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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The discussion below focuses on the factors affecting our consolidated results of operations and financial condition at and for the year ended December 31, 2024, and where appropriate, factors that may affect our future financial performance, unless stated otherwise. This discussion should be read in conjunction with the consolidated financial statements, notes to the consolidated financial statements and selected consolidated financial data.

Refer to the Company’s 2023 annual report on Form 10-K filed with the SEC on March 8, 2024 for the discussion of results of operations and financial condition at and for the year ended December 31, 2023.

INTRODUCTORY NOTE

On January 2, 2025, the Company completed its previously announced stock-for stock acquisition of Northway. The total consideration paid by the Company consisted of approximately $96.5 million (approximately 2.3 million shares of the Company’s common stock) based on the closing price of the Company’s common stock of $42.25, as reported by Nasdaq on January 2, 2025. Results of operations and cash flows for all periods presented in this Annual Report on Form 10-K reflect only the results of operations and cash flows of the Company and do not include the results of operations or cash flows of Northway. In addition, neither the shares of Company common stock issued as consideration in the acquisition nor any purchase accounting adjustment that the Company will make in connection with the acquisition are reflected in the Company’s financial condition for any period presented in this Annual Report on Form 10-K. The Company will account for the Northway acquisition as a business combination in results of operations for the first quarter of 2025. For additional information regarding the Company’s acquisition of Northway, refer to Note 23 of the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

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ACRONYMS AND ABBREVIATIONS

The acronyms and abbreviations identified below are used throughout Item 7. “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 this section of the Form 10-K:

Acronym Description Acronym Description

ALCO: Asset/Liability Committee GDP: Gross domestic product

ACL: Allowance for credit losses HTM: Held-to-maturity

AOCI: Accumulated other comprehensive income (loss) LGD: Loss given default

ASC: Accounting Standards Codification LIBOR: London Interbank Offered Rate

ASU: Accounting Standards Update LTIP: Long-Term Performance Share Plan

BOLI: Bank-owned life insurance MBS: Mortgage-backed security

CECL: Current Expected Credit Losses N.M.: Not meaningful

CMO: Collateralized mortgage obligation OCI: Other comprehensive income (loss)

DCRP: Defined Contribution Retirement Plan PD: Probability of default

EPS: Earnings per share ROU: Right-of-use

FRBB: Federal Reserve Bank of Boston U.S.: United States of America

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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 core net income; core diluted earnings per share; core return on average assets; core return on average equity; pre-tax, pre-provision income and core pre-tax, pre-provision; income; the efficiency ratio; return on average tangible equity and core return on average tangible equity; tangible book value per share and tangible common equity ratio; net interest income (fully-taxable equivalent); and core deposits and average core deposits. We utilize these non-GAAP financial measures for purposes of measuring our performance against our peer group and other financial institutions and analyzing our internal performance. We also believe these non-GAAP financial measures help investors better understand the Company’s operating performance and trends and allow 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.

Core Net Income; Core Diluted Earnings per Share; Core Return on Average Assets; and Core Return on Average Equity. Core net income, core diluted earnings per share, core return on average assets and core return on average equity are each supplemental measures that exclude certain transactions as outlined and calculated in the table below. Each item reconciles to reported net income, diluted earnings per share, return on average assets and return on average equity. The Company believes these core financial metrics assist users of its financial statements with their financial analysis period-over-period as they are core for certain non-recurring items.

For the Year EndedDecember 31,

Core Net Income:

Adjustment for net loss on sale of securities — 10,310 912

Adjustment for Signature Bank bond (recovery) write-off (910) 1,838 —

Adjustment for merger and acquisition costs 1,159

Core Diluted Earnings per Share:

Diluted earnings per share, as presented $ 3.62 $ 2.97 $ 4.17

Adjustment for net loss on sale of securities — 0.71 0.06

Adjustment for Signature Bank bond (recovery) write-off (0.06) 0.13 —

Adjustment for merger and acquisition costs 0.08

Tax impact of above adjustments(1) 0.01 (0.18) (0.01)

Core diluted earnings per share $ 3.65 $ 3.63 $ 4.22

Core Return on Average Assets:

Return on average assets, as presented 0.92 % 0.76 % 1.12 %

Adjustment for net loss on sale of securities — % 0.18 % 0.02 %

Adjustment for Signature Bank bond (recovery) write-off (0.02) % 0.03 % —

Adjustment for merger and acquisition costs 0.02 %

Tax impact of above adjustments(1) — % (0.04) % —

Core return on average assets 0.92 % 0.93 % 1.14 %

Core Return on Average Equity:

Return on average equity, as presented 10.36 % 9.30 % 13.15 %

Adjustment for net loss on sale of securities — % 2.21 % 0.20 %

Adjustment for Signature Bank bond (recovery) write-off (0.18) % 0.39 % —

Adjustment for merger and acquisition costs 0.23 %

Tax impact of above adjustments(1) 0.04 % (0.55) % (0.04) %

(1) Assumed a 21% income tax rate for eligible costs.

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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 adjustment for (credit) provision for credit losses and adjustment for income tax expense. This supplemental measure became a widely used by financial institutions as a measure of financial performance for comparability across financial institutions.

For the Year EndedDecember 31,

Adjustment for (credit) provision for credit losses (404) 2,100 4,500

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 used by financial institutions 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.

For the Year EndedDecember 31,

Adjustment for merger and acquisition costs 1,159 — —

Adjustment for the effect of tax-exempt income(1) 637 901 937

Adjustment for net loss on sale of securities — 10,310 912

Ratio of non-interest expense to total revenues(2) 63.24 % 65.75 % 56.72 %

(1) Reported on a tax-equivalent basis using a 21% income tax rate.

(2) Revenue is the sum of net interest income and non-interest income.

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Return on Average Tangible Equity and Core Return on Average Tangible Equity. Return on average tangible equity is the ratio of (i) net income, adjusted for tax effected amortization of core deposit intangible assets and other adjustments, as necessary, to (ii) average shareholders' equity, adjusted for average goodwill and core deposit intangible assets. This adjusted financial ratio reflects a shareholders' return on tangible capital deployed in our business and is a common performance measure within the financial services industry. Core return on average tangible equity is calculated the same as return on average tangible equity but uses core net income which excludes certain transactions as shown in the table above. The Company believes this adjusted metric assists users of its financial statements with their period-over-period financial analysis as it is adjusted for certain non-recurring items.

For the Year EndedDecember 31,

Return on Average Tangible Equity:

Adjustment for amortization of core deposit intangible assets 556 592 625

Tax impact of above adjustment(1) (117) (124) (131)

Core Return on Average Tangible Equity:

Core net income (see “Core Net Income” table above) $ 53,432 $ 52,980 $ 62,159

Adjustment for amortization of core deposit intangible assets 556 592 625

Tax impact of above adjustment(1) (117) (124) (131)

Core return on average tangible equity 12.94 % 14.42 % 16.90 %

(1) Assumed a 21% income tax rate.

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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 core deposit intangible assets to (ii) total common shares outstanding at period end. Tangible book value per share is a common measure within our industry when assessing the value of a company as it removes goodwill and other intangible assets generated within purchase accounting upon a business combination.

Tangible common equity is the ratio of (i) shareholders’ equity less goodwill and core deposit intangible assets to (ii) total assets less goodwill and core deposit intangible assets. This ratio is a measure used within our industry to assess whether or not a company is highly leveraged.

(In thousands, except number of shares and per share data) December 31,

Tangible Book Value Per Share:

Adjustment for goodwill and core deposit intangible assets (95,112) (95,668)

Tangible book value per share $ 29.91 $ 27.42

Tangible Common Equity Ratio:

Adjustment for goodwill and core deposit intangible assets (95,112) (95,668)

Common equity ratio 9.15 % 8.66 %

Tangible common equity ratio 7.64 % 7.11 %

Net Interest Income (Fully-Taxable Equivalent). Net interest income on a fully-taxable equivalent basis is net interest income plus the taxes that would have been paid had tax-exempt securities been taxable. This number attempts to enhance the comparability of the performance of assets that have different tax liabilities. This is a common measure with the financial services industry and is used within the calculation of net interest margin on a fully-taxable equivalent basis.

For the Year EndedDecember 31,

Adjustment for the effect of tax-exempt income(1) 637 901 937

(1) Reported on a tax-equivalent basis using a 21% income tax rate.

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 lower cost. The Company calculates core deposits as total deposits less CDs and brokered deposits.Management believes core deposits is a useful measure to assess the Company's deposit base, including its potential volatility.

December 31,

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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 deposits less CDs. Management believes core deposits is a useful measure to assess the Company's deposit base, including its potential volatility.

For the Year EndedDecember 31,

(1) Brokered deposits are excluded from total average deposits, as presented on the Average Balance, Interest and Yield/Rate analysis table.

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 materially differ 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 and (ii) accounting for acquisitions and the subsequent review of goodwill and intangible assets generated in an acquisition for impairment.

Refer to Note 1 of the consolidated financial statements for additional details of the Company's accounting policies, including new accounting standards recently adopted.

Allowance for Credit Losses (“ACL”). The ACL is calculated using the current expected credit loss accounting model, often referred to as “CECL.” Under CECL, the ACL at each reporting period serves as our best estimate of projected credit losses over the contractual life of certain assets, adjusted for expected prepayments, given an expectation of economic conditions and forecasts as of the valuation date.

The recorded ACL on loans is determined based on the amortized cost basis of the assets and may be determined at various levels, including homogeneous loan pools and individual credits with unique risk factors. We use a discounted cash flow approach to calculate the ACL for each loan segment. Within the discounted cash flow model, a probability of default (“PD”) and loss given default (“LGD”) assumption is applied to calculate the expected loss for each loan segment. PD is the probability the asset will default within a given timeframe and LGD is the percentage of the assets not expected to be collected due to default. PD and LGD data may be derived using (1) internal historical default and loss experience, as well as from (2) external data if there are not statistically meaningful loss events or our own internal loss data does not span a full economic cycle for a given loan segment.

CECL may create more volatility in our ACL and particularly in our ACL on loans. Under CECL, our ACL may increase or decrease period-to-period based on many assumptions, including, but not limited to: (i) macroeconomic forecasts and conditions; (ii) a change in the forecast period; (iii) a change in the reversion speed; (iv) a change in the prepayment speed assumption; (v) various qualitative factors outlined in ASU 2016-13.

ACL on Loans. We consider the ACL on loans to be a critical accounting estimate given the uncertainty in evaluating the allowance required to cover management’s estimate of all expected credit losses over the expected contractual life of the loans in its portfolio. Determining the appropriateness of the allowance is a key management function that requires significant judgment and estimate by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the current loan portfolio, in light of the factors then prevailing, may result in significant changes in the allowance in future periods. While our current evaluation indicates that the ACL on loans at December 31, 2024 and 2023 was appropriate, the allowance may need to be increased under adversely different conditions or assumptions.

The significant key assumptions used with the ACL on loans calculation at December 31, 2024 and 2023 using the CECL methodology, included:

•Macroeconomic factors (loss drivers): Macroeconomic factors are used within our discounted cash flow model to forecast the PD over the forecast period. As macroeconomic factor conditions worsen, the PD increases, and the

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corresponding LGD increases, resulting in an increase in the ACL on loans. We monitor and assess Maine unemployment, changes in Maine GDP, changes in National GDP, and changes in Maine's Housing Price Index at least annually to determine if these macroeconomic factors continue to be the most predictive indicator of losses within our loan portfolio. Macroeconomic factors used in the calculation of the ACL on loans may change from time to time and in times of greater uncertainty, we may consider a range of possible forecasts and evaluate the probability of each scenario. We assessed our loss factors again in the fourth quarter of 2024 and there were no changes made to the ACL on loans calculation for reporting as of December 31, 2024.

•Forecast Period and Reversion speed: The company uses a reasonable and supportable forecast period in developing the ACL, which represents the time period that management believes it can reasonably forecast the identified loss drivers. Generally, the forecast period management believes to be reasonable and supportable is set annually and validated through an assessment of economic leading indicators. In periods of greater volatility and uncertainty, such as that seen across the global markets and economies, including the U.S., we are likely to use a shorter forecast period, whereas when markets, economies and various other factors are considered more stable and certain, we are likely to use a longer forecast period. Generally, we expect our forecast period to range from one to three years. Once the reasonable and supportable forecast period is determined, the company reverts its loss expectations to the long-run historical mean for the remainder of the contract life of the asset, adjusted for prepayments. In determining the length of time over which the reversion will take place (i.e. “reversion speed”), we consider such factors such as, but not limited to, historical loan loss experience over previous economic cycles, as well as where we believe we are within the current economic cycle. At December 31, 2024 and 2023, we used a two-year forecast period and a two-year reversion period for each loan segment to measure the ACL on loans as we believe this methodology aligns the economic forecasted data used to calculate the ACL with the Company’s internal views of the future economic state.

•Prepayment speeds: Prepayment speeds are determined for each loan segment utilizing our own historical loan data, as well as consideration of current environmental factors. The prepayment speed assumption is utilized with the discounted cash flow model (i.e. the CECL model) to forecast expected cash flows over the contractual life of the loan, adjusted for expected prepayments. A higher prepayment speed assumption will drive a lower ACL, and vice versa.

•Qualitative factors: Companies are required to consider various qualitative factors that may impact expected credit losses. We continue to consider qualitative factors in determining and arriving at our ACL on loans each reporting period. In 2024 the Company increased the qualitative factors used to address the increased risk for all loans that were rated as criticized or classified.

As of December 31, 2024 and 2023, the recorded ACL on loans was $35.7 and $36.9 million, respectively, and represented our best estimate of expected credit losses within our loan portfolio as of each date. However, we may adjust our assumptions to account for differences between expected and actual losses each period. A future change of our assumptions will likely alter the level of allowance required and may have a material impact on future results of operations and financial condition. The ACL is reviewed periodically within a calendar quarter to assess trends in the aforementioned key assumptions, as well as asset quality within our loan portfolio, and we consider the impact of these trends on the ACL and the Company's financial condition, if any. The ACL on loans is reviewed and approved on a quarterly basis by the Company's Audit Committee, and later reviewed and ratified by the Bank's Board of Directors.

Refer to “—Results of Operations—Provision for Credit Losses,” “—Financial Condition—Asset Quality,” and Note 3 of the consolidated financial statements for further discussion.

Purchase Price Allocation and Impairment of Goodwill and Identifiable Intangible Assets. We record all acquired assets and liabilities at fair value, which is an estimate determined by the use of internal valuation techniques. We also may engage external valuation services to assist with the valuation of material assets and liabilities acquired, including, but not limited to, loans, core deposit intangibles and/or other intangible assets, real estate and time deposits. As part of purchase accounting, we typically acquire goodwill and other intangible assets as part of the purchase price. These assets are subject to ongoing periodic impairment tests under differing accounting models. We did not acquire any other company or assets during 2024 or 2023, however, refer to Note 23 of the consolidated financial statements for subsequent events.

Goodwill impairment evaluations are required to be performed at least annually, but may be required more frequently if certain conditions indicate a potential impairment may exist. Our policy is to perform the goodwill impairment analysis annually as of November 30th, or more frequently as warranted. The goodwill impairment evaluation is required to be performed at the reporting unit level. Goodwill impairment is measured by the amount the book value of the reporting unit exceeds its fair value, and an impairment charge is recorded for the lesser of this amount or the amount to write-down goodwill to zero.

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We elected to use the quantitative analysis to perform the annual goodwill impairment assessment as of November 30, 2024 and 2023 and concluded that goodwill was not impaired. We may use a qualitative analysis to evaluate goodwill for impairment when it is believed that it is not more-likely-than-not that the fair value of the reporting unit is below its book value, or if a quantitative analysis was recently used to estimate the fair value of the reporting unit, and there are not any indications of events that would suggest such conclusions for impairment have changed. The Company did not recognize any impairment of goodwill in 2024, 2023 or 2022.

Refer to “—Financial Condition—Goodwill and Core Deposit Intangible Assets” and Note 4 of the consolidated financial statements for further discussion.

EXECUTIVE OVERVIEW

2024 Overview. Throughout 2024, we continued our work and efforts from 2023 with a goal of continuing to improve and optimize our net interest margin and maintain our strong asset quality. Over the course of 2024, we took various actions to improve our net interest margin. Those actions, combined with the Federal Reserve reducing the Federal Funds Rate by 100 basis points during the second half of 2024, resulted in an improvement to our net interest margin from a reported 2.30% for the first quarter of 2024 to 2.57% for the fourth quarter of 2024. Our improvement in net interest margin consistently each calendar quarter throughout 2024, along with continued strong asset quality and disciplined management of our operating expenses, translated into strong reported earnings for 2024 of $53.0 million, or $3.62 per a diluted share, which was 22% higher than reported net income for 2023. Profitability continues to improve, highlighted by a return on average assets of 1.01%, return on average equity of 10.99% and a return on tangible shareholders’ equity (non-GAAP) of 13.50% for the fourth quarter of 2024.

On September 10, 2024, we announced our planned acquisition of Northway, the bank holding company of Northway Bank, which we later closed on January 2, 2025. The acquisition of Northway presented a great opportunity for two historic franchises in Northern New England to combine and create a premier banking and financial services franchise across Maine and New Hampshire through 73 total branches. Through the combination, the Company’s total assets are approximately $7.0 billion as of January 2, 2025.

We enter 2025 with strong financial momentum and a balance sheet positioned well for the current interest rate environment.

Operating Results. For 2024, the Company reported net income of $53.0 million and diluted EPS of $3.62, each an increase of 22% compared to 2023. During 2023, we took certain actions to improve the Company’s future earnings capacity and profitability by selling certain investments and redeploying the proceeds into higher yielding assets. In doing so, the Company recorded pre-tax investment losses totaling $10.3 million in 2023. Also, during 2023, we wrote-off a $1.8 million Signature Bank corporate bond in full due to Signature Bank’s failure. During 2024, we sold our position in this corporate bond and recovered $910,000, before taxes. Adjusting for these items, along with $1.2 million, before taxes, of merger-related costs associated with the acquisition of Northway Financial during 2024, we reported core net income of $53.4 million and diluted EPS of $3.65, each an increase of 1% over 2023.

Financial Highlights. Our financial highlights for 2024 include:

Improving Profitability and Return Profile – Improved net interest margin and disciplined management of operating expenses, the Company resulted in positive operating leverage of 4% for 2024, which drove improved financial profitability and shareholder returns, headlined by a return on average assets of 0.92%, return on average equity of 10.36% and return on average tangible equity (non-GAAP) of 12.83%, compared to 0.76%, 9.30% and 11.83% for 2023, respectively.

Strong Asset Quality – Key credit quality metrics in both commercial and consumer portfolios remained resilient throughout 2024, headlined by non-performing assets of 0.11% of total assets and past due loans of 0.05% of total loans at December 31, 2024.

Strong Capital Position – At December 31, 2024, all of our regulatory capital ratios were well in excess of regulatory capital requirements. Our capital and loan reserve levels, along with our strong credit quality position us for continued success.

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Financial Highlights As of or For The Year endedDecember 31,

(In thousands, except per share data and ratios) 2024 2023 Change

Earnings and Profitability

Core diluted EPS (non-GAAP) $ 3.65 $ 3.63 1 %

Core return on average assets (non-GAAP) 0.92 % 0.93 % (0.01) %

Core return on average equity (non-GAAP) 10.45 % 11.35 % (0.90) %

Return on average tangible equity (non-GAAP) 12.83 % 11.83 % 1.00 %

Core return on average tangible equity (non-GAAP) 12.94 % 14.42 % (1.48) %

Balance Sheet and Liquidity

Cash dividends declared per share $ 1.68 $ 1.68 — %

Uninsured and uncollateralized deposits to total deposits 16.42 % 14.56 % 1.86 %

Credit Quality and Capital

Non-performing assets to total assets 0.11 % 0.13 % (0.02) %

Allowance for credit losses on loans to total loans 0.87 % 0.90 % (0.03) %

Tangible common equity ratio (non-GAAP) 7.64 % 7.11 % 0.53 %

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RESULTS OF OPERATIONS

Net Interest Income and Net Interest Margin

Net interest income is the interest earned on our lending activities, investment securities and other interest-earning assets, less the interest paid on interest-bearing deposits and borrowings (i.e. our primary business activities). Net interest income, which is our largest source of revenue, accounted for 75%, 81% and 78% of total revenues for the years ended 2024, 2023 and 2022, respectively. 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. Net interest income on a fully-taxable equivalent basis for the year ended December 31, 2024 was $133.1 million, a slight decrease of $75,000 from 2023. The decrease consisted of a $23.1 million, or 25%, increase in interest expense, which was partially offset by an increase in interest income on a fully-taxable equivalent basis of $23.3 million, or 10%, between periods.

•The Company’s average cost of funds for the year ended December 31, 2024 was 2.28%, compared to 1.83% for the year ended December 31, 2023, and was the driver for the increase in interest expense year-over-year. The increase in our average funding costs year-over-year reflects the higher short-term interest rate environment, highlighted by an average Federal Fund Effective Interest Rate of 5.14% for the year ended December 31, 2024, compared to 5.02% for the year ended December 31, 2023. Beginning in September 2024, the Federal Reserve Bank began lowering the Federal Funds Interest Rate. From September 2024 through December 31, 2024, the Federal Funds Rate was decreased by 1.00%, and the Federal Funds Target rate stood at 4.25% to 4.50% at December 31, 2024.

•The increase in interest income on a fully-taxable equivalent basis was also primarily driven by the higher interest rate environment between years. For the year ended December 31, 2024, the Company’s yield on average interest-earning assets was 4.62%, compared to 4.19% for the year ended December 31, 2023. The average 10-year U.S. Treasury Rate for 2024 was 4.58%, compared to 3.96% for 2023.

Net Interest Margin. Net interest margin is calculated as net interest income on a fully-taxable equivalent basis as a percentage of average interest-earning assets. Our net interest margin on a fully-taxable equivalent basis for each of the years ended December 31, 2024 and 2023 was 2.46%.

The following table presents, 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:

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Average Balance, Interest and Yield/Rate Analysis

For the Year Ended December 31,

ASSETS

Interest-earning assets:

Loans(3):

LIABILITIES & SHAREHOLDERS’ EQUITY

Deposits:

Borrowings:

Less: fully-taxable equivalent adjustment (637) (901) (937)

Net interest rate spread (fully-taxable equivalent) 2.34 % 2.36 % 2.83 %

Net interest margin (fully-taxable equivalent) 2.46 % 2.46 % 2.86 %

(1) Reported average balances are calculated on a daily basis.

(2) Reported on a tax-equivalent basis calculated using a 21% tax rate, including certain commercial loans.

(3) Non-accrual loans and loans held for sale are included in total average loans.

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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 year's rate), (b) changes in rates (change in rate multiplied by current year'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.

(In thousands) Volume Rate Volume Rate

Interest-earning assets:

Interest-bearing liabilities:

Junior subordinated debentures — (18) (18) — 10 10

Net interest income included the following for the periods indicated:

Income Statement Location For the Year EndedDecember 31,

Recoveries on previously charged-off acquired loans Interest income 488 88 217

The Company's consolidated financial statements and the notes to the consolidated financial statements presented within have been prepared in accordance with GAAP, which requires the measurement of the financial position and operating results in terms of historical dollars and, in some cases, current fair values without considering changes in the relative purchasing power of money over time due to inflation. Unlike many industrial companies, substantially all of our assets and virtually all of

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our liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than the general level of inflation. Over short periods of time, interest rates and the yield curve may not necessarily move in the same direction or in the same magnitude as inflation.

(Credit) Provision for Credit Losses

The (credit) provision for credit losses was made up of the following components for the periods indicated:

For the Year EndedDecember 31, Change from2024 to 2023

Provision for loan losses. For the year ended December 31, 2024, a provision for loan losses of $53,000 was recorded and was primarily driven by improvement within our macroeconomic forecast for 2024 and lower loan growth of $17.2 million during 2024, compared to $87.7 million of loan growth for 2023. Asset quality continued be strong through 2024, as highlighted by non-accruals of 0.12% of total loans and net charge-offs of 0.03% of average loans as of and for the year ended December 31, 2024, compared to 0.13% and 0.03%, respectively, as of and for the year ended December 31, 2023. The Company’s asset quality remained strong at December 31, 2024 and 2023. Refer to “—Financial Condition—Asset Quality” for further details.

Provision for credit losses on off-balance credit exposures. At December 31, 2024, the ACL on off-balance sheet credit exposures was $2.8 million, as compared to $2.4 million as of December 31, 2023. The increase was driven by the increase in unfunded credit lines of $37.0 million and the increase in the residential and commercial pipelines of $19.4 million between periods.

Provision for HTM debt securities: In the first quarter of 2023, the Company fully wrote-off a $1.8 million Signature Bank corporate bond due to Signature Bank’s failure. In the first quarter of 2024, the Company sold its Signature Bank corporate bond and recovered proceeds of $910,000.There was no additional provision expense recorded for the years ended December 31, 2024 and 2023, respectively.

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Non-Interest Income

The following table sets forth information regarding non-interest income for the periods indicated:

For the Year EndedDecember 31, Change from2024 to 2023

Non-interest income as a percentage of total revenues(1) 25 % 19 % 22 %

(1) Revenue is the sum of net interest income and non-interest income.

Debit card income represents theinterchange fees earned from debit card transactions of our business and consumer checking account customers, and the annual incentive bonus received from our network provider.

Service charges on deposit accounts represents the fees earned from providing various services to deposit customers, including overdraft, normal fees for servicing deposit accounts, and cash management fees for business customers. The increase in 2024 compared to 2023 was primarily driven by: (1) an increase in cash management fees of $399,000 as commercial deposit customers opted to pay services fees and waive any service fee credit as short-term interest rates increased, and (2) overdraft fee income increased $255,000 to $5.7 million for the year ended 2024.

Income from fiduciary services represents the fees earned for investment advisory and trust services provided by Camden National Wealth Management. The fees earned are primarily a percentage of our clients' assets under management. Assets under management increased 10% during 2024 to $1.2 billion as of December 31, 2024.

Mortgage banking income, net is generated through the sale of residential mortgage loans to secondary market investors and also includes income recognized upon the sale of residential mortgages in which we maintain the servicing rights creating a mortgage servicing asset, net of related amortization of the capitalized mortgage servicing asset. Our practice has been to sell the servicing rights for residential mortgages originated, except for certain third party relationships that require the Company to service the loan.

The increase in mortgage banking income, net for the year ended 2024 compared to 2023, was driven by the increase in net gains recognized on residential mortgage loan sales. In 2024, we sold 56% of our residential mortgage production, compared to 48% in 2023.

Brokerage and insurance commissions represent the fees earned for brokerage services, investment advisory and insurance services provided by the Bank, doing business as Camden Financial Consultants. Assets under administration grew 15% during 2024 to $913.3 million as of December 31, 2024.

Bank-owned life insurance represents the change in cash surrender value of the Company's various BOLI policies in place for certain current and former officers of the Company and Bank. The change in cash surrender value reflects the performance of the underlying investments of the policies.

Net loss on sale of securities represents the realized (loss) gain upon sale of our debt investments. In 2023, we executed investment sales that resulted in pre-tax losses of $10.3 million. The trades were completed to reposition a portion of our balance sheet. We reinvested $126.8 million of cash proceeds from the investment sales and expect these trades will optimize our balance sheet and improve future earnings and profitability. We did not execute on any similar investment trades during 2024. Refer to “—Financial Condition—Investments,” and Note 3 of the consolidated financial statements for further discussion.

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Other Income includes third party merchant and credit card commissions, customer loan swap fees and other miscellaneous fees and net gains on equity securities.

Non-Interest Expense

The following table sets forth information regarding non-interest expense for the periods indicated:

For the Year EndedDecember 31, Change from2024 to 2023

Merger and acquisition costs 1,159 — — 1,159 — %

Amortization of core deposit intangible assets 556 592 625 (36) (6) %

Ratio of non-interest expense to total revenues 63.24 % 65.75 % 56.72 %

Salaries and employee benefits includes employee wages, commissions, incentives, equity compensation, employer-related taxes, insurance benefits, and other certain employee-related costs, net of direct employee-related costs incurred for loan originations. The increase for the year ended December 31, 2024 compared to 2023 was primarily driven by an increase in performance-based incentives of $3.5 million between periods. The operating environment in 2023 included the Federal Reserve increasing the Federal Funds Interest Rate by 1.00% to a target range of 5.25% to 5.50% at December 31, 2023, as well as the well-publicized failure of three banks in the U.S., one of which resulted in the Company writing-off a $1.8 million Signature Bank bond during 2023 (refer to Note 3 of the consolidated financial statement for further details). In comparison, the Federal Reserve lowered the Federal Funds Interest rate by 1.00% during the second half of 2024 to a target range of 4.25% to 4.50% at December 31, 2024.

Furniture, equipment and data processing includes depreciation expense of capitalized furniture, equipment and data-related costs, and ongoing system and other data processing costs, including outsourced solutions. The increase for the year ended December 31, 2024 compared to 2023 was driven by the Company’s continued investments in customer-facing technology platforms, which during 2024 included investment in an enhanced wealth management platform and continued investments in our online banking platform and mobile app, internal systems and production platforms to drive increased productivity and efficiencies, and updates to various information security and resiliency-related systems and enhancements.

Net occupancy costs include building and property costs associated with the operation of our branches, loan production offices and service centers, including, but not limited to, rent, depreciation, maintenance and related taxes, net of rental income earned from the lease of office space.

Consulting and professional fees include third party consulting services and other professional fees, such as audit and tax services, legal services, and Company and Bank director fees. During 2023, we incurred legal, consulting and director fees associated with the succession and transition of the Company and Bank’s President and CEO, which was the driver of elevated consulting and professional costs for 2023 in comparison to 2024.

Debit card expense is the cost incurred for the generation of debit card income, including third party switch network provider fees and related data transmission costs, and plastic card costs for the generation of debit cards for checking account customers. The increase for the year ended December 31, 2024 compared to 2023 was driven by rising vendor costs, including fraud detection and prevention costs. Many of the costs associated with debit card expense are fixed per unit regardless of the activity that generates income, and, thus, an increase or decrease in debit card income may not necessarily directly correlate with the change in debit card expense year-over-year.

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Regulatory assessments are the costs incurred and paid to various regulatory agencies, including the FDIC and OCC. Regulatory assessment fees are based on a number of factors, including but not limited to, asset growth, regulator risk assessment and positive or negative trends specific to the financial institution.

Merger and acquisition costsare the acquisition costs, including legal, investment banker, consulting and other related costs, incurred through December 31, 2024 associated with our acquisition of Northway Financial on January 2, 2025. Of the merger and acquisition costs incurred through December 31, 2024, all but $56,000 of the costs were estimated to be non-deductible for federal income tax purposes. We anticipate incurring additional merger-related costs during 2025, with the majority of costs expected to be incurred during the first half of 2025.

The following table summarizes Merger-related costs incurred through December 31, 2024:

(Dollars in thousands) Merger and Acquisition Costs

Legal fees $ 695

Investment banker 156

OREO and collection costs, net include the costs associated with OREO, collection and foreclosure efforts for the Company's loans. Should asset quality metrics deteriorate in 2025, the costs associated with OREO, collection and foreclosure efforts likely would increase.

Amortization of core deposit intangible assets represents the amortization expense on core deposit intangible assets. Refer to “—Financial Condition—Goodwill and Core Deposit Intangible Assets,” and Note 4 of the consolidated financial statements for further details. We anticipate the creation of additional core deposit intangible assets associated with the acquisition of Northway Financial on January 2, 2025. These core deposit intangible assets are definite-lived intangible assets and will be amortized over their estimated useful life.

Other expenses include employee-related costs, such as certain SERP and other postretirement benefits expenses; hiring, training, education, meeting and business travel costs; donations and marketing costs; postage, freight and courier costs; and other expenses. The decrease for the year ended December 31, 2024, compared to the same period in 2023, was driven by external recruiting costs associated with the CEO succession and transition that was effective on January 1, 2024.

Income Tax Expense

Income tax expense for the years ended December 31, 2024 and 2023 was $12.5 million and $10.5 million, respectively, and resulted in an effective income tax rate of 19.0% for 2024 and 19.4% for 2023, respectively. The Company's effective income tax rate for the year ended December 31, 2024 of 19.0% was lower than our marginal tax rate of 22.8%, which includes our 21.0% federal income tax rate and a 1.8% blended state income tax rate, net of federal tax benefit. The decrease in the effective tax rate for the year ended December 31, 2024 compared to 2023, was primarily due to an increase in tax credit investments, partially offset by nondeductible merger and acquisition costs and an increase in income before income tax expense of $11.6 million, or 21.6%, compared to 2023,

The Company's deferred tax assets were $40.0 million and $42.2 million at December 31, 2024 and 2023, respectively. The decrease in deferred tax assets during 2024 was primarily driven by the decrease in unrealized losses on the AFS investments portfolio, including the remaining losses from the investments transferred from AFS to HTM in June 2022. While not anticipated as of December 31, 2024, should the Company realize a loss on these investments, the loss would be characterized as an ordinary loss for income tax purposes and not as a capital loss, and thus would not carry restrictions on use of any such loss. We continuously monitor and assess the need for a valuation allowance on our deferred tax assets, and we determined that no valuation allowance was necessary as of December 31, 2024 or December 31, 2023.

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Refer to “—Financial Condition—Investments,” and Note 2 of the consolidated financial statements for further discussion of investments.

Refer to Note 19 of the consolidated financial statements for further discussion of income taxes and related deferred tax assets and liabilities.

2023 Operating Results as Compared to 2022 Operating Results

Results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s 2023 annual report on Form 10-K filed with the SEC on March 8, 2024.

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FINANCIAL CONDITION

Cash and Cash Equivalents

Total cash and cash equivalents at December 31, 2024 were $215.0 million, compared to $99.8 million at December 31, 2023. The elevated cash balances at December 31, 2024 were temporary due to anticipated cash usage in the first quarter of 2025 associated with normal seasonal deposit outflows, an expected deposit outflow of $61.8 million by one large deposit customer that temporarily deposited funds with the Bank in fourth quarter of 2024, and the payoff of $45.0 million of Northway’s FHLBB advances to optimize our balance sheet upon the Company’s completion of the acquisition of Northway on January 2, 2025.

Included within the Company’s cash and cash equivalents balances at December 31, 2024 and 2023, was cash held in escrow by the FHLBB as collateral posted by the counterparties for our derivatives in a net asset position at each reporting date totaling $13.2 million and $15.4 million, respectively. We and the counterparty manage these cash accounts daily. Refer to Notes 12 and 13 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. At December 31, 2024 and 2023, the Company’s investment portfolio generally consisted of MBS, CMO, municipal and corporate debt securities, FHLBB and FRB common stock, and mutual funds held in a rabbi trust for purposes of Company executive and director nonqualified retirement plans. 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 FHLBB and FRB common stock is carried at cost, and our mutual fund investments are carried at fair value. At December 31, 2024 and 2023, total investments were 20% and 21%, respectively, of total assets.

In 2022, we transferred securities from AFS to HTM to help manage our capital position in a rising interest rate environment. The securities were reclassified at fair value at the time of the transfer, which was a non-cash transaction. At December 31, 2024, the net unrealized losses on the transferred securities reported within AOCI were $41.8 million, net of a deferred tax asset of $11.4 million, and the weighted-average life on these securities was 7.9 years. At December 31, 2023, the net unrealized losses on the transferred securities reported within AOCI were $46.9 million, net of a deferred tax asset of $12.8 million and the weighted-average of these securities was 8.5 years.

At December 31, 2024 and 2023, the Company's investments portfolio totaled $1.1 billion and $1.2 billion, respectively, representing a decrease of $51.5 million, or 4%, for the year ended December 31, 2024. Given the interest rate environment, our primary strategy throughout 2024 was to redeploy normal investment cash flows from pay downs, calls and maturities to fund loan growth and optimize funding costs. The primary components for the net change in total investments for the year ended 2024 were:

•Pay downs, calls and maturities of $122.2 million;

•Purchases of $60.4 million of debt securities during 2024;

•Net amortization and accretion of $4.7 million; and

•The change in the fair value of the Company’s AFS debt securities of $4.7 million.

Our AFS debt securities portfolio, which comprised 52% and 53% of our investment portfolio at December 31, 2024 and 2023, respectively, was carried at fair value using level 2 valuation techniques. Refer to Notes 1 and 21 of the consolidated financial statements for further details on the Company's fair value techniques.

The AFS and HTM 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 corporate and municipal bonds that are highly rated by nationally recognized rating agencies. At December 31, 2024 and 2023, the book value of U.S. government and government-sponsored agencies represented approximately 91% of the AFS and HTM debt securities portfolio. The book value of corporate and municipal bonds carrying a credit rating of “AA” or higher at December 31, 2024 and 2023 and was 5% and 4% of the AFS and HTM debt securities, respectively.

Our other investments on the consolidated statements of condition consist 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

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December 31, 2024 and 2023, our investment in FHLBB stock totaled $17.1 million and $10.0 million, respectively, and our investment in FRB stock was $5.4 million at each date.

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.

The following table sets forth the carrying value of the Company’s investments portfolio along with the percentage distribution as of the dates indicated:

December 31,

Trading Securities (carried at fair value):

Total trading securities 5,243 — % 4,647 — %

AFS Debt Investments (carried at fair value):

Obligations of states and political subdivisions 5,289 — % 6,386 — %

HTM Debt Investments (carried at amortized cost):

Obligations of U.S. government-sponsored enterprises 7,729 1 % 7,593 1 %

Obligations of states and political subdivisions 56,047 5 % 56,262 5 %

Other Investments (carried at cost):

We continuously monitor and evaluate our investment securities portfolio to identify and assess risks within our portfolio, including, but not limited to, the impact of the current rate environment and the related prepayment risk, and credit ratings. The overall mix of debt securities at December 31, 2024 compared to December 31, 2023 remains relatively unchanged and well positioned to provide a stable source of cash flow. The duration of our debt investment securities portfolio at December 31, 2024 was 5.2 years, compared to 5.7 years at December 31, 2023. The weighted average life of our debt securities portfolio at December 31, 2024 was 7.0 years, compared to 7.8 years at December 31, 2023.

The Company’s AFS debt securities that are in an unrealized loss position are assessed to determine if an allowance should be recorded or if a write-down is required in accordance with ASU 2016-13. As of and for the years ended December 31, 2024, 2023 and 2022, we did not record any allowances or write-down any of our AFS debt securities in an unrealized loss position. Refer to Note 1 of the consolidated financial statements for further discussion of our practices and policies, and refer to Note 2 of the consolidated financial statements for additional details of our assessment of the allowance for AFS investments as of December 31, 2024 and 2023.

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We assess our HTM debt securities each reporting period to determine if an allowance should be recorded or if a write-down is required. In the first quarter of 2023, we wrote-off a $1.8 million corporate bond issued by Signature Bank due to Signature Bank's failure through provision expense on the consolidated statements of income. This corporate bond was designated as HTM and previously carried no ACL. In January 2024, we sold the Signature Bank security and recovered $910,000. We completed a review of our HTM investment portfolio as of December 31, 2024 and 2023, and concluded that no ACL was warranted on any bonds at this time. Refer to Note 1 of the consolidated financial statements for further discussion of our practices and policies, and refer to Note 2 of the consolidated financial statements for additional details of our assessment of the allowance for HTM investments as of December 31, 2024 and 2023.

The fair value and book value of the Company's corporate bonds and municipal securities as of December 31, 2024 and 2023 was as follows:

At December 31, 2024 and 2023, municipal bonds were 5% of the book value of the total bond portfolio. At December 31, 2024 and 2023, all municipal bonds carried an investment-grade credit rating.

At December 31, 2024 and 2023, corporate bonds were 3% of the book value of the total bond portfolio. At December 31, 2024 and 2023, corporate bonds with a book value of $25.9 million and $31.2 million, or 70% and 77% of the corporate bond portfolio, carried an investment-grade credit rating. The remaining $11.2 million and $9.6 million of book value, or 30% and 23% of the corporate bond portfolio, were non-rated corporate bonds of community banks within our markets. As of December 31, 2024, the corporate bond portfolio was made up of 18 different companies, which included 16 different banks. The banks in the portfolio range from the largest U.S. banks to community banks, with 35% of our exposure as of December 31, 2024, being to global systemically important banks, or "G-SIBs." A limited number of our rated corporate bonds were downgraded in 2023 as a result of stress in the banking system, although all remain investment-grade as of December 31, 2024. We continue to monitor and analyze the performance of our corporate bond portfolio.

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The following table presents the book value and fully-taxable equivalent weighted-average yields of debt investments by contractual maturity and the carrying value of other investments, for the periods indicated. Actual maturities of debt investments may differ from contractual maturities because borrowers may have the right to call or prepay.

December 31,

Debt investments:

Other investments(2):

Mutual funds (fair value) $ 5,243 $ 4,647

(1) Weighted average is calculated by dividing the book value by the book value times tax yield.

(2) There is no scheduled maturity date.

Loans

The following table sets forth the composition of our loan portfolio at the dates indicated, as well as the change during 2024:

December 31,

Loan portfolio mix:

Refer to Note 3 of the consolidated financial statements for additional details on our loan segmentation and risks as of December 31, 2024 and 2023.

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At December 31, 2024 and 2023, 36% and 35% of the consumer loan portfolio was unsecured, respectively. At December 31, 2024 and 2023, 55% and 53% of the home equity portfolio was secured by a junior lien position, respectively.

Portfolio Concentrations

The Company provides loans primarily to customers located within our geographic market area. As of December 31, 2024 and 2023, our primary markets continued to be in Maine, making up 68% of our loan portfolio. Massachusetts and New Hampshire were our second and third largest markets, making up 16% and 11%, respectively, of our total loan portfolio as of December 31, 2024, compared to 16% and 10%, respectively, as of December 31, 2023. As of December 31, 2024, our distribution channels included 56 branches within Maine, two locations in New Hampshire, including a branch in Portsmouth and a commercial loan production office in Manchester, and an online residential mortgage and small business digital loan platform. On January 2, 2025, we completed our acquisition of Northway, which included Northway Bank and its 17 branches across New Hampshire. Northway Bank’s primary lending area is within New Hampshire.

At December 31, 2024, the lessors of residential buildings industry (lessors of buildings used as residences, such as single-family homes, apartments and town houses) and the non-residential building operators' industry (operators of commercial and industrial buildings, retail establishments, theaters, banks and insurance buildings) concentrations were 32% and 31%, respectively, of our total commercial real estate portfolio and both were 13% of total loans. At December 31, 2023, the non-residential building operators’ industry and lessors of residential building industry concentrations were 33% and 28%, respectively, of total commercial real estate portfolio and 13% and 11% of total loans. At December 31, 2024, there were no other industry concentrations within our loan portfolio that exceeded 10% of total loans.

The table below summarizes the industry concentrations of the commercial loan portfolio at the dates indicated:

December 31,

Commercial loan portfolio mix:

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(1) The following table summarizes the real estate investment loan portfolio, by property type as of the dates indicated:

December 31,

(a) Multi-family (5+ units) loans are primarily located in non-urban locations, including 68% in Maine, 23% in New Hampshire, and 7% in Massachusetts at December 31, 2024.

(b) Office loans are nearly all located in non-urban locations, including 52% in Maine, 26% in New Hampshire, and 23% in Massachusetts at December 31, 2024.

(c) Represents multi-family (1-4 units) that are used for commercial purposes.

(d) Other 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 3 and Note 8 of the consolidated financial statements provide information on related party lending and deposit transactions, respectively. We have not entered into significant related party transactions.

Asset Quality

Asset quality is of the upmost 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 team, Collection and Special Assets team and 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, oversee 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.

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•The adequacy of the ACL is overseen by the Management Provision Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Compliance, and Commercial and Retail Banking. 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.

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 amount of our non-performing loans as of the dates indicated:

December 31,

Non-accrual loans:

Commercial real estate - non-owner-occupied $ 129 $ 262

Commercial real estate - owner-occupied 430 124

Consumer and home equity 452 798

Accruing loans past due 90 days — —

Other real estate owned — —

Total non-performing assets $ 4,829 $ 5,448

ACL on loans to non-accrual loans 739.86 % 677.96 %

Non-accrual loans to total loans 0.12 % 0.13 %

Non-performing loans to total loans 0.12 % 0.13 %

Non-performing assets to total assets 0.08 % 0.10 %

Generally, a loan is classified as non-accrual when interest and/or principal payments are 90 days past due or when management believes collecting all principal and interest owed is in doubt. All previously accrued but unpaid interest on non-accrual loans is reversed from interest income in the current period. Interest payments received on non-accrual loans are applied as a reduction of principal. A loan remains on non-accrual status until all principal and interest amounts contractually due are brought current, all future principal and interest payments are reasonably assured, and a consistent repayment record, generally six consecutive payments, has been demonstrated. At that time, we may reclassify the loan to performing.

The following table highlights the interest income that would have been recognized if loans on non-accrual status had been current in accordance with their original terms (i.e., “foregone interest income”) for the periods indicated:

For the Year EndedDecember 31,

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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 our borrowers or collateral deficiencies. Based on historical experience, the credit quality of some of these loans may improve due to the financial condition of the borrowers or changes in collateral values, while the credit quality of other loans may deteriorate, resulting in some amount of loss. These loans are not included in the above analysis of non-accrual loans. At December 31, 2024, potential problem loans totaled $96,000.

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 at the dates indicated:

December 31,

Loans 30-89 days past due:

Commercial real estate - non-owner-occupied $ 59 $ 84

Commercial real estate - owner-occupied 630 656

Consumer and home equity 621 922

Loans 30-89 days past due to total loans 0.05 % 0.12 %

ACL. The following table sets forth information concerning the components of our ACL for the periods indicated:

At or For the Year EndedDecember 31,

Net charge-offs (recoveries)(1):

Commercial real estate (10) 39 (5)

Residential real estate (26) (26) 66

Consumer and home equity (33) 59 40

Components of ACL:

Net charge-offs to average loans 0.03 % 0.03 % 0.02 %

Provision (credit) for loan losses to average loans — % 0.03 % 0.12 %

ACL on loans to total loans 0.87 % 0.90 % 0.92 %

(1) Additional information related to (credit) provision for loan losses and net (charge-offs) recoveries is presented in the following table for the periods indicated:

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For the Year EndedDecember 31,

Commercial real estate $ — $ 5 $ (5) $ 1,532,225 — %

The following table sets forth information concerning the allocation of the ACL on loans by loan categories at the dates indicated:

December 31,

Commercial real estate - non-owner-occupied $ 14,897 34 % $ 16,581 33 %

Commercial real estate - owner-occupied 2,481 8 % 2,290 7 %

Refer to “—Critical Accounting Estimates” and Note 1 of the consolidated financial statements for further details of our CECL model macroeconomic factors (i.e. loss drivers), and refer to Note 3 of the consolidated financial statements for discussion of the risk characteristics for each portfolio segment considered when evaluating the ACL, as well as factors driving the change in the ACL on loans at December 31, 2024 compared to December 31, 2023.

Goodwill and Core Deposit Intangible Assets

Upon completion of an acquisition the Company will likely generate goodwill and other intangible assets. Goodwill represents the price paid in excess of the fair value of acquired assets and liabilities. Through the acquisition of other financial institutions, core deposit intangible assets are recognized at the estimated fair value of the acquired non-maturity deposit customer relationships. Goodwill is reviewed for impairment as of November 30th annually, or more frequently as determined by management, and core deposit intangible assets are reviewed when a triggering event suggests such a review necessary.

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At December 31, 2024 and 2023, goodwill totaled $94.7 million. Through our annual impairment analysis performed as of November 30, 2024 and 2023, we determined goodwill was not impaired. Refer to “—Critical Accounting Estimates” and Note 4 of the consolidated financial statements for further details of the testing performed.

At December 31, 2024 and 2023, core deposit intangible assets totaled $415,000 and $971,000, respectively, and related amortization was $556,000, $592,000, and $625,000 for the years ended 2024, 2023 and 2022, respectively. There were no indications of potential risk of impairment of core deposit intangible assets for any of the aforementioned years.

On January 2, 2025, the Company completed its previously announced acquisition of Northway and has not yet completed the purchase accounting due to the timing of the Merger, and it continues to evaluate the estimated fair values of the assets acquired and the liabilities assumed. Accordingly, the fair value of the assets and liabilities acquired, including goodwill and other intangible assets, is not yet available. Refer to Note 23 of the consolidated financial statements.

Investment in BOLI

BOLI is presented in the consolidated statements of condition at its cash surrender value. Increases in BOLI’s cash surrender value are reported as a component of non-interest income in the consolidated statements of income.

BOLI was $104.3 million and $101.5 million at December 31, 2024 and 2023, respectively. The increase year-over-year reflects the increase in the cash surrender value. BOLI provides a means to mitigate increasing employee benefit costs. We expect to benefit from the BOLI contracts as a result of the tax-free growth in cash surrender value and death benefits that are expected to be generated over time. The largest risk to the BOLI program is credit risk of the insurance carriers. At December 31, 2024, we had one stable value account (that is subject to a wrapper) and that totals 9% of the BOLI portfolio, while the remaining amounts of the BOLI portfolio are in general accounts. To mitigate risk, annual financial condition reviews are completed on all carriers and we impose internal policy limits so that no one carrier exceed 10% of Tier 1 capital plus the allowable ACL (as defined for regulatory purposes). BOLI is invested in the “general account” of quality insurance companies or in separate account products, 94% of our balances are with insurance carriers that had an A.M. Best rating of “A” or better at December 31, 2024.

Deposits

The Company receives checking, savings and time deposits primarily from customers located within our markets. Other forms of deposits include brokered deposits and deposits with the Certificate of Deposit Account Registry System (“CDARS”). The table below details the Company’s deposits, and change between periods, as of each date indicated:

December 31, Change

(1) Includes $89.1 million and $61.5 million of deposits from Camden National Wealth Management as of December 31, 2024 and 2023, respectively, which represent client funds. These deposits fluctuate with changes in the portfolios of the clients of Camden National Wealth Management.

(2) At December 31, 2024 and 2023, brokered deposits consisted of $105.2 million and $70.9 million, respectively, of brokered money market balances and $74.8 million and $31.0 million, respectively, of brokered certificates of deposit (“CD”) balances.

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The deposit landscape was highly competitive across our markets throughout 2024 as depositors looked to deploy excess liquidity into higher yielding, interest-bearing deposit accounts prior to short-term interest rate cuts by the Federal Reserve. We continue to manage our deposits closely with a focus on maintaining and enhancing existing depositor relationships and developing new ones, while balancing the Company's overall funding cost and liquidity position.

The sharp increase in short-term interest rates during 2022 and 2023 resulted in our customers, and more broadly across the banking industry, moving excess deposits from lower interest-earning accounts, including checking and savings accounts, to higher yielding accounts, including money market and CD. Throughout 2023 and 2024, our CD product offerings remained relatively short in term to provide the opportunity for CDs to reprice faster and manage our interest rate risk position to falling interest rates. The weighted-average life to maturity of our CD portfolio at December 31, 2024 was 6 months.

Other factors impacting deposits during 2024 included:

•The introduction of a high-yield savings product during the first half of 2024 in an effort to raise cost effective deposits, drive new customer acquisition and provide an alternative higher-yielding deposit product for customers looking for greater liquidity than CDs while enabling us to be better positioned for expected lower short-term interest rates. Through this new product, we drove savings deposit growth of 23%in 2024.

•Given the strength of our overall liquidity position, we took certain actions that included pricing down certain non-relationship, higher cost municipal and institutional deposits with a goal of improving our net interest margin that resulted in approximately $150.0 million of deposit outflows during 2024. Adjusting for these intentional deposit outflows, deposits during 2024 grew 4%.

We will supplement the Company’s funding using brokered deposits to manage overall funding costs, liquidity and our interest rate risk position. The Company’s brokered CDs of $74.8 million matured in February 2025.

At December 31, 2024, 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 $1.1 billion, or 23% of total deposits, for both December 31, 2024 and 2023, respectively.

Total uninsured and uncollateralized deposits that exceeded the FDIC deposit insurance limit of $250,000 and that were not secured by pledged assets or any other guarantee of the Company, totaled $760.8 million, or 16%, of total deposits as of December 31, 2024, and $669.5million, or 15%, of total deposits as of December 31, 2023.

The balance of CDs that exceeded the FDIC deposit insurance limit of $250,000 was $109.2 million, or 21% of CD balances, as of December 31, 2024, and $167.2 million, or 27% of CD balances, as of December 31, 2023. The total uninsured portion of these CDs was $40.2million, or 8% and $93.7 million or 15% as of December 31, 2024 and 2023, respectively.

Borrowings and Advances

We utilize a variety of funding sources to manage our borrowings, including, but not limited to, FHLBB and correspondent bank overnight borrowings, FHLBB advances, customer and wholesale repurchase agreements, the Bank Term Funding Program (“BTFP”) (under which the Federal Reserve no longer allowed for additional borrowings from financial institutions as of March 11, 2024), and junior subordinated debentures. We proactively monitor our borrowings through Management and Board ALCO as part of prudent balance sheet, earnings, and liquidity management. As part of our liquidity management, we use internal designations of “short-term” and “long-term” borrowings, and manage our borrowings within each designation:

•Short-term borrowings include, but are not limited to, FHLBB and correspondent bank overnight borrowings, FHLBB advances with maturity within one year of origination, the BTFP, and customer repurchase agreements; and

•Long-term borrowings may include, but are not limited to, FHLBB advances with maturity greater than one year, wholesale repurchase agreements, and junior subordinated debentures.

At December 31, 2024, short-term borrowings were $500.6 million, representing an increase of $15.0 million, or 3%, since December 31, 2023. In 2024, we prepaid BTFP borrowings of $135.0 million held at December 31, 2023, and replaced the debt with $150.0 million of FHLBB advances to extend and diversify the term of our borrowings. To reduce borrowing costs, we entered into two tranches of interest swaps on these FHLBB advances.

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Short-Term Borrowings. The following table below provides certain information on our short-term borrowings at and for the period ended:

December 31,

FHLBB and correspondent bank overnight borrowings:

Balance outstanding at end of year $ — $ 24,950 $ 18,725

Weighted average interest rate for the year 5.65 % 4.82 % 2.43 %

Weighted average interest rate at end of year — % 5.56 % 4.38 %

FHLBB advances (less than one year):

Weighted average interest rate for the year 4.09 % 3.14 % 2.94 %

Weighted average interest rate at end of year 4.62 % 5.53 % 4.93 %

BTFP:

Balance outstanding at end of year $ — $ 135,000 $ —

Maximum balance outstanding at any month end 225,000 135,000 —

Weighted average interest rate for the year 4.77 % 4.70 % — %

Weighted average interest rate at end of year — % 4.70 % — %

Customer repurchase agreements:

Weighted average interest rate for the year 1.73 % 1.49 % 0.51 %

Weighted average interest rate at end of year 1.64 % 1.56 % 1.00 %

Junior Subordinated Debentures. In connection with the formation of CCTA and UBCT, and the issuance and sale of trust preferred securities to the public, we received and had outstanding at December 31, 2024 and 2023, junior subordinated debentures totaling $44.3 million.

FHLBB Collateral. FHLBB short-term and long-term borrowings 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. The carrying value of residential real estate and commercial loans pledged as collateral was $1.9 billion for both December 31, 2024 and 2023, respectively. The carrying value of securities pledged as collateral at the FHLBB was $4.0 million and $4.3 million at December 31, 2024 and 2023, respectively.

Shareholders’ Equity

Total shareholders’ equity at December 31, 2024 was $531.2 million, which was an increase of $36.2 million, or 7%, since December 31, 2023. The increase was primarily driven by: (1) an increase in retained earnings of $28.4 million driven by net income of $53.0 million, partially offset by dividends declared of $24.5 million for the year ended December 31, 2024; and (2) an increase in AOCI of $6.9 million driven by an increase in the fair value of the Company's debt securities and interest rate swaps, net of tax.

At each of December 31, 2024 and 2023, the Company and the Bank exceeded all regulatory capital requirements, and the Bank met the capital ratios necessary to be considered “well capitalized” under the prompt corrective action framework. There

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were no changes to the Company’s or the Bank's capital ratios that occurred subsequent to December 31, 2024 that would change the Company or Bank's regulatory capital categorization.

In January 2024, the Company's Board of Directors authorized the repurchase of up to 750,000 shares of the Company's common stock, representing approximately 5.0% of the Company's issued and outstanding shares of common stock as of December 31, 2023. This program replaced the 2023 program and matured on January 4, 2025. We currently do not have an active share repurchase program in place.

For the year ended December 31, 2024, the Company repurchased 50,000 shares of its common stock at a weighted-average price of $32.19 per share.

Refer to “—Capital Resources” and Note 14 of the consolidated financial statements for further discussion of the Company's capital position.

The following table presents certain information regarding shareholders’ equity for the periods indicated:

As of and For the Year EndedDecember 31,

Financial Ratios

Average equity to average assets 8.92 % 8.18 % 8.51 %

Tangible common equity ratio (non-GAAP) 7.64 % 7.11 % 6.37 %

Per Share Data

Tangible book value per share (non-GAAP) $ 29.91 $ 27.42 $ 24.37

Dividends declared per share $ 1.68 $ 1.68 $ 1.62

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. At December 31, 2024 and 2023, the Company's liquidity level exceeded its target. We believe that we currently have appropriate liquidity available to respond to demands. 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 December 31, 2024, our primary liquidity sources available were as follows:

(Dollars in thousands) Amount

Unpledged investment securities 579,140

Over collateralized securities pledging position 43,482

FRB Discount Window 35,012

Unsecured borrowing lines 94,872

Total available primary liquidity $ 1,602,420

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Deposits. Deposits continue to represent our primary source of funds. As of December 31, 2024, total deposits were $4.6 billion, an increase of 1% over December 31, 2023. Refer to “—Financial Condition—Deposits” for additional discussion on the Company’s deposit mix and changes in deposit balances during 2024.

The following is a summary of the scheduled maturities of CDs as of December 31, 2024:

(In thousands) CDs

At December 31, 2024, the Company’s brokered deposits totaled $180.0 million and was comprised of $74.8 million of brokered CDs and $105.2 million of brokered money market accounts. The Company’s brokered CDs of $74.8 million at December 31, 2024, matured in February 2025. The Company has established an internal policy limiting brokered deposits to 20% of the Bank’s assets and had $979.9 million of brokered deposit capacity as of December 31, 2024. Our internal brokered deposit limit falls within the Bank’s total borrowed funds limit that cannot exceed 50% of the Bank’s assets.

Borrowings. Borrowings are used to supplement deposits as a source of liquidity. Our primary sources of borrowings are with the FHLBB, federal funds and customer repurchase agreements, but may also include alternative sources such as various forms of subordinated debentures. At December 31, 2024, total borrowings were $545.0 million.

Our practice is to secure borrowings from the FHLBB with qualified commercial and residential real estate loans, home equity loans and certain investment securities. At December 31, 2024, our total borrowing capacity with FHLBB was $711.0 million.

Customer repurchase agreements are secured by mortgage-backed securities and government-sponsored enterprises. Through the Bank, we also have available lines of credit with the FHLBB of $9.9 million, with correspondent banks of $85.0 million, and with the FRB Discount Window of $35.0 million as of December 31, 2024. We also believe that we have additional untapped access to the brokered deposit market and wholesale reverse repurchase transaction market. These sources are considered as liquidity alternatives in our contingent liquidity plan.

The following is a summary of the scheduled maturities of borrowings as of December 31, 2024:

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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 residential mortgage loan portfolio is also a significant source of contingent liquidity for the Company that could be accessed in a reasonable time period through the sale of loans on the secondary market, as needed. As of December 31, 2024, qualifying loans with a book value of $1.9 billion were pledged as collateral.

The following table presents the contractual maturities of loans at the date indicated:

Maturity Distribution(1):

Fixed Rate:

Variable Rate:

(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 includes 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 also manage our liquidity position through timely sales of residential mortgage loans to the secondary market. For the year ended December 31, 2024, we sold 56%, or $221.9 million, of our residential mortgage loan originations 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. The rise in interest rates during 2022 and 2023 resulted in slowing cash flows. As of December 31, 2024 and 2023, the Company's MBS and CMO debt securities portfolio totaled 91% of the Company's investment portfolio. The investment portfolio is also a significant source of contingent liquidity for the Company that could be accessed in a reasonable time period through the sale of investments on the secondary market, if needed. As of December 31, 2024 and 2023, $334.8 million and $337.6 million of the MBS and CMO debt securities portfolio, or 56% and 54%, respectively, were designated as AFS and not pledged as collateral. As of December 31, 2024 and 2023, $305.7 million and $200.4 million, or 59% and 37%, respectively, were designated as HTM and not pledged as collateral.

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The following is a summary of the scheduled cash flows from our debt securities portfolio, including investments designated as AFS and HTM, as of December 31, 2024:

(In thousands) ContractualCash Flows(1)

(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 year ended December 31, 2024, the Company reported $53.0 million of net income, paid cash dividends of $24.6 million to shareholders and repurchased shares of its common stock for $1.6 million.

Also through 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 differ materially from that estimated and disclosed within the table below. At December 31, 2024, we had the following lease and other contractual obligations to make future payments under each of these contracts as follows:

Total Amount Committed Payments Due Per Period

(In thousands) 1 Year or Less > 1 Year

Other contractual obligations 5,305 5,305 —

The Company's estimated lease liability for its various operating and finance leases was reported within other liabilities on our consolidated statements of condition. Please refer to Notes 1 and 6 of the consolidated financial statements for discussion and details of our leases.

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 11 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 12 of the consolidated financial statements for further discussion of our derivatives and hedge instruments.

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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 $531.2 million and $495.1 million at December 31, 2024 and December 31, 2023, respectively, which amounted to 9% of total assets at each date. Refer to “—Financial Condition—Shareholders' Equity” for discussion regarding changes in shareholders' equity since December 31, 2023.

Our principal cash requirement is the payment of dividends on our common stock, as and when declared by the Company's Board of Directors. We declared dividends to shareholders in the aggregate amount of $24.5 million, or $1.68 per share, $24.5 million, or $1.68 per share, and $23.7 million, or $1.62 per share, for the years ended December 31, 2024, 2023 and 2022, respectively. 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 regulatory requirements and state corporate law.

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. For the years ended December 31, 2024, 2023, and 2022, the Bank declared dividends payable to the Company in the amount of $30.1 million, $22.5 million, and $31.7 million, respectively. Under OCC regulations, the Bank generally may not declare a dividend in excess of the Bank’s undivided profits or, absent OCC approval, if the total amount of dividends declared by the Bank in any calendar year exceeds the total of the Bank's retained net income for the current year plus its retained net income for the prior two years. 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 14 of the consolidated financial statements for discussion and details of the Company and Bank's capital regulatory requirements. At December 31, 2024 and 2023, the Company and Bank met all regulatory capital requirements and the Bank continues to be classified as “well capitalized” under 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; and 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.

The Company is, and may become, subject to other risks. Refer to Item 1A. Risk Factors for further description of the Company's material risks.

Credit Risk. Credit risk is the current and prospective risk to earnings or capital arising from an obligor's failure to meet the terms of any contract with the Company or otherwise to perform as agreed. It is found in all activities in which success depends on counterparty, issuer or borrower performance. It arises any time funds are extended, committed, invested or otherwise exposed through actual or implied contractual agreements, whether reflected on or off the Company's balance sheet. The Company makes various assumptions and judgments about the collectability of its loan portfolio, including the creditworthiness of its borrowers and counterparties and the value of the real estate and other assets serving as collateral for the repayment of loans. For further discussion regarding credit risk and the credit quality of the Company’s loan portfolio, refer to “—Financial Condition—Asset Quality,” and Note 3 of the consolidated financial statements.

Liquidity Risk. Liquidity risk is the current and prospective risk to earnings or capital arising from the Company’s inability to meet its obligations when they come due, without incurring unacceptable losses. Liquidity risk includes the inability to manage unplanned decreases or changes in funding sources. Liquidity risk also arises from the failure to recognize or address changes in market conditions that affect the ability to liquidate assets quickly and with minimal loss in value. For further discussion regarding the Company's management of liquidity risk, refer to the “—Liquidity” section.

Market Risk. Market riskis the risk of loss in a financial instrument arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates, commodity prices and equity prices. Our primary market risk exposure is interest rate risk. The ongoing monitoring and management of this risk is an important component of our asset and liability management process, which is governed by policies established by the Bank’s Board of Directors that are reviewed and approved annually. The Board ALCO delegates responsibility for carrying out the asset/liability management policies to Management ALCO. In this capacity, Management ALCO develops guidelines and strategies impacting our asset/liability management-related activities based upon estimated market risk sensitivity, policy limits and overall market interest rate levels and trends. Board ALCO meets on a quarterly basis to review strategies, policies, economic conditions and various activities as part of the management of these risks.

Certain of the Company's revenues are asset-based and determined as a percentage of the value of a client's assets under management. Such values are affected by changes in financial markets, such as interest rate risk, equity prices, and foreign exchange rates, and, accordingly, declines in the financial market may negatively impact its revenue. As of December 31, 2024, client assets under management by Camden National Wealth Management were $1.2 billion. It is estimated that a 1% increase or decrease in client assets under management would result in a de minimis impact to our consolidated financial results.

Interest Rate Risk. Interest rate riskrepresents 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 internal ALCO policy limits, which specify a maximum tolerance level for net interest income exposure over a one- and two-year horizon, assuming no balance sheet growth or change in composition, given a 200 basis point upward and downward shift in interest rates. 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%.

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As of December 31, 2024, 2023 and 2022, our net interest income sensitivity analysis reflected the following changes to net interest income assuming no balance sheet growth or change in composition, 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 inNet Interest Income

As of December 31,

Year 1

Year 2

The preceding sensitivity analysis 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, decay rates, pricing decisions on loans and deposits, including loan and deposit betas, 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.

Based upon the net interest income simulation models, in Year 1 of a rising interest rate environment the Company is slightly liability sensitive as our funding will reprice faster than assets as market rates rise over the first year and result in lower net interest income. Cash flows from investments and loans are redeployed into current market rates at higher yields than our existing portfolio, however funding cost pressures continue in the higher current rate environment and outpace asset yield expansion. In Year 2, funding cost pressures subside and asset yields continue to improve, resulting in improved net interest income compared to our Year 1 base scenario. In Year 1 of a falling interest rate environment, net interest income is expected to improve as the decrease in funding costs outpaces the decrease in asset yields from accelerated loan and investment prepayments. In Year 2, net interest income is expected to further increase compared to our Year 1 base scenario as asset yields are supported by fixed rates and floors while cost of funds reductions continue.

Periodically, if deemed appropriate, we use 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. As of December 31, 2024, we had interest rate swap agreements with a total notional of $43.0 million related to our junior subordinated debentures, $50.0 million of notional interest rate swap agreements on variable rate deposits to mitigate exposure to rising rates, $400.0 million of notional interest rate swap agreements on short-term fixed-rate rolling funding to mitigate exposure to rising rates, and $375.0 million of notional interest rate swap agreements to hedge fixed-rate residential mortgages using the “portfolio layer” method, and $313.4 million of notional interest rate swap agreements related to commercial loan level derivative program with both our commercial customers and a corresponding swap dealer. The Board and Management ALCO monitor derivative activities relative to their expectations and our hedging policies. Refer to Note 12 of the consolidated financial statements for further discussion of our derivatives instruments.

Capital Risk. Capital risk is the risk that an investor may lose all or part of the principal amount invested. The Company faces this risk as it manages its balance sheet and has investments or loans that may lose all or part of the principal amount the Company has invested, which can have an impact on shareholders' equity. The Company also faces capital risk in that the entity may lose value on components of its shareholders' equity. The regulatory environment mandates the Company and Bank maintain certain levels of capital. These capital levels can change based upon regulatory changes, which can then impact what the Company is able to accomplish from a strategic perspective. For further discussion regarding capital risk and management of this risk, refer to “—Capital Resources,” and Note 14 of the consolidated financial statements.

Operational Risk. Operational riskis the current and prospective risk to earnings and capital arising from fraud, error and the inability to deliver products or services, maintain a competitive position and manage information. Risk is inherent in efforts to gain strategic advantage and in the failure to keep pace with changes in the financial services marketplace. Operational risk is evident in each product and service offered by the Company and encompasses product development and delivery, transaction processing, systems development, change management, complexity of products and services, human resource elements and the

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internal control environment. The risk that transactions may not be processed on time or correctly can have significant impact on the Bank’s reputation, which can result in compliance violations and fines, and/or other financial risks.

The Company manages operational risk through a series of internal programs, as well as through the assistance of third parties. These programs include various internal and external audit programs, internal committees to oversee compliance with programs and remedial actions, if necessary, and various documented policies, procedures and framework for addressing such risks.

Technology Risk, including Cybersecurity. Technology Risk, including risk relating to artificial intelligence and other emerging or developing technologies, is the risk offinancial loss, disruption or damage to the reputation of an organization resulting from the failure of its information technology systems, weak computing infrastructure, or a breach of information technology systems. Technology and cybersecurity risk could materialize in a variety of ways, such as unpatched or vulnerable computing systems, deliberate and unauthorized breaches of security to gain access to information systems, unintentional or accidental breaches of security, operational information technology risks due to factors such as poor system integrity, weak computing infrastructure and/or a weak Cybersecurity protection program.

Poorly managed technology and cybersecurity risk can leave an institution exposed to a variety of cybercrimes, with consequences ranging from data disruption to economic destitution. Reputation risk due to a technology and/or cybersecurity event can be significant to overcome depending on the severity of the event.

The Company manages technology and cybersecurity risks through its internal programs, as well as through the assistance of third parties. Refer to Item 1C. Cybersecurity for further information.

Vendor and Third Party Risk. Vendor and third party riskrepresents the risk related to outsourced activities and in certain situations includes reliance on vendors to deliver services on our behalf. The Company has many service partners and an increasing reliance on outsourced services, which places greater risk on the Company through these many partners. These relationships are controlled by contracts and service level agreements, but represent increasing risk to the Company.

The Company manages vendor and third party risk through its vendor management program, which includes robust due diligence and risk assessment prior to engaging a new vendor, annual review of certain vendors depending on the services provided by the vendor, and an evaluation of the risk the vendor may present to the Company through our reliance on its services.

People and Compensation Risk. People and compensation risk includes: (1) the risk of employee dishonesty, incompetence or error; (2) the risk of not having individuals with adequate training and experience to properly discharge their responsibilities; (3) the risk of not having sufficient depth of personnel to provide back up for critical functions; (4) the risk of lawsuit by employees alleging improper actions by or on behalf of the Company; (5) succession planning; and (6) compensation risk, which includes having compensation plans that effectively allow the Company to hire and keep the right talent, and properly designed compensation and incentive programs to promote ethical behavior and assure that excessive risk is not encouraged.

The Company manages people and compensation risk through annual risk assessments of various compensation and incentive plans, oversight by the Compensation Committee of the Board of Directors, the use of third party compensation consultants, and various insurance programs.

Compliance and Legal Risk. Compliance and legal riskis the current and prospective risk to earnings or capital arising from violations of, or nonconformance with, laws, rules, regulations, prescribed practices, internal policies and procedures, or ethical standards. This risk exposes the Company to fines, civil money penalties, payment of damages, and the voiding of contracts. Compliance risk can lead to diminished reputation, reduced franchise value, limited business opportunities, reduced expansion potential, and an inability to enforce contracts. Legal risk exists in generally all activity of the Company where there is any possibility that the Company will become subject to liability for improper actions.

The Company manages compliance and legal risk through various internal and external audit programs, use of third parties for consulting and legal support, ongoing compliance risk assessments, the ERM Committee and various insurance programs.

Strategic Alignment Risk. Strategic alignment riskis the current and prospective impact on earnings or capital arising from adverse business decisions, improper implementation of decisions, or lack of responsiveness to industry changes. This risk is a function of the compatibility of the Company's strategic goals, the business strategies developed to achieve those goals, the resources deployed against these goals, and the quality of implementation.

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Reputation Risk. Reputation risk is the current and prospective impact on earnings and capital arising from negative public opinion. The reputation of financial services companies can be based on brand and trust, and the loss of brand or trust can negatively impact the Company's operations and financial results. Reputation risk exposure is present throughout the organization and our interactions with our various stakeholders, including, but not limited to, our customers, communities and investors.

The Company manages its strategic alignment and reputation risk through various internal policies and programs, including, but not limited to, the Company's core values, code of ethics policy, financial code of ethics policy, Audit Committee complaint policy, employee handbook, and other policies and programs, as well as through strategic planning and oversight by the Board of Directors.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1 of the consolidated financial statements for details of recently issued accounting pronouncements and their expected impact on the consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Information required by this Item 7A is included in Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management” and is incorporated into this Item 7A by reference.

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Item 8. Financial Statements and Supplementary Data

CONSOLIDATED STATEMENTS OF CONDITION

December 31,

(In thousands, except number of shares) 2024 2023

ASSETS

Total cash, cash equivalents and restricted cash 214,963 99,804

Investments:

Less: allowance for credit losses on loans (35,728) (36,935)

Core deposit intangible assets 415 971

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities

Deposits:

Accrued interest and other liabilities 95,788 92,144

Commitments and contingencies (Note 11)

Shareholders’ Equity

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF INCOME

For the Year EndedDecember 31,

(In thousands, except number of shares and per share data) 2024 2023 2022

Interest Income

Interest Expense

Non-Interest Income

Net loss on sale of securities — (10,310) (912)

Non-Interest Expense

Merger and acquisition costs 1,159 — —

Amortization of core deposit intangible assets 556 592 625

Other real estate owned and collection costs, net 201 42 29

Per Share Data

Diluted earnings per share $ 3.62 $ 2.97 $ 4.17

Cash dividends declared per share $ 1.68 $ 1.68 $ 1.62

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Year EndedDecember 31,

Other comprehensive income (loss):

Net change in fair value on debt securities, net of tax 3,394 24,130 (130,366)

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Other comprehensive loss, net of tax — — — (119,726) (119,726)

Stock-based compensation expense — 2,553 — — 2,553

Other comprehensive income, net of tax — — — 24,403 24,403

Stock-based compensation expense — 2,793 — — 2,793

Other comprehensive income, net of tax — — — 6,906 6,906

Equity issuance costs (246) (246)

Stock-based compensation expense — 2,902 — — 2,902

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Year Ended December 31,

Operating Activities

Gain on sale of mortgage loans, net of origination costs (2,236) (1,649) (3,403)

Investment securities amortization and accretion, net 1,779 2,312 3,831

Amortization of core deposit intangible assets 556 592 625

Purchase accounting accretion, net (89) (145) (280)

Net decrease in derivative collateral posted to counterparties — — 30,690

Net gain on sale of premises and equipment — — (204)

Net loss on sale of investment securities — 10,310 912

Investing Activities

Proceeds from sales of available-for-sale debt securities — 126,766 36,280

Purchase of held-to-maturity securities — (20,981) (42,748)

Proceeds from the sale of premises and equipment — — 466

Proceeds from sale of other real estate owned — — 287

Net cash provided by (used in) investing activities 30,329 (7,029) (487,722)

Financing Activities

Repayment of Bank Term Funding Program (360,000) — —

Equity issuance costs (246) — —

Supplemental information

The accompanying notes are an integral part of these consolidated financial statements.

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CAMDEN NATIONAL CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Acronyms and Abbreviations.The acronyms and abbreviations identified below are used in the notes to the consolidated financial statements. The following is provided to aid the reader and provide a reference page when reviewing the notes to the consolidated financial statements.

Acronym Description Acronym Description

ALCO: Asset/Liability Committee GDP: Gross domestic product

ACL: Allowance for credit losses HTM: Held-to-maturity

AOCI: Accumulated other comprehensive income (loss) LGD: Loss given default

ASC: Accounting Standards Codification LIBOR: London Interbank Offered Rate

ASU: Accounting Standards Update LTIP: Long-Term Performance Share Plan

BOLI: Bank-owned life insurance MBS: Mortgage-backed security

CECL: Current Expected Credit Losses N.M.: Not meaningful

CMO: Collateralized mortgage obligation OCI: Other comprehensive income (loss)

DCRP: Defined Contribution Retirement Plan PD: Probability of default

EPS: Earnings per share ROU: Right-of-use

FRBB: Federal Reserve Bank of Boston U.S.: United States of America

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General Business.Camden National Corporation, a Maine corporation (the “Company”), is the bank holding company for Camden National Bank (the “Bank”) and is headquartered in Camden, Maine. The primary business of the Company is to attract deposits from and to extend loans to consumer, institutional, municipal, non-profit and commercial customers. The Company, through the Bank, offers commercial and consumer banking products and services, and through Camden Financial Consultants, a division of the Bank, and Camden National Wealth Management, a department of the Bank, offers brokerage and insurance services as well as investment management and fiduciary services. The Bank's deposits are insured by the FDIC, subject to regulatory limits.

Principles of Consolidation. The accompanying consolidated financial statements include the accounts of the Company and the Bank (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, 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 CCTA and UBCT. These entities are unconsolidated subsidiaries of the Company.

Use of Estimates. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could vary from these estimates as a result of changing conditions and future events. Several estimates are material and are susceptible to change, such as the allowance for credit losses (“ACL”), including the allowance for loan losses, off-balance sheet credit exposures, and AFS and HTM debt securities; the accounting for business combinations including subsequent impairment analyses for goodwill and other intangible assets; accounting for income taxes; and postretirement benefits.

Subsequent Events. The Company has evaluated events and transactions subsequent to December 31, 2024 for potential recognition or disclosure and has disclosed such events and transactions in Note 23 of the consolidated financial statements.

Significant Concentration of Credit Risk.The Company makes loans primarily to customers in Maine, Massachusetts and New Hampshire. Although it has a diversified loan portfolio, a large portion of the Company's loans are secured by commercial or residential real estate and are subject to real estate market volatility within these states. Furthermore, the debtors' ability to honor their contracts is highly dependent upon other economic factors throughout Maine, Massachusetts and New Hampshire. The Company does not generally engage in non-recourse lending and typically will require the principals of any commercial borrower to obligate themselves personally on the loan. Refer to Note 3 for further discussion of credit concentrations.

Cash, Cash Equivalents and Restricted Cash. For the purpose of reporting, cash and cash equivalents consist of cash on hand and amounts due from banks. In March 2020, the FRB reduced its reserve requirement ratios to 0%, effectively eliminating cash reserve requirements for all depository institutions.

Certain cash balances will be designated as restricted as required by certain contracts with unrelated third parties.

Investments. Debt investments for which the Company has the positive intent and ability to hold to maturity are classified as HTM and recorded at amortized cost on the consolidated statements of condition.

Debt investments that are not classified as HTM or trading are classified as AFS and are carried at fair value on the Company's consolidated statements of condition with subsequent changes to fair value recorded within AOCI, net of tax.

Trading securities and equity investments with a readily determinable fair value are carried at fair value on the Company's consolidated statements of condition, with the change in fair value recognized between periods recognized within net income on the consolidated statements of income.

Purchase premiums and discounts are recognized in interest income on the consolidated statements of income using the interest method over the period to maturity or issuer call option date, if earlier, and are recorded on the trade date.

Upon sale of an investment security, the realized gain or loss on the sale is recognized within non-interest income on the consolidated statements of income. The cost basis of our investments sold is determined using the specific identification method.

ACL on (or Write-off of) AFS Debt Securities. Management assesses its AFS debt securities in an unrealized loss position for the following: (i) whether it intends to sell the security, or (ii) it is more likely than not that it will be required to sell the