Earnings surge at Camden National (CAC) as Q1 2026 net income climbs
Filing Impact
Filing Sentiment
Form Type
10-Q
Camden National Corporation reported sharply higher quarterly results for the three months ended March 31, 2026. Net income rose to $21.9 million from $7.3 million a year earlier, and diluted EPS increased to $1.29 from $0.43.
Net interest income grew to $52.4 million, helped by lower interest expense, while the provision for credit losses dropped to $0.6 million from $9.4 million. Non-interest expense declined mainly because prior-year merger and acquisition costs of $7.5 million did not recur. Total loans were stable at about $5.0 billion, deposits increased to $5.59 billion, and total assets were $7.0 billion. Capital ratios at both the holding company and the bank remained well above regulatory minimums, with the bank’s common equity Tier 1 ratio at 12.60%.
Positive
- None.
Negative
- None.
Insights
Earnings jumped on lower credit costs and absence of merger charges.
Camden National delivered net income of $21.9M versus $7.3M a year earlier, with diluted EPS at $1.29. Net interest income improved to $52.4M as deposit costs eased and overall earning asset yields held steady.
A key driver was a much smaller provision for credit losses: $0.6M versus $9.4M in the prior year, when acquisition-related provisioning was elevated. Non-interest expense also fell after $7.5M of merger and acquisition costs in the prior period did not repeat.
Credit quality indicators remain manageable, with non-accrual loans at $11.0M on a $5.0B loan book and an allowance of $45.6M. Regulatory capital is solid; the bank’s common equity Tier 1 ratio was 12.60% as of March 31, 2026, comfortably above the 7.0% requirement plus buffer.
Key Figures
Net income: $21.9M
Net income prior-year: $7.3M
Diluted EPS: $1.29
+5 more
8 metrics
Net income
$21.9M
Three months ended March 31, 2026
Net income prior-year
$7.3M
Three months ended March 31, 2025
Diluted EPS
$1.29
Three months ended March 31, 2026
Net interest income
$52.4M
Quarter ended March 31, 2026
Provision for credit losses on loans
$0.6M
Quarter ended March 31, 2026
Total loans
$5.0B
As of March 31, 2026
Total deposits
$5.59B
As of March 31, 2026
Bank CET1 capital ratio
12.60%
Camden National Bank as of March 31, 2026
Key Terms
Allowance for Credit Losses, Available-for-sale securities, Held-to-maturity securities, Non-accrual loans, +2 more
6 terms
Allowance for Credit Losses financial
"The following table presents the activity in the ACL on loans for the periods indicated"
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
Available-for-sale securities financial
"Available-for-sale securities, at fair value (amortized cost of $ 946,468 and $ 972,686 , respectively)"
Available-for-sale securities are investments in stocks, bonds or similar instruments that a company does not intend to trade frequently but may sell before they mature. They matter to investors because changes in the market value of these holdings show up as paper gains or losses on the company's balance sheet rather than immediately in profit, so they can affect reported net worth and the timing of income without changing day-to-day earnings. Think of them like items on a household shelf you might sell later: their value moves with the market even if you haven’t cashed out.
Held-to-maturity securities financial
"Held-to-maturity securities, at amortized cost (fair value of $ 444,404 and $ 457,821 , respectively)"
Held-to-maturity securities are debt investments—like bonds—that a company or investor intends and is able to keep until they mature and repay their face value. Think of them as money you lock in like a fixed-term certificate: they matter to investors because their value is recorded at amortized cost rather than market price, so they provide predictable interest income and reduce balance-sheet volatility but limit flexibility to sell.
Non-accrual loans financial
"The following table presents the amortized cost basis of loans on non-accrual status by portfolio segment"
A non-accrual loan is a loan a lender has decided is unlikely to produce the scheduled interest payments, so the lender stops counting future interest as income and may record the loan at a reduced value. Think of it like renting out a house where the tenant has stopped paying: you stop counting future rent as earnings because it’s uncertain you’ll get it. For investors, a rise in non-accrual loans signals worsening credit quality, lower reported income and higher potential losses that can weaken a bank’s capital and share price.
Cash flow hedge financial
"Interest Rate Contracts - Cash Flow Hedges. The Company’s objectives in using interest rate derivatives are to add stability"
A cash flow hedge is an accounting label for a contract or arrangement used to offset expected future swings in a company’s cash payments or receipts — for example from variable-rate interest, foreign currency sales, or forecasted purchases. It matters to investors because it aims to smooth future cash and earnings volatility: gains or losses on the hedge are held out of current profit and reported separately until the underlying transaction affects results, much like buying insurance to steady future bills.
Common equity Tier 1 capital ratio financial
"Common equity Tier 1 risk-based capital ratio | 12.60 % | 7.00 % | 6.50 %"
A bank’s common equity tier 1 (CET1) capital ratio measures the size of its strongest loss-absorbing capital—mainly common shares and retained earnings—relative to the bank’s assets after adjusting those assets for how risky they are (riskier loans count more). Think of it as the safety cushion compared with the weight of risky business; investors use it to judge a bank’s ability to survive losses, meet rules, and sustain dividends or growth.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
OR
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 001-13227
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | ||||||||||
| incorporation or organization) | Identification No.) | ||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
Registrant's telephone number, including area code: (207 ) 236-8821
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | ☐ | ☒ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date:
Outstanding at April 30, 2026: Common stock (no par value) 16,914,680 shares.
CAMDEN NATIONAL CORPORATION
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2026
TABLE OF CONTENTS OF INFORMATION REQUIRED IN REPORT
| PAGE | ||||||||
| PART I. FINANCIAL INFORMATION | ||||||||
| ITEM 1. | FINANCIAL STATEMENTS | |||||||
Consolidated Statements of Condition (unaudited) - March 31, 2026 and December 31, 2025 | 3 | |||||||
Consolidated Statements of Income (unaudited) - Three Months Ended March 31, 2026 and 2025 | 4 | |||||||
Consolidated Statements of Comprehensive Income (unaudited) - Three Months Ended March 31, 2026 and 2025 | 5 | |||||||
Consolidated Statements of Changes in Shareholders’ Equity (unaudited) - Three Months Ended March 31, 2026 and 2025 | 6 | |||||||
Consolidated Statements of Cash Flows (unaudited) - Three Months Ended March 31, 2026 and 2025 | 7 | |||||||
| Notes to the Unaudited Consolidated Financial Statements | 8 | |||||||
| ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 40 | ||||||
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK | 69 | ||||||
| ITEM 4. | CONTROLS AND PROCEDURES | 70 | ||||||
| PART II. OTHER INFORMATION | ||||||||
| ITEM 1. | LEGAL PROCEEDINGS | 71 | ||||||
| ITEM 1A. | RISK FACTORS | 71 | ||||||
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 71 | ||||||
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 71 | ||||||
| ITEM 4. | MINE SAFETY DISCLOSURES | 71 | ||||||
| ITEM 5. | OTHER INFORMATION | 71 | ||||||
| ITEM 6. | EXHIBITS | 72 | ||||||
| SIGNATURES | 73 | |||||||
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CONDITION
(unaudited)
| (In thousands, except number of shares) | March 31, 2026 | December 31, 2025 | ||||||||||||
| ASSETS | ||||||||||||||
| Cash and due from banks | $ | $ | ||||||||||||
| Interest-bearing deposits in other banks (including restricted cash) | ||||||||||||||
| Total cash, cash equivalents and restricted cash | ||||||||||||||
| Investments: | ||||||||||||||
| Trading securities | ||||||||||||||
Available-for-sale securities, at fair value (amortized cost of $ | ||||||||||||||
Held-to-maturity securities, at amortized cost (fair value of $ | ||||||||||||||
| Other investments | ||||||||||||||
| Total investments | ||||||||||||||
Loans held for sale, at fair value (book value of $ | ||||||||||||||
| Loans | ||||||||||||||
| Less: allowance for credit losses on loans | ( | ( | ||||||||||||
| Net loans | ||||||||||||||
| Goodwill | ||||||||||||||
| Core deposit intangible assets | ||||||||||||||
| Bank-owned life insurance | ||||||||||||||
| Premises and equipment, net | ||||||||||||||
| Deferred tax assets | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||
| Liabilities | ||||||||||||||
| Deposits: | ||||||||||||||
| Non-interest checking | $ | $ | ||||||||||||
| Interest checking | ||||||||||||||
| Savings and money market | ||||||||||||||
| Certificates of deposit | ||||||||||||||
| Brokered deposits | ||||||||||||||
| Total deposits | ||||||||||||||
| Short-term borrowings | ||||||||||||||
| Long-term borrowings | ||||||||||||||
| Junior subordinated debentures | ||||||||||||||
| Accrued interest and other liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
Commitments and Contingencies (Note 7) | ||||||||||||||
| Shareholders’ Equity | ||||||||||||||
Common stock, | ||||||||||||||
| Retained earnings | ||||||||||||||
| Accumulated other comprehensive loss | ( | ( | ||||||||||||
| Total shareholders’ equity | ||||||||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
3
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (In thousands, except number of shares and per share data) | 2026 | 2025 | ||||||||||||||||||||||||
| Interest Income | ||||||||||||||||||||||||||
| Interest and fees on loans | $ | $ | ||||||||||||||||||||||||
Taxable interest on investments | ||||||||||||||||||||||||||
| Nontaxable interest on investments | ||||||||||||||||||||||||||
| Dividend income | ||||||||||||||||||||||||||
| Other interest income | ||||||||||||||||||||||||||
| Total interest income | ||||||||||||||||||||||||||
| Interest Expense | ||||||||||||||||||||||||||
| Interest on deposits | ||||||||||||||||||||||||||
| Interest on borrowings | ||||||||||||||||||||||||||
| Interest on junior subordinated debentures | ||||||||||||||||||||||||||
| Total interest expense | ||||||||||||||||||||||||||
| Net interest income | ||||||||||||||||||||||||||
Provision for credit losses | ||||||||||||||||||||||||||
Net interest income after provision for credit losses | ||||||||||||||||||||||||||
| Non-Interest Income | ||||||||||||||||||||||||||
| Debit card income | ||||||||||||||||||||||||||
| Service charges on deposit accounts | ||||||||||||||||||||||||||
| Income from fiduciary services | ||||||||||||||||||||||||||
| Brokerage and insurance commissions | ||||||||||||||||||||||||||
| Mortgage banking income, net | ||||||||||||||||||||||||||
| Bank-owned life insurance | ||||||||||||||||||||||||||
| Other income | ||||||||||||||||||||||||||
| Total non-interest income | ||||||||||||||||||||||||||
| Non-Interest Expense | ||||||||||||||||||||||||||
| Salaries and employee benefits | ||||||||||||||||||||||||||
| Furniture, equipment and data processing | ||||||||||||||||||||||||||
| Net occupancy costs | ||||||||||||||||||||||||||
| Debit card expense | ||||||||||||||||||||||||||
| Amortization of core deposit intangible assets | ||||||||||||||||||||||||||
| Consulting and professional fees | ||||||||||||||||||||||||||
| Regulatory assessments | ||||||||||||||||||||||||||
Other real estate owned and collection costs, net | ||||||||||||||||||||||||||
Merger and acquisition costs | ||||||||||||||||||||||||||
| Other expenses | ||||||||||||||||||||||||||
| Total non-interest expense | ||||||||||||||||||||||||||
Income before income tax expense (benefit) | ||||||||||||||||||||||||||
Income Tax Expense (Benefit) | ( | |||||||||||||||||||||||||
| Net Income | $ | $ | ||||||||||||||||||||||||
| Per Share Data | ||||||||||||||||||||||||||
| Basic earnings per share | $ | $ | ||||||||||||||||||||||||
| Diluted earnings per share | $ | $ | ||||||||||||||||||||||||
| Cash dividends declared per share | $ | $ | ||||||||||||||||||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||||||||||||
| Diluted weighted average number of common shares outstanding | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||||||||||||||
| Net Income | $ | $ | ||||||||||||||||||||||||
Other comprehensive (loss) income: | ||||||||||||||||||||||||||
| Net change in fair value of debt securities, net of tax | ( | |||||||||||||||||||||||||
| Net change in fair value of cash flow hedging derivatives, net of tax | ( | |||||||||||||||||||||||||
| Net change in other comprehensive income for supplemental executive retirement plan and other postretirement benefit plan, net of tax | ( | ( | ||||||||||||||||||||||||
Other comprehensive (loss) income | ( | |||||||||||||||||||||||||
| Comprehensive Income | $ | $ | ||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(unaudited)
| Three Months Ended | ||||||||||||||||||||||||||||||||
| Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||||||||||||
(In thousands, except number of shares and per share data) | Shares Outstanding | Amount | ||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Net income | — | — | — | |||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | |||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | |||||||||||||||||||||||||||||
| Issuance of vested share awards, net of repurchase for tax withholdings | ( | — | — | ( | ||||||||||||||||||||||||||||
Common stock issued for acquisition of Northway Financial, Inc. | — | — | ||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | ( | — | ( | |||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Net income | — | — | — | |||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | ( | ( | |||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | |||||||||||||||||||||||||||||
| Issuance of vested share awards, net of repurchase for tax withholdings | ( | — | — | ( | ||||||||||||||||||||||||||||
| Common stock repurchased | ( | ( | — | — | ( | |||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | ( | — | ( | |||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| | ||||||||||||||||||||||||||||||||
6
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Three Months Ended March 31, | ||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||
| Operating Activities | ||||||||||||||
| Net Income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Originations of mortgage loans held for sale | ( | ( | ||||||||||||
| Proceeds from the sale of mortgage loans | ||||||||||||||
| Gain on sale of mortgage loans, net of origination costs | ( | ( | ||||||||||||
Provision for credit losses | ||||||||||||||
| Depreciation and amortization expense | ||||||||||||||
Investment securities amortization and accretion, net | ||||||||||||||
| Stock-based compensation expense | ||||||||||||||
| Amortization of core deposit intangible assets | ||||||||||||||
| Purchase accounting accretion, net | ( | ( | ||||||||||||
Net increase (decrease) in derivative collateral received from counterparties | ( | |||||||||||||
Deferred income tax expense (benefit) | ( | |||||||||||||
Decrease (increase) in other assets | ( | |||||||||||||
Decrease in other liabilities | ( | ( | ||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Investing Activities | ||||||||||||||
Cash received in acquisition of Northway Financial, Inc. | ||||||||||||||
Proceeds from maturities of available-for-sale debt securities | ||||||||||||||
Proceeds from sales of available-for-sale debt securities | ||||||||||||||
| Purchase of available-for-sale debt securities | ( | ( | ||||||||||||
Proceeds from maturities and recoveries of held-to-maturity securities | ||||||||||||||
| Purchase of held-to-maturity securities | ( | |||||||||||||
Net decrease in loans | ||||||||||||||
Proceeds from BOLI death benefit | ||||||||||||||
Purchase of Federal Home Loan Bank and Federal Reserve Bank stock | ( | ( | ||||||||||||
| Proceeds from sale of Federal Home Loan Bank stock | ||||||||||||||
| Purchase of premises and equipment | ( | ( | ||||||||||||
| Recoveries of previously charged-off loans | ||||||||||||||
Net cash provided by investing activities | ||||||||||||||
| Financing Activities | ||||||||||||||
Net increase (decrease) in deposits | ( | |||||||||||||
Net (repayments) proceeds from borrowings less than 90 days | ( | |||||||||||||
Proceeds from Federal Home Loan Bank long-term advances | ( | |||||||||||||
| Common stock repurchases | ( | |||||||||||||
Issuance of restricted stock, net of repurchase for tax withholdings | ( | ( | ||||||||||||
| Cash dividends paid on common stock | ( | ( | ||||||||||||
| Finance lease payments | ( | ( | ||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
Net increase in cash, cash equivalents and restricted cash | ||||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | ||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||||||||
| Supplemental information | ||||||||||||||
| Interest paid | $ | $ | ||||||||||||
| Income taxes paid | ||||||||||||||
| Cash dividends declared, not paid | ||||||||||||||
Change in fair value hedges presented within residential real estate loans and other assets | ( | |||||||||||||
Assets acquired in Northway Financial, Inc. acquisition, excluding cash received | ||||||||||||||
Liabilities assumed in Northway Financial, Inc. acquisition | ||||||||||||||
Common stock issued for Northway Financial, Inc. acquisition | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
7
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – BASIS OF PRESENTATION
The accompanying unaudited consolidated interim financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all disclosures required by accounting principles generally accepted in the United States of America for complete presentation of financial statements. In the opinion of management, the consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the consolidated statements of condition of Camden National Corporation (the “Company”) as of March 31, 2026 and December 31, 2025, the consolidated statements of income for the three months ended March 31, 2026 and 2025, the consolidated statements of comprehensive income for the three months ended March 31, 2026 and 2025, the consolidated statements of changes in shareholders' equity for the three months ended March 31, 2026 and 2025, and the consolidated statements of cash flows for the three months ended March 31, 2026 and 2025. The consolidated financial statements include the accounts of the Company and Camden National Bank (the “Bank”), a wholly-owned subsidiary of the Company (which includes the consolidated accounts of Healthcare Professional Funding Corporation (“HPFC”) and Property A, Inc.). All intercompany accounts and transactions have been eliminated in consolidation. Assets held by the Bank in a fiduciary capacity, through Camden National Wealth Management, a division of the Bank, are not assets of the Company and, therefore, are not included in the consolidated statements of condition. The Company also owns 100% of the common stock of Camden Capital Trust A (“CCTA”), Union Bankshares Capital Trust I (“UBCT”), Northway Capital Trust III (“NCT III”) and Northway Capital Trust IV (“NCT IV”). These entities are unconsolidated subsidiaries of the Company. Certain reclassifications may have been made to prior period amounts to conform to the current period presentation. Any such reclassifications did not impact net income or shareholders' equity as previously reported. Net income reported for the three months ended March 31, 2026, is not necessarily indicative of the results that may be expected for the full year. The information in this report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
8
The acronyms, abbreviations and definitions identified below are used throughout this Form 10-Q, including Part I. “Financial Information” and Part II. “Management's Discussion and Analysis of Financial Condition and Results of Operations.” The following is provided to aid the reader and provide a reference page when reviewing these sections of the Form 10-Q.
| Acronym | Description | Acronym | Description | |||||||||||||||||
| AFS: | Available-For-Sale | GDP: | Gross Domestic Product | |||||||||||||||||
| ACL: | Allowance for Credit Losses | HTM: | Held-To-Maturity | |||||||||||||||||
| ALCO: | Asset/Liability Committee | LIBOR: | London Interbank Offered Rate | |||||||||||||||||
| AOCI: | Accumulated Other Comprehensive Income (Loss) | Management ALCO: | Management Asset/Liability Committee | |||||||||||||||||
| ASC: | Accounting Standards Codification | MBS: | Mortgage-Backed Security | |||||||||||||||||
| ASU: | Accounting Standards Update | N/A: | Not Applicable | |||||||||||||||||
| Bank: | Camden National Bank, a wholly-owned subsidiary of Camden National Corporation | NCT III: | Northway Capital Trust III, an unconsolidated entity formed by Northway Financial, Inc., acquired by the Company on January 2, 2025 | |||||||||||||||||
| BOLI: | Bank-owned life insurance | NCT IV: | Northway Capital Trust IV, an unconsolidated entity formed by Northway Financial, Inc., acquired by the Company on January 2, 2025 | |||||||||||||||||
| Board ALCO: | Board of Directors' Asset/Liability Committee | Northway: | Northway Financial, Inc., the bank holding company of Northway Bank, acquired by the Company on January 2, 2025 | |||||||||||||||||
| CCTA: | Camden Capital Trust A, an unconsolidated entity formed by the Company | N.M.: | Not Meaningful | |||||||||||||||||
| CD: | Certificate of Deposits | OBBBA: | One Big Beautiful Bill Act | |||||||||||||||||
CDI: | Core deposit intangible | OCC: | Office of the Comptroller of the Currency | |||||||||||||||||
| Company: | Camden National Corporation | OCI: | Other Comprehensive Income (Loss) | |||||||||||||||||
| CMO: | Collateralized Mortgage Obligation | OREO: | Other Real Estate Owned | |||||||||||||||||
| EPS: | Earnings Per Share | PCD: | Purchase Credit Deteriorated | |||||||||||||||||
| FASB: | Financial Accounting Standards Board | PD: | Probability of Default | |||||||||||||||||
| FDIC: | Federal Deposit Insurance Corporation | SERP: | Supplemental Executive Retirement Plans | |||||||||||||||||
| FHLBB: | Federal Home Loan Bank of Boston | SOFR: | Secured Overnight Financing Rate | |||||||||||||||||
| FRB: | Federal Reserve System Board of Governors | UBCT: | Union Bankshares Capital Trust I, an unconsolidated entity formed by Union Bankshares Company that was subsequently acquired by the Company | |||||||||||||||||
| GAAP: | Generally Accepted Accounting Principles in the United States | U.S.: | United States of America | |||||||||||||||||
9
NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS
The following provides a brief description of recently issued accounting pronouncements that have yet to be adopted by the Company:
ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). The FASB issued ASU 2024-03 to improve disclosures about a public business entity’s expenses and to address requests from investors for more detailed information about certain types of expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual periods, with early adoption permitted. The Company does not expect ASU 2024-03 to have a material impact to the disclosures in its consolidated financial statements.
ASU No. 2025-06, Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The FASB issued ASU 2025-06 to modernize the accounting for software costs related to internal-use software. ASU 2025-06 removes all references to project stages and clarifies when an entity is required to start capitalizing software costs. ASU 2025-06 is to be applied on either a prospective basis, modified transition approach or a retrospective transition approach and is effective for annual reporting periods beginning after December 15, 2027 with early adoption permitted. The Company does not expect ASU 2025-06 to have a material impact to the Company’s consolidated financial statements.
NOTE 3 – INVESTMENTS
Trading Securities
Trading securities are reported on the Company’s consolidated statements of condition at fair value. As of March 31, 2026 and December 31, 2025, the fair value of the Company’s trading securities was $4.4 million and $5.7 million, respectively. These securities are held in a rabbi trust account and invested in mutual funds. The trading securities will be used for future payments associated with the Company’s deferred compensation plan for eligible employees and directors.
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AFS Debt Securities
AFS debt securities are reported on the Company’s consolidated statements of condition at fair value. The following table summarizes the amortized cost, estimated fair value, and unrealized gains (losses) of AFS debt securities, as of the dates indicated:
| (In thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||
| Obligations of states and political subdivisions | $ | $ | $ | ( | $ | |||||||||||||||||||||
MBS issued or guaranteed by U.S. government-sponsored enterprises | ( | |||||||||||||||||||||||||
CMO issued or guaranteed by U.S. government-sponsored enterprises | ( | |||||||||||||||||||||||||
Subordinated corporate bonds | ( | |||||||||||||||||||||||||
| Total AFS debt securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||
| Obligations of states and political subdivisions | $ | $ | $ | ( | $ | |||||||||||||||||||||
| MBS issued or guaranteed by U.S. government-sponsored enterprises | ( | |||||||||||||||||||||||||
| CMO issued or guaranteed by U.S. government-sponsored enterprises | ( | |||||||||||||||||||||||||
Subordinated corporate bonds | ( | |||||||||||||||||||||||||
| Total AFS debt securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
As of March 31, 2026 and December 31, 2025, there was no
The Company previously transferred debt securities from AFS to HTM in 2022. Unrealized losses associated with these securities at the time of transfer were recorded in AOCI and are being amortized over the remaining life of the securities as an adjustment yield. As of March 31, 2026, net unrealized losses related to the transferred securities remaining in AOCI were $35.4 million, net of a deferred tax asset of $10.3 million, and as of December 31, 2025 were $36.7 million, net of a deferred tax asset of $10.6 million.
The net unrealized losses on AFS debt securities recorded in AOCI (excluding the aforementioned securities transferred from AFS to HTM) as of March 31, 2026 were $35.7 million, net of a deferred tax asset of $10.2 million, and as of December 31, 2025 were $33.7 million, net of a deferred tax asset of $9.6 million.
The following table details the Company’s sales of AFS debt securities for the periods indicated below:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||||||||||||||
Proceeds from sales(1) | $ | $ | ||||||||||||||||||||||||
Gross realized gains | ||||||||||||||||||||||||||
| Gross realized losses | ||||||||||||||||||||||||||
(1) Shortly after closing the Northway acquisition, the Company sold certain acquired AFS debt securities at fair value, and, therefore, no gain or loss was recognized on the sale.
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The following table presents the Company’s AFS debt securities with gross unrealized losses, for which an ACL has not been recorded, segregated by the length of time the securities have been in a continuous loss position, as of the dates indicated:
| Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||||||||||
| (In thousands, except number of holdings) | Number of Holdings | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| Obligations of states and political subdivisions | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||
| MBS issued or guaranteed by U.S. government-sponsored enterprises | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| CMO issued or guaranteed by U.S. government-sponsored enterprises | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Subordinated corporate bonds | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Total AFS debt securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Obligations of states and political subdivisions | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||
| MBS issued or guaranteed by U.S. government-sponsored enterprises | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| CMO issued or guaranteed by U.S. government-sponsored enterprises | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Subordinated corporate bonds | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Total AFS debt securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||
For the three months ended March 31, 2026 and 2025, the unrealized losses on the Company’s AFS debt securities have not been recognized into income because management does not intend to sell, and it is not more-likely-than-not it will be required to sell, any of the AFS debt securities before recovery of its amortized cost basis. Furthermore, the unrealized losses were due to changes in interest rates and other market conditions and were not reflective of credit events. Agency-backed and government-sponsored enterprise securities have a long history of no credit losses, including during times of severe stress. The principal and interest payments on agency guaranteed debt is backed by the U.S. government. Government-sponsored enterprises similarly guarantee principal and interest payments and securities backed by government-sponsored enterprises carry an implicit guarantee from the U.S. Department of the Treasury. Additionally, government-sponsored enterprise securities are exceptionally liquid, readily marketable, and provide a substantial amount of price transparency and price parity, indicating a perception of zero credit losses. Municipal debt holdings are comprised of high credit quality (rated A- or higher) state and municipal obligations. High credit quality state and municipal obligations have a history of zero to near-zero credit loss. Subordinated corporate bonds are primarily comprised of investment grade senior notes and senior subordinated notes of other financial institutions.
| | ||||||||||||||||||||||||||
As of March 31, 2026 and December 31, 2025, total accrued interest receivable on AFS debt securities, which has been excluded from reported amortized cost basis on AFS debt securities, was $2.5 million and $2.6 million, respectively, and was reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.
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The amortized cost and estimated fair values of the Company’s AFS debt securities by contractual maturity as of March 31, 2026, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-related securities are shown in total, as their maturities are highly variable.
| (In thousands) | Amortized Cost | Fair Value | ||||||||||||
| Due in one year or less | $ | $ | ||||||||||||
| Due after one year through five years | ||||||||||||||
| Due after five years through ten years | ||||||||||||||
| Due after ten years | ||||||||||||||
| Subtotal | ||||||||||||||
| Mortgage-related securities | ||||||||||||||
| Total | $ | $ | ||||||||||||
HTM Debt Securities
HTM debt securities are reported on the Company’s consolidated statements of condition at amortized cost. The following table summarizes the amortized cost, estimated fair value and unrealized gains (losses) of HTM debt securities as of the dates indicated:
| (In thousands) | Amortized Cost(1) | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||
| Obligations of U.S. government-sponsored enterprises | $ | $ | $ | ( | $ | |||||||||||||||||||||
| Obligations of states and political subdivisions | ( | |||||||||||||||||||||||||
| MBS issued or guaranteed by U.S. government-sponsored enterprises | ( | |||||||||||||||||||||||||
| CMO issued or guaranteed by U.S. government-sponsored enterprises | ( | |||||||||||||||||||||||||
Subordinated corporate bonds | ( | |||||||||||||||||||||||||
| Total HTM debt securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||
| Obligations of U.S. government-sponsored enterprises | $ | $ | $ | ( | $ | |||||||||||||||||||||
| Obligations of states and political subdivisions | ( | |||||||||||||||||||||||||
| MBS issued or guaranteed by U.S. government-sponsored enterprises | ( | |||||||||||||||||||||||||
| CMO issued or guaranteed by U.S. government-sponsored enterprises | ( | |||||||||||||||||||||||||
Subordinated corporate bonds | ( | |||||||||||||||||||||||||
| Total HTM debt securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
(1)Amortized cost presented above includes unamortized unrealized losses from the aforementioned transfer from AFS to HTM securities that occurred in 2022. As of March 31, 2026 and December 31, 2025, the unamortized, unrealized losses on the 2022 transfer included within amortized cost were as follows: (1) $686,000 and $720,000 in obligations of U.S. government-sponsored enterprises, (2) $4.5 million and $4.6 million in obligations of state and political subdivisions, (3) $25.9 million and $26.8 million in MBS, (4) $13.9 million and $14.4 million in CMO, and (5) $16,000 and $23,000 in subordinated corporate bonds, respectively.
The Company evaluated its HTM debt securities with an amortized cost as of March 31, 2026 and December 31, 2025, and determined that the expected credit loss on its HTM portfolio was immaterial, and therefore it did not carry an ACL on the HTM portfolio at either date. Additionally, there were no charge-offs, recoveries or provision recorded during the three months ended March 31, 2026 or 2025.
The HTM debt securities portfolio is comprised of the same types of securities as the AFS debt securities portfolio. Refer to the discussion above for considerations of credit risk.
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As of March 31, 2026 and December 31, 2025, none of the Company’s HTM debt securities were past due or on non-accrual status; therefore, the Company did not recognize any interest income on non-accrual HTM debt securities during the three months ended March 31, 2026 and 2025. As of March 31, 2026 and December 31, 2025, total accrued interest receivable on HTM debt securities was $1.5 million and $1.6 million, respectively, and no allowance was provided for. Accrued interest on HTM debt securities is reported within other assets on the consolidated statements of condition and excluded from reported amortized cost.
| (In thousands) | Amortized Cost | Fair Value | ||||||||||||
| Due in one year or less | $ | $ | ||||||||||||
| Due after one year through five years | ||||||||||||||
| Due after five years through ten years | ||||||||||||||
| Due after ten years | ||||||||||||||
| Subtotal | ||||||||||||||
| Mortgage-related securities | ||||||||||||||
| Total | $ | $ | ||||||||||||
AFS and HTM Debt Securities Pledged
As of March 31, 2026 and December 31, 2025, AFS and HTM debt securities with an amortized cost of $947.8 million and $952.7 million and estimated fair values of $896.4 million and $904.3 million, respectively, were pledged to secure FHLBB advances, FRB advances, public deposits, and securities sold under agreements to repurchase and for other purposes required or permitted by law.
Other Investments
The Company’s FHLBB, FRB and other correspondent bank common stock are each reported at cost within other investments on the consolidated statements of condition. The Company evaluates these investments for impairment based on the ultimate recoverability of the par value. The Company did not record any impairment on its other investments for the three months ended March 31, 2026 and 2025.
The following table summarizes the Company’s other investments as presented on the consolidated statements of condition, as of the dates indicated:
| (In thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| FHLBB | $ | $ | ||||||||||||
| FRB | ||||||||||||||
Other | ||||||||||||||
| Total other investments | $ | $ | ||||||||||||
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NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS
Loans
The composition of the Company’s loan portfolio, excluding residential loans held for sale, was as follows for the dates indicated:
| (In thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Commercial Loans: | ||||||||||||||
| Commercial real estate - non-owner-occupied | $ | $ | ||||||||||||
| Commercial real estate - owner-occupied | ||||||||||||||
| Commercial | ||||||||||||||
| Total commercial loans | ||||||||||||||
| Retail Loans: | ||||||||||||||
| Residential real estate | ||||||||||||||
| Home equity | ||||||||||||||
| Consumer | ||||||||||||||
| Total retail loans | ||||||||||||||
| Total loans | $ | $ | ||||||||||||
The loan balances for each portfolio segment presented above are net of their respective unamortized fair value mark discount on acquired loans and net of unamortized loan origination costs for the dates indicated:
| (In thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Net unamortized fair value mark discount on acquired loans | $ | ( | $ | ( | ||||||||||
| Net unamortized loan origination costs | ||||||||||||||
| Total | $ | ( | $ | ( | ||||||||||
The Company’s lending activities are primarily conducted in Maine, Massachusetts and New Hampshire. The Company originates single- and multi-family residential loans, commercial real estate loans, business loans, municipal loans and a variety of consumer loans. In addition, the Company makes loans for the construction of residential homes, multi-family properties and commercial real estate properties. The ability and willingness of borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the geographic area and the general economy.
Related Party Loans. In the normal course of business, the Company makes loans to certain officers, directors and their associated companies, under terms that are consistent with the Company’s lending policies and regulatory requirements and that do not involve more than the normal risk of collectability or present other unfavorable features. As of March 31, 2026 and December 31, 2025, outstanding loans to certain officers, directors and their associated companies were less than 5% of the Company's shareholders’ equity.
Loan Sales
For the three months ended March 31, 2026 and 2025, the Company sold $61.0 million and $42.3 million, respectively, of residential mortgage loans on the secondary market, which resulted in gains on the sale of loans (net of costs) of $704,000 and $497,000 , respectively.
As of March 31, 2026 and December 31, 2025, the Company had certain residential mortgage loans with a principal balance of $17.6 million and $15.0 million, respectively, designated as held for sale. The Company has elected the fair value option of accounting for its loans held for sale, and as of March 31, 2026 and December 31, 2025, it had recorded unrealized (losses) gains of $(76,000 ) and $75,000 , respectively. For the three months ended March 31, 2026 and 2025, the Company recorded the change in unrealized losses on loans held for sale within mortgage banking income, net, on the Company’s consolidated statements of income of $151,000 and $102,000 , respectively.
The Company has forward delivery commitments with a secondary market investor on each of its loans held for sale as of
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March 31, 2026 and December 31, 2025. Refer to Note 8 for further discussion of the Company's forward delivery commitments.
ACL on Loans
The Company manages its loan portfolio proactively to effectively identify problem credits and assess trends early, implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continuously reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company monitors and manages credit risk through the following governance structure:
•The Credit Risk Policy Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Risk, and Commercial and Retail Banking, along with the Credit Risk and Special Assets teams, oversees the Company’s systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan rating system.
•The adequacy of the ACL is overseen by the Management Provision Committee, which is an internal management committee. The Management Provision Committee is comprised of the Company’s chief executive officer, chief financial officer, chief credit officer and certain members of senior management within Accounting, Credit Risk, and Collections and Special Assets. The Management Provision Committee supports the oversight efforts of the Audit Committee of the Board of Directors.
•The Directors’ Credit Committee of the Board of Directors reviews large credit exposures, monitors external loan review reports, reviews the lending authority for individual loan officers when required, and has approval authority and responsibility for all matters regarding the loan policy and other credit-related policies, including reviewing and monitoring asset quality trends, and concentration levels.
•The Audit Committee of the Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.
Segmentation. For purposes of determining the ACL on loans, the Company disaggregates its loans into portfolio segments. Each portfolio segment possesses unique risk characteristics that are considered when determining the appropriate level of allowance. As of March 31, 2026 and December 31, 2025, the Company’s loan portfolio segments, as determined based on the unique risk characteristics of each, include the following:
Commercial Real Estate - Non-Owner-Occupied. Non-owner occupied commercial real estate loans are, in substance, all commercial real estate loans that are not categorized by the Company as owner-occupied commercial real estate loans. Non owner-occupied commercial real estate loans are investment properties in which the primary source for repayment of the loan by the borrower is derived from rental income associated with the property or the proceeds of the sale, refinancing, or permanent refinancing of the property. Non-owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, multi-family residential, commercial/retail office space, industrial/warehouse space, hotels, assisted living facilities and other specific use properties. Also included within the non-owner-occupied commercial real estate loan segment are construction projects until they are completed. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.
Commercial Real Estate - Owner-Occupied. Generally, owner-occupied commercial real estate loans are properties that are owned and operated by the borrower, and the primary source for repayment is the cash flow from the ongoing operations and activities conducted by the borrower's business. Owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, commercial/retail office space, restaurants, educational and medical practice facilities and other specific use properties. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.
Commercial. Commercial loans consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate, if applicable. Commercial loans are primarily paid by the operating cash flow of the borrower. Commercial loans may be secured
16
or unsecured. The commercial loan portfolio also includes participations in shared national credits and other syndicated lending arrangements in which the Company acts as a participant rather than the lead lender. Syndicated loans are underwritten in accordance with the lead bank’s credit standards and are subject to the Company’s independent credit review, ongoing monitoring, and risk rating assessment. As of March 31, 2026 and December 31, 2025, the Company had $79.1 million and $74.8 million, respectively, of syndicated commercial loans outstanding.
Residential Real Estate. Residential real estate loans held in the Company's loan portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines. Collateral consists of mortgage liens on one- to four-family residences, including for investment purposes.
Home Equity. Home equity loans and lines of credit are made to qualified individuals and are secured by senior or junior mortgage liens on owner-occupied one- to four-family homes, condominiums, or vacation homes. The home equity loan has a fixed rate and is billed as equal payments comprised of principal and interest. The home equity line of credit has a variable rate and is billed as interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines. At March 31, 2026 and December 31, 2025, 57% of the home equity loan portfolio was secured by junior lien positions in both periods.
Consumer. Consumer loan products including personal lines of credit and amortizing loans made to qualified individuals for various purposes such as education, auto loans, debt consolidation, personal expenses or overdraft protection. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines, as applicable. Consumer loans may be secured or unsecured.
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The following table presents the activity in the ACL on loans for the periods indicated:
| Commercial Real Estate | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | Non-Owner-Occupied | Owner- Occupied | Commercial | Residential Real Estate | Home Equity | Consumer | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
As of or for the Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance, December 31, 2025 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision (credit) for loan losses | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance, March 31, 2026 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
As of or for the Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired PCD loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for loans losses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for acquired non-PCD loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General provision (credit) for loan losses | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total provision for loan losses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance, March 31, 2025 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
As of or for the Year Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired PCD loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for loans losses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for acquired non-PCD loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General provision for loan losses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total provision for loan losses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending balance, December 31, 2025 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
During the first quarter of 2026, the Company completed its annual review of the significant model inputs and assumptions within its discounted cash flow analysis used for estimating its ACL on loans and determined there were no material changes to its methodology. As of March 31, 2026, the following loss drivers for each loan segment were used to calculate the expected PD over the forecast and reversion period: (i) the commercial real estate – non-owner-occupied loan segment used Maine Unemployment and change in National GDP; (ii) the commercial real estate – owner-occupied loan segment used Maine Unemployment and change in National GDP; (iii) the commercial loan segment used Maine Unemployment and change in National GDP; (iv) the residential real estate loan segment used Maine Unemployment and change in Maine House Price Index; (v) the home equity loan segment used Maine Unemployment and change in Maine House Price Index; and (vi) the consumer loan segment used Maine Unemployment and change in National Retail Sales. These updates resulted in higher modeled loss expectations within the commercial and residential loan portfolios and were a primary driver of the increase in the provision for credit losses and ACL recorded during the first quarter of 2026.
As of March 31, 2026 and December 31, 2025, total accrued interest receivable on loans, which has been excluded from reported amortized cost basis on loans, was $16.0 million and $15.8 million, respectively, and reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.
Credit Concentrations
The Company focuses on maintaining a well-balanced and diversified loan portfolio and imposes internal credit concentration limits that includes consideration of regulatory requirements, which are reviewed quarterly by the Credit Risk Policy Committee. Despite such efforts, it is recognized that credit concentrations may occasionally emerge as a result of economic conditions, changes in local demand, natural loan growth and runoff. To identify credit concentrations effectively, all commercial and commercial real estate loans are assigned Standard Industrial Classification codes, North American Industry Classification System codes, and state and county codes. Shifts in portfolio concentrations are monitored. As of March 31,
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2026, the Company’s total exposure to (1) the lessors of nonresidential buildings’ industry (operators of commercial and industrial buildings, retail establishments, theaters, banks and insurance buildings) and (2) the lessors of residential buildings’ industry (lessors of buildings used as residences, such as single-family homes, apartments and town houses) were 12 % of total loans and 28 % of total commercial real estate loans. There were no other industry exposures exceeding 10% of the Company’s total loan portfolio as of March 31, 2026.
Credit Quality Indicators
To further identify loans with similar risk profiles, the Company categorizes each portfolio segment into classes by credit risk characteristic and applies a credit quality indicator to each portfolio segment. The indicators for commercial real estate - non-owner-occupied and owner-occupied, commercial and residential real estate portfolio segments are represented by Grades 1 through 10 as outlined below. In general, risk ratings are adjusted periodically throughout the year as updated analysis and review warrants. This process may include, but is not limited to, annual credit and loan reviews, periodic reviews of loan performance metrics, such as delinquency rates, and quarterly reviews of adversely risk rated loans. The Company uses the following definitions when assessing grades for the purpose of evaluating the risk and adequacy of the ACL on loans:
•Grade 1 through 6 — Grades 1 through 6 represent groups of loans that are not subject to adverse criticism as defined in regulatory guidance. Loans in these groups exhibit characteristics that represent low to moderate risks, which is measured using a variety of credit risk criteria, such as cash flow coverage, debt service coverage, balance sheet leverage, liquidity, management experience, industry position, prevailing economic conditions, support from secondary sources of repayment and other credit factors that may be relevant to a specific loan. In general, these loans are supported by properly margined collateral and guarantees of principal parties.
•Grade 7 — Loans with potential weakness (Special Mention). Loans in this category are currently protected based on collateral and repayment capacity and do not constitute undesirable credit risk, but have potential weakness that may result in deterioration of the repayment process at some future date. This classification is used if a negative trend is evident in the obligor’s financial situation. Special mention loans do not sufficiently expose the Company to warrant adverse classification.
•Grade 8 — Loans with definite weakness (Substandard). Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or by collateral pledged. Borrowers experience difficulty in meeting debt repayment requirements. Deterioration is sufficient to cause the Company to look to the sale of collateral.
•Grade 9 — Loans with potential loss (Doubtful). Loans classified as doubtful have all the weaknesses inherent in the substandard grade with the added characteristic that the weaknesses make collection or liquidation of the loan in full highly questionable and improbable. The possibility of some loss is extremely high, but because of specific pending factors that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined.
•Grade 10 — Loans with definite loss (Loss). Loans classified as loss are considered uncollectible. The loss classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the asset because recovery and collection time may be protracted.
The Company periodically reassesses asset quality indicators to reflect appropriately the risk composition of the Company’s loan portfolio. Home equity and consumer loans are not individually risk rated, but rather analyzed as groups taking into account delinquency rates and other economic conditions which may affect the ability of borrowers to meet debt service requirements, including interest rates and energy costs. Performing loans include loans that are current and loans that are past due less than 90 days. Loans that are past due over 90 days and non-accrual loans, are considered non-performing.
Based on the most recent analysis performed, the risk category of loans by portfolio segment by vintage was as follows as of and for the dates indicated:
19
Revolving Loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Amortized Cost Basis | Converted to Term | Total | |||||||||||||||||||||||||||||||||||||||||||||||
As of and for the period ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner-occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass (Grades 1-6) | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention (Grade 7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard (Grade 8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful (Grade 9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate - non-owner-occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs for the three months ended | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - owner-occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass (Grades 1-6) | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention (Grade 7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard (Grade 8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful (Grade 9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate - owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs for the three months ended | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass (Grades 1-6) | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention (Grade 7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard (Grade 8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful (Grade 9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs for the three months ended | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential Real Estate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass (Grades 1-6) | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention (Grade 7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard (Grade 8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful (Grade 9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total residential real estate | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs for the three months ended | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Home equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total home equity | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs for the three months ended | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs for the three months ended | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
20
Revolving Loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Amortized Cost Basis | Converted to Term | Total | |||||||||||||||||||||||||||||||||||||||||||||||
As of and for the year ended December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner-occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass (Grades 1-6) | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention (Grade 7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard (Grade 8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful (Grade 9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate - non-owner-occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs for the year ended | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - owner-occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass (Grades 1-6) | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention (Grade 7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard (Grade 8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful (Grade 9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate - owner-occupied | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs for the year ended | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass (Grades 1-6) | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention (Grade 7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard (Grade 8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful (Grade 9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs for the year ended | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential Real Estate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass (Grades 1-6) | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Special mention (Grade 7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard (Grade 8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful (Grade 9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total residential real estate | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs for the year ended | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Home equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total home equity | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Gross charge-offs for the year ended | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risk rating: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs for the year ended | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
21
Past Due and Non-Accrual Loans
The Company closely monitors the performance of its loan portfolio. A loan is placed on non-accrual status when the financial condition of the borrower is deteriorating, payment in full of both principal and interest is not expected as scheduled, or principal or interest has been in default for 90 days or more. Exceptions may be made if the asset is secured by collateral sufficient to satisfy both the principal and accrued interest in full and collection is reasonably assured. When one loan to a borrower is placed on non-accrual status, all other loans to the borrower are re-evaluated to determine if they should also be placed on non-accrual status. All previously accrued and unpaid interest is reversed at this time. A loan will return to accrual status when collection of principal and interest is assured and the borrower has demonstrated timely payments of principal and interest for a reasonable period, generally at least six months. Unsecured loans, however, are not normally placed on non-accrual status because they are generally charged-off once their collectability is in doubt.
The following is a loan aging analysis by portfolio segment (including loans past due over 90 days and non-accrual loans) and loans past due over 90 days and accruing as of the following dates:
| (In thousands) | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days or Greater Past Due | Total Past Due | Current | Total Loans Outstanding | Loans > 90 Days Past Due and Accruing | |||||||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner-occupied | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - owner-occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Home equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner-occupied | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - owner-occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Home equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
22
The following table presents the amortized cost basis of loans on non-accrual status by portfolio segment as of the dates indicated:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| (In thousands) | Non-Accrual Loans With an Allowance | Non-Accrual Loans Without an Allowance | Total Non-Accrual Loans | Non-Accrual Loans With an Allowance | Non-Accrual Loans Without an Allowance | Total Non-Accrual Loans | ||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner-occupied | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Commercial real estate - owner-occupied | ||||||||||||||||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||||||||||||||
| Residential real estate | ||||||||||||||||||||||||||||||||||||||
| Home equity | ||||||||||||||||||||||||||||||||||||||
| Consumer | ||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
The Company's policy is to reverse previously recorded accrued interest income when a loan is placed on non-accrual, as such, the Company did not record any interest income on its non-accrual loans for the three months ended March 31, 2026 and 2025.
Interest income that would have been recognized if loans on non-accrual status had been current in accordance with their original terms, including accrued interest reversed during the period when loans were placed on non‑accrual, is estimated to have been $263,000 and $73,000 for the three months ended March 31, 2026 and 2025, respectively.
Collateral-dependent loans are loans for which repayment is expected to be provided substantially by the underlying collateral and there are no other available and reliable sources of repayment. The following table presents the amortized cost basis of collateral-dependent loans by portfolio segment and collateral type, as of the dates indicated:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||
| Collateral Type | Total Collateral -Dependent Non-Accrual Loans | Collateral Type | Total Collateral -Dependent Non-Accrual Loans | |||||||||||||||||||||||||||||||||||||||||
| (In thousands) | Real Estate | Other Assets | Real Estate | Other Assets | ||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||||||||||||||||||||||
| Residential real estate | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Loan Modifications for Borrowers Experiencing Financial Difficulty
The Company offers several types of loan and receivables modification programs to borrowers experiencing financial difficulty, primarily interest rate reductions and term extensions. In such instances, the Company may modify loans and receivables with the intention to minimize future losses and improve collectability, while providing customers with temporary or permanent financial relief. For the three months ended March 31, 2026 and 2025, the Company had no material modified loans to borrowers that were experiencing financial difficulty.
23
The Company closely monitors the performance of loans that were previously modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts and relevant factors are considered while assessing the adequacy of the ACL. During the three months ended March 31, 2026 and 2025, there were no defaults of previously modified loans to borrowers experiencing financial difficulty.
In-Process Foreclosure Proceedings
As of March 31, 2026 and December 31, 2025, the Company had $669,000 and $709,000 , respectively, of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings were in process.
FHLBB Advances
FHLBB advances are those borrowings from the FHLBB greater than 90 days. FHLBB advances are collateralized by a blanket lien on qualified collateral consisting primarily of loans with first mortgages secured by one-to-four family properties, certain commercial real estate loans, certain pledged investment securities and other qualified assets. As of March 31, 2026 and December 31, 2025, the combined carrying value of residential real estate and commercial loans pledged as collateral was $2.3
Refer to Notes 3 and 6 of the consolidated financial statements for discussion of securities pledged as collateral.
NOTE 5 – BORROWINGS
The following summarizes the Company's borrowings as presented on the consolidated statements of condition as of the dates indicated:
| (In thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
Short-term borrowings: | ||||||||||||||
FHLBB borrowings(1) | $ | $ | ||||||||||||
Customer repurchase agreements | ||||||||||||||
Total short-term borrowings | $ | $ | ||||||||||||
Long-term borrowings: | ||||||||||||||
FHLBB borrowings | $ | $ | ||||||||||||
Total long-term borrowings | $ | $ | ||||||||||||
Junior subordinated debentures: | ||||||||||||||
CCTA(1) | $ | $ | ||||||||||||
UBCT(1) | ||||||||||||||
NCT III(1) | ||||||||||||||
NCT IV(1) | ||||||||||||||
Total junior subordinated debentures | $ | $ | ||||||||||||
(1) The Company has interest rate swap contracts on certain borrowings and junior subordinated debentures. Refer to Note 8 for further discussion of derivative instruments.
NOTE 6 – REPURCHASE AGREEMENTS
The Company can raise additional liquidity by entering into repurchase agreements at its discretion. In a security repurchase agreement transaction, the Company generally will sell a security, agreeing to repurchase either the same or a substantially identical security on a specified later date, at a greater price than the original sales price. The difference between the sale price and purchase price is the cost of the proceeds, which is recorded within interest on borrowings on the consolidated statements of income. The securities underlying the agreements are delivered to counterparties as collateral for the repurchase obligations. Because the securities are treated as collateral and the agreement does not qualify for a full transfer of effective control, the transactions do not meet the criteria to be classified as sales and are therefore considered secured borrowing transactions for accounting purposes. Payments on such borrowings are interest only until the scheduled repurchase date. In a repurchase agreement the Company is subject to the risk that the purchaser may default at maturity and not return the securities underlying the agreements. In order to minimize this potential risk, the Company either deals with established firms when
24
entering into these transactions, or with customers whose agreements stipulate that the securities underlying the agreement are not delivered to the customer and instead are held in segregated safekeeping accounts by the Company's safekeeping agents.
The table below sets forth information regarding the Company’s repurchase agreements accounted for as secured borrowings and types of collateral as of the dates indicated:
| (In thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
MBS issued or guaranteed by U.S. government-sponsored enterprises | $ | $ | ||||||||||||
CMO issued or guaranteed by U.S. government-sponsored enterprises | ||||||||||||||
Total(1)(2) | $ | $ | ||||||||||||
(1) Presented within short-term borrowings on the consolidated statements of condition.
(2) All customer repurchase agreements mature continuously or overnight for the dates indicated.
As of March 31, 2026 and December 31, 2025, certain customers held CDs totaling $141,000 and $206,000 , respectively, that were collateralized by MBS and CMO securities that were overnight repurchase agreements.
Certain counterparties monitor collateral and may request additional collateral to be posted from time to time.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Commitments
In the normal course of business, the Company is a party to both on- and off-balance sheet financial instruments involving, to varying degrees, elements of credit risk and interest rate risk in addition to the amounts recognized in the consolidated statements of condition.
The following is a summary of the Company's contractual off-balance sheet commitments as of the dates indicated:
| (In thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Commitments to extend credit | $ | $ | ||||||||||||
| Standby letters of credit | ||||||||||||||
| Total | $ | $ | ||||||||||||
The Company’s commitments to extend credit from its lending activities do not necessarily represent future cash requirements since certain of these instruments may expire without being funded and others may not be fully drawn upon. These commitments are subject to the Company’s credit approval process, including an evaluation of the customer’s creditworthiness and related collateral requirements. Commitments generally have fixed expiration dates or other termination clauses.
Standby letters of credit are conditional commitments issued to guarantee the performance of a borrower to a third party. In the event of nonperformance by the borrower, the Company would be required to fund the commitment and would be entitled to the underlying collateral, if applicable, which generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate. The maximum potential future payments are limited to the contractual amount of the commitment.
The Company establishes an ACL on off-balance sheet credit exposures on its contractual off-balance sheet commitments, except those that are unconditionally cancellable by the Company. As of March 31, 2026 and December 31, 2025, the ACL on off-balance sheet credit exposures was $2.8 million and $3.1 million, respectively. The ACL on off-balance sheet credit exposure was presented within accrued interest and other liabilities on the consolidated statements of condition.
For the three months ended March 31, 2026 and 2025, the (credit) provision for credit losses on off-balance sheet credit exposures recorded in provision for credit losses on the consolidated statements of income was ($254,000 ) and $556,000 , respectively.
25
Legal Contingencies
In the normal course of business, the Company and its subsidiaries are subject to pending and threatened litigation, claims, investigations and legal and administrative cases and proceedings. Although the Company is not able to predict the outcome of such actions, after reviewing pending and threatened actions with counsel, management believes that, based on the information currently available, the outcome of such actions, individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial statements.
Reserves are established for legal claims only when losses associated with the claims are judged to be probable, and the loss can be reasonably estimated. Assessments of litigation exposure are difficult because they involve inherently unpredictable factors including, but not limited to: whether the proceeding is in the early stages; whether damages are unspecified, unsupported, or uncertain; whether there is a potential for punitive or other pecuniary damages; whether the matter involves legal uncertainties, including novel issues of law; whether the matter involves multiple parties and/or jurisdictions; whether discovery has begun or is not complete; whether meaningful settlement discussions have commenced; and whether the lawsuit involves class allegations. In many lawsuits and arbitrations, it is not possible to determine whether a liability has been incurred or to estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case a reserve will not be recognized until that time. Assessments of class action litigation, which generally is more complex than other types of litigation, are particularly difficult, especially in the early stages of the proceeding when it is not known whether a class will be certified or how a potential class, if certified, will be defined. As a result, the Company may be unable to estimate reasonably possible losses with respect to every litigation matter it faces.
The Company did no
NOTE 8 – DERIVATIVES AND HEDGING
The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s credit derivatives result from loan participation arrangements, and therefore are not used to manage interest rate risk in the Company’s assets or liabilities.
Derivatives Designated as Hedging Instruments - Hedges of Interest Rate Risk
Interest Rate Contracts - Cash Flow Hedges. The Company’s objectives in using interest rate derivatives are to add stability to interest income and expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed rate payments or the receipt of fixed rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. For the three months ended March 31, 2026 and 2025, such derivatives were used to hedge the variable cash flows associated with existing variable-rate assets or liabilities or forecasted issuances of debt.
For derivatives designated, and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and subsequently is reclassified into interest expense or interest income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense or interest income as interest payments are made or received on the Company’s variable-rate liabilities or assets. The Company estimates that over the next 12 months, an additional $1.8 million will be reclassified as a decrease to interest expense.
Interest Rate Contracts - Fair Value Hedges. Derivatives designated as fair value hedges are utilized to mitigate the risk of changes in the fair values of recognized assets and liabilities. The Company uses interest rate contracts in this manner to manage its exposure to changes in the fair value of hedged items caused by changes in interest rates.
Changes in the fair value of the derivatives and changes in the fair value of the hedged item due to changes in the hedged risk are recognized in earnings in the same line item. If a hedge is terminated, but the hedged item was not derecognized, all
26
remaining adjustments to the carrying amount of the hedged item are amortized over a period that is consistent with the amortization of other discounts or premiums associated with the hedged item.
Derivatives not Designated as Hedges
Customer Loan Swaps. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.
Fixed Rate Mortgage Interest Rate Lock Commitments. As part of the origination process of a residential loan, the Company may enter into rate lock agreements with its borrower, which is considered an interest rate lock commitment. If the Company intends to sell the loan upon origination, it will account for the interest rate lock commitment as a derivative.
Forward Delivery Commitments. The Company typically enters into a forward delivery commitment with a secondary market investor, which has been approved by the Company within its normal governance process, at the onset of the loan origination process. The Company may enter into these arrangements with the secondary market investors on a “best effort” or “mandatory delivery” basis. The Company's normal practice is typically to enter into these arrangements on a “best effort” basis. The Company enters into these arrangements with the secondary market investors to manage its interest rate exposure. The Company accounts for the forward delivery commitment as a derivative upon origination of a loan identified as held for sale.
Risk Participation Agreements. The Company’s existing credit derivatives result from participations in or out of interest rate swaps provided by or to external lenders as part of loan participation arrangements, therefore, they are not used to manage interest rate risk in the Company’s assets or liabilities. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain lenders which participate in loans.
27
The following table presents the fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition as of the dates indicated:
| Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||||||||||||
(In thousands) | Notional Amount | Location | Fair Value | Notional Amount | Location | Fair Value | ||||||||||||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments: | ||||||||||||||||||||||||||||||||||||||
Interest rate contracts(1) | $ | Other Assets | $ | $ | Accrued interest and other liabilities | $ | ||||||||||||||||||||||||||||||||
| Total derivatives designated as hedging instruments | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||||||||||||||||
Customer loan swaps(1) | $ | Other assets | $ | $ | Accrued interest and other liabilities | $ | ||||||||||||||||||||||||||||||||
| Risk participation agreements | Other assets | Accrued interest and other liabilities | ||||||||||||||||||||||||||||||||||||
| Fixed rate mortgage interest rate lock commitments | Other assets | Accrued interest and other liabilities | ||||||||||||||||||||||||||||||||||||
| Forward delivery commitments | Other assets | Accrued interest and other liabilities | ||||||||||||||||||||||||||||||||||||
| Total derivatives not designated as hedging instruments | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments: | ||||||||||||||||||||||||||||||||||||||
Interest rate contracts(1) | $ | Other assets | $ | $ | Accrued interest and other liabilities | $ | ||||||||||||||||||||||||||||||||
| Total derivatives designated as hedging instruments | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||||||||||||||||
Customer loan swaps(1) | $ | Other assets | $ | $ | Accrued interest and other liabilities | $ | ||||||||||||||||||||||||||||||||
| Risk participation agreements | Other assets | Accrued interest and other liabilities | ||||||||||||||||||||||||||||||||||||
| Fixed rate mortgage interest rate lock commitments | Other assets | Accrued interest and other liabilities | ||||||||||||||||||||||||||||||||||||
| Forward delivery commitments | Other assets | Accrued interest and other liabilities | ||||||||||||||||||||||||||||||||||||
| Total derivatives not designated as hedging instruments | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
(1) Reported fair values include accrued interest receivable and payable.
The following table shows the carrying amount and associated cumulative basis adjustments related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships:
| Location in Consolidated Statements of Condition | Carrying Amount of Hedged Assets/(Liabilities) | Cumulative Fair Value Hedging Adjustment in the Carrying Amount of the Hedged Assets/(Liabilities) | ||||||||||||||||||||||||||||||||||||
(In thousands) | March 31, 2026 | December 31, 2025 | March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
Loans(1) | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
(1) These amounts include the amortized cost basis of residential real estate loans that were used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period. As of March 31, 2026 and December 31, 2025, the amortized cost basis of the residential real estate loans used in these hedging relationships was $692.0 million and $701.9 million, respectively, and the amount of
28
the designated hedged residential loans was $325.0 million and $475.0 million, respectively.
The table below presents the effect of cash flow hedge accounting, before tax, on AOCI for the periods indicated:
(In thousands) | Amount of Gain (Loss) Recognized in OCI on Derivative | Amount of Gain (Loss) Recognized in OCI Included Component | Amount of Gain (Loss) Recognized in OCI Excluded Component | Location of Gain (Loss) Recognized from AOCI into Income | Amount of Gain Reclassified from AOCI into Income | Amount of Gain Reclassified from AOCI into Income Included Component | Amount of Gain (Loss) Reclassified from AOCI into Income Excluded Component | |||||||||||||||||||||||||||||||||||||
For the Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| Interest rate contracts | $ | $ | $ | Interest on borrowings | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Interest rate contracts | Interest on junior subordinated debentures | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
For the Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Interest rate contracts | $ | ( | $ | ( | $ | Interest on borrowings | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Interest rate contracts | ( | ( | Interest on junior subordinated debentures | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | ( | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
The table below presents the effect of fair value and cash flow hedge accounting on the consolidated statements of income for the periods indicated:
| Location and Amount of Gain (Loss) Recognized in Income | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | Interest and fees on loans | Interest on borrowings | Interest on junior subordinated debentures | Interest and fees on loans | Interest on borrowings | Interest on junior subordinated debentures | ||||||||||||||||||||||||||||||||||||||||||||
Total presented on the consolidated statements of income in which the effects of cash flow and fair value hedges are recorded | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Gain (loss) on fair value hedging relationships | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate contracts: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Hedged items | $ | ( | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Gain (loss) on cash flow hedging relationships | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate contracts: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Amount of gain (loss) reclassified from AOCI into income | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Amount of gain (loss) reclassified from AOCI into income - included component | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Amount of gain (loss) reclassified from AOCI into income - excluded component | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income for the periods indicated:
| Location of Gain (Loss) Recognized in Income | Amount of Gain (Loss) Recognized in Income | |||||||||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
(In thousands) | 2026 | 2025 | ||||||||||||||||||||||||||||||
| Customer loan swaps | Other expense | $ | ( | $ | ( | |||||||||||||||||||||||||||
| Fixed rate mortgage interest rate lock commitments | Mortgage banking income, net | ( | ||||||||||||||||||||||||||||||
| Forward delivery commitments | Mortgage banking income, net | ( | ||||||||||||||||||||||||||||||
| Total | $ | $ | ( | |||||||||||||||||||||||||||||
29
Credit Risk-Related Contingent Features
By using derivatives, the Company is exposed to credit risk to the extent that counterparties to the derivative contracts do not perform as required. Should a counterparty fail to perform under the terms of a derivative contract, the Company’s credit exposure on interest rate swaps is limited to the net positive fair value and accrued interest of all swaps with each counterparty. The Company seeks to minimize counterparty credit risk through credit approvals, limits, monitoring procedures, and obtaining collateral, where appropriate. As such, management believes the risk of incurring credit losses on derivative contracts with institutional counterparties is remote.
The Company has agreements with its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. In addition, the Company also has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well- capitalized institution, then the counterparty could terminate the derivative position(s) and the Company could be required to settle its obligations under the agreements.
As of March 31, 2026 and December 31, 2025, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for non-performance risk, related to these agreements was $8.0 million and $7.5 million, respectively. As of March 31, 2026 and December 31, 2025, the Company has minimum collateral posting thresholds with certain of its derivative counterparties and has not 8.0 million and $7.5 million, respectively.
NOTE 9 – BALANCE SHEET OFFSETTING
The Company does not offset the carrying value for derivative instruments or repurchase agreements on the consolidated statements of condition. The Company nets the amount recognized for the right to reclaim cash collateral against the obligation to return cash collateral arising from instruments executed with the same counterparty under a master netting arrangement. Collateral legally required to be pledged or received is monitored and adjusted as necessary. Refer to Note 6 for further discussion of repurchase agreements and Note 8 for further discussion of derivative instruments.
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The following table presents the Company's derivative positions and repurchase agreements, and the potential effect of netting arrangements on its financial position, as of the dates indicated:
| Gross Amount Not Offset in the Consolidated Statements of Condition | ||||||||||||||||||||||||||||||||||||||
(In thousands) | Gross Amount Recognized in the Consolidated Statements of Condition | Gross Amount Offset in the Consolidated Statements of Condition | Net Amount Presented in the Consolidated Statements of Condition | Financial Instruments Pledged (Received)(1) | Cash Collateral Pledged (Received)(1) | Net Amount | ||||||||||||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||||||||||||||
| Derivative assets: | ||||||||||||||||||||||||||||||||||||||
Customer loan swaps - dealer bank(2) | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
Customer loan swaps - commercial customer(3) | ||||||||||||||||||||||||||||||||||||||
Interest rate contracts(2) | ( | |||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
| Derivative liabilities: | ||||||||||||||||||||||||||||||||||||||
Customer loan swaps - commercial customer(3) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Customer loan swaps - dealer bank(2) | ||||||||||||||||||||||||||||||||||||||
Interest rate contracts(2) | ||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Customer repurchase agreements | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Derivative assets: | ||||||||||||||||||||||||||||||||||||||
Customer loan swaps - dealer bank(2) | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
Customer loan swaps - commercial customer(3) | ||||||||||||||||||||||||||||||||||||||
Interest rate contracts(2) | ( | |||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
| Derivative liabilities: | ||||||||||||||||||||||||||||||||||||||
Customer loan swaps - commercial customer(3) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Customer loan swaps - dealer bank(2) | ||||||||||||||||||||||||||||||||||||||
Interest rate contracts(2) | ||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Customer repurchase agreements | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
(1) The amount presented was the lesser of the amount pledged (received) or the net amount presented in the consolidated statements of condition.
(2) The Company maintains master netting arrangements with each counterparty and settles collateral on a net basis for all contracts.
(3) The Company manages its net exposure on its commercial customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices. The Company does not post collateral to its commercial customers as part of its contract.
NOTE 10 – REGULATORY CAPITAL REQUIREMENTS
The Company and Bank are subject to various regulatory capital requirements administered by the FRB and the OCC. Failure to meet minimum capital requirements can result in mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.
The Company and Bank are required to maintain certain levels of capital based on risk-adjusted assets. These capital requirements represent quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company and Bank's capital classification is also subject to qualitative judgments by our regulators about components, risk weightings and other factors. The quantitative measures established to ensure capital
31
adequacy require the Company and Bank to maintain minimum amounts and ratios of total capital, Tier 1 capital, and common equity Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets, or the leverage ratio. These requirements apply to the Company on a consolidated basis.
Under the current requirements, banking organizations must have a minimum total risk-based capital ratio of 8.0 %, a minimum Tier 1 risk-based capital ratio of 6.0 %, a minimum common equity Tier 1 risk-based capital ratio of 4.5 %, and a minimum leverage ratio of 4.0 % in order to be “adequately capitalized.” In addition to these requirements, banking organizations must maintain a capital conservation buffer consisting of common Tier 1 equity in an amount above the minimum risk-based capital requirements for “adequately capitalized” institutions equal to 2.5% of total risk-weighted assets, resulting in a requirement for the Company and the Bank effectively to maintain common equity Tier 1, Tier 1 and total capital ratios of 7.0%, 8.5% and 10.5%, respectively. The Company and the Bank must maintain the capital conservation buffer to avoid restrictions on the ability to pay dividends, pay discretionary bonuses and to engage in share repurchases based on the amount of the shortfall and the institution's “eligible retained income” (that is, the greater of (i) net income for the preceding four quarters, net of distributions and associated tax effects not reflected in net income and (ii) average net income over the preceding four quarters).
The Company and Bank's risk-based capital ratios exceeded regulatory requirements, including the capital conservation buffer, as of March 31, 2026 and December 31, 2025, and the Bank's capital ratios met the requirements for it to be considered "well capitalized" under prompt corrective action provisions for each period. There were no changes to the Company or Bank's capital ratios that occurred subsequent to March 31, 2026 that would change the Company or Bank's regulatory capital categorization. The following table presents the Company and Bank's regulatory capital ratios at the periods indicated:
| March 31, 2026 | Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer | Minimum Regulatory Provision to Be “Well Capitalized” | December 31, 2025 | Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer | Minimum Regulatory Provision to Be “Well Capitalized” | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||||||||||||||||||
| Camden National Corporation: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total risk-based capital ratio | $ | % | % | % | $ | % | % | % | ||||||||||||||||||||||||||||||||||||||||||
Tier 1 risk-based capital ratio | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||
Common equity Tier 1 risk-based capital ratio(1) | % | % | N/A | % | % | N/A | ||||||||||||||||||||||||||||||||||||||||||||
Tier 1 leverage capital ratio(1) | % | % | N/A | % | % | N/A | ||||||||||||||||||||||||||||||||||||||||||||
| Camden National Bank: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total risk-based capital ratio | $ | % | % | % | $ | % | % | % | ||||||||||||||||||||||||||||||||||||||||||
Tier 1 risk-based capital ratio | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||
Common equity Tier 1 risk-based capital ratio | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||
Tier 1 leverage capital ratio | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||
(1) “Minimum Regulatory Provisions to Be ‘Well Capitalized’” are not formally defined under applicable banking regulations for bank holding companies.
In 2006 and 2008, the Company issued $44.3 million of junior subordinated debentures in connection with the issuance of trust preferred securities. In 2025, as part of the Northway acquisition, the Company assumed two additional tranches of junior subordinated debentures totaling $20.6 million, which were subject to fair value purchase accounting at the acquisition date. Although the junior subordinated debentures are recorded as liabilities on the Company’s consolidated statements of condition, the Company is permitted, in accordance with applicable regulation, to include the debentures within its calculation of risk-based capital, subject to certain limits. As of March 31, 2026 and December 31, 2025, $63.0
The Company and Bank’s regulatory capital and risk-weighted assets fluctuate due to normal business, including profits and losses generated by the Company and Bank as well as changes to their asset mix. Of particular significance are changes within the Company and Bank’s loan portfolio mix due to the differences in regulatory risk-weighting between retail and commercial loans. Furthermore, the Company and Bank's regulatory capital and risk-weighted assets are subject to change due to changes in GAAP and regulatory capital standards. The Company and Bank proactively monitor their regulatory capital and risk-weighted assets, and the impact of changes to their asset mix, and the impact of proposed and pending changes as a result of new and/or amended GAAP standards and regulatory changes.
32
NOTE 11 – OTHER COMPREHENSIVE INCOME
The following tables present a reconciliation of the changes in the components of other comprehensive income and loss for the periods indicated, including the amount of tax (expense) benefit allocated to each component:
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||
| (In thousands) | Pre-Tax Amount | Tax (Expense) Benefit | After-Tax Amount | Pre-Tax Amount | Tax (Expense) Benefit | After-Tax Amount | |||||||||||||||||||||||||||||||||||
| Debt Securities: | |||||||||||||||||||||||||||||||||||||||||
| Change in fair value | $ | ( | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Less: reclassification adjustment for amortization of securities transferred from AFS to HTM | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
| Net change in fair value | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
| Cash Flow Hedges: | |||||||||||||||||||||||||||||||||||||||||
| Change in fair value | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Less: reclassified AOCI gain into interest expense(1) | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Net change in fair value | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
| Postretirement Plans: | |||||||||||||||||||||||||||||||||||||||||
Amortization of settlement recognition of net loss and prior service credit(2) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Other comprehensive income | $ | ( | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
(1) Reclassified into interest on borrowings and/or junior subordinated debentures on the consolidated statements of income. Refer to Note 8 of the consolidated financial statements for further details.
The following table presents the changes in each component of AOCI, after tax, for the periods indicated:
| (In thousands) | Net Unrealized Gains (Losses) on Debt Securities(1) | Net Unrealized Gains (Losses) on Cash Flow Hedges(1) | Defined Benefit Postretirement Plans(1) | AOCI(1) | ||||||||||||||||||||||
As of or For the Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||
Balance at December 31, 2025 | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||
Other comprehensive (loss) income before reclassifications | ( | ( | ||||||||||||||||||||||||
| Less: Amounts reclassified from AOCI | ( | ( | ||||||||||||||||||||||||
Other comprehensive (loss) income | ( | ( | ( | |||||||||||||||||||||||
Balance at March 31, 2026 | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||
As of or For the Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | |||||||||||||||||||||||||
| Less: Amounts reclassified from AOCI | ( | ( | ||||||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | ||||||||||||||||||||||||
Balance at March 31, 2025 | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||
(1) All amounts are net of tax.
33
NOTE 12 – REVENUE FROM CONTRACTS WITH CUSTOMERS
A portion of the Company's non-interest income is derived from contracts with customers, and, as such, the revenue recognized depicts the transfer of promised goods or services to its customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company considers the terms of the contract and all relevant facts and circumstances when applying this guidance.
The Company has disaggregated its revenue from contracts with customers into categories based on the nature of the revenue. The categorization of revenues from contracts with customers that are within the scope of ASC 606 closely aligns with the presentation of revenue categories presented within non-interest income on the consolidated statements of income. The following table presents the revenue streams within the scope of ASC 606 for the periods indicated:
| Location on Consolidated Statements of Income | Three Months Ended March 31, | |||||||||||||||||||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||||||||||||||||||||
| Debit card interchange income | Debit card income | $ | $ | |||||||||||||||||||||||||||||
| Services charges on deposit accounts | Service charges on deposit accounts | |||||||||||||||||||||||||||||||
| Fiduciary services income | Income from fiduciary services | |||||||||||||||||||||||||||||||
| Investment program income | Brokerage and insurance commissions | |||||||||||||||||||||||||||||||
| Other non-interest income | Other income | |||||||||||||||||||||||||||||||
Total non-interest income within the scope of ASC 606 | ||||||||||||||||||||||||||||||||
Total non-interest income not in scope of ASC 606 | ||||||||||||||||||||||||||||||||
| Total non-interest income | $ | $ | ||||||||||||||||||||||||||||||
In each of the revenue streams identified above, there were no significant judgments made in determining or allocating the transaction price, as the consideration and services are generally explicitly identified in the associated contracts.
NOTE 13 – EPS
The following is an analysis of basic and diluted EPS, reflecting the application of the two-class method, as described below:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (In thousands, except number of shares and per share data) | 2026 | 2025 | ||||||||||||||||||||||||
Net income available to common shareholders | $ | $ | ||||||||||||||||||||||||
Weighted-average common shares outstanding for basic EPS | ||||||||||||||||||||||||||
Dilutive effect of stock-based awards(1) | ||||||||||||||||||||||||||
Weighted-average common and potential common shares for diluted EPS | ||||||||||||||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||||||
| Basic EPS | $ | $ | ||||||||||||||||||||||||
| Diluted EPS | $ | $ | ||||||||||||||||||||||||
Awards excluded from the calculation of diluted EPS(2) | ||||||||||||||||||||||||||
(1) Represents the assumed dilutive effect of restricted shares, restricted share units and contingently issuable performance-based awards utilizing the treasury stock method.
(2) Represents any stock-based awards not included in the computation of potential common shares for purposes of calculating diluted EPS as the exercise prices were greater than the average market price of the Company's common stock, and, therefore, are considered anti-dilutive.
Non-vested stock-based payment awards that contain non-forfeitable rights to dividends are participating securities and are included in the computation of EPS pursuant to the two-class method. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Certain of the Company’s non-vested stock-based awards qualify as participating securities.
34
NOTE 14 – FAIR VALUE MEASUREMENT AND DISCLOSURE
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined using quoted market prices. However, in many instances, quoted market prices are not available. In such instances, fair values are determined using various valuation techniques. Various assumptions and observable inputs must be relied upon in applying these techniques. GAAP establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.
GAAP permits an entity to choose to measure eligible financial instruments and other items at fair value. The Company has elected the fair value option for its loans held for sale. Electing the fair value option for loans held for sale enables the Company’s financial position to align more clearly with the economic value of the actively traded asset.
The fair value hierarchy for valuation of an asset or liability is as follows:
Level 1: Valuation is based upon unadjusted quoted prices in active markets for identical assets and liabilities that the entity has the ability to access as of the measurement date.
Level 2: Valuation is determined from quoted prices for similar assets or liabilities in active markets, from quoted prices for identical or similar instruments in markets that are not active or by model-based techniques in which all significant inputs are observable in the market.
Level 3: Valuation is derived from model-based and other techniques in which at least one significant input is unobservable and which may be based on the Company’s own estimates about the assumptions that market participants would use to value the asset or liability.
In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon model-based techniques incorporating various assumptions including, but not limited to, interest rates, prepayment speeds and credit losses. Assets and liabilities valued using model-based techniques are classified as either Level 2 or Level 3, depending on the lowest level classification of an input that is considered significant to the overall valuation. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.
Financial Instruments Recorded at Fair Value on a Recurring Basis
Trading Securities and Deferred Compensation: The fair value of trading securities and deferred compensation is reported using market quoted prices and has been classified as Level 1 as such securities and underlying securities are actively traded and no valuation adjustments have been applied.
Debt Securities: The fair value of investments in debt securities is reported utilizing prices provided by an independent pricing service based on recent trading activity and other observable information including, but not limited to, dealer quotes, market spreads, cash flows, market interest rate curves, market consensus prepayment speeds, credit information, and the bond’s terms and conditions. The fair value of debt securities is classified as Level 2.
Loans Held For Sale: The fair value of loans held for sale is determined on an individual loan basis using quoted secondary market prices and is classified as Level 2.
Derivatives: The fair value of interest rate swaps is determined using inputs that are observable in the marketplace obtained from third parties including yield curves, publicly available volatilities, and floating indexes and, accordingly, are classified as Level 2 inputs. The credit value adjustments associated with derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default. As of March 31, 2026 and December 31, 2025, the credit valuation
35
adjustment on the overall valuation of its derivative positions was not significant to the overall valuation of its derivatives, and, thus, the Company's interest rate swaps were classified as Level 2.
The fair value of the Company’s fixed rate interest rate lock commitments were determined using secondary market pricing for loans with similar structures, including term, rate and borrower credit quality, adjusted for the Company's pull-through rate estimate (i.e. estimate of loans within its loan pipeline that will ultimately complete the origination process and be funded). The Company has classified its fixed rate interest rate lock commitments as Level 2, as the quoted secondary market prices are the more significant input, and, although the Company's internal pull-through rate estimate is a Level 3 estimate, it is less significant to the ultimate valuation.
The fair value of the Company’s forward delivery commitments is determined using secondary market pricing for loans with similar structures, including term, rate and borrower credit quality, and the locked and agreed to price with the secondary market investor. The Company has classified its fixed rate interest rate lock commitments as Level 2.
36
The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, for the dates indicated:
| (In thousands) | Fair Value | Readily Available Market Prices (Level 1) | Observable Market Data (Level 2) | Company Determined Fair Value (Level 3) | ||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||
| Financial assets: | ||||||||||||||||||||||||||
| Trading securities | $ | $ | $ | $ | ||||||||||||||||||||||
| AFS debt securities: | ||||||||||||||||||||||||||
| Obligations of states and political subdivisions | ||||||||||||||||||||||||||
MBS issued or guaranteed by U.S. government-sponsored enterprises | ||||||||||||||||||||||||||
CMO issued or guaranteed by U.S. government-sponsored enterprises | ||||||||||||||||||||||||||
Subordinated corporate bonds | ||||||||||||||||||||||||||
| Loans held for sale | ||||||||||||||||||||||||||
| Customer loan swaps | ||||||||||||||||||||||||||
| Interest rate contracts | ||||||||||||||||||||||||||
| Fixed rate mortgage interest rate lock commitments | ||||||||||||||||||||||||||
| Forward delivery commitments | ||||||||||||||||||||||||||
| Financial liabilities: | ||||||||||||||||||||||||||
| Deferred compensation | $ | $ | $ | $ | ||||||||||||||||||||||
| Customer loan swaps | ||||||||||||||||||||||||||
| Interest rate contracts | ||||||||||||||||||||||||||
| Fixed rate mortgage interest rate lock commitments | ||||||||||||||||||||||||||
| Forward delivery commitments | ||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||
| Financial assets: | ||||||||||||||||||||||||||
| Trading securities | $ | $ | $ | $ | ||||||||||||||||||||||
| AFS debt securities: | ||||||||||||||||||||||||||
| Obligations of states and political subdivisions | ||||||||||||||||||||||||||
MBS issued or guaranteed by U.S. government-sponsored enterprises | ||||||||||||||||||||||||||
CMO issued or guaranteed by U.S. government-sponsored enterprises | ||||||||||||||||||||||||||
Subordinated corporate bonds | ||||||||||||||||||||||||||
| Loans held for sale | ||||||||||||||||||||||||||
| Customer loan swaps | ||||||||||||||||||||||||||
| Interest rate contracts | ||||||||||||||||||||||||||
| Fixed rate mortgage interest rate lock commitments | ||||||||||||||||||||||||||
| Forward delivery commitments | ||||||||||||||||||||||||||
| Financial liabilities: | ||||||||||||||||||||||||||
| Deferred compensation | $ | $ | $ | $ | ||||||||||||||||||||||
| Customer loan swaps | ||||||||||||||||||||||||||
| Interest rate contracts | ||||||||||||||||||||||||||
| Fixed rate mortgage interest rate lock commitments | ||||||||||||||||||||||||||
| Forward delivery commitments | ||||||||||||||||||||||||||
The Company did not have any transfers between Level 1 and Level 2 of the fair value hierarchy during the three months ended March 31, 2026. The Company’s policy for determining transfers between levels occurs at the end of the reporting period when circumstances in the underlying valuation criteria change and result in transfer between levels.
37
Financial Instruments Recorded at Fair Value on a Nonrecurring Basis
The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis in accordance with GAAP, which may consist of collateral-dependent loans and servicing assets. These include assets that are measured at the lower of cost or market value that were recognized at fair value below cost at the end of the period.
Collateral-Dependent Loans: Expected credit losses on individually assessed loans deemed to be collateral dependent are valued based upon the lower of amortized cost or fair value of the underlying collateral less costs to sell. Management estimates the fair values of these assets using Level 2 inputs, such as the fair value of collateral based on independent third-party market approach appraisals for collateral-dependent loans, and Level 3 inputs where circumstances warrant an adjustment to the appraised value based on the age of the appraisal and/or comparable sales, condition of the collateral, and market conditions.
Servicing Assets: The Company accounts for mortgage servicing assets at cost, subject to impairment testing. When the carrying value of a tranche exceeds fair value, a valuation allowance is established to reduce the carrying cost to fair value. Fair value is based on a valuation model that calculates the present value of estimated net servicing income. The Company obtains a third-party valuation based upon loan level data including note rate, type and term of the underlying loans. The model utilizes two significant unobservable inputs, namely loan prepayment assumptions and the discount rate used, to calculate the fair value of each tranche, and, as such, the Company has classified the model within Level 3 of the fair value hierarchy.
Non-Financial Instruments Recorded at Fair Value on a Non-Recurring Basis
Non-financial assets measured at fair value on a nonrecurring basis may consist of OREO, goodwill and CDI assets. As of March 31, 2026 and December 31, 2025, the Company did not have any material, non-financial instruments measured and reported at fair value.
OREO: OREO properties acquired through foreclosure or deed in lieu of foreclosure are recorded at net realizable value, which is the fair value of the real estate, less estimated costs to sell. Any write-down of the recorded investment in the related loan is charged to the ACL upon transfer to OREO. Upon acquisition of a property, a current appraisal is used, or an internal valuation is prepared to substantiate fair value of the property. After foreclosure, management periodically, but at least annually, obtains updated valuations of the OREO properties and, if additional impairments are deemed necessary, the subsequent write-downs for declines in value are recorded through a valuation allowance and a provision for credit losses charged to other non-interest expense within the consolidated statements of income. As management considers appropriate, adjustments are made to the appraisal obtained for the OREO property to account for recent sales activity of comparable properties, changes in the condition of the property, and changes in market conditions. These adjustments are not observable in an active market and are classified as Level 3. The Company had no material OREO properties as of March 31, 2026 and December 31, 2025.
Goodwill: Goodwill represents the excess cost of an acquisition over the fair value of the net assets acquired. The fair value of goodwill is estimated by utilizing several standard valuation techniques, including discounted cash flow analyses, bank merger multiples, and/or an estimation of the impact of business conditions and investor activities on the long-term value of the goodwill. Should an impairment occur, the associated goodwill is written-down to fair value and the impairment charge is recorded within non-interest expense in the consolidated statements of income. The Company conducts an annual impairment test of goodwill in the fourth quarter each year, or more frequently as necessary. There have been no indications or triggering events during the three months ended March 31, 2026, for which management believes it is more likely than not that goodwill is impaired.
Core Deposit Intangible Assets: The Company’s CDI assets represent the estimated value of acquired customer relationships and are amortized over the estimated life of those relationships. CDI assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There were no events or changes in circumstances for the three months ended March 31, 2026 and 2025, that indicated the carrying amount may not be recoverable.
38
The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the dates indicated:
| (In thousands) | Carrying Amount | Fair Value | Readily Available Market Prices (Level 1) | Observable Market Prices (Level 2) | Company Determined Market Prices (Level 3) | |||||||||||||||||||||||||||
| March 31, 2026 | ||||||||||||||||||||||||||||||||
| Financial assets: | ||||||||||||||||||||||||||||||||
| HTM debt securities | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Commercial real estate loans(1)(2) | ||||||||||||||||||||||||||||||||
Commercial loans(2) | ||||||||||||||||||||||||||||||||
Residential real estate loans(2) | ||||||||||||||||||||||||||||||||
Home equity loans(2) | ||||||||||||||||||||||||||||||||
Consumer loans(2) | ||||||||||||||||||||||||||||||||
Bank-owned life insurance(3) | ||||||||||||||||||||||||||||||||
| Servicing assets | ||||||||||||||||||||||||||||||||
| Financial liabilities: | ||||||||||||||||||||||||||||||||
| Time deposits | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Short-term borrowings | ||||||||||||||||||||||||||||||||
| Long-term borrowings | ||||||||||||||||||||||||||||||||
Junior subordinated debentures | ||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| Financial assets: | ||||||||||||||||||||||||||||||||
| HTM debt securities | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Commercial real estate loans(1)(2) | ||||||||||||||||||||||||||||||||
Commercial loans(2) | ||||||||||||||||||||||||||||||||
Residential real estate loans(2) | ||||||||||||||||||||||||||||||||
Home equity loans(2) | ||||||||||||||||||||||||||||||||
Consumer loans(2) | ||||||||||||||||||||||||||||||||
Bank-owned life insurance(3) | ||||||||||||||||||||||||||||||||
| Servicing assets | ||||||||||||||||||||||||||||||||
| Financial liabilities: | ||||||||||||||||||||||||||||||||
| Time deposits | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Short-term borrowings | ||||||||||||||||||||||||||||||||
| Long-term borrowings | ||||||||||||||||||||||||||||||||
Junior subordinated debentures | ||||||||||||||||||||||||||||||||
(1) Commercial real estate loan includes non-owner-occupied and owner-occupied properties.
(2) The presented carrying amount is net of the allocated ACL on loans.
(3) Represents a cash surrender life insurance policy recorded at the amount realized upon surrender of the policy, as a result the carrying amount approximates fair value.
Excluded from the summary were financial instruments measured at fair value on a recurring and nonrecurring basis, as previously described.
The Company considers its financial instruments' current use to be the highest and best use of the instruments.
39
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
The discussions set forth below and in the documents we incorporate by reference herein contain certain statements that may be considered forward-looking statements under the Private Securities Litigation Reform Act of 1995, as amended, including certain plans, expectations, goals, projections, and statements, which are subject to numerous risks, assumptions, and uncertainties. Forward-looking statements can be identified by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “plan,” “target,” “potential” or “goal” or future or conditional verbs such as “will,” “may,” “might,” “should,” “could” and other expressions which predict or indicate future events or trends and which do not relate to historical matters. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult for the Company to predict. The actual results, performance or achievements of the Company may differ materially from what is reflected in such forward-looking statements.
Forward-looking statements should not be relied on, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of the Company. These risks, uncertainties and other factors may cause the actual results, performance or achievements of the Company to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.
The following factors, among others, could cause the Company’s financial performance to differ materially from the Company’s goals, plans, objectives, intentions, expectations and other forward-looking statements:
•weakness in the United States economy in general and the regional and local economies within the Northern New England region, which could result in a deterioration of credit quality, an increase in the allowance for credit losses or a reduced demand for the Company’s credit or fee-based products and services;
•changes in trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System or the imposition of tariffs or retaliatory tariffs;
•inflation, interest rate, market, and monetary fluctuations;
•ongoing competition in the labor markets and increased employee turnover;
•the adequacy of succession planning for key executives or other personnel, and the Company’s ability to transition effectively to new members of the senior executive team;
•competitive pressures, including continued industry consolidation and the increased financial services provided by non-banks;
•deterioration in the value of the Company's investment securities;
•commercial real estate vacancies and their impact on the ability of borrowers to repay their loans;
•volatility in the securities markets that could adversely affect the value or credit quality of the Company’s assets, impairment of goodwill, or the availability and terms of funding necessary to meet the Company’s liquidity needs;
•changes in information technology and other operational risks, including cybersecurity and artificial intelligence, that require increased capital spending and introduce additional risk;
•changes in consumer spending and savings habits;
•changes in tax, banking, securities and insurance laws and regulations;
•the outcome of pending and future litigation and governmental proceedings, including tax-related examinations and other matters;
•changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Financial Accounting Standards Board (“FASB”), and other accounting standard setters;
•the effects of climate change on the Company and its customers, borrowers or service providers;
•the effects of civil unrest, international hostilities, including hostilities in Iran, or other geopolitical events;
•the effects of epidemics and pandemics;
•turmoil and volatility in the financial services industry, including failures or rumors of failures of other depository
40
institutions, which could affect the ability of depository institutions, including Camden National Bank, to attract and retain depositors, and could affect the ability of financial services providers, including the Company, to borrow or raise capital;
•actions taken by governmental agencies to stabilize the financial system and the effectiveness of such actions;
•increases in deposit insurance assessments due to bank failures;
•changes to regulatory capital requirements; and
•questions about the soundness of one or more financial institutions with which the Company does business.
In addition, statements regarding the potential effects of notable national and global current events, including hostilities in Iran and recent rulings on the permissibility of certain tariffs, on the Company’s business, financial condition, liquidity and results of operations may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the Company's control.
You should carefully review all of these factors, and be aware that there may be other factors that could cause differences, including the risk factors listed in our Annual Report on Form 10-K for the year ended December 31, 2025, as updated by the Company's quarterly reports on Form 10-Q, including this report, and other filings with the Securities and Exchange Commission. Readers should carefully review the risk factors described therein and should not place undue reliance on our forward-looking statements.
These forward-looking statements were based on information, plans and estimates at the date of this report, and we undertake no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except to the extent required by applicable law or regulation.
41
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP
In addition to evaluating the Company’s results of operations in accordance with GAAP, management supplements this evaluation with an analysis of certain non-GAAP financial measures such as: adjusted net income; adjusted diluted earnings per share; adjusted return on average assets; adjusted return on average equity; pre-tax, pre-provision income and adjusted pre-tax, pre-provision income; return on average tangible equity and adjusted return on average tangible equity; the efficiency and tangible common equity ratios; net interest margin and core net interest margin (both on a fully-taxable equivalent basis); tangible book value per share; core deposits and average core deposits. We utilize these non-GAAP financial measures for purposes of measuring performance against the Company's peer group and other financial institutions, as well as for analyzing its internal performance. The Company also believes these non-GAAP financial measures help investors better understand the Company's operating performance and trends and allows for better performance comparisons to other banks. In addition, these non-GAAP financial measures remove the impact of unusual items that may obscure trends in the Company’s underlying performance. These disclosures should not be viewed as a substitute for GAAP operating results, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other financial institutions.
Adjusted Net Income; Adjusted Diluted Earnings per Share; Adjusted Return on Average Assets; and Adjusted Return on Average Equity. The following table provides a reconciliation of net income, diluted EPS, return on average assets and return on average equity to adjusted net income, adjusted diluted EPS, adjusted return on average assets and adjusted return on average equity. Certain non-recurring transactions have been excluded to calculate adjusted net income, adjusted diluted EPS, adjusted return on average assets and adjusted return on average equity. We believe the following adjusted financial information and metrics assist users of our financial statements with their financial analysis period-over-period as it adjusts for certain non-recurring items.
42
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (In thousands, except number of shares, per share data and ratios) | 2026 | 2025 | ||||||||||||||||||||||||
| Adjusted Net Income: | ||||||||||||||||||||||||||
| Net income, as presented | $ | 21,883 | $ | 7,326 | ||||||||||||||||||||||
| Adjustments before taxes: | ||||||||||||||||||||||||||
| Provision for non-PCD acquired loans | — | 6,294 | ||||||||||||||||||||||||
| Provision for acquired unfunded commitments | — | 249 | ||||||||||||||||||||||||
| Merger and acquisition costs | — | 7,525 | ||||||||||||||||||||||||
| Total adjustments before taxes | — | 14,068 | ||||||||||||||||||||||||
Tax impact of above adjustments(1) | — | (3,205) | ||||||||||||||||||||||||
Adjustment for deferred tax valuation adjustment(2) | — | (2,421) | ||||||||||||||||||||||||
| Adjusted net income | $ | 21,883 | $ | 15,768 | ||||||||||||||||||||||
| Adjusted Diluted Earnings per Share: | ||||||||||||||||||||||||||
| Diluted earnings per share, as presented | $ | 1.29 | $ | 0.43 | ||||||||||||||||||||||
| Adjustments before taxes: | ||||||||||||||||||||||||||
| Provision for non-PCD acquired loans | — | 0.37 | ||||||||||||||||||||||||
| Provision for acquired unfunded commitments | — | 0.01 | ||||||||||||||||||||||||
| Merger and acquisition costs | — | 0.45 | ||||||||||||||||||||||||
| Total adjustments before taxes | — | 0.83 | ||||||||||||||||||||||||
Tax impact of above adjustments(1) | — | (0.19) | ||||||||||||||||||||||||
Adjustment for deferred tax valuation adjustment(2) | — | (0.14) | ||||||||||||||||||||||||
| Adjusted diluted earnings per share | $ | 1.29 | $ | 0.93 | ||||||||||||||||||||||
| Adjusted Return on Average Assets: | ||||||||||||||||||||||||||
| Return on average assets, as presented | 1.28 | % | 0.43 | % | ||||||||||||||||||||||
| Adjustments before taxes: | ||||||||||||||||||||||||||
| Provision for non-PCD acquired loans | — | % | 0.37 | % | ||||||||||||||||||||||
| Provision for acquired unfunded commitments | — | % | 0.01 | % | ||||||||||||||||||||||
| Merger and acquisition costs | — | % | 0.44 | % | ||||||||||||||||||||||
| Total adjustments before taxes | — | % | 0.82 | % | ||||||||||||||||||||||
Tax impact of above adjustments(1) | — | % | (0.19) | % | ||||||||||||||||||||||
Adjustment for deferred tax valuation adjustment(2) | — | % | (0.14) | % | ||||||||||||||||||||||
| Adjusted return on average assets | 1.28 | % | 0.92 | % | ||||||||||||||||||||||
| Adjusted Return on Average Equity: | ||||||||||||||||||||||||||
| Return on average equity, as presented | 12.58 | % | 4.75 | % | ||||||||||||||||||||||
| Adjustments before taxes: | ||||||||||||||||||||||||||
| Provision for non-PCD acquired loans | — | % | 4.08 | % | ||||||||||||||||||||||
| Provision for acquired unfunded commitments | — | % | 0.16 | % | ||||||||||||||||||||||
| Merger and acquisition costs | — | % | 4.88 | % | ||||||||||||||||||||||
| Total adjustments before taxes | — | % | 9.12 | % | ||||||||||||||||||||||
Tax impact of above adjustments(1) | — | % | (2.08) | % | ||||||||||||||||||||||
Adjustment for deferred tax valuation adjustment(2) | — | % | (1.57) | % | ||||||||||||||||||||||
| Adjusted return on average equity | 12.58 | % | 10.22 | % | ||||||||||||||||||||||
(1) Calculated using an estimated combined marginal income tax rate of 23%.
(2) A one-time deferred tax valuation adjustment of $2.4 million resulted from a change in the apportionment of state income taxes due to the Northway acquisition.
43
Pre-Tax, Pre-Provision Income and Adjusted Pre-Tax, Pre-Provision Income. Pre-tax, pre-provision income is a supplemental measure of operating earnings and performance. Pre-tax, pre-provision income is calculated as net income before provision for credit losses and income tax expense. This supplemental measure has become more widely used by financial institutions as a measure of financial performance for comparability across financial institutions.
Adjusted pre-tax, pre-provision income is a supplemental measure with certain non-recurring expenses excluded. We believe the following adjusted financial information and metrics assist users of our financial statements with their financial analysis period-over-period as it adjusts for certain non-recurring items.
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | ||||||||||||||||||||||||
| Net income, as presented | $ | 21,883 | $ | 7,326 | ||||||||||||||||||||||
Adjustment for provision for credit losses | 553 | 9,429 | ||||||||||||||||||||||||
Adjustment for income tax expense (benefit) | 6,194 | (1,152) | ||||||||||||||||||||||||
| Pre-tax, pre-provision income | $ | 28,630 | $ | 15,603 | ||||||||||||||||||||||
| Adjustment for merger and acquisition costs | — | 7,525 | ||||||||||||||||||||||||
| Adjusted pre-tax, pre-provision income | $ | 28,630 | $ | 23,128 | ||||||||||||||||||||||
Efficiency Ratio. The efficiency ratio represents an approximate measure of the cost required for the Company to generate a dollar of revenue. This is a common measure within the financial services industry and is a key ratio for evaluating Company performance. The efficiency ratio is calculated as the ratio of (i) total non-interest expense, adjusted for certain operating expenses, as necessary, to (ii) net interest income on a tax equivalent basis plus total non-interest income, adjusted for certain other income items, as necessary.
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | ||||||||||||||||||||||||
| Non-interest expense, as presented | $ | 35,708 | $ | 44,451 | ||||||||||||||||||||||
| Adjustment for merger and acquisition costs | — | (7,525) | ||||||||||||||||||||||||
Adjustment for amortization of CDI assets | (1,354) | (1,473) | ||||||||||||||||||||||||
| Adjusted non-interest expense | $ | 34,354 | $ | 35,453 | ||||||||||||||||||||||
| Net interest income, as presented | $ | 52,358 | $ | 48,858 | ||||||||||||||||||||||
Adjustment for the effect of tax-exempt income(1) | 225 | 326 | ||||||||||||||||||||||||
| Non-interest income, as presented | 11,980 | 11,196 | ||||||||||||||||||||||||
Adjusted net interest income plus non-interest income | $ | 64,563 | $ | 60,380 | ||||||||||||||||||||||
| GAAP efficiency ratio | 55.50 | % | 74.02 | % | ||||||||||||||||||||||
| Non-GAAP efficiency ratio | 53.21 | % | 58.72 | % | ||||||||||||||||||||||
(1) Reported on a tax-equivalent basis using a 21% income tax rate.
Return on Average Tangible Equity and Adjusted Return on Average Tangible Equity. Return on average tangible equity is the ratio of (i) net income, adjusted for (a) amortization of CDI assets and the tax impact of the adjustment and (b) goodwill impairment, as necessary, to (ii) average shareholders' equity, adjusted for average goodwill and CDI assets. This adjusted financial ratio reflects a shareholder's return on tangible capital deployed in our business and is a common measure within the financial services industry.
44
Adjusted return on average tangible equity is the ratio of (i) core net income (as defined in the table above) adjusted for (a) amortization of CDI assets and the tax impact of the adjustment and (b) goodwill impairment, as necessary, to (ii) average shareholders' equity, adjusted for average goodwill and CDI assets.
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | ||||||||||||||||||||||||
| Return on Average Tangible Equity: | ||||||||||||||||||||||||||
| Net income, as presented | $ | 21,883 | $ | 7,326 | ||||||||||||||||||||||
Adjustment for amortization of CDI assets | 1,354 | 1,473 | ||||||||||||||||||||||||
Tax impact of above adjustment(1) | (311) | (339) | ||||||||||||||||||||||||
Net income, adjusted for amortization of CDI assets | $ | 22,926 | $ | 8,460 | ||||||||||||||||||||||
| Average equity, as presented | $ | 705,336 | $ | 625,789 | ||||||||||||||||||||||
Adjustment for average goodwill and CDI assets | (193,554) | (200,125) | ||||||||||||||||||||||||
| Average tangible equity | $ | 511,782 | $ | 425,664 | ||||||||||||||||||||||
| Return on average equity | 12.58 | % | 4.75 | % | ||||||||||||||||||||||
| Return on average tangible equity | 18.17 | % | 8.06 | % | ||||||||||||||||||||||
| Adjusted Return on Average Tangible Equity: | ||||||||||||||||||||||||||
Adjusted net income (see “Adjusted Net Income” table above) | $ | 21,883 | $ | 15,768 | ||||||||||||||||||||||
Adjustment for amortization of CDI assets | 1,354 | 1,473 | ||||||||||||||||||||||||
Tax impact of above adjustment(1) | (311) | (339) | ||||||||||||||||||||||||
Adjusted net income, adjusted for amortization of CDI assets | $ | 22,926 | $ | 16,902 | ||||||||||||||||||||||
| Adjusted return on average tangible equity | 18.17 | % | 16.10 | % | ||||||||||||||||||||||
(1) Calculated using an estimated combined marginal income tax rate of 23%.
Core Net Interest Margin (fully-taxable equivalent). The following table provides a reconciliation of net interest margin (fully-taxable equivalent) to core net interest margin (fully-taxable equivalent). Certain non-recurring transactions have been excluded to calculate core net interest margin (fully-taxable equivalent). We believe the following adjusted financial information and metrics assist users of our financial statements with their financial analysis period-over-period as it adjusts for certain non-recurring items.
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | ||||||||||||||||||||||||||||||
| Net interest margin (fully-taxable equivalent), as presented | 3.24 | % | 3.04 | % | ||||||||||||||||||||||||||||
Net accretion income on loans from purchase accounting(1) | (0.26) | % | (0.30) | % | ||||||||||||||||||||||||||||
Net accretion income on investments from purchase accounting(2) | (0.06) | % | (0.07) | % | ||||||||||||||||||||||||||||
Net amortization on time deposits and borrowings from purchase accounting(3) | — | % | 0.01 | % | ||||||||||||||||||||||||||||
| Core net interest margin (fully-taxable equivalent) | 2.92 | % | 2.68 | % | ||||||||||||||||||||||||||||
(1) Recognized $3.7 million and $4.3 million of net accretion income on loans from purchase accounting for the three months ended March 31, 2026 and 2025, respectively.
(2) Recognized $759,000 and $831,000 of net accretion income on investments from purchase accounting for the three months ended March 31, 2026 and 2025, respectively.
(3) Recognized $75,000 of amortization expense on borrowings from purchase accounting for the three months ended March 31, 2026 and $131,000 of amortization expense on time deposits and borrowings from purchase accounting for the three months ended March 31, 2025.
Tangible Book Value per Share and Tangible Common Equity Ratio. Tangible book value per share is the ratio of (i) shareholders’ equity less goodwill and other intangibles to (ii) total common shares outstanding at period end. Tangible book value per share is a common measure within the financial services industry to assess the value of a company, as it removes goodwill and other intangible assets generated within purchase accounting upon a business combination.
45
Tangible common equity is the ratio of (i) shareholders’ equity less goodwill and other intangible assets to (ii) total assets less goodwill and other intangible assets. This ratio is a measure used within the financial services industry to assess a company's capital adequacy.
| (Dollars in thousands, except number of shares, per share data and ratios) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Tangible Book Value Per Share: | ||||||||||||||
| Shareholders’ equity, as presented | $ | 710,007 | $ | 696,558 | ||||||||||
Adjustment for goodwill and CDI assets | (192,731) | (194,085) | ||||||||||||
| Tangible shareholders’ equity | $ | 517,276 | $ | 502,473 | ||||||||||
| Shares outstanding at period end | 16,914,371 | 16,924,310 | ||||||||||||
| Book value per share | $ | 41.98 | $ | 41.16 | ||||||||||
| Tangible book value per share | $ | 30.58 | $ | 29.69 | ||||||||||
| Tangible Common Equity Ratio: | ||||||||||||||
| Total assets | $ | 6,961,581 | $ | 6,974,584 | ||||||||||
Adjustment for goodwill and CDI assets | (192,731) | (194,085) | ||||||||||||
| Tangible assets | $ | 6,768,850 | $ | 6,780,499 | ||||||||||
| Common equity ratio | 10.20 | % | 9.99 | % | ||||||||||
| Tangible common equity ratio | 7.64 | % | 7.41 | % | ||||||||||
Core Deposits. Core deposits are used by management to measure the portion of the Company's total deposits that management believes to be more stable and at a lower interest rate cost. The Company calculates core deposits as total deposits (as reported on the consolidated statements of condition) less certificates of deposit and brokered deposits. Management believes core deposits is a useful measure to assess the Company's deposit base, including its potential volatility.
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Total deposits | $ | 5,585,352 | $ | 5,537,781 | ||||||||||
| Adjustment for certificates of deposit | (652,002) | (679,087) | ||||||||||||
| Adjustment for brokered deposits | (118,883) | (130,565) | ||||||||||||
| Core deposits | $ | 4,814,467 | $ | 4,728,129 | ||||||||||
Average Core Deposits. Average core deposits are used by management to measure the portion of the Company's total deposits that management believes to be more stable and at a lower interest rate cost. The Company calculates average core deposits as total average deposits (excluding average brokered deposits, as disclosed on the Average Balance, Interest and Yield/Rate Analysis tables) less average certificates of deposit. Management believes core deposits is a useful measure to assess the Company's deposit base, including its potential volatility.
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | ||||||||||||||||||||||||
Total average deposits, as presented(1) | $ | 5,366,368 | $ | 5,330,745 | ||||||||||||||||||||||
| Adjustment average certificates of deposit | (665,552) | (706,851) | ||||||||||||||||||||||||
| Average core deposits | $ | 4,700,816 | $ | 4,623,894 | ||||||||||||||||||||||
(1) Brokered deposits are excluded from total average deposits, as presented on the Average Balance, Interest and Yield/Rate analysis table.
46
CRITICAL ACCOUNTING ESTIMATES
Critical accounting estimates are defined as those that are reflective of significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. In preparing the Company’s consolidated financial statements, management is required to make significant estimates and assumptions that affect assets, liabilities, revenues, and expenses reported. Actual results could differ materially from our current estimates as a result of changing conditions and future events. Estimates particularly critical and susceptible to significant near-term change, include (i) the ACL on loans, (ii) fair value of loans acquired in business combinations, and (iii) goodwill.
There have been no material changes to the Company’s critical accounting policies from those disclosed within its Annual Report on Form 10-K for the year ended December 31, 2025. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for discussion of the Company’s critical accounting policies.
Refer to Note 2 of the consolidated financial statements for discussion of accounting pronouncements issued but yet to be adopted and implemented.
GENERAL OVERVIEW
Camden National Corporation (hereafter referred to as “we,” “our,” “us,” or the “Company”) is a publicly-held bank holding company, with $7.0 billion in assets as of March 31, 2026, incorporated under the laws of the State of Maine and headquartered in Camden, Maine. Camden National Bank (the “Bank”), a wholly-owned subsidiary of the Company, was founded in 1875. The Company was founded in 1984, went public in 1997 and is registered with NASDAQ Global Market (“NASDAQ”) under the ticker symbol “CAC.”
The primary business of the Company and the Bank is to attract deposits from, and to extend loans to, consumer, institutional, municipal, non-profit and commercial customers. The Company, through the Bank, provides a broad array of banking and other financial services, including wealth management and trust services, brokerage, investment advisory and insurance services, to consumer, business, non-profit and municipal customers.
The Company operates throughout Maine and New Hampshire. The Company and the Bank generally have effectively competed with other financial institutions by emphasizing customer service, highlighted by local decision-making, establishing long-term customer relationships, building customer loyalty and providing products and services designed to meet the needs of customers.
EXECUTIVE OVERVIEW
Net income totaled $21.9 million and diluted EPS was $1.29 for the first quarter of 2026, compared to $7.3 million and $0.43, respectively, in the first quarter of 2025. For the same periods, adjusted net income and adjusted diluted EPS (which exclude certain non-recurring items, primarily related to the Northway acquisition in 2025) increased 39%, reflecting strong operating performance and our successful acquisition of Northway. Net interest margin improvement of 20 basis points between periods to 3.24% for the first quarter of 2026 was a large driver in the improvement of operating performance. With our solid financial performance for the first quarter of 2026, we reported a return on average assets of 1.28%, a return on average equity of 12.58%, and a return on average tangible equity (non-GAAP) of 18.17% for the quarter, which were all favorable improvements over the same period of 2025.
The Company’s financial condition continues to be on solid footing supported by strong asset quality, liquidity and capital positions. Total assets at March 31, 2026, were $7.0 billion and were relatively flat compared to December 31, 2025, while deposits grew 1% during the first quarter, driven by growth in non‑maturity deposits, which enabled the Company to reduce higher‑cost short‑term borrowings by $68.3 million during the period. At March 31, 2026, our loan-to-deposit ratio was 89% and, combined with the normal cash flow from our investment portfolio, we believe we are well positioned to fund expected loan growth throughout the year and continue to drive net interest margin expansion in 2026.
Asset quality for the first quarter of 2026 was strong, highlighted by annualized net charge‑offs of 0.04% of average loans and past‑due loans totaling just 0.06% of total loans at March 31, 2026. Our ACL on loans at March 31, 2026, was 0.92% of total loans and 4.2 times non-performing loans, compared to 0.91% and 6.5 times at December 31, 2025, respectively.
At March 31, 2026, our capital levels were well in excess of regulatory requirements and they continue to build. The strength of our capital continues to support disciplined growth and investment in the franchise, while we also continue to return
47
capital to our shareholders. During the first quarter of 2026, we returned $8.6 million of capital to our shareholders through a combination of cash dividends and repurchases of the Company’s common stock. We will continue to balance our capital deployment in a manner that allows us to remain open and to attractive organic and inorganic growth opportunities that may arise.
RESULTS OF OPERATIONS
Net Interest Income and Net Interest Margin
Net interest income represents the interest earned on loans, securities, and other interest‑earning assets, adjusted for net loan fees, origination costs, and the accretion or amortization of fair value marks on loans, investments, time deposits and/or borrowings recorded in purchase accounting, less interest paid on interest‑bearing deposits and borrowings. Net interest income is the Company’s largest source of revenue, with revenue defined as the sum of net interest income and non‑interest income.
For the quarter ended March 31, 2026, net interest income totaled $52.4 million, representing approximately 81% of total revenues, compared to $48.8 million, or 81% of total revenues, for the same period in 2025. Net interest income is affected by factors including, but not limited to, changes in interest rates, loan and deposit pricing strategies and competitive conditions, loan prepayment speeds, the volume and mix of interest‑earning assets and interest‑bearing liabilities, and the level of non‑performing assets.
Net Interest Income (Fully-Taxable Equivalent) for the Three Months Ended March 31, 2026 and 2025. On a fully-taxable equivalent basis, net interest income for the three months ended March 31, 2026 was $52.6 million, an increase of $3.4 million, or 7%, compared to the same period in 2025. The increase between periods was driven primarily by a decrease in interest expense of $3.5 million, or 12%, and partially offset by a decrease in interest income, on a fully-taxable equivalent basis, of $125,000, or less than 1%.
Average funding liabilities totaled $6.1 billion for the first quarter of 2026, a decrease of $34.8 million, or 1%, compared to the first quarter of 2025. Interest expense for the first quarter of 2026 decreased $3.5 million, primarily due to a reduction in the average cost of funds of 22 basis points to 1.72%. The decrease in the average cost of funds reflects changes in the interest rate environment, as well as a reduction in average high‑cost brokered deposits of $67.3 million between periods. The Federal Funds Effective Rate for the first quarter of 2026 was 3.64%, which was 69 basis points lower than the same period of 2025.
Average interest‑earning assets totaled $6.5 billion for the first quarter of 2026, an increase of $31.3 million, or 1%, compared to the first quarter of 2025. The decrease in interest income between periods of $125,000 was primarily attributable to a reduction in the recognition of net fair value mark accretion from purchase accounting, which declined by $727,000 between periods to $4.3 million in the first quarter of 2026. Fair value mark accretion recognized during the quarter consisted of $3.7 million related to loans and $759,000 related to investments, decreases of $655,000 and $72,000, respectively, between periods.
Net Interest Margin (Fully-Taxable Equivalent) for the Three Months Ended March 31, 2026 and 2025. Net interest margin, on a fully-taxable equivalent basis, for the three months ended March 31, 2026 was 3.24%, an increase of 20 basis points over the three months ended March 31, 2025. Refer to the discussion above for a description of the factors contributing to the change between periods. Adjusting for the impact of net fair value market accretion income from purchase accounting, which contributed $4.3 million and $5.0 million to net interest income for the first quarter of 2026 and 2025, respectively, the Company reported non-GAAP, core net interest margin of 2.92% for the three months ended March 31, 2026, an increase of 24 basis points over the same period of 2025.
The following tables present, for the periods noted, average balances, interest income, interest expense, and the corresponding average yields earned and rates paid, as well as net interest income, net interest rate spread and net interest margin:
48
Quarterly Average Balance, Interest and Yield/Rate Analysis | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | March 31, 2025 | |||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Average Balance | Interest | Yield/Rate | Average Balance | Interest | Yield/Rate | ||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits in other banks and other interest-earning assets | $ | 32,360 | $ | 380 | 4.70 | % | $ | 84,211 | $ | 936 | 4.44 | % | ||||||||||||||||||||||||||
| Investments - taxable | 1,395,629 | 10,857 | 3.11 | % | 1,375,818 | 10,442 | 3.04 | % | ||||||||||||||||||||||||||||||
Investments - nontaxable(1) | 61,137 | 576 | 3.77 | % | 62,485 | 592 | 3.79 | % | ||||||||||||||||||||||||||||||
Loans(2): | ||||||||||||||||||||||||||||||||||||||
| Commercial real estate | 2,183,289 | 30,605 | 5.61 | % | 2,065,534 | 29,377 | 5.69 | % | ||||||||||||||||||||||||||||||
Commercial(1) | 360,451 | 5,513 | 6.12 | % | 409,037 | 6,514 | 6.37 | % | ||||||||||||||||||||||||||||||
Municipal(1) | 51,070 | 653 | 5.18 | % | 90,554 | 1,378 | 6.17 | % | ||||||||||||||||||||||||||||||
| Residential real estate | 2,018,838 | 24,089 | 4.77 | % | 2,034,024 | 23,960 | 4.71 | % | ||||||||||||||||||||||||||||||
Home equity | 336,593 | 5,533 | 6.67 | % | 283,516 | 5,080 | 7.27 | % | ||||||||||||||||||||||||||||||
Consumer | 16,769 | 390 | 9.43 | % | 19,631 | 442 | 9.13 | % | ||||||||||||||||||||||||||||||
| Total loans | 4,967,010 | 66,783 | 5.39 | % | 4,902,296 | 66,751 | 5.45 | % | ||||||||||||||||||||||||||||||
| Total interest-earning assets | 6,456,136 | 78,596 | 4.88 | % | 6,424,810 | 78,721 | 4.91 | % | ||||||||||||||||||||||||||||||
| Cash and due from banks | 64,370 | 77,740 | ||||||||||||||||||||||||||||||||||||
| Other assets | 458,688 | 444,714 | ||||||||||||||||||||||||||||||||||||
| Less: ACL | (45,558) | (44,898) | ||||||||||||||||||||||||||||||||||||
| Total assets | $ | 6,933,636 | $ | 6,902,366 | ||||||||||||||||||||||||||||||||||
| Liabilities & Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||||||||||||||||
| Non-interest checking | $ | 1,088,115 | $ | — | — | % | $ | 1,107,398 | $ | — | — | % | ||||||||||||||||||||||||||
| Interest checking | 1,682,848 | 6,637 | 1.60 | % | 1,703,056 | 7,778 | 1.85 | % | ||||||||||||||||||||||||||||||
| Savings | 1,114,741 | 3,866 | 1.41 | % | 894,803 | 2,156 | 0.98 | % | ||||||||||||||||||||||||||||||
| Money market | 815,112 | 4,671 | 2.32 | % | 918,637 | 5,956 | 2.63 | % | ||||||||||||||||||||||||||||||
| Certificates of deposit | 665,552 | 5,203 | 3.17 | % | 706,851 | 6,490 | 3.72 | % | ||||||||||||||||||||||||||||||
| Total deposits | 5,366,368 | 20,377 | 1.54 | % | 5,330,745 | 22,380 | 1.70 | % | ||||||||||||||||||||||||||||||
| Borrowings: | ||||||||||||||||||||||||||||||||||||||
| Brokered deposits | 129,178 | 1,271 | 3.99 | % | 196,510 | 2,241 | 4.62 | % | ||||||||||||||||||||||||||||||
| Customer repurchase agreements | 256,619 | 590 | 0.93 | % | 236,437 | 751 | 1.29 | % | ||||||||||||||||||||||||||||||
Junior subordinated debentures | 61,545 | 888 | 5.85 | % | 61,282 | 898 | 5.94 | % | ||||||||||||||||||||||||||||||
| Other borrowings | 324,853 | 2,887 | 3.60 | % | 348,402 | 3,267 | 3.80 | % | ||||||||||||||||||||||||||||||
| Total borrowings | 772,195 | 5,636 | 2.96 | % | 842,631 | 7,157 | 3.44 | % | ||||||||||||||||||||||||||||||
| Total funding liabilities | 6,138,563 | 26,013 | 1.72 | % | 6,173,376 | 29,537 | 1.94 | % | ||||||||||||||||||||||||||||||
| Other liabilities | 89,737 | 103,201 | ||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 705,336 | 625,789 | ||||||||||||||||||||||||||||||||||||
| Total liabilities & shareholders' equity | $ | 6,933,636 | $ | 6,902,366 | ||||||||||||||||||||||||||||||||||
| Net interest income (fully-taxable equivalent) | 52,583 | 49,184 | ||||||||||||||||||||||||||||||||||||
| Less: fully-taxable equivalent adjustment | (225) | (326) | ||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 52,358 | $ | 48,858 | ||||||||||||||||||||||||||||||||||
| Net interest rate spread (fully-taxable equivalent) | 3.16 | % | 2.97 | % | ||||||||||||||||||||||||||||||||||
| Net interest margin (fully-taxable equivalent) | 3.24 | % | 3.04 | % | ||||||||||||||||||||||||||||||||||
Core net interest margin (fully-taxable equivalent)(3) | 2.92 | % | 2.68 | % | ||||||||||||||||||||||||||||||||||
(1) Reported on tax-equivalent basis calculated using the federal corporate income tax rate of 21%, including certain commercial loans.
(2) Non-accrual loans and loans held for sale are included in total average loans.
(3) This is a non-GAAP measure. Please see "Non-GAAP Financial Measures and Reconciliation to GAAP” for additional information.
49
The following table presents certain information on a fully-taxable equivalent basis regarding changes in interest income and interest expense for the periods indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes attributable to rate and volume. The (a) changes in volume (change in volume multiplied by prior period's rate), (b) changes in rates (change in rate multiplied prior period's volume), and (c) changes in rate/volume (change in rate multiplied by the change in volume), which is allocated to the change due to rate column:
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||
March 31, 2026 vs. March 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Increase (Decrease) Due to: | Net Increase (Decrease) | |||||||||||||||||||||||||||||||||||||
| (In thousands) | Volume | Rate | ||||||||||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits in other banks and other interest-earning assets | $ | (576) | $ | 20 | $ | (556) | ||||||||||||||||||||||||||||||||
| Investments – taxable | 151 | 264 | 415 | |||||||||||||||||||||||||||||||||||
| Investments – nontaxable | (13) | (3) | (16) | |||||||||||||||||||||||||||||||||||
| Commercial real estate | 1,675 | (447) | 1,228 | |||||||||||||||||||||||||||||||||||
| Commercial | (774) | (227) | (1,001) | |||||||||||||||||||||||||||||||||||
| Municipal | (601) | (124) | (725) | |||||||||||||||||||||||||||||||||||
| Residential real estate | (179) | 308 | 129 | |||||||||||||||||||||||||||||||||||
Home equity | 951 | (498) | 453 | |||||||||||||||||||||||||||||||||||
Consumer | (64) | 12 | (52) | |||||||||||||||||||||||||||||||||||
| Total interest income (fully-taxable equivalent) | 570 | (695) | (125) | |||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
| Interest checking | (92) | (1,049) | (1,141) | |||||||||||||||||||||||||||||||||||
| Savings | 531 | 1,179 | 1,710 | |||||||||||||||||||||||||||||||||||
| Money market | (671) | (614) | (1,285) | |||||||||||||||||||||||||||||||||||
| Certificates of deposit | (379) | (908) | (1,287) | |||||||||||||||||||||||||||||||||||
| Brokered deposits | (767) | (203) | (970) | |||||||||||||||||||||||||||||||||||
| Customer repurchase agreements | 64 | (225) | (161) | |||||||||||||||||||||||||||||||||||
| Junior subordinated debentures | 4 | (14) | (10) | |||||||||||||||||||||||||||||||||||
| Other borrowings | (221) | (159) | (380) | |||||||||||||||||||||||||||||||||||
| Total interest expense | (1,531) | (1,993) | (3,524) | |||||||||||||||||||||||||||||||||||
| Net interest income (fully-taxable equivalent) | $ | 2,101 | $ | 1,298 | $ | 3,399 | ||||||||||||||||||||||||||||||||
Net interest income on a fully-taxable equivalent basis included the following for the periods indicated:
| Income Statement Location | Three Months Ended March 31, | |||||||||||||||||||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||||||||||||||||||||
Net fair value mark accretion income from purchase accounting | Interest income and interest expense | $ | 4,345 | $ | 5,016 | |||||||||||||||||||||||||||
Net loan origination fees | Interest income | 451 | 494 | |||||||||||||||||||||||||||||
Recoveries on previously charged-off acquired loans | Interest income | 39 | 23 | |||||||||||||||||||||||||||||
Interest income from residential real estate derivatives | Interest income | (14) | 588 | |||||||||||||||||||||||||||||
| Total | $ | 4,821 | $ | 6,121 | ||||||||||||||||||||||||||||
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Provision for Credit Losses
The provision for credit losses was made up of the following components for the periods indicated:
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for loan losses(1) | $ | 806 | $ | 8,873 | $ | (8,067) | (91) | % | ||||||||||||||||||||||||||||||||||||||||||
(Credit) provision for credit losses on off-balance sheet credit exposures(2) | (253) | 556 | (809) | (146) | % | |||||||||||||||||||||||||||||||||||||||||||||
Provision for credit losses | $ | 553 | $ | 9,429 | $ | (8,876) | (94) | % | ||||||||||||||||||||||||||||||||||||||||||
(1)Provision for loan losses: The Company recorded provision expense of $806,000 for the first quarter of 2026, primarily driven by the annual update to significant model inputs and assumptions within the allowance for credit losses framework, which resulted in higher modeled loss expectations within the commercial and residential loan portfolios. Refer to Note 4 of the consolidated financial statements for further details.
The provision for credit losses recorded in the first quarter of 2025 totaled $8.9 million and was primarily driven by the acquisition of Northway on January 2, 2025, including the required establishment of the allowance on acquired non‑PCD loans at closing totaling $6.3 million.
(2)Provision for credit losses on off-balance sheet credit exposures: At March 31, 2026, the ACL on off-balance sheet credit exposures was $2.8 million, as compared to $3.4 million as of March 31, 2025.
Non-Interest Income
The following table presents the components of non-interest income for the periods indicated:
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||
Debit card income | $ | 3,422 | $ | 3,233 | $ | 189 | 6 | % | ||||||||||||||||||||||||||||||||||||||||||
Service charges on deposit accounts | 2,158 | 2,318 | (160) | (7) | % | |||||||||||||||||||||||||||||||||||||||||||||
Income from fiduciary services(1) | 2,014 | 1,838 | 176 | 10 | % | |||||||||||||||||||||||||||||||||||||||||||||
Brokerage and insurance commissions | 1,735 | 1,697 | 38 | 2 | % | |||||||||||||||||||||||||||||||||||||||||||||
Mortgage banking income, net(2) | 828 | 508 | 320 | 63 | % | |||||||||||||||||||||||||||||||||||||||||||||
Bank-owned life insurance(3) | 791 | 660 | 131 | 20 | % | |||||||||||||||||||||||||||||||||||||||||||||
Other income | 1,032 | 942 | 90 | 10 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total non-interest income | $ | 11,980 | $ | 11,196 | $ | 784 | 7 | % | ||||||||||||||||||||||||||||||||||||||||||
| Non-interest income as a percentage of total revenues | 19% | 19% | ||||||||||||||||||||||||||||||||||||||||||||||||
(1)Income from fiduciary services: The increase between periods was driven by the increase in assets under management of $120.3 million, or 10%, to $1.3 billion at March 31, 2026.
(2)Mortgage banking income, net: The increase between periods was driven by the increase in the gain from the sale of residential mortgage loans. During the three months ended March 31, 2026, the Company sold $61.0 million, or 52% of its residential mortgage production, compared to $41.8 million or 55% for the same period of 2025.
(3)Bank-owned life insurance: The increase between periods was driven by the proceeds received from a death benefit on one of our BOLI policies during the first three months ended March 31, 2026.
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Non-Interest Expense
The following table presents the components of non-interest expense for the periods indicated:
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||
Salaries and employee benefits(1) | $ | 19,615 | $ | 20,243 | $ | (628) | (3) | % | ||||||||||||||||||||||||||||||||||||||||||
Furniture, equipment and data processing | 4,644 | 4,731 | (87) | (2) | % | |||||||||||||||||||||||||||||||||||||||||||||
Net occupancy costs | 3,059 | 3,033 | 26 | 1 | % | |||||||||||||||||||||||||||||||||||||||||||||
Debit card expense | 1,616 | 1,690 | (74) | (4) | % | |||||||||||||||||||||||||||||||||||||||||||||
Amortization of CDI assets | 1,354 | 1,473 | (119) | (8) | % | |||||||||||||||||||||||||||||||||||||||||||||
Consulting and professional fees(2) | 921 | 1,498 | (577) | (39) | % | |||||||||||||||||||||||||||||||||||||||||||||
Regulatory assessments | 907 | 986 | (79) | (8) | % | |||||||||||||||||||||||||||||||||||||||||||||
OREO and collection costs, net | 6 | 90 | (84) | (93) | % | |||||||||||||||||||||||||||||||||||||||||||||
Merger and acquisition costs(3) | — | 7,525 | (7,525) | (100) | % | |||||||||||||||||||||||||||||||||||||||||||||
Other expenses(4) | 3,586 | 3,182 | 404 | 13 | % | |||||||||||||||||||||||||||||||||||||||||||||
Total non-interest expense | $ | 35,708 | $ | 44,451 | $ | (8,743) | (20) | % | ||||||||||||||||||||||||||||||||||||||||||
| Ratio of non-interest expense to total revenues | 55.50% | 74.02 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Efficiency ratio (non-GAAP) | 53.21% | 58.72 | % | |||||||||||||||||||||||||||||||||||||||||||||||
(1)Salaries and employee benefits: The decrease between periods was primarily driven by the reduction in number of employees following the acquisition of Northway on January 2, 2025, and completion of our integration in mid-March 2025 as we achieved our expected merger synergies.
(2)Consulting and professional fees: The decrease between periods was primarily driven by the discontinuance of a number of legacy Northway consulting arrangements that were no longer required following the acquisition of Northway on January 2, 2025, and completion of integration activities in mid-March 2025 as we achieved our expected merger synergies.
(3)Merger and acquisition costs: The merger and acquisition costs occurred in the first quarter of 2025 were related to the Northway acquisition. The Company did not incur similar costs during the first quarter of 2026.
(4)Other expenses: The increase between periods was primarily driven by higher marketing expenses of $254,000 and increased customer‑related costs, including fraud, of $87,000.
Income Tax Expense
The Company recorded income tax expense of $6.2 million for the three months ended March 31, 2026, compared to an income tax benefit of $1.2 million for the same period in 2025. The income tax benefit recognized for the three months ended March 31, 2025, was driven by lower pre-tax income driven by merger and acquisition costs of $7.5 million and remeasurement of our deferred tax assets that resulted in a reduction to income tax expense of $2.6 million, each were driven by the Company’s acquisition of Northway on January 2, 2025.
The Company’s estimated effective tax rate for 2026, before any discrete period items, is 22.5%, compared to our reported effective tax rate for 2025 of 17.2%. The increase in our estimated effective tax rate is driven by the aforementioned income tax benefit from the deferred tax asset remeasurement, lower forecasted tax-exempt income from municipal bonds, lower income tax credits and lower BOLI income as a percentage of pre-tax income.
52
FINANCIAL CONDITION
Cash and Cash Equivalents
Total cash and cash equivalents as of March 31, 2026, were $133.7 million, compared to $97.5 million at December 31, 2025. The increase in cash and cash equivalents was driven by temporary deposit and investment cash flows. The Company continues to actively manage its cash balances.
Included within the Company’s cash and cash equivalents’ balances at March 31, 2026 and December 31, 2025, was cash held in escrow by the FHLBB as collateral posted by the counterparties for our derivatives in a net asset position totaling $7.5 million and $7.2 million, respectively. We and the counterparty manage these cash accounts daily. Refer to Notes 8 and 9 of the consolidated financial statements for additional detail on the Company’s derivatives and collateral.
Investments
The Company utilizes the investment portfolio to manage liquidity, interest rate risk, and regulatory capital, as well as to take advantage of market conditions to generate returns without undue risk. As of March 31, 2026 and December 31, 2025, our investment portfolio consisted of MBS, CMO, municipal and subordinated corporate debt securities; FHLBB, FRB and other correspondent bank relationship common stock; and mutual funds held in a rabbi trust for the executive and director nonqualified retirement plans.
As of March 31, 2026, the reported value of the Company’s total investments portfolio was $1.4 billion, a decrease of $45.3 million, or 3%, since December 31, 2025, driven by normal paydowns, calls and maturities.
AFS and HTM Debt Securities. We designate our debt securities as AFS or HTM based on our intent and investment strategy and they are carried at fair value and amortized cost, respectively.
Our AFS debt securities portfolio, which comprised 64% of our investment portfolio as of both March 31, 2026 and December 31, 2025, was carried at fair value on our consolidated statements of financial condition using Level 2 valuation techniques. Refer to Note 14 of the consolidated financial statements for further details on the Company's fair value techniques.
Our HTM debt securities are carried at amortized cost on our consolidated statements of financial condition and comprised 34% of our investment portfolio as of both March 31, 2026 and December 31, 2025.
The book value of our debt securities was $1.4 billion as of both March 31, 2026 and December 31, 2025. Our debt securities portfolio has limited credit risk due to its composition, which includes securities backed by the U.S. government and government-sponsored agencies, and highly rated subordinated corporate and municipal bonds by nationally recognized rating agencies. At March 31, 2026 and December 31, 2025, the book value of U.S. government and government‑sponsored agencies represented approximately 93% of our debt securities portfolio.
53
The following table details the composition of the Company's investment portfolio, based on the book value of each security type as a percentage of total book value of the Company's debt securities, as of the dates indicated:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| (Dollars in thousands) | ($) | % of Total Debt Securities | ($) | % of Total Debt Securities | ||||||||||||||||||||||
| MBS - Agency-backed | $ | 967,593 | 68 | % | $ | 991,803 | 68 | % | ||||||||||||||||||
| CMO - Agency-backed | 345,166 | 24 | % | 358,994 | 24 | % | ||||||||||||||||||||
| Municipal | 60,822 | 4 | % | 61,106 | 4 | % | ||||||||||||||||||||
Subordinated corporate bonds | 38,246 | 3 | % | 38,212 | 3 | % | ||||||||||||||||||||
| Other - Agency-backed | 7,899 | 1 | % | 7,865 | 1 | % | ||||||||||||||||||||
| Total | $ | 1,419,726 | 100 | % | $ | 1,457,980 | 100 | % | ||||||||||||||||||
We continually monitor and evaluate our investment portfolio to identify and assess risks within our portfolio, including but not limited to, the impact of the current interest rate environment and the related prepayment risk, and the review of credit ratings. The overall mix of debt securities as of March 31, 2026, compared to December 31, 2025, remains consistent and is believed to be well-positioned to provide a stable source of cash flow. As of March 31, 2026 and December 31, 2025, the duration of our debt investment securities portfolio, adjusting for calls when appropriate and consensus prepayment speeds, was 4.8 years and 4.9 years, respectively.
The following table presents the fair value and book value of the Company's subordinated corporate bonds and municipal securities, as of the dates indicated:
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | # of Securities | Fair Value | Book Value | Net Unrealized (Loss) Gain | # of Securities | Fair Value | Book Value | Net Unrealized (Loss) Gain | ||||||||||||||||||||||||||||||||||||||||||
| Municipal bonds | 52 | $ | 59,227 | $ | 60,822 | $ | (1,595) | 53 | $ | 60,167 | $ | 61,105 | $ | (938) | ||||||||||||||||||||||||||||||||||||
| Subordinated corporate bonds | 16 | 38,719 | 38,246 | 473 | 18 | 38,812 | 38,212 | 600 | ||||||||||||||||||||||||||||||||||||||||||
| Total | 68 | $ | 97,946 | $ | 99,068 | $ | (1,122) | 71 | $ | 98,979 | $ | 99,317 | $ | (338) | ||||||||||||||||||||||||||||||||||||
At March 31, 2026 and December 31, 2025, municipal bonds represented 4% of the book value of the total bond portfolio, and all of our municipal bonds carried an investment‑grade credit rating.
At March 31, 2026 and December 31, 2025, subordinated corporate bonds represented 3% of the book value of the total bond portfolio, of which $26.0 million, or 68%, carried an investment‑grade credit rating, and $12.2 million, or 32%, consisted of non‑rated subordinated corporate bonds of community banks within our markets. As of March 31, 2026, the subordinated corporate bond portfolio was made up of 15 different companies, which included 13 different banks. The banks in the portfolio range from the largest U.S. banks to community banks, with 34% of our exposure as of March 31, 2026, being to global systemically important banks, or "G-SIBs". We continue to monitor and analyze the performance of our subordinated corporate bond portfolio.
We completed a review of our HTM and AFS investment portfolio as of March 31, 2026, and concluded that no ACL was warranted on any of our bonds at this time.
Other Investments. Our other investments on the consolidated statements of condition is primarily made up of FHLBB and FRB common stock. These investments are carried at cost. We are required to maintain a certain level of investment in FHLBB stock based on our level of FHLBB advances, and maintain a certain level of investment in FRB common stock based on the Bank's capital levels. As of March 31, 2026 and December 31, 2025, our investment in FHLBB common stock totaled $14.6 million and $17.7 million, respectively, while our investment in FRB common stock totaled $8.7 million at both dates.
Trading Securities. Our investments in mutual funds are designated as trading securities and carried at fair value. These investments are held within a rabbi trust and will be used for future payments associated with the Company’s Executive and Director Deferred Compensation Plan. These investments are carried at fair value using Level 1 valuation techniques. Refer to Note 14 of the consolidated financial statements for further details on fair value.
54
Loans
The following table sets forth the composition of our loan portfolio as of the dates indicated:
| Change | ||||||||||||||||||||||||||
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | $ | % | ||||||||||||||||||||||
| Commercial real estate - non-owner-occupied | $ | 1,780,079 | $ | 1,778,985 | $ | 1,094 | — | % | ||||||||||||||||||
| Commercial real estate - owner-occupied | 415,662 | 406,120 | 9,542 | 2 | % | |||||||||||||||||||||
| Commercial | 414,694 | 417,439 | (2,745) | (1) | % | |||||||||||||||||||||
| Residential real estate | 1,993,435 | 2,012,922 | (19,487) | (1) | % | |||||||||||||||||||||
Home equity | 342,874 | 332,256 | 10,618 | 3 | % | |||||||||||||||||||||
Consumer | 16,273 | 17,416 | (1,143) | (7) | % | |||||||||||||||||||||
| Total loans | $ | 4,963,017 | $ | 4,965,138 | $ | (2,121) | — | % | ||||||||||||||||||
| Commercial Loan Portfolio | $ | 2,610,435 | $ | 2,602,544 | $ | 7,891 | — | % | ||||||||||||||||||
| Retail Loan Portfolio | $ | 2,352,582 | $ | 2,362,594 | $ | (10,012) | — | % | ||||||||||||||||||
| Commercial Portfolio Mix | 53 | % | 52 | % | ||||||||||||||||||||||
| Retail Portfolio Mix | 47 | % | 48 | % | ||||||||||||||||||||||
Portfolio Concentrations. Our primary geographical markets are Maine, New Hampshire and Massachusetts, making up 57%, 25%, and 13%, respectively, of the loan portfolio as of March 31, 2026, compared to 57%, 25% and 12%, respectively, as of December 31, 2025. As of March 31, 2026, our distribution channels included 56 branches in Maine and 16 branches in New Hampshire, and an online residential mortgage and small business digital loan platform.
As of March 31, 2026, the (i) non-residential building operators’ industry (operators of commercial and industrial buildings, retail establishments, theaters, banks and insurance buildings) and (ii) lessors of residential buildings industry (lessors of buildings used as residences, such as single-family homes, apartments and town houses) concentrations were both 28% of our total commercial real estate portfolio and 12% of total loans, respectively. As of March 31, 2026, there were no other industry concentrations within our loan portfolio that exceeded 10% of total loans.
55
The table below summarizes the significant industries within the Company’s commercial loan portfolio at the dates indicated:
| March 31, 2026 | December 31, 2025 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | $ | % of Commercial Loan Portfolio | % of Total Loan Portfolio | $ | % of Commercial Loan Portfolio | % of Total Loan Portfolio | $ | % | ||||||||||||||||||||||||||||||||||||||||||
Real estate investment(1) | $ | 1,337,737 | 51 | % | 27 | % | $ | 1,335,058 | 51 | % | 27 | % | $ | 2,679 | — | % | ||||||||||||||||||||||||||||||||||
| Lodging | 317,849 | 12 | % | 6 | % | 306,182 | 12 | % | 6 | % | 11,667 | 4 | % | |||||||||||||||||||||||||||||||||||||
| Retail trade | 169,564 | 7 | % | 3 | % | 158,397 | 6 | % | 3 | % | 11,167 | 7 | % | |||||||||||||||||||||||||||||||||||||
| Health care | 152,733 | 6 | % | 3 | % | 152,887 | 6 | % | 3 | % | (154) | — | % | |||||||||||||||||||||||||||||||||||||
| Construction | 84,292 | 3 | % | 2 | % | 82,397 | 3 | % | 2 | % | 1,895 | 2 | % | |||||||||||||||||||||||||||||||||||||
| Wholesale trade | 77,573 | 3 | % | 2 | % | 77,787 | 3 | % | 2 | % | (214) | — | % | |||||||||||||||||||||||||||||||||||||
| Manufacturing | 70,485 | 3 | % | 1 | % | 65,495 | 3 | % | 1 | % | 4,990 | 8 | % | |||||||||||||||||||||||||||||||||||||
| Finance and insurance | 59,278 | 2 | % | 1 | % | 61,236 | 2 | % | 1 | % | (1,958) | (3) | % | |||||||||||||||||||||||||||||||||||||
Other (each < 2%) | 340,924 | 13 | % | 8 | % | 363,105 | 14 | % | 7 | % | (22,181) | (6) | % | |||||||||||||||||||||||||||||||||||||
| Total | $ | 2,610,435 | 100 | % | 53 | % | $ | 2,602,544 | 100 | % | 52 | % | $ | 7,891 | — | % | ||||||||||||||||||||||||||||||||||
| Commercial loan portfolio mix: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner-occupied | $ | 1,780,079 | 66 | % | 37 | % | $ | 1,778,985 | 68 | % | 36 | % | 1,094 | — | % | |||||||||||||||||||||||||||||||||||
| Commercial real estate - owner-occupied | 415,662 | 15 | % | 8 | % | 406,120 | 16 | % | 8 | % | 9,542 | 2 | % | |||||||||||||||||||||||||||||||||||||
| Commercial | 414,694 | 19 | % | 8 | % | 417,439 | 16 | % | 8 | % | (2,745) | (1) | % | |||||||||||||||||||||||||||||||||||||
| Total | $ | 2,610,435 | 100 | % | 53 | % | $ | 2,602,544 | 100 | % | 52 | % | $ | 7,891 | — | % | ||||||||||||||||||||||||||||||||||
(1) The following table summarizes the real estate investment loan portfolio, by property type as of the dates indicated:
| March 31, 2026 | December 31, 2025 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | $ | % of Real Estate Investment Portfolio | % of Total Loan Portfolio | $ | % of Real Estate Investment Portfolio | % of Total Loan Portfolio | $ | % | ||||||||||||||||||||||||||||||||||||||||||
Multi-family (5+ units)(a) | $ | 453,596 | 34 | % | 9 | % | $ | 445,583 | 33 | % | 9 | % | $ | 8,013 | 2 | % | ||||||||||||||||||||||||||||||||||
| Retail | 195,644 | 15 | % | 4 | % | 203,011 | 15 | % | 4 | % | (7,367) | (4) | % | |||||||||||||||||||||||||||||||||||||
Office(b) | 179,422 | 13 | % | 4 | % | 182,651 | 14 | % | 4 | % | (3,229) | (2) | % | |||||||||||||||||||||||||||||||||||||
| Industrial | 177,227 | 13 | % | 3 | % | 180,099 | 13 | % | 4 | % | (2,872) | (2) | % | |||||||||||||||||||||||||||||||||||||
Multi-family (1-4 units)(c) | 142,778 | 11 | % | 3 | % | 144,074 | 11 | % | 3 | % | (1,296) | (1) | % | |||||||||||||||||||||||||||||||||||||
Other(d) | 189,070 | 14 | % | 4 | % | 179,640 | 14 | % | 3 | % | 9,430 | 5 | % | |||||||||||||||||||||||||||||||||||||
| Total | $ | 1,337,737 | 100 | % | 27 | % | $ | 1,335,058 | 100 | % | 27 | % | $ | 2,679 | — | % | ||||||||||||||||||||||||||||||||||
(a) Multi-family (5+ units) loans are primarily located in non-urban locations, including 51% in Maine, 35% in New Hampshire, and 13% in Massachusetts as of March 31, 2026, compared to 50%, 37%, and 11%, respectively, as of December 31, 2025.
(b) Office loans are primarily located in non-urban locations, including 45% in Maine, 39% in New Hampshire, and 15% in Massachusetts as of March 31, 2026, compared to 46%, 39%, and 15%, respectively, as of December 31, 2025.
(c) Represents multi-family (1-4 units) that are used for commercial purposes.
(d) Includes multiple property types that individually are less than 5% of the real estate investment portfolio and individually are 1% or less of the total loan portfolio.
Related Party Transactions. The Bank is permitted, in its normal course of business, to make loans to certain officers and directors of the Company and Bank under terms that are consistent with the Bank’s lending policies and regulatory requirements. In addition to extending loans to certain officers and directors of the Company and Bank on terms consistent with the Bank’s lending policies, federal banking regulations also require training, audit and examination of the adherence to this policy (also known as “Regulation O” requirements). Note 4 of the consolidated financial statements provides information on related party lending transactions. We have not entered into significant related party transactions.
56
Asset Quality
Asset quality is of the utmost importance to the Company, and continues to be of great focus given current market conditions. Our practice is to manage the Company's loan portfolio proactively so that we are able to effectively identify problem credits and trends early, assess and implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continuously reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company continues to dedicate significant resources to monitor and manage credit risk throughout our loan portfolio and includes management and board-level oversight as follows:
•The Credit Risk Policy Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Risk, and Commercial and Retail Banking, along with the Credit Risk and Special Assets teams, oversees the Company's systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan rating system.
•The adequacy of the ACL is overseen by the Management Provision Committee, which is an internal management committee. The Management Provision Committee is comprised of the Company’s chief executive officer, chief financial officer, chief credit officer and certain members of senior management within Accounting, Credit Risk, and Collections and Special Assets. The Management Provision Committee supports the oversight efforts of the Audit Committee of the Board of Directors.
•The Directors’ Credit Committee of the Board of Directors reviews large credit exposures, monitors external loan review reports, reviews the lending authority for individual loan officers when required, and has approval authority and responsibility for all matters regarding the loan policy and other credit-related policies, including reviewing and monitoring asset quality trends, and concentration levels.
•The Audit Committee of the Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.
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Non-Performing Assets. Non-performing assets include non-accrual loans, accruing loans 90 days or more past due, and property acquired through foreclosure or repossession. The following table sets forth the composition and amounts of our non-performing loans as of the dates indicated:
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Non-accrual loans: | ||||||||||||||
| Commercial real estate - non-owner-occupied | $ | 5,017 | $ | 429 | ||||||||||
| Commercial real estate - owner-occupied | 403 | 210 | ||||||||||||
| Commercial | 2,689 | 3,042 | ||||||||||||
| Residential real estate | 2,252 | 2,667 | ||||||||||||
Home equity | 596 | 672 | ||||||||||||
Consumer | 2 | 3 | ||||||||||||
| Total non-accrual loans | 10,959 | 7,023 | ||||||||||||
| Other real estate owned | — | — | ||||||||||||
| Total non-performing assets | $ | 10,959 | $ | 7,023 | ||||||||||
| Total loans, excluding loans held for sale | $ | 4,963,017 | $ | 4,965,138 | ||||||||||
| Total assets | $ | 6,961,581 | $ | 6,974,584 | ||||||||||
| ACL on loans | $ | 45,576 | $ | 45,276 | ||||||||||
| ACL on loans to non-accrual loans | 415.88 | % | 644.68 | % | ||||||||||
| Non-accrual loans to total loans | 0.22 | % | 0.14 | % | ||||||||||
| Non-performing loans to total loans | 0.22 | % | 0.14 | % | ||||||||||
| Non-performing assets to total assets | 0.16 | % | 0.10 | % | ||||||||||
Potential Problem Loans. Potential problem loans consist of classified accruing commercial and commercial real estate loans that were 30-89 days past due. Such loans are characterized by weaknesses in the financial condition of borrowers or collateral deficiencies. Based on historical experience, the credit quality of some of these loans may improve due to changes in collateral values or the financial condition of the borrowers, while the credit quality of other loans may deteriorate, resulting in a loss. These loans are not included in the above analysis of non-accrual loans. As of March 31, 2026 and December 31, 2025, loans classified as potential problem loans totaled $381,000 and $4.6 million, respectively.
Past Due Loans. Past due loans consist of accruing loans that were 30-89 days past due. The following table presents the recorded investment of past due loans as of the dates indicated:
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Accruing loans 30-89 days past due: | ||||||||||||||
| Commercial real estate - non-owner-occupied | $ | 569 | $ | 4,698 | ||||||||||
| Commercial real estate - owner-occupied | — | 586 | ||||||||||||
| Commercial | 1,350 | 541 | ||||||||||||
| Residential real estate | 772 | 1,565 | ||||||||||||
Home equity | 328 | 713 | ||||||||||||
Consumer | 58 | 59 | ||||||||||||
| Total | $ | 3,077 | $ | 8,162 | ||||||||||
| Total loans | $ | 4,963,017 | $ | 4,965,138 | ||||||||||
| Accruing loans 30-89 days past due to total loans | 0.06 | % | 0.16 | % | ||||||||||
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ACL. The following table sets forth information concerning the components of our ACL for the periods indicated:
As of or For The Three Months Ended March 31, | As of or For The Year Ended December 31, 2025 | |||||||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | ||||||||||||||||||||||||||||||
| ACL on loans at the beginning of the period | $ | 45,276 | $ | 35,728 | $ | 35,728 | ||||||||||||||||||||||||||
| ACL on acquired PCD loans | — | 3,071 | 3,071 | |||||||||||||||||||||||||||||
Components of Provision for Credit Losses on Loans: | ||||||||||||||||||||||||||||||||
| Provision for acquired non-PCD loans | — | 6,293 | 6,293 | |||||||||||||||||||||||||||||
General provision for loan losses | 806 | 2,580 | 15,738 | |||||||||||||||||||||||||||||
Total provision for credit losses on loans | 806 | 8,873 | 22,031 | |||||||||||||||||||||||||||||
Net charge-offs (recoveries)(1): | ||||||||||||||||||||||||||||||||
| Commercial real estate | (4) | 139 | 3,151 | |||||||||||||||||||||||||||||
| Commercial | 475 | 786 | 12,231 | |||||||||||||||||||||||||||||
| Residential real estate | (6) | (2) | (21) | |||||||||||||||||||||||||||||
Home equity | — | 3 | 20 | |||||||||||||||||||||||||||||
Consumer | 41 | 23 | 173 | |||||||||||||||||||||||||||||
| Total net charge-offs | 506 | 949 | 15,554 | |||||||||||||||||||||||||||||
| ACL on loans at the end of the period | $ | 45,576 | $ | 46,723 | $ | 45,276 | ||||||||||||||||||||||||||
| Components of ACL: | ||||||||||||||||||||||||||||||||
| ACL on loans | $ | 45,576 | $ | 46,723 | $ | 45,276 | ||||||||||||||||||||||||||
| ACL on off-balance sheet credit exposures | 2,810 | 3,362 | 3,064 | |||||||||||||||||||||||||||||
| ACL at end of the period | $ | 48,386 | $ | 50,085 | $ | 48,340 | ||||||||||||||||||||||||||
Total loans, excluding loans held for sale | $ | 4,963,017 | $ | 4,885,086 | $ | 4,965,138 | ||||||||||||||||||||||||||
| Average loans | $ | 4,967,010 | $ | 4,902,296 | $ | 4,953,595 | ||||||||||||||||||||||||||
Net charge-offs to average loans | 0.04 | % | 0.08 | % | 0.31 | % | ||||||||||||||||||||||||||
Provision for loan losses to average loans | 0.02 | % | 0.18 | % | 0.44 | % | ||||||||||||||||||||||||||
| ACL on loans to total loans | 0.92 | % | 0.96 | % | 0.91 | % | ||||||||||||||||||||||||||
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(1) Additional information related to net charge-offs (recoveries) is presented in the following table for the periods indicated:
For The Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Total Charge-offs | Total Recoveries | Net Charge-Offs (Recoveries) | Average Loans | Ratio of Net Charge-Offs (Recoveries) to Average Loans | |||||||||||||||||||||||||||||||||
2026: | ||||||||||||||||||||||||||||||||||||||
| Commercial real estate | $ | — | $ | 4 | $ | (4) | 2,183,289 | — | % | |||||||||||||||||||||||||||||
| Commercial | 627 | 152 | 475 | 411,521 | 0.12 | % | ||||||||||||||||||||||||||||||||
| Residential real estate | — | 6 | (6) | 2,018,838 | — | % | ||||||||||||||||||||||||||||||||
| Home equity | — | — | — | 336,593 | — | % | ||||||||||||||||||||||||||||||||
Consumer | 43 | 2 | 41 | 16,769 | 0.24 | % | ||||||||||||||||||||||||||||||||
| Total | $ | 670 | $ | 164 | $ | 506 | $ | 4,967,010 | 0.04 | % | ||||||||||||||||||||||||||||
2025: | ||||||||||||||||||||||||||||||||||||||
| Commercial real estate | $ | 191 | $ | 52 | $ | 139 | $ | 2,065,534 | 0.01 | % | ||||||||||||||||||||||||||||
| Commercial | 896 | 110 | 786 | 499,591 | 0.16 | % | ||||||||||||||||||||||||||||||||
| Residential real estate | 4 | 6 | (2) | 2,034,024 | — | % | ||||||||||||||||||||||||||||||||
Home equity | 3 | — | 3 | 283,516 | — | % | ||||||||||||||||||||||||||||||||
Consumer | 26 | 3 | 23 | 19,631 | 0.12 | % | ||||||||||||||||||||||||||||||||
| Total | $ | 1,120 | $ | 171 | $ | 949 | $ | 4,902,296 | 0.02 | % | ||||||||||||||||||||||||||||
| For the Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||
2025: | ||||||||||||||||||||||||||||||||||||||
| Commercial real estate | $ | 3,220 | $ | 69 | $ | 3,151 | $ | 2,112,281 | 0.15 | % | ||||||||||||||||||||||||||||
| Commercial | 12,659 | 428 | 12,231 | 487,827 | 2.51 | % | ||||||||||||||||||||||||||||||||
| Residential real estate | 4 | 25 | (21) | 2,034,170 | — | % | ||||||||||||||||||||||||||||||||
Home equity | 21 | 1 | 20 | 300,686 | 0.01 | % | ||||||||||||||||||||||||||||||||
Consumer | 185 | 12 | 173 | 18,631 | 0.93 | % | ||||||||||||||||||||||||||||||||
| Total | $ | 16,089 | $ | 535 | $ | 15,554 | $ | 4,953,595 | 0.31 | % | ||||||||||||||||||||||||||||
ACL on Loans. During the first quarter of 2026, we completed our annual review and assessment of significant model inputs and assumptions within the discounted cash flow analysis used for estimating the Company’s ACL on loans, and we determined there were no material changes to our methodology or key loss drivers. The significant key assumptions used with the ACL on loans calculation as of March 31, 2026 and December 31, 2025, included: (i) Company-specific key loss drivers (i.e., macroeconomic factors), (ii) our forecast period and reversion speed, (iii) prepayment speeds, and (iv) various qualitative factors.
As of March 31, 2026 and December 31, 2025, the recorded ACL on loans was $45.5 million, or 0.92% to total loans, and $45.2 million, or 0.91% of total loans, respectively, and represented our best estimate. Our ACL on loans estimate as of each date incorporated the ongoing risk of a recession over the next 12 to 24 months using multiple scenarios and probability weighting each scenario. The ACL on loans as of March 31, 2026 and December 31, 2025, incorporated a similar weighting for the probability of a recession over the next 12 to 24 months based on our forecasted macroeconomic outlook as of each date. Refer to “—Provision for Credit Losses” and Note 4 of the consolidated financial statements for other factors impacting the change in ACL on loans during the three months ended March 31, 2026.
We may adjust our assumptions to account for differences between expected and actual losses from period to period. A future change of our assumptions likely will alter the level of allowance required and may have a material impact on future results of operations and financial condition. The ACL on loans is reviewed periodically within a calendar quarter to assess trends in CECL (“Current Expected Credit Losses”) key assumptions and asset quality, and their effects on the Company's financial condition.
ACL on Off-Balance Sheet Credit Exposures. The ACL on off-balance sheet credit exposures as of March 31, 2026 and December 31, 2025 was $2.8 million and $3.1 million, respectively. During the three months ended March 31, 2026, there were
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no significant changes in our model methodology to determine the ACL on off-balance sheet credit exposures The model uses the credit loss factors for each segment calculated within the ACL on loans model described above.
The ACL on off-balance sheet credit exposures was presented within accrued interest and other liabilities on the consolidated statements of condition. Increases (decreases) to the ACL on off-balance sheet credit exposures were presented within provision for credit losses on the consolidated statements of income.
We may adjust our assumptions to account for differences between expected and actual losses from period to period. A future change to our assumptions will likely alter the level of allowance required and may have a material impact on future results of operations and financial condition.
ACL on HTM Securities. As of March 31, 2026 and December 31, 2025, we evaluated our HTM debt securities for any credit concerns and none were identified. As of March 31, 2026 and December 31, 2025, we did not carry an ACL recorded on the Company’s HTM investments. Refer to “—Investments” and Note 3 of the consolidated financial statements for further discussion.
Liabilities
Deposits. Deposits totaled $5.6 billion and $5.5 billion at March 31, 2026 and December 31, 2025, respectively. The 1% increase during the first quarter of 2026 was driven by an increase in core deposits of $86.3 million, or 2%, to $4.8 billion at March 31, 2026. Savings and interest checking deposit balances grew 5% and 4%, respectively, during the first quarter of 2026, offsetting the decrease in non-interest checking, CDs, and brokered deposits of 3%, 4% and 9%, respectively, during the same period.
The Company's loan-to-deposit ratio was 89% at March 31, 2026 compared to 90% at December 31, 2025.
As of March 31, 2026, the Company had no customer relationships that exceeded 10% of total deposits.
Uninsured and Uncollateralized Deposits. Total deposits that exceeded the FDIC deposit insurance limit of $250,000 were $1.3 billion, or 24% of total deposits, as of March 31, 2026, and $1.3 billion, or 23% of total deposits, as of December 31, 2025.
Total uninsured and uncollateralized deposits that exceeded the FDIC deposit insurance limit of $250,000 and were not secured by pledged assets or any other guarantee of the Company totaled $837.0 million, or 15% of total deposits, as of March 31, 2026, and $828.3 million, or 15% of total deposits, as of December 31, 2025.
Borrowings. As of March 31, 2026, total borrowings were $576.0 million, a decrease of $68.3 million, or 11%, since December 31, 2025. The decrease in borrowings during the first quarter of 2026 was driven by a $75.0 million, or 23%, decrease in FHLBB advances as the Company was able to replace its funding with lower cost core deposit growth.
Shareholders' Equity
Shareholders' equity as of March 31, 2026, totaled $710.0 million, an increase of $13.4 million, or 2%, since December 31, 2025.
On March 31, 2026, the Company announced a quarterly cash dividend to shareholders of $0.42 per share totaling $7.1 million, payable on April 30, 2026 to shareholders of record as of April 15, 2026. As of March 31, 2026, the Company's annualized dividend yield was 3.54% based on Camden National's closing share price of $47.45, as reported by NASDAQ on March 31, 2026.
In January 2026, the Company’s Board of Directors authorized the repurchase of up to 850,000 shares of the Company’s common stock, representing approximately 5% of the Company’s issued and outstanding shares of common stock as of December 31, 2025. During the three months ended March 31, 2026, the Company repurchased 33,131 shares of its common stock at a weighted average price of $44.85 per share totaling $1.5 million.
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The following table presents certain information regarding shareholders’ equity as of and for the periods indicated:
As of or For The Three Months Ended March 31, | As of or For The Year Ended December 31, 2025 | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||
Average equity to average assets | 10.17 | % | 9.07 | % | 9.44 | % | |||||||||||||||||||||||||||||
Common equity ratio | 10.20 | % | 9.19 | % | 9.99 | % | |||||||||||||||||||||||||||||
| Tangible common equity ratio (non-GAAP) | 7.64 | % | 6.49 | % | 7.41 | % | |||||||||||||||||||||||||||||
Dividend payout ratio | 32.56 | % | 97.67 | % | 45.21 | % | |||||||||||||||||||||||||||||
Per Share Data | |||||||||||||||||||||||||||||||||||
Book value per share | $ | 41.98 | $ | 37.91 | $ | 41.16 | |||||||||||||||||||||||||||||
| Tangible book value per share (non-GAAP) | $ | 30.58 | $ | 26.02 | $ | 29.69 | |||||||||||||||||||||||||||||
Dividends declared per share | $ | 0.42 | $ | 0.42 | $ | 1.68 | |||||||||||||||||||||||||||||
Refer to “—Capital Resources” and Note 10 of the consolidated financial statements for further discussion of the Company and Bank's capital resources and regulatory capital requirements.
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LIQUIDITY
Our liquidity needs require the availability of cash to meet the withdrawal demands of depositors and credit commitments to borrowers. Liquidity is defined as our ability to maintain availability of funds to meet customer needs, as well as to support our asset base. The primary objective of liquidity management is to maintain a balance between sources and uses of funds to meet our cash flow needs in the most economical and expedient manner. Due to the potential for unexpected fluctuations in both deposits and loans, active management of liquidity is necessary. We maintain various sources of funding and levels of liquid assets and monitor liquidity in accordance with internal guidelines and all applicable regulatory requirements. Sources of funds that we utilize consist of deposits; borrowings from the FHLBB and other sources; cash flows from loans and investments; and cash flows from operations, including other contractual obligations and commitments.
As of March 31, 2026, our primary liquidity sources available were as follows:
| (Dollars in thousands) | Amount | |||||||
Excess cash(1) | $ | 65,986 | ||||||
| Unpledged investment securities | 410,120 | |||||||
| Over collateralized securities pledging position | 102,389 | |||||||
| FHLBB | 998,724 | |||||||
| Fed Discount Window | 145,146 | |||||||
| Unsecured borrowing lines | 94,872 | |||||||
| Total available primary liquidity | $ | 1,817,237 | ||||||
(1) Excess cash represents cash held at the FRB that is above the minimum reserve requirement. As of March 31, 2026, the minimum reserve requirement remains at zero.
Total available primary liquidity of $1.8 billion was 2.2 times uninsured and uncollateralized deposits as of March 31, 2026. Refer to "—Financial Condition—Liabilities—Uninsured and Uncollateralized Deposits" for further details.
In addition to the available primary liquidity noted above, as of March 31, 2026, we may access an additional $1.3 billion in funding through brokered deposits.
Although we believe that our level of liquidity is sufficient to meet current and future funding requirements, changes in current economic conditions, including consumer saving habits and the availability or access to the brokered deposit and wholesale repurchase markets, could significantly affect our liquidity position.
Deposits. Deposits continue to represent our primary source of funds. As of March 31, 2026 and December 31, 2025, total deposits, including brokered deposits, were $5.6 billion and $5.5 billion, respectively. Refer to “—Financial Condition—Liabilities—Deposits” for further discussion on deposits.
The following is a summary of the scheduled maturities of CDs as of March 31, 2026:
| (Dollars in thousands) | CDs | |||||||
| 1 year or less | $ | 609,404 | ||||||
| > 1 year | 42,598 | |||||||
| Total | $ | 652,002 | ||||||
Borrowings. Borrowings are used to supplement deposits as a source of liquidity. Our primary sources of borrowings are the FHLBB, FRB, other federal funds and customer repurchase agreements. As of March 31, 2026, total borrowings were $576.0 million, compared to $644.3 million as of December 31, 2025. We secure borrowings from the FHLBB with qualified residential real estate loans, certain investment securities and certain other assets available to be pledged. As of March 31, 2026, the Company had $998.7 million in borrowing capacity from the FHLBB.
Customer repurchase agreements are secured by MBS and government-sponsored enterprises investment securities. Through the Bank, as of March 31, 2026, we have available lines of credit of $9.9 million with the FHLBB, $85.0 million with two correspondent banks, and $145.1 million with the FRB Discount Window. We also have access to the brokered deposit market and wholesale reverse repurchase transactions market. These sources are considered as liquidity alternatives in our contingent liquidity plan.
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The following is a summary of the scheduled maturities of borrowings as of March 31, 2026:
| (Dollars in thousands) | FHLBB Advances | Customer Repurchase Agreements | Junior Subordinated Debentures | Total | ||||||||||||||||||||||
| 1 year or less | $ | 250,000 | $ | 263,429 | $ | — | $ | 513,429 | ||||||||||||||||||
| > 1 year | 1,000 | — | 61,590 | 62,590 | ||||||||||||||||||||||
| Total | $ | 251,000 | $ | 263,429 | $ | 61,590 | $ | 576,019 | ||||||||||||||||||
Loans. Contractual loan repayments also affect our liquidity position. Actual speed and timing of repayment may differ materially from contract terms due to prepayments or nonpayment.
The Company's unpledged residential mortgage loan portfolio is also a source of contingent liquidity as it could be sold in a reasonable time period, at fair value, on the secondary market. As of March 31, 2026, qualifying residential mortgage loans with a book value of $2.0 billion were pledged as collateral to the FHLBB.
The following table presents the contractual maturities of loans at the date indicated:
| March 31, 2026 | ||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Due in 1 Year or Less | Due after 1 Year Through 5 Years | Due After 5 Years Through 15 Years | Due in More than 15 Years | Total | % of Total Loans | ||||||||||||||||||||||||||||||||
Maturity Distribution(1): | ||||||||||||||||||||||||||||||||||||||
| Fixed Rate: | ||||||||||||||||||||||||||||||||||||||
Commercial real estate(2) | $ | 66,535 | $ | 442,987 | $ | 447,060 | $ | 2,514 | $ | 959,096 | 19 | % | ||||||||||||||||||||||||||
| Commercial | 15,093 | 131,762 | 56,494 | 8,106 | 211,455 | 4 | % | |||||||||||||||||||||||||||||||
| Residential real estate | 645 | 8,944 | 112,852 | 1,349,431 | 1,471,872 | 30 | % | |||||||||||||||||||||||||||||||
Home equity | 46 | 117 | 13,043 | 281,103 | 294,309 | 6 | % | |||||||||||||||||||||||||||||||
Consumer | 1,761 | 11,453 | 2,972 | 87 | 16,273 | — | % | |||||||||||||||||||||||||||||||
| Total fixed rate | 84,080 | 595,263 | 632,421 | 1,641,241 | 2,953,005 | 59 | % | |||||||||||||||||||||||||||||||
| Adjustable/Variable Rate: | ||||||||||||||||||||||||||||||||||||||
Commercial real estate(2) | 105,072 | 449,369 | 443,158 | 239,046 | 1,236,645 | 25 | % | |||||||||||||||||||||||||||||||
| Commercial | 57,250 | 79,480 | 59,944 | 6,565 | 203,239 | 4 | % | |||||||||||||||||||||||||||||||
| Residential real estate | 16 | 1,306 | 32,990 | 487,251 | 521,563 | 11 | % | |||||||||||||||||||||||||||||||
Home equity | 34 | 2,630 | 13,616 | 32,285 | 48,565 | 1 | % | |||||||||||||||||||||||||||||||
| Total adjustable/variable rate | 162,372 | 532,785 | 549,708 | 765,147 | 2,010,012 | 41 | % | |||||||||||||||||||||||||||||||
| Total loans | $ | 246,452 | $ | 1,128,048 | $ | 1,182,129 | $ | 2,406,388 | $ | 4,963,017 | 100 | % | ||||||||||||||||||||||||||
(1) Scheduled repayments are reported in the maturity category in which payment is due. Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are reported as due in one year or less.
(2) Commercial real estate loans include non-owner-occupied and owner-occupied properties.
Additionally, we have active relationships with various secondary market investors that purchase residential mortgage loans we originate. In addition to managing our interest rate risk position and earnings through the sale of these loans, we are also able to manage our liquidity position through timely sales of residential mortgage loans to the secondary market.
Investments. We generally invest in amortizing MBS and CMO debt securities that return cash flow at an accelerated rate in comparison to other types of debt securities that are of a bullet structure. MBS and CMO debt security cash flow will vary depending on the interest rate environment because borrowers may have the right to call or prepay obligations with or without prepayment penalties. Interest rates have remained elevated during 2025, which has continued to result in slowing cash flows. As of March 31, 2026 and December 31, 2025, the Company’s MBS and CMO debt securities portfolio totaled 92% of its total investment portfolio.
The Company's unpledged AFS investment portfolio is also a source of contingent liquidity, as it could be sold in a
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reasonable time period on the secondary market, at fair value, which was $278.6 million as of March 31, 2026.
The following is a summary of the scheduled cash flows from our debt securities portfolio, including investments designated as AFS and HTM, as of March 31, 2026:
| (Dollars in thousands) | Contractual Cash Flows(1) | |||||||||||||||||||||||||
| 1 year or less | $ | 145,516 | ||||||||||||||||||||||||
| > 1 year | 1,229,358 | |||||||||||||||||||||||||
| Total | $ | 1,374,874 | ||||||||||||||||||||||||
(1) Expected contractual cash flows could differ as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Other Liquidity Requirements. The Company generates cash flows from earnings through its normal course of business from earnings and, although not contractual, the Company has a history of paying a quarterly cash dividend to its shareholders and repurchasing its shares of common stock. For the three months ended March 31, 2026, the Company reported net income of $21.9 million and paid cash dividends of $7.1 million to shareholders.
In addition, in the course of its normal operations, the Company is party to several other contractual obligations not previously discussed, such as various lease agreements on a number of its branches. Renewal options within the various lease contracts, as applicable, were considered to determine the lease term and estimate the contractual obligation and commitment for the Company's operating and finance leases. Furthermore, certain lease contracts of the Company contain language that subject its rent payment to variability, such as those tied to an index or change in an index. As a result, the future contractual obligation and commitment may materially differ from that estimated and disclosed within the table below. As of March 31, 2026, we had the following lease and other contractual obligations to make future payments under each of these contracts as follows:
| (Dollars in thousands) | Total Amount | Payments Due per Period | ||||||||||||||||||
| Contractual obligations and commitments | Committed | 1 Year or Less | > 1 Year | |||||||||||||||||
Operating leases | $ | 17,761 | $ | 1,579 | $ | 16,182 | ||||||||||||||
Finance leases | 8,946 | 244 | 8,702 | |||||||||||||||||
Other contractual obligations | 4,937 | 4,937 | — | |||||||||||||||||
Total | $ | 31,644 | $ | 6,760 | $ | 24,884 | ||||||||||||||
The Company’s estimated lease liability for its various operating and finance leases was reported within other liabilities on our consolidated statements of condition.
In the normal course of business, we are a party to credit related financial instruments with off-balance sheet risk, which are not reflected in the consolidated statements of condition. These financial instruments include commitments to extend credit and standby letters of credit. Many of the commitments will expire without being drawn upon, and thus, the total amount does not necessarily represent future cash requirements. Refer to Note 7 of the consolidated financial statements for additional details.
We use derivative financial instruments for risk management purposes (primarily interest rate risk) and not for trading or speculative purposes. These contracts with our various counterparties may subject the Company to various cash flow requirements, which may include posting of cash as collateral (or other assets) for arrangements that the Company is in a liability position (i.e. “underwater”). Refer to Note 8 of the consolidated financial statements for further discussion of our derivatives and hedge instruments.
CAPITAL RESOURCES
As part of our goal to operate a safe, sound and profitable financial organization, we are committed to maintaining a strong capital base. Shareholders’ equity totaled $710.0 million as of March 31, 2026 and $696.6 million as of December 31, 2025, which amounted to 10% of total assets. Refer to "—Financial Condition—Shareholders' Equity" for further discussion on shareholders’ equity for the three months ended March 31, 2026.
Our principal cash requirement is the payment of dividends on our common stock, as and when declared by the Company’s
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Board of Directors. We declared dividends to shareholders in the aggregate amount of $7.1 million the three months ended March 31, 2026 and 2025. The Company's Board of Directors approves cash dividends on a quarterly basis after careful analysis and consideration of various factors, including the following: (i) capital position relative to total assets, (ii) risk-based assets, (iii) total classified assets, (iv) economic conditions, (v) growth rates for total assets and total liabilities, (vi) earnings performance and projections and (vii) strategic initiatives and related capital requirements. All dividends declared and distributed by the Company will be in compliance with applicable state corporate law and regulatory requirements.
We are primarily dependent upon the payment of cash dividends by the Bank, our wholly-owned subsidiary, to service our commitments. We, as the sole shareholder of the Bank, are entitled to dividends, when and as declared by the Bank's Board of Directors from legally available funds. The Bank declared dividends payable to the Company in the amount of $11.4 million during the first quarter of 2026. The Bank did not declare any dividends during the first quarter of 2025. Under regulations prescribed by the OCC, the Bank may not declare dividends in excess of the Bank’s net income for the current year plus its retained net income for the prior two years without prior approval from the OCC. If we are required to use dividends from the Bank to service unforeseen commitments in the future, we may be required to reduce the dividends paid to our shareholders going forward.
Please refer to Note 10 of the consolidated financial statements for discussion and details of the Company and Bank’s regulatory capital requirements. As of March 31, 2026 and December 31, 2025, the Company and Bank exceeded all regulatory capital requirements, and the Bank continues to meet the capital requirements to be classified as “well capitalized” under applicable prompt corrective action provisions.
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RISK MANAGEMENT
The Company’s Board of Directors and management have identified significant risk categories which affect the Company. The risk categories include: credit; liquidity; market; interest rate; capital; operational; technology, including cybersecurity; vendor and third party; people and compensation; compliance and legal; strategic alignment; and reputation. The Board of Directors has approved an Enterprise Risk Management (“ERM”) Policy that addresses each category of risk. The direct oversight and responsibility for the Company's risk management program has been delegated to the Company's Executive Vice President, Chief Risk Officer, who is a member of the Executive Committee and reports directly to the Chief Executive Officer.
There have been no material changes to the Company’s risk categories and risk management policies as described in Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Please refer to Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for further details regarding the Company’s risk management.
Interest rate risk
Interest rate risk represents the sensitivity of earnings to changes in market interest rates. As interest rates change, the interest income and expense streams associated with our financial instruments also change, thereby impacting net interest income, the primary component of our earnings. Board ALCO and Management ALCO utilize the results of a detailed and dynamic simulation model to quantify the estimated exposure of net interest income to sustained interest rate changes. While Board ALCO and Management ALCO routinely monitor simulated net interest income sensitivity over a rolling two-year horizon, they also utilize additional tools to monitor potential longer-term interest rate risk.
The simulation model captures the impact of changing interest rates on the interest income received and interest expense paid on all interest-earning assets and interest-bearing liabilities reflected on our consolidated statements of condition, as well as for derivative financial instruments. This sensitivity analysis is compared to ALCO policy limits, which specify a maximum tolerance level for net interest income exposure over a one- and two-year horizon, assuming a static balance sheet, given a 200 basis point upward and downward shift in interest rates. A parallel and pro rata shift in rates over a 12-month period is assumed. Using this approach, we are able to produce simulation results that illustrate the effect that both a gradual change of rates and a “rate shock” have on earnings expectations. In the down 200 basis points scenario, Federal Funds and Treasury yields are floored at 0.01% while Prime is floored at 3.00%. All other market rates are floored at the lesser of current levels or 0.25%.
The sensitivity analysis below does not represent a forecast and should not be relied upon as being indicative of expected operating results. These hypothetical estimates are based upon numerous assumptions including, among others, the nature and timing of interest rate levels, yield curve shape, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits and reinvestment/replacement of asset and liability cash flows. While assumptions are developed based upon current economic and local market conditions, we cannot make any assurances as to the predictive nature of these assumptions, including how customer preferences or competitor influences might change.
As of March 31, 2026 and 2025, our net interest income sensitivity analysis reflected the following changes to net interest income, as compared to our modeled Year 1 Base net interest income, assuming no balance sheet growth and a parallel shift in interest rates. All rate changes were “ramped” over the first 12-month period and then maintained at those levels over the remainder of the ALCO simulation horizon.
| Estimated Changes In Net Interest Income | ||||||||||||||
| Rate Change from Year 1 — Base | March 31, 2026 | March 31, 2025 | ||||||||||||
| Year 1 | ||||||||||||||
| +200 basis points | (2.4) | % | (1.7) | % | ||||||||||
| -200 basis points | 3.3 | % | 3.1 | % | ||||||||||
| Year 2 | ||||||||||||||
| +200 basis points | 3.8 | % | 5.7 | % | ||||||||||
Rates unchanged | 5.1 | % | 8.0 | % | ||||||||||
| -200 basis points | 7.3 | % | 11.4 | % | ||||||||||
If rates remain at or near current levels, net interest income is projected to increase in year two of the simulation. Asset cash flows reprice and replace into the current rate environment at rates above current portfolio averages and funding costs
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decline due to maturing CDs renewing into lower current market rates, causing balance sheet spread to expand. If deposit pricing increased from current levels without any changes to market rates or if unfavorable funding mix changes occurred, it would negatively impact net interest income projections.
If rates increase 200 basis points, net interest income is projected to decrease in the first year of the simulation as the funding base adjusts into the higher rate environment to a greater degree than asset yields increase. In the second year, net interest income is projected to increase as loan and investment yields continue to reprice/reset into higher yields and funding cost increases slow.
If rates decrease 200 basis points, net interest income is projected to improve in the first year of the simulation as reductions in funding costs are able to more than offset near-term asset yield deterioration. In the second year, net interest income is projected to further increase as asset yields are supported by fixed rates and floors while cost of funds reductions continue, albeit at a slower pace.
In addition to using our investments portfolio to manage liquidity risk, we also use it to manage our interest rate risk and provide a natural hedge to our interest risk exposure created by loans, deposits and borrowings. Refer to “—Financial Condition—Investments” for further details of the Company’s investment portfolio, including the duration of the bond portfolio as of March 31, 2026 and December 31, 2025.
Periodically, if deemed appropriate, we use back-to-back loan swaps, interest rate swaps, floors and caps, which are common derivative financial instruments, to hedge our interest rate risk position. The Board of Directors has approved hedging policy statements governing the use of these instruments. The Board and Management ALCO monitor derivative activities relative to their expectations and our hedging policies. Refer to Note 8 of the consolidated financial statements for further discussion of these derivative instruments.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Information required by this Item 3 is included in Item 2. “Management's Discussion and Analysis of Financial Condition and Results of Operations - Risk Management” and such information is incorporated into this Item 3 by reference.
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ITEM 4. CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company’s management conducted an evaluation with the participation of the Company’s Chief Executive Officer and Chief Operating Officer and Chief Financial Officer & Principal Financial and Accounting Officer, regarding the effectiveness of the Company’s disclosure controls and procedures, as of the end of the period covered by this quarterly report on Form 10-Q. In designing and evaluating the Company’s disclosure controls and procedures, the Company and its management recognize that any controls and procedures, no matter how well designed and operated, can provide only a reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Operating Officer and Chief Financial Officer & Principal Financial and Accounting Officer concluded that they believe the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. We intend to continue to review and document our disclosure controls and procedures, including our internal controls and procedures for financial reporting, and we may from time to time make changes to the disclosure controls and procedures to enhance their effectiveness and to ensure that our systems evolve with our business.
There was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the normal course of business, the Company and its subsidiaries are subject to pending and threatened legal actions. Although the Company is not able to predict the outcome of such actions, after reviewing pending and threatened actions with counsel, management believes that based on the information currently available the outcome of such actions, individually or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial position as a whole.
ITEM 1A. RISK FACTORS
There are a number of factors that may adversely affect the Company’s business, financial results or stock price. Refer to “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for discussion of these risks.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) None
(b) None
(c) The following table summarizes the Company's stock purchases during the three months ended March 31, 2026:
| Issuer Purchases of Equity Securities | ||||||||||||||||||||||||||
| Period | Total number of shares (or units) purchased(1)(2) | Average price paid per share (or unit) | Total number of shares (or units) purchased as part of publicly announced plans or programs | Maximum number (or appropriate dollar value) of shares (or units) that may yet be purchased under the plans or programs (2) | ||||||||||||||||||||||
January 1-31, 2026 | — | $ | — | — | 850,000 | |||||||||||||||||||||
February 1-28, 2026 | — | — | — | 850,000 | ||||||||||||||||||||||
March 1-31, 2026 | 33,792 | 44.84 | 33,131 | 816,869 | ||||||||||||||||||||||
| Total | 33,792 | $ | 44.84 | 33,131 | 816,869 | |||||||||||||||||||||
(1) Includes 661 shares surrendered by employees of the Company to satisfy their tax withholding obligations in connection with the vesting of restricted stock awards.
(2) In January 2026, the Company announced that the Board of Directors had authorized a common stock repurchase program for management to repurchase up to 850,000 shares. This program will terminate upon the earlier of (i) reaching the authorized share repurchase amount, (ii) vote by the Board of Directors to terminate the plan, or (iii) January 7, 2027.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
| Exhibit No. | Definition | |||||||
31.1* | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934. | |||||||
31.2* | Certification of Chief Financial Officer, Principal Financial & Accounting Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934. | |||||||
32.1** | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
32.2** | Certification of Chief Financial Officer, Principal Financial & Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101* | iXBRL (Inline eXtensible Business Reporting Language). The following materials from Camden National Corporation’s Quarterly Report on Form 10-Q for the period ended March 31, 2026, formatted in iXBRL: (i) Consolidated Statements of Condition - March 31, 2026 and December 31, 2025; (ii) Consolidated Statements of Income - Three Months Ended March 31, 2026 and 2025; (iii) Consolidated Statements of Comprehensive Income - Three Months Ended March 31, 2026 and 2025; (iv) Consolidated Statements of Changes in Shareholders’ Equity - Three Months Ended March 31, 2026 and 2025; (v) Consolidated Statements of Cash Flows - Three Months Ended March 31, 2026 and 2025; and (vi) Notes to the Unaudited Consolidated Financial Statements. | |||||||
| 104* | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | |||||||
| * | Filed herewith. | |||||||
| ** | Furnished herewith. | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CAMDEN NATIONAL CORPORATION | |||||||||||
| (Registrant) | |||||||||||
| /s/ Simon R. Griffiths | May 7, 2026 | ||||||||||
| Simon R. Griffiths | Date | ||||||||||
| President and Chief Executive Officer (Principal Executive Officer) | |||||||||||
| /s/ Michael R. Archer | May 7, 2026 | ||||||||||
| Michael R. Archer | Date | ||||||||||
| Chief Financial Officer and Principal Financial & Accounting Officer | |||||||||||
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FAQ
How did Camden National (CAC) perform in the quarter ended March 31, 2026?
Camden National generated significantly higher earnings, with net income of $21.9 million versus $7.3 million a year earlier. Diluted EPS was $1.29, supported by higher net interest income and a much lower provision for credit losses compared with the prior-year quarter.
What were Camden National’s key revenue and net interest income figures for Q1 2026?
Total interest income was $78.4 million and total interest expense was $26.0 million, resulting in net interest income of $52.4 million. Non-interest income contributed an additional $12.0 million, mainly from debit card fees, service charges, fiduciary services, brokerage, insurance, and mortgage banking.
How did credit quality and loan loss provisioning trend for Camden National (CAC)?
The provision for credit losses on loans was $0.6 million, down from $9.4 million in the prior year’s quarter. The allowance for credit losses on loans totaled $45.6 million, and non-accrual loans were $11.0 million, indicating a modest level of problem credits relative to total loans.
What was Camden National’s loan and deposit profile as of March 31, 2026?
Total loans were $5.0 billion, split between commercial and retail segments, including $2.61 billion in commercial loans and $2.35 billion in retail loans. Total deposits reached $5.59 billion, with a mix of non-interest checking, interest checking, savings, money market, certificates of deposit, and brokered deposits.
How strong are Camden National’s regulatory capital ratios?
Camden National’s consolidated total risk-based capital ratio was 14.27% and common equity Tier 1 ratio was 12.01% as of March 31, 2026. Camden National Bank’s common equity Tier 1 ratio was 12.60%, comfortably above regulatory minimums and the capital conservation buffer thresholds.
Did merger-related costs affect Camden National’s prior-year results?
Yes. In the prior-year quarter, Camden National recorded $7.5 million in merger and acquisition costs related to the Northway Financial transaction. These costs did not recur in the quarter ended March 31, 2026, contributing to the substantial year-over-year improvement in net income and overall profitability.