Camden National Corporation (“Camden National”) (NASDAQ: CAC), the bank holding company for Camden National Bank, and Northway Financial, Inc. (OTCQB: NWYF), the parent company of Northway Bank, said Sept. 10 that they have entered into a definitive agreement under which Camden National will acquire Northway in an all-stock transaction valued at approximately $86.6 million.

The transaction combines two franchises with adjacent geographies, creating a publicly traded northern New England bank. The combined company will have 74 branches serving markets throughout a contiguous footprint in New Hampshire and Maine, with approximately $7.0 billion in assets, $5.1 billion in loans, $5.5 billion in deposits, and $2.0 billion of Assets Under Administration. The combined company will operate under the Camden National Bank name.

“Camden National and Northway share a similar culture, consistent credit and risk profiles, and deep commitment to the communities we serve,” said Simon Griffiths, president and chief executive officer of Camden National, in a news release. “This union will increase our size and scale, and bolster our presence in New Hampshire, which we believe will drive profitability and shareholder value. Our customers, employees, and communities will significantly benefit from broader product offerings, higher lending limits, and an enhanced customer experience.”

“We are excited to announce this strategic combination with Camden National. The ability to have two organizations with similar missions come together positions us well in a significantly competitive market; particularly with an improved ability to allocate capital in more ways than we could on our own. Combined, we strengthen our foundations of a forward-thinking approach to community banking while best serving clients with whom we have built strong relationships over the years.” said William Woodward, president, chief executive officer and chairman of Northway Financial, in the same release. “With shared histories and community commitment, this alliance doesn't just extend our influence; it drives significant operational enhancements and strategically positions us for future growth for years to come."

Subject to the terms of the definitive agreement, which both boards have unanimously approved, Northway shareholders will receive 0.83 shares of Camden National common stock for each outstanding share of Northway common stock.

Based on Camden National’s closing stock price of $37.90 on September 9, the transaction is valued at approximately $86.6 million or $31.46 per share of Northway common stock. Following the completion of the transaction, one Northway director will join the boards of directors of both Camden National and Camden National Bank upon the completion of the transaction.

As of June 30, 2024, Northway had approximately $1.3 billion of total assets, $0.9 billion of total loans, and $1.0 billion of deposits.

Northway is a bank holding company and parent company of Northway Bank. Through Northway Bank, Northway offers financial products and services to individuals, businesses, and the public sector from its 17 branches and its loan production offices located in North Conway, Laconia, Bedford, Concord, and Portsmouth, New Hampshire. 

On a combined basis, the merger is expected to be approximately 19.9% accretive to Camden National’s 2025 earnings per share and 32.7% accretive to Camden National’s 2026 earnings per share. Following the completion of the merger, Camden National’s capital ratios are expected to remain significantly above “well-capitalized” thresholds, with the pro forma company well-positioned for future growth.

The merger is expected to be completed during the first quarter of 2025, subject to certain customary conditions, including the receipt of required regulatory approvals and approval by Northway shareholders.

Upon completion of the transaction, Camden National shareholders will own approximately 86% of the combined company and Northway’s shareholders will own approximately 14% of the combined company, which will continue to trade on Nasdaq under the “CAC” stock ticker symbol.

Raymond James & Associates, Inc. is serving as the exclusive financial advisor and rendered a fairness opinion to the Board of Directors of Camden National. Sullivan & Cromwell LLP is serving as legal counsel to Camden National in the transaction.

Performance Trust Capital Partners LLC is serving as the exclusive financial advisor to Northway and rendered a fairness opinion to the Board of Directors of Northway. Goodwin Procter LLP is serving as legal counsel to Northway in the transaction.