EX-99.2 4 a123124proformasfor8-ka.htm EX-99.2 Document

Unaudited Pro Forma Condensed Combined Financial Data

The following unaudited pro forma condensed combined financial data is based on the historical financial data of Camden National Corporation (“Camden”) and Northway Financial, Inc. (“Northway”) and has been prepared to illustrate the effects of the merger of Northway with and into Camden, under the terms of an Agreement and Plan of Merger, by and between Camden and Northway, dated September 9, 2024 (the “Merger Agreement”). It is also based on certain assumptions that Camden believes are reasonable, which are described in the notes to the unaudited pro forma condensed combined financial statements. The unaudited pro forma condensed combined financial data does not give effect to any anticipated synergies, operating efficiencies or cost savings that may be associated with the merger. The unaudited pro forma condensed combined income statement also does not include any integration costs the companies may incur related to the merger as part of combining the operations of the companies.

Certain reclassifications were made to Northway’s historical financial information to conform to Camden’s presentation of financial information. This data should be read in conjunction with the Camden’s historical consolidated financial statements and accompanying notes in Camden’s Annual Report on Form 10-K, as of and for the year ended December 31, 2024 and the Northway historical financial statements and accompanying notes included.

Camden has not completed its detailed valuation analysis necessary to determine the fair market values of Northway’s assets acquired and liabilities assumed. Accordingly, the unaudited pro forma condensed combined financial data does not include an allocation of the purchase price, unless otherwise specified. The pro forma adjustments included are subject to change depending on changes in interest rates and the components of assets and liabilities, and as additional information becomes available and additional analyses are performed. The final allocation of the purchase price is expected to be reported within the Company’s results of operations for the first quarter of 2025. Increases or decreases in the fair values of the net assets as compared with the information shown in the unaudited pro forma condensed combined financial data may change the amount of the purchase price allocated to goodwill and other assets and liabilities, and may impact Camden’s statement of operations due to adjustments in yield and/or amortization of the adjusted assets or liabilities. Any changes to Northway’s shareholders’ equity, including results of operations and certain balance sheet changes through the date the merger was completed may also change the purchase price allocation, which may include the recording of a lower or higher amount of goodwill. The final adjustments may be materially different from the unaudited pro forma adjustments presented in these pro formas.

The unaudited pro forma combined consolidated financial information is presented for illustrative purposes only and does not necessarily indicate the financial results of the combined company had the companies actually been combined at the beginning of the periods presented. This information does not consider any potential impacts of current market conditions on revenues, potential revenue enhancements, anticipated cost savings and expense efficiencies, among other factors, and this information should not be considered indicative of the market value of Camden common stock or the actual or future results of operations of Camden for any period. Actual results may be materially different than the pro forma information presented.
















Consolidated Holding Company
Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet
As of December 31, 2024
(In thousands)Camden HistoricalNorthway HistoricalPro Forma AdjustmentsPro Forma Combined
ASSETS   
Cash and due from banks$62,379 $9,924 $(10,331)A$61,972 
Interest-bearing deposits in other banks (including restricted cash) 152,584 37,746 591 N190,921 
Total cash, cash equivalents and restricted cash214,963 47,670 (9,740)252,893 
Investments:   
Trading securities5,243 — — 5,243 
Available-for-sale securities, at fair value593,749 226,706 — 820,455 
Held-to-maturity securities, at amortized cost517,778 — — 517,778 
Other investments22,514 2,516 — 25,030 
Total investments1,139,284 229,222 — 1,368,506 
Loans held for sale, at fair value11,049 257 — 11,306 
Loans held for investment4,115,259 873,995 (88,629)C4,900,625 
      Less: allowance for credit losses on loans(35,728)(10,222)(395)D(46,345)
       Net loans4,079,531 863,773 (89,024)4,854,280 
Goodwill94,697 9,934 55,573 E160,204 
Core deposit intangible assets415 — 34,069 F34,484 
Bank-owned life insurance104,308 4,372 — 108,680 
Premises and equipment, net37,052 12,157 1,765 G, N50,974 
Deferred tax assets40,037 14,006 10,655 H64,698 
Other assets83,802 12,132 4,274 I, N100,208 
Total assets$5,805,138 $1,193,523 $7,572 $7,006,233 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Liabilities  
Deposits$4,633,167 $971,899 $(312)J$5,604,754 
Borrowings, repurchase agreements and junior subordinated debentures544,952 131,119 (627)K675,444 
Accrued interest and other liabilities95,788 17,938 — 113,726 
Total liabilities5,273,907 1,120,956 (939)6,393,924 
Shareholders’ Equity531,231 72,567 8,511 L612,309 
Total liabilities and shareholders’ equity$5,805,138 $1,193,523 $7,572 $7,006,233 





Consolidated Holding Company
Unaudited Pro Forma Condensed Combined Consolidated Income Statements
For the Year Ended December 31, 2024
(In thousands, except per share data)Camden HistoricalNorthway HistoricalPro Forma AdjustmentsPro Forma Combined
Interest Income
Interest and fees on loans$214,650 $40,540 $11,962 C$267,152 
Taxable interest on investments27,381 6,900 5,301 B39,582 
Nontaxable interest on investments1,849 304 — 2,153 
Dividend income1,630 350 — 1,980 
Other interest income4,047 1,642 — 5,689 
Total interest income249,557 49,736 17,263 316,556 
Interest Expense
Interest on deposits95,806 12,870 156 J108,832 
Interest on borrowings19,166 4,658 (44)K23,780 
Interest on junior subordinated debentures2,132 1,218 62 K3,412 
Total interest expense117,104 18,746 174 136,024 
Net interest income132,453 30,990 17,089 180,532 
(Credit) provision for credit losses(404)(492)9,237 D8,341 
Net interest income after (credit) provision for credit losses132,857 31,482 7,852 172,191 
Non-Interest Income
Debit card income12,657 2,233 — 14,890 
Service charges on deposit accounts8,444 960 — 9,404 
Income from fiduciary services7,270 — — 7,270 
Brokerage and insurance commissions5,535 — — 5,535 
Mortgage banking income, net3,230 220 — 3,450 
Bank-owned life insurance2,806 324 — 3,130 
Net gain on sale of securities
— 553 553 
Other income4,597 1,132 — 5,729 
Total non-interest income44,539 5,422 — 49,961 
Non-Interest Expense
Salaries and employee benefits64,073 18,417 — 82,490 
Furniture, equipment and data processing14,364 2,455 149 G16,968 
Net occupancy costs7,912 2,435 — 10,347 
Debit card expense5,287 1,202 — 6,489 
Consulting and professional fees3,583 2,885 — 6,468 
Regulatory assessments3,258 607 — 3,865 
Merger and acquisition costs1,159 2,079 10,331 A13,569 
Amortization of core deposit intangible assets556 — 3,407 F3,963 
Other real estate owned and collection costs, net201 — — 201 
Other expenses11,543 2,711 — 14,254 
Total non-interest expense111,936 32,791 13,887 158,614 
Income before income tax expense65,460 4,113 (6,035)63,538 
Income Tax Expense12,456 258 (1,267)M11,447 
Net Income$53,004 $3,855 $(4,768)$52,091 
Per Share Data
Basic earnings per share$3.63 $1.40 N.M.$3.09 
Diluted earnings per share$3.62 $1.40 N.M.$3.08 
Weighted average number of common shares outstanding14,579,276 2,751,650 (467,868)16,863,058 
Diluted average number of common shares outstanding14,633,803 2,751,650 (467,868)16,917,585 
N.M. = Not meaningful




NOTE 1 – BASIS OF PRESENTATION
 
The unaudited pro forma condensed combined consolidated financial information and explanatory notes have been prepared under the acquisition method of accounting for business combinations. The unaudited pro forma condensed combined balance sheet as of December 31, 2024 gives effect to the merger as if it had occurred on that date. The unaudited pro forma condensed combined statements of income for the year ended December 31, 2024 gives effect to the merger as if it had become effective on January 1, 2024. This information is not intended to reflect the actual results that would have been achieved had the acquisition actually occurred on that date. The pro forma adjustments are preliminary, based on estimates and are subject to change as more information becomes available and after final analyses of the fair values of both tangible and intangible assets acquired and liabilities assumed are completed. Accordingly, the final fair value adjustments may materially differ from those presented in this document.

NOTE 2 – PURCHASE PRICE
 
Pursuant to the Merger Agreement, each share of Northway common stock outstanding at the time of the merger was exchanged for 0.83 shares of Camden common stock, with cash paid in lieu of fractional shares. The merger was consummated on January 2, 2025 and 2,283,782 shares of Camden common stock were issued as merger consideration. Based on the closing price of Camden common stock of $42.25 on January 2, 2025, $96.5 million in consideration was paid. For purposes of the unaudited condensed combined financial information, the fair value of Camden common stock to be issued as merger consideration was based on Camden’s closing price of $42.25 as of January 2, 2025.

NOTE 3 - PRO FORMA ADJUSTMENTS TO UNAUDITED CONDENSED COMBINED FINANCIAL INFORMATION

The following pro forma adjustments have been reflected in the unaudited pro forma condensed combined financial information. All adjustments are based on preliminary assumptions and valuations, which are subject to change:
Balance SheetIncome Statement
(in thousands, except per share data)
As of
12/31/24
For the Year Ended 12/31/24
AEstimated remaining merger-related transaction costs including contract termination costs, system conversion costs, professional service fees and certain other estimated costs$(10,331)$10,331 
BEstimated investment unrealized loss accretion to interest income using a 9 year amortization period and a straight-line method$5,301 
CAdjustments to loan portfolio:
Interest rate adjustment to record loans at fair value; estimated loan discount accretion into interest income, approximates a level yield over the remaining life of the respective loans$(79,392)
Credit adjustment non-purchased credit deterioration (“non-PCD”) loans at fair value(9,237)
Total adjustment to loans held for investment $(88,629)$11,962 
DAdjustment to allowance for credit losses (“ACL”) on loans:
Reversal of Northway’s historical ACL on loans
$10,222 
Increase to the ACL for credit losses for purchased credit deterioration (“PCD”) loans(1,380)
Day two adjustment to record provision for credit losses for non-PCD loans, offset through income statement(9,237)$9,237 
Net change in ACL$(395)
EExcess of purchase price less Northway’s tangible equity, net fair value adjustments and creation of core deposit intangible (“CDI”) assets:
Purchase price (calculated based on CNC January 2, 2025 closing price of $42.25, and issuance of 2,283,782 shares)
$96,490 
Northway adjusted tangible equity:
Northway tangible equity62,633 
Net purchase accounting adjustments(31,650)
Northway adjusted tangible equity30,983 
Goodwill created65,507 
Less: Existing Northway goodwill(9,934)
Adjustment to goodwill$55,573 



Balance SheetIncome Statement
(in thousands, except per share data)
As of
12/31/24
For the Year Ended 12/31/24
FAdjustment to record CDI assets estimated at 4% of core deposits; amortization of CDI assets using a 10-year amortization period and straight-line method$34,069 $3,407 
GAdjustment to increase premises and equipment, net, to record at fair value; additional depreciation expense included in furniture, equipment and data processing based on an estimated average life of 30 years$4,460 $149 
HDeferred tax asset created as a result of the purchase accounting adjustments$8,669 
Deferred tax asset on day two provision for credit losses for non-PCD loans1,986 
Total adjustment to deferred tax assets$10,655 
I
Adjustment to increase current taxes receivable for $10.3 million of estimated remaining merger costs calculated using a 21% tax rate
$2,169 
JAdjustment to decrease time deposits to record at fair value; additional interest expense on deposits, amortization based on estimated life of 2 years$(312)$156 
KAdjustment to increase borrowings to record at fair value; reduced interest expense on borrowings, amortization based on estimated life of 4 years$174 $(44)
Adjustment to decrease trust preferred securities to record at fair value; additional interest expense, amortization based on estimated life of 13 years(801)$62 
Total adjustment to borrowings$(627)
LAdjustments to shareholders’ equity:
Elimination of Northway common stock$(3,800)
Elimination of Northway treasury stock15,470 
Elimination of Northway additional paid in capital(4,140)
Elimination of Northway retained earnings(115,026)
Elimination of Northway accumulated other comprehensive loss34,929 
Camden stock issued as consideration (calculated based on January 2, 2025 closing price of $42.25)
96,490 
Adjustment to record the impact on retained earnings of the current expected credit losses (“CECL”) day two provision for credit losses for non-PCD loans of $9.2 million, net of tax(7,251)
Adjustment to record the impact on retained earnings for estimated remaining merger-related costs of $10.3 million, net of tax
(8,161)
Total adjustment to shareholders’ equity$8,511 
MAdjustment to decrease income tax expense to reflect the estimated income tax effect of purchase accounting adjustments at 21%.$(1,267)
NReclassifications made to Northway to conform with Camden historical presentation:
Other assets to interest-bearing deposits in other banks$591 
Premises and equipment, net to other assets$2,695