CAMDEN, Maine - Camden National (NASDAQ:CAC) Corporation (NASDAQ: CAC), the parent company of Camden National Bank, has announced a definitive agreement to acquire Northway Financial, Inc. (OTCQB: NWYF), the parent company of Northway Bank, in an all-stock transaction valued at approximately $86.6 million. This strategic merger is set to create a leading Northern New England banking institution with a combined $7.0 billion in assets.
The transaction, unanimously approved by both companies' boards, will result in a banking entity with 74 branches across New Hampshire and Maine. Northway shareholders are to receive 0.83 shares of Camden National common stock for each Northway share they hold, which was valued at around $31.46 per share based on Camden National’s closing stock price on September 9, 2024.
According to Simon Griffiths, President and CEO of Camden National, the merger will enhance the bank's presence in New Hampshire and drive profitability and shareholder value. He emphasized the cultural alignment and shared community commitment of the two organizations. William Woodward (NASDAQ:WWD), President, CEO, and Chairman of Northway, echoed the sentiment, highlighting the strengthened position in a competitive market and the potential for operational enhancements.
The combined company is expected to maintain the Camden National Bank name and will continue trading on Nasdaq under the "CAC" ticker symbol. Upon completion of the merger, Camden National shareholders will own roughly 86% of the combined entity, while Northway shareholders will hold about 14%.
Financially, the merger is anticipated to be 19.9% accretive to Camden National's 2025 earnings per share and 32.7% accretive to its 2026 earnings per share. The capital ratios post-merger are expected to remain well above the "well-capitalized" thresholds, positioning the company for future growth.
The completion of the merger is expected in the first quarter of 2025, pending regulatory approvals and approval by Northway shareholders. One Northway director will join the boards of directors of both Camden National and Camden National Bank following the transaction.
Advisors for the transaction include Raymond James & Associates, Inc., and Sullivan & Cromwell LLP for Camden National, and Performance Trust Capital Partners LLC and Goodwin Procter LLP for Northway.
The information provided in this article is based on a press release statement.
In other recent news, Camden National Corporation has reported strong Q2 financials, with a net income of $12 million or $0.81 per diluted share. This positive performance is attributed to disciplined execution and rigorous expense control. The company also reported a slight increase in nonperforming assets but maintains a robust asset quality.
Camden National Corporation is investing in technology to improve customer experience and efficiency. They anticipate a continued expansion in net interest margin while estimating operating expenses to remain between $27.5 million to $28 million for the rest of the year.
Furthermore, the corporation aims to return to a net interest margin of $270 million, although the timeline remains uncertain. They also expect their wealth management business to grow, leveraging their geographic advantages.
However, there has been a marginal increase in nonperforming assets, and the timeline for achieving the anticipated net interest margin is unclear. Despite these challenges, Camden National Corporation maintains a strong capital and liquidity position, with twice the available liquidity sources. These are among the recent developments for the corporation.
InvestingPro Insights
As Camden National Corporation (NASDAQ: CAC) prepares for its strategic merger with Northway Financial, Inc., investors and industry analysts are closely monitoring the company's financial health and growth potential. Recent data from InvestingPro underscores a few key aspects that could influence shareholder value and the company's market position post-merger.
InvestingPro Data shows that Camden National Corporation has a market capitalization of $552.37 million, with a Price to Earnings (P/E) ratio standing at 12.68. This indicates a reasonable valuation relative to the company's earnings. Additionally, the company has demonstrated a solid operating income margin of 35.47% over the last twelve months as of Q2 2024, which could signal efficient management and strong profitability.
On the shareholder returns front, Camden National has shown a robust three-month price total return of 22.5%, reflecting investor confidence and a positive market response to the company's performance and strategic initiatives. This aligns with the InvestingPro Tip that highlights the company's strong return over the last three months.
Furthermore, Camden National's commitment to shareholder returns is evident with a noteworthy dividend yield of 4.43%, complemented by the company's track record of maintaining dividend payments for 28 consecutive years. This is further bolstered by the fact that the company has raised its dividend for 7 consecutive years, as noted in another InvestingPro Tip, reinforcing its appeal to income-focused investors.
InvestingPro also features additional tips that could be beneficial for those interested in Camden National's financial outlook. With 4 analysts having revised their earnings upwards for the upcoming period and predictions of profitability this year, the company's prospects appear encouraging. For a more comprehensive analysis, investors can explore the full suite of InvestingPro Tips available for CAC at https://www.investing.com/pro/CAC, which includes a total of 7 tips that provide deeper insights into the company's financial performance and market expectations.
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