Camden National (CAC) Q2 FY26 earnings call: guidance and Q&A

What are the cash flows from the loan and security portfolios over the next six months, and what are the repricing dynamics for new loans?

Investment portfolio cash flows are around $35 million per quarter, and loan portfolio cash flows are around $170-$180 million per quarter, totaling about $200 million. New loans are originating in the low sixes to six and a half percent range, representing a significant pickup over rolling off rates.

“On the investment side, we internally model it right around $35 million a quarter, I believe, right in that neighborhood. And then on the loan side, we have another, call it, $170, $180, I believe. In total, we're trading around $200 million.”

asked by Stephen Moss · answered by Michael Archer

Given the 45% increase in the committed loan pipeline, what factors lead to the expectation of 'measured' Q3 loan growth?

Commercial activity and home equity (HELOCs) have been strong, with HELOC balances up 23% YoY and improved funding times. The company sees a nice balanced story on loan growth, reflecting strategy and focus, but still expects measured growth for Q3.

“I mean, I think certainly commercial activity has been strong and, you know, we're seeing sort of across the geography, nice momentum. Certainly home equity has been a significant growth engine for us.”

asked by Stephen Moss · answered by Simon Griffiths

Is the strong fee income growth sustainable, and what components are driving it (price increases vs. new customers)?

Fee income growth was balanced across wealth management, brokerage, debit card, deposit-related fees, and mortgage banking. Investments in wealth offerings (especially in New Hampshire) and digital enhancements (new online portal) are attracting new customers and driving debit income. The company views this as a key focus and expects continued strengthening.

“I would say just generally across the fee income, it was a balanced story for us. nice momentum across wealth management, which we talked about, certainly brokerage, debit card, deposit-related fees, mortgage banking, I think all played a role.”

asked by Stephen Moss · answered by Simon Griffiths

When does the company expect the pronounced benefits to NIM from fixed asset repricing and roll-on/roll-off to diminish, looking into 2027-2028?

Management sees benefits continuing through 2026, particularly from reinvesting the investment book to fund loan growth. They are not looking as far out as 2027-2028 for specific NIM outlook but expect core NIM to continue ticking up 2-3 basis points consistently over the next few quarters.

“I mean, I think there's a lot of caveats to that answer there, Matt. I think it depends on a lot of things, certainly yield curve and so forth. So at least for now we see it. I mean, certainly through 2026, we certainly could see benefit of investments and continuing to, I think one real opportunity for us is just our investment book, being able to bring that down over time and frankly help fund some of the loan growth.”

asked by Matthew Breeds · answered by Michael Archer

Was there a BOLI death benefit gain in fee income this quarter, and if so, how much?

Yes, there was a BOLI death benefit gain, but it was a smaller part of the overall increase in BOLI income. The BOLI income also includes volatility from underlying equity-driven securities acquired with Northway. The death benefit was about $50,000, and the total incremental BOLI revenue was about $500,000. The Q3 non-interest income guidance reduction is partly due to this BOLI income volatility.

“Yes, good question. The short answer is yes. I would say that was a smaller part of the real kind of tick up, if you will, in the bully income this past quarter... That incremental revenue 500,000 or so, how much that would get penalty? I think it was right around 50 MAP plus or minus 50,000.”

asked by Matthew Breeds · answered by Michael Archer

Given the desire to build fee income, what is the appetite for non-bank acquisitions?

The company is open to looking at the right opportunities in the fee income space, but pricing for such entities is often high. While they have conversations, it's not a primary consideration, especially with significant competition in the wealth management sector.

“Yes, I think that we're open to looking at the right opportunity and certainly on that fee income side, there could be a couple of ideas in that space that could be interesting, but generally the pricing on those pieces are pretty high.”

asked by Daniel Cardenas · answered by Simon Griffiths

What is the optimal size of an institution Camden National would look to acquire?

The company is conscious of crossing the $10 billion asset mark and its income implications. The focus is on finding the right fit, including contiguous markets, cultural alignment, and synergy, to drive revenue growth and leverage the transaction. While not perfectly planned, crossing $10 billion could offer scale advantages, but organic growth remains the primary focus.

“You know, we are conscious, of course, of crossing potentially at some point the $10 billion mark and the income implications of that, but, you know, I think we're going to I look at it sort of from a, you know, just focusing on the fundamentals of the business, making sure that there's really, there's a there for the, you know, there's a there there if you like for the acquisition and partnership is there, the culture is there, the synergy is there.”

asked by Daniel Cardenas · answered by Simon Griffiths