Camden National Bank (CAC)

Maine-based regional bank Camden National (NASDAQ:CAC) announced better-than-expected revenue in Q4 CY2025, with sales up 42.6% year on year to $68.05 million. Its non-GAAP profit of $1.33 per share was 0.8% above analysts’ consensus estimates.

Company Overview

Rooted in Maine's coastal communities since 1875, Camden National (NASDAQ:CAC) is a regional bank holding company that provides banking, wealth management, and financial services to consumers and businesses throughout Maine and New Hampshire.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

Camden National competes with other regional banks operating in Maine and New Hampshire, including Bar Harbor Bankshares (NYSE:BHB), Bangor Bancorp (NASDAQ:BNGO), and Northeast Bank (NASDAQ:NBN), as well as larger national institutions such as Bank of America (NYSE:BAC) and TD Bank Group (NYSE:TD).

From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Regrettably, Camden National Bank’s revenue grew at a tepid 6.4% compounded annual growth rate over the last five years. This was below our standard for the banking sector and is a rough starting point for our analysis.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Camden National Bank’s annualized revenue growth of 25% over the last two years is above its five-year trend, suggesting its demand recently accelerated. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Camden National Bank reported magnificent year-on-year revenue growth of 42.6%, and its $68.05 million of revenue beat Wall Street’s estimates by 2.9%.

Net interest income made up 77.1% of the company’s total revenue during the last five years, meaning lending operations are Camden National Bank’s largest source of revenue.

Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.

Topline growth carries importance, but the overall profitability behind this expansion determines true value creation. For banks, the efficiency ratio captures this relationship by measuring non-interest expenses, including salaries, facilities, technology, and marketing, against total revenue.

Markets emphasize efficiency ratio trends over static measurements, recognizing that revenue compositions drive different expense bases. Lower efficiency ratios signal superior performance by indicating that banks are controlling costs effectively relative to their income.

Over the last five years, Camden National Bank’s efficiency ratio has increased by 2.8 percentage points, going from 54.9% to 55.2%. Said differently, the company’s expenses have increased at a faster rate than revenue, which usually raises questions unless the company is in high-growth mode and reinvesting its profits into attractive ventures.

Camden National Bank’s efficiency ratio came in at 54.2% this quarter, beating analysts’ expectations by 72.5 basis points (100 basis points = 1 percentage point).

For the next 12 months, Wall Street expects Camden National Bank to maintain its trailing one-year ratio with a projection of 54.3%.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Camden National Bank’s EPS grew at a weak 1.7% compounded annual growth rate over the last five years, lower than its 6.4% annualized revenue growth. However, its efficiency ratio actually improved during this time, telling us that non-fundamental factors such as taxes affected its ultimate earnings.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Camden National Bank, its two-year annual EPS growth of 11.5% was higher than its five-year trend. Accelerating earnings growth is almost always an encouraging data point.

In Q4, Camden National Bank reported adjusted EPS of $1.33, up from $1.03 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Camden National Bank’s full-year EPS of $4.41 to grow 23.9%.

Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.

This explains why tangible book value per share (TBVPS) stands as the premier banking metric. TBVPS strips away questionable intangible assets, revealing concrete per-share net worth that investors can trust. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.

Camden National Bank’s TBVPS was flat over the last five years. However, TBVPS growth has accelerated recently, growing by 4.1% annually over the last two years from $27.38 to $29.69 per share.

Over the next 12 months, Consensus estimates call for Camden National Bank’s TBVPS to grow by 13.9% to $33.82, decent growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, Camden National Bank has averaged a Tier 1 capital ratio of 11.9%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity (ROE) measures how effectively banks generate profit from each dollar of shareholder equity - a critical funding source. High-ROE institutions typically compound shareholder wealth faster over time through retained earnings, share repurchases, and dividend payments.

Over the last five years, Camden National Bank has averaged an ROE of 11.1%, respectable for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired.

We enjoyed seeing Camden National Bank beat analysts’ revenue expectations this quarter. We were also happy its net interest income outperformed Wall Street’s estimates. On the other hand, its EPS slightly beat. Overall, this print had some key positives. The stock remained flat at $47.28 immediately following the results.

Updated: January 27, 2026 at 8:36 AM EST

Before deciding whether to buy Camden National Bank or pass, we urge investors to consider business quality, valuation, and the latest quarterly results.

Camden National Bank isn’t a terrible business, but it doesn’t pass our quality test. First off, its revenue growth was uninspiring over the last five years, and analysts don’t see anything changing over the next 12 months. And while its expanding net interest margin shows its loan book is becoming more profitable, the downside is its weak EPS growth over the last five years shows it’s failed to produce meaningful profits for shareholders. On top of that, its TBVPS growth was weak over the last five years.

Camden National Bank’s P/B ratio based on the next 12 months is 1.1x. This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We're fairly confident there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $47.50 on the company (compared to the current share price of $47.28).