) .
Integration costs: while Q4 M&A expense was modest ($0.4M), management guided to higher merger/integration costs in Q1 2025 as Northway conversion completes in mid-March, a near-term opex headwind .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Diluted EPS ($)	$0.58	$0.90	$1.00
Core Diluted EPS ($)	$0.85	$0.95	$1.03
Net Interest Income ($M)	$32.7	$33.6	$35.4
Non-Interest Income ($M)	$6.0	$11.4	$12.2
Total Operating Revenue ($M) (NII + Non-Interest)	$38.7 (calc)	$45.0 (calc)	$47.6 (calc)
Net Interest Margin (%)	2.40%	2.46%	2.57%
Efficiency Ratio (GAAP) (%)	71.96%	64.23%	59.62%
ROAA (%)	0.59%	0.91%	1.01%

KPIs and Balance Sheet

KPI	Q4 2023	Q3 2024	Q4 2024
Loans (period-end, $M)	$4,098.1	$4,116.7	$4,115.3
Deposits (period-end, $M)	$4,597.4	$4,575.2	$4,633.2
NPLs / Loans (%)	0.18%	0.17%	0.16%
30–89 DPD / Loans (%)	0.12%	0.03%	0.05%
ACL / Loans (%)	0.90%	0.86%	0.87%
Net Charge-offs (qtd, annualized, %)	0.04%	0.03%	0.04%
Tangible Common Equity Ratio (%)	7.11%	7.69%	7.64%
Total Risk-Based Capital (%)	14.36%	14.85%	15.11%

Segment breakdown: Not applicable. CAC reports as a community bank with revenues from net interest income and non-interest income (see above components) .

Key drivers vs prior quarter and year:

NIM +11 bps q/q to 2.57% on disciplined deposit repricing and lower short-end rates; total cost of funds fell to ~2.16% (CFO noted 2.15%), deposit cost to 1.91% .
Non-interest income +7% q/q from Visa bonus and swap fees; opex -2% q/q with lower salaries/benefits and lower M&A expense; efficiency improved to 59.6% .
Loans flat q/q due to large commercial/CRE payoffs; deposits +1% q/q with 7% q/q growth in savings, aided by a temporary ~$61.8M deposit expected to run off in Q1 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Core NIM (%)	Q1 2025	Q4’24: “~2.50% ± 2–5 bps” (next quarter outlook)	“~2.60% ± ~5 bps” near term core NIM	Raised
Reported NIM (%)	2025 start	Prior deck implied accretion could add 15–20 bps; reported NIM to rise with purchase accounting	CFO: “towards ~2.85%–2.90%, up towards 3%” potential with accretion; final PA pending	Clarified/higher
M&A Costs	Q1 2025	“Most one-time deal costs over next 2 quarters” (from Q3)	“Anticipate higher M&A costs in Q1’25 during integration”	Timing affirmed
Deposits	Q1 2025	Seasonal outflows typical	Expect seasonal outflows; ~$61.8M temporary deposit to leave	Maintained/Specific
Conversion Timing	Mid-March 2025	“Expected mid-March”	“On target for mid-March”	Maintained
Dividend	Ongoing	Declared $0.42 (Dec 17)	Declared $0.42 payable Jan 31, 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Net interest margin trajectory	NIM 2.36% in Q2; guided slight q/q expansion; cost of funds 2.35%	NIM 2.57% (+11 bps q/q); core NIM guide ~2.60% ±5 bps; reported NIM to benefit from accretion post-close	Improving
Deposit costs/mix	Introduced high-yield savings; savings up 8% in Q2	Deposit cost down to ~1.91%; total cost of funds ~2.15%–2.16%; savings +7% q/q; seasonal outflows expected Q1	Positive leverage
Loan growth	Q2 modest; Q3 cited paydowns; low-single-digit 2025 ex-Northway	Q4 growth muted by payoffs; 2025 outlook low single-digit organic; NH team expansion post-Northway	Selective/modest
Asset quality	Strong, stable metrics (Q2/Q3)	NPLs 0.16%, 30–89 dpd 0.05%, NCOs 0.04% (qtd), ACL/loans 0.87%	Stable/strong
Technology/digital	Account opening platform planned year-end (Q3)	Digital account opening launched; 1.7M bot transactions in Dec (<1% manual)	Execution delivering efficiency
Wealth/fee growth	Brokerage/WM fees up in Q2/Q3	AUA $2.1B (+12% y/y); fee income momentum continues	Building
M&A integration	Regulatory approvals (Dec); Q3: deal accretive	Closed Jan 2; conversion mid-March; early balance sheet optimization actions	On-plan

Management Commentary

“We produced another quarter with strong operating results… core earnings growth of 9%… ROAA surpassed 1%” – Simon Griffiths, CEO .
“We took quick action after each Fed cut to lower deposit costs… deposit cost decreased 18 bps… total cost of funds decreased 19 bps” – Mike Archer, CFO .
“Plus or minus 2.60%… plus or minus 5 bps… is a pretty good guide [for core NIM]” – CEO .
“Reported [NIM]… probably 2.85%–2.90%, up towards 3%” with purchase accounting accretion – CFO .
“We are opportunistic… expanded [NH] group to 8 commercial lenders” – CEO .

Q&A Highlights

Loan growth: Expect low-single-digit organic growth in 2025; selective posture; NH team adds capacity post-Northway .
Margin: Core NIM ~2.60% ±5 bps near term; reported NIM to benefit from accretion; timing subject to purchase accounting finalization .
Balance sheet optimization: Post-close, paid down ~$45M higher-cost long-term FHLB; sold ~$65M bonds to improve yield/duration mix .
Pro forma scale: Earning assets around ~$6.5B in Q1 reasonable; goodwill/intangibles expected slightly above prior forecast ($40–$45M) pending final marks .
CECL Day 2: No material surprises vs plan; ~12–15% PCD mix expected .

Estimates Context

Wall Street consensus (EPS, revenue) for Q4 2024 via S&P Global was not retrievable at the time of analysis due to request limits. As a result, we cannot provide a beat/miss vs consensus for EPS or revenue this quarter [GetEstimates error]. Values retrieved from S&P Global were unavailable at this time.

Key Takeaways for Investors

Core earnings power is improving on deposit cost normalization and disciplined pricing; efficiency and ROAA inflected higher, setting a constructive baseline entering 2025 .
Near-term margin guide (~2.60% core NIM) is supportive, with upside to reported NIM from Northway accretion; purchase accounting timing remains a variable for GAAP prints .
Asset quality remains a differentiator (very low NPLs/DPD/NCOs) supporting modest reserve levels (ACL/loans 0.87%) and capital flexibility (TRBC 15.11%) .
Integration execution is the swing factor for 1H’25: expect temporary higher M&A opex in Q1; conversion mid-March is a milestone for realizing synergies and revenue opportunities in NH .
Deposit dynamics are seasonally softer in Q1 and include a known ~$61.8M temporary outflow; trajectory thereafter should benefit from high-yield savings product success and digital onboarding .
Balanced loan growth strategy (low-single-digit) and fee initiatives (wealth, swaps, cards) diversify revenue while containing risk .
Dividend maintained ($0.42/qtr); capital ratios comfortably above regulatory minimums, providing resilience amid integration .

Appendix: Additional Q4 details from 8-K/press release

Q4 revenue drivers: NII +5% q/q to $35.4M; non-interest income +7% q/q to $12.2M; GAAP efficiency ratio improved ~460 bps q/q to 59.6% .
Balance sheet: deposits +1% q/q to $4.63B; savings +7% q/q; loans ~$4.12B flat q/q; cash balances temporarily higher to $215M ahead of post-close actions .
Capital: Common equity ratio 9.15%; TCE 7.64%; TRBC 15.11% .

CAMDEN NATIONAL CORP (CAC)·Q4 2024 Earnings Summary