UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1996.
Commission File No. 01-28190
CAMDEN NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
MAINE 01-04132282
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
2 ELM STREET, CAMDEN, ME 04843
(Address of principal executive offices) (Zip Code)
Registrants's telephone number, including area code:
(207) 236-8821
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter periods that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date:
Outstanding at June 30, 1996: Common stock (no par value)
2,340,924 shares
<PAGE>
CAMDEN NATIONAL CORPORATION
Form 10-Q for the quarter ended June 30, 1996
TABLE OF CONTENTS OF INFORMATION REQUIRED IN REPORT
PART I.
ITEM 1. FINANCIAL INFORMATION
PAGE
Consolidated Statements of Income
Six Months Ended June 30, 1996 and 1995 and
Three Months Ended June 30, 1996 and 1995 3
Consolidated Balance Sheets
June 30, 1996 and 1995 and December 31, 1995 4
Consolidated Statements of Changes in Stockholders' Equity
Six Months Ended June 30, 1996 and 1995 5
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1996 and 1995 6
Notes to Consolidated Financial Statements
Six Months Ended June 30, 1996 and 1995 7
Analysis of Change in Net Interest Margin on Earning Assets
Six Months Ended June 30, 1996 and 1995 8
Anaysis of Volume and Rate Changes on Net Interest
Income & Expenses June 30, 1996 over June 30, 1995 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10-14
PART II.
ITEM 2. Changes in Securities 15
ITEM 4. Submission Matters to a Vote of Security holders 16
ITEM 6. Exhibits and Reports on Form 8-K. 17
SIGNATURES 18
EXHIBITS 19-28
<PAGE>
<TABLE>
Camden National Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
(In Thousands, except number of shares and per share data)
<CAPTION>
Six Months Three Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $14,052 $13,268 $7,036 $6,844
Interest on US Government
and agency obligations 4,468 4,526 2,300 2,245
Interest on state and political
subdivisions 192 227 109 126
Interest on interest rate
swap agreements 626 754 313 369
Interest on federal funds sold
and other investments 292 224 151 112
------- ------- ------ ------
Total interest income 19,630 18,999 9,909 9,696
Interest Expense
Interest on deposits 7,117 6,212 3,493 3,274
Interest on interest rate
swap agreements 569 764 283 381
Interest on other borrowings 1,781 2,272 982 1,178
------- ------- ------ ------
Total interest expense 9,467 9,248 4,758 4,833
------- ------- ------ ------
Net interest income 10,163 9,751 5,151 4,863
Provision for Loan Losses 324 435 107 249
------- ------- ------ ------
Net interest income after provision
for loan losses 9,839 9,316 5,044 4,614
Other Income
Service charges on deposit accounts 746 713 503 451
Other service charges and fees 617 634 365 418
Other 486 265 321 93
------- ------- ------ ------
Total other income 1,849 1,612 1,189 962
Operating Expenses
Salaries and employee benefits 3,050 2,795 1,510 1,384
Premises and fixed assets 994 962 490 497
Other operating expenses 1,906 1,970 1,106 1,021
------- ------- ------ ------
Total operating expenses 5,950 5,727 3,106 2,902
Less minority interest in net
(loss) income (22) 21 (6) 35
------- ------- ------ ------
Income before income taxes 5,760 5,180 3,133 2,639
Income Taxes 1,905 1,560 1,036 852
------- ------- ------ ------
Net Income $ 3,855 $ 3,620 $2,097 $1,787
======= ======= ====== ======
Per Share Data
Earnings per share $ 1.65 $ 1.54 $ .90 $ .76
(Net income divided by weighted
average shares outstanding)
Cash dividends per share $ .43 $ .27 $ .25 $ .13
Weighted average number of
shares outstanding 2,341,759 2,347,006 2,340,924 2,344,974
</TABLE>
<PAGE>
<TABLE>
Camden National Corporation and Subsidiaries
Consolidated Statements of Condition
(Unaudited)
<CAPTION>
(In Thousands, except number of shares June 30, Dec 31,
and per share data) 1996 1995
<S> <C> <C>
Assets
Cash and due from banks $ 14,319 $ 16,356
Federal funds sold 1,500 1,700
Investment securities:
Available for sale 28,322 26,196
Held to maturity 138,945 135,136
Residential mortgages held for sale 2,161 2,083
Loans 301,466 283,019
Less allowance for loan losses (4,120) (4,080)
-------- --------
Net loans 297,346 278,939
Bank premises and equipment 8,531 8,495
Other real estate owned 1,133 1,086
Interest receivable 4,943 4,252
Other assets 5,741 6,442
-------- --------
Total assets $502,941 $480,685
======== ========
Liabilities
Demand deposits $ 38,666 $ 46,034
NOW deposits 37,798 42,192
Money market deposits 25,908 27,066
Savings deposits 63,367 63,503
Broker deposits 2,261 9,108
Certificates of deposit under $100,000 159,821 159,310
Certificates of deposit $100,000 and over 23,860 22,667
-------- --------
Total deposits 351,681 369,880
Borrowings from Federal Home Loan Bank 68,482 39,387
Other borrowed funds 20,939 12,593
Accrued interest and other liabilities 5,491 5,056
Minority interest in subsidiary 67 89
-------- --------
Total liabilities 446,660 427,005
Stockholders' Equity
Common stock, no par value; (authorized
18,000,000, issued 2,376,082) 2,436 2,436
Surplus 1,226 1,226
Net unrealized appreciation (depreciation)
on securities available for sale (5) 104
Retained earnings 53,799 50,951
-------- --------
57,456 54,717
Less cost of 35,158, and 31,521
shares of treasury stock on June 30,
1996 and December 31, 1995 1,175 1,037
-------- --------
Total stockholders' equity 56,281 53,680
Total liabilities and
stockholders' equity $502,941 $480,685
======== ========
</TABLE>
<PAGE>
<TABLE>
Camden National Corporation and Subsidiaries
Consolidated Statements of Changes in Stockholders' Equity
Six Months Ended June 30, 1995 and 1996
(Unaudited)
(In Thousands, except number of shares and per share data)
<CAPTION>
Net Unrealized
Appreciation
on Securities
Common Retained Available Treas Total
Stock Surplus Earnings For Sale Stock Equity
<S> <C> <C> <C> <C> <C> <C>
Balance at 12/31/94 $2,436 $1,208 $44,922 $ 137 $ (445) $48,258
Net income
for 1995 - - 3,620 - - 3,620
Change in
unrealized
gains (losses)
on securities
available for
sale, net of
tax benefit
of $24,000 - - - (46) - (46)
Purchase of
treasury stock
(25,200 shares) - - - - (937) (937)
Sale of treasury
stock
(20,629 shares) - 25 - - 338 363
Cash dividends - - (653) - - (653)
------ ------ ------- ------ ------- -------
Balance at 6/30/95 $2,436 $1,233 $47,889 $ 91 $(1,044) $50,605
====== ====== ======= ====== ======= =======
Balance at 12/31/95 2,436 1,226 50,951 104 (1,037) 53,680
Net income
for 1996 - - 3,855 - - 3,855
Change in
unrealized
gains (losses)
on securities
available for
sale, net of
tax benefit
of $56,000 - - - (109) - (109)
Purchase of
treasury stock
(4,295 shares) - - - - (163) (163)
Sale of treasury
stock
(658 shares) - - - - 25 25
Cash dividends - - (1,007) - - (1,007)
------ ------ ------- ------ ------- -------
Balance at 6/30/96 $2,436 $1,226 $53,799 $ (5) $(1,175) $56,281
====== ====== ======= ====== ======= =======
</TABLE>
<PAGE>
<TABLE>
Camden National Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
(In Thousands, except number of Six Months Ended June 30,
shares and per share data) 1996 1995
<S> <C> <C>
Operating Activities
Net Income $ 3,855 $ 3,620
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 324 435
Depreciation and amortization 406 398
Increase in interest receivable (691) (375)
Decrease (Increase) in other assets 754 (2,243)
(Decrease) Increase in accrued interest (376) 422
Increase (Decrease) in other liabilities 868 (849)
Cash receipts from sale of residential loans 1,433 1,832
Origination of mortgage loans held for sale (1,511) (954)
Other, net (1) 20
------- -------
Net cash provided by operating activities 5,061 2,306
Investing Activities
Proceeds from maturities and calls of
securities held to maturity 16,273 4,018
Proceeds from maturities and calls of
securities available for sale 400 100
Purchase of securities to be
held to maturity (20,103) (580)
Purchase of securities available for sale (2,684) (2,294)
Increase in loans (18,731) (19,836)
Net (increase) decrease in other real estate (47) 552
Purchase of premises and equipment (481) (1,182)
(Increase) Decrease in minority position (22) 21
Net purchase of federal funds 200 0
------- -------
Net cash used by investing activities (25,195) (19,201)
Financing Activities
Net decrease in demand deposits,
NOW accounts, and savings accounts (13,056) (22,744)
Net (decrease) increase in
certificates of deposit (5,143) 28,243
Net increase in short-term borrowings 37,441 8,452
Acquisition of treasury stock (163) (937)
Sale of treasury stock 25 363
Cash dividends (1,007) (653)
------- -------
Net cash provided by financing activities 18,097 12,724
------- -------
Decrease in cash and cash equivalents (2,037) (4,171)
Cash and cash equivalents at beginning of period 16,356 17,159
------- -------
Cash and cash equivalents at end of period $14,319 $12,988
======= =======
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements were prepared
in accordance with instructions for Form 10-Q and, therefore, do not include
all disclosures required by generally accepted accounting principles for
complete presentation of financial statements. In the opinion of management,
the consolidated financial statements contain all adjustments (consisting only
of normal recurring accruals) necessary to present fairly the consolidated
balance sheets of Camden National Corporation, as of June 30, 1996 and December
31, 1995, the consolidated statements of income for the three and six months
ended June 30, 1995 and June 30, 1995, and the consolidated statements of
stockholders' equity and cash flows for the six months ended June 30, 1996, and
June 30, 1995. All significant intercompany transactions and balances are
eliminated in consolidation. The income reported for 1996 period is not
necessarily indicative of the results that may be expected for the full year.
NOTE 2 - SFAS 122
SFAS 122, "Accounting for Mortgage Servicing Rights" was issued in May of
1995. Where mortgage loans are sold or securitized but the rights to service
those loans are retained by the creditor, the standard requires that the total
cost of such loans (whether originated or acquired) be allocated between the
mortgage servicing rights and the loans themselves based on their relative fair
values. SFAS 122 also addresses measurement of impairment of capitalized
mortgage servicing rights. The Company has adopted SFAS 122 as of January 1,
1996. During the first half of 1996 activity in this area was minimal and had
no material effect on the financial position and results of operations.
<PAGE>
<TABLE>
ANALYSIS OF CHANGE IN NET INTEREST MARGIN ON EARNING ASSETS
<CAPTION>
Six Months Ended Six Months Ended
June 30, 1996 June 30, 1995
---------------------- ----------------------
Average Yield/ Average Yield/
Balance Int. Rate Balance Int. Rate
------- ----- ------ ------- ----- ------
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Securities-Taxable 150,755 4,731 6.28% 147,064 4,737 6.44%
Securities-Nontaxable 7,829 250 6.39% 10,865 343 6.31%
Federal Funds Sold 2,138 56 5.24% 479 13 5.43%
Loans 291,838 14,176* 9.71% 275,848 13,330* 9.66%
------- ------ ----- ------- ------ -----
Total Earning Assets 452,560 19,213 8.49% 434,256 18,423 8.48%
Cash and Due from Banks 12,433 11,985
Other Assets 19,750 19,256
Less Allowance for
Loan Losses (4,144) (3,860)
------- -------
Total Assets 480,599 461,637
======= =======
LIABILITIES & SHAREHOLDERS' EQUITY
NOW Accounts 38,334 264 1.38% 38,839 329 1.69%
Savings Accounts 62,285 1,041 3.34% 63,171 1,082 3.43%
Money Market Accounts 25,445 392 3.08% 33,786 552 3.27%
Certificates of Deposit 184,030 5,231 5.68% 158,483 4,189 5.29%
Short-term Borrowings 64,489 1,782 5.53% 74,273 2,272 6.12%
Broker Certificates of Deposit 6,173 188 6.09% 1,831 60 6.55%
------- ------ ----- ------- ------ -----
Total Interest-bearing
Liabilities 380,756 8,898 4.67% 370,383 8,484 4.58%
Demand Deposits 39,380 37,245
Other Liabilities 5,834 4,899
Shareholders' Equity 54,629 49,110
------- -------
Total Liabilities &
Shareholders' Equity 480,599 461,637
======= =======
Net Interest Income 10,315 9,939
(fully-taxable equivalent)
Less: fully-taxable equivalent
adjustment (152) (188)
------ ------
10,163 9,751
====== ======
Net Interest Rate Spread
(fully-taxable equivalent) 3.82% 3.90%
Net Interest Margin
(fully-taxable equivalent) 4.56% 4.58%
<FN>
*Includes net swap income figures (in thousands) - June 1996 $57 and
June 1995 $(10)
Notes: Nonaccrual loans are included in total average loans.
Tax exempt interest was calculated using a rate of 34% for
fully-taxable equivalent.
</TABLE>
<PAGE>
<TABLE>
ANALYSIS OF VOLUME AND RATE CHANGE ON NET
INTEREST INCOME AND EXPENSES
<CAPTION>
June 1996 Over June 1995
-----------------------------
Change Change
due to due to Total
Volume Rate Change
------ ------ ------
INTEREST-EARNING ASSETS:
<S> <C> <C> <C>
Securities-taxable 119 (125) (6)
Securities-nontaxable (96) 3 (93)
Federal Funds Sold 45 (2) 43
Loans 773 73 846
---- ---- ----
Total Interest Income 841 (51) 790
INTEREST-BEARING LIABILITIES:
NOW Accounts (4) (61) (65)
Savings Accounts (15) (26) (41)
Money Market Accounts (136) (24) (160)
Certificates of Deposit 675 367 1,042
Short-term Borrowings (299) (191) (490)
Broker Certificates 142 (14) 128
---- ---- ----
Total Interest Expense 363 51 414
Net Interest Income 478 (102) 376
(fully taxable equivalent)
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
FINANCIAL CONDITION
At June 30, 1996 the Company had consolidated assets of $502.9
million, an increase of $22.2 million or 4.6%, from December 31,1995.
The major change in assets was due to increased loan demand, that
resulted in an increase in the loan portfolio of $18.5 million. The
investment portfolio also increased by $5.9 million during the first
six months of 1996. During the second quarter of 1996 more attractive
investment yields were available. Therefore, after experiencing
little activity in the first quarter of 1996, purchases were made in both
the held to maturity and the available for sale investment portfolios
during the second quarter.
The liquidity needs of the Company's financial institution
subsidiaries require the availability of cash to meet the withdrawal
demands of depositors and the credit commitments to borrowers. Deposits
still represent the Company's primary source of funds. Since December 31,
1995, deposits have declined by $18.2 million or 4.9%, most of which has been
in DDA and NOW accounts. These declines are the result of seasonal reductions
that the Company normally experiences during the first six months of each
year. During the same period, broker certificates of deposit decreased $6.8
million since December 31, 1995. This decrease was due to the fact that
alternative funding was available at more attractive rates.
Borrowings also provide liquidity in the form of federal funds
purchased, securities sold under agreements to repurchase, treasury
tax and loan accounts, and borrowings from the Federal Home Loan
Bank. Loan growth is normally stronger during the first half of the year
due to the seasonal business of many of the Company's commercial loan
customers. In addition, the Company normally has seasonal deposit reductions
during this same period. Therefore, management had anticipated that
borrowings would increase during the first six months of this year to meet
those funding needs.
In determining the adequacy of the loan loss allowance, management
relies primarily on its review of the loan portfolio both to
ascertain whether there are probable losses to be written off, and to
assess the loan portfolio in the aggregate. Nonperforming loans are
examined on an individual basis to determine estimated probable loss.
In addition, management considers current and projected loan mix and
loan volumes, historical net loan loss experience for each loan
category, and current and anticipated economic conditions affecting
each loan category. No assurance can be given, however, that adverse
economic conditions or other circumstances will not result in
increased losses in the portfolio. The Company continues to monitor
and modify its allowance for loan losses as conditions dictate.
During the first half of 1996, $324,000 was added to the reserve
for loan losses, resulting in an allowance of $4.1 million, or 1.36%,
of total loans outstanding. Management believes that this allowance
is appropriate given the current economic conditions in the Company's
service area and the overall condition of the loan portfolio.
<PAGE>
Under Federal Reserve Board (FRB) guidelines, bank holding companies
such as the Company are required to maintain capital based on "risk-
adjusted" assets. These guidelines apply to the Company on a
consolidated basis. Under the current guidelines, banking
organizations must maintain a risk-based capital ratio of eight
percent, of which at least four percent must be in the form of core
capital. The Company's Tier 1 and Tier 2 ratios at June 30, 1996, of
19.97% and 18.72% respectively, exceed regulatory guidelines. The Company's
ratios at December 31, 1995 were 20.04% and 18.79%
The principal cash requirement of the Company is the payment of
dividends on common stock when declared. The Company is primarily
dependent upon the payment of cash dividends by Camden National Bank
to service its commitments. During the first half of 1996 Camden
National Bank paid dividends to the Company in the amount of
$1,170,466. The Company paid dividends to shareholders in the amount
of $1,007,256 and $163,210 was used to repurchase outstanding stock of
the Company.
RESULTS OF OPERATIONS
Net income for the six months ended June 30, 1996 was $3,855,000,
an increase of $235,000 or 6.5% above the first half of 1995's net
income of $3,620,000. In the first half of 1995 the Company had a
tax benefit of $134,000, due to stock options that were exercised.
If the Company had not had the tax benefit in 1995, earnings in the
first six months would have exceeded those of last year's by $369,000
or 10%. Earnings in the three months ended June 30, 1996 were $310,000
or 17.3% higher than the three months ended June 30, 1995. One major
contributing factor was the provision for loan losses that was $142,000
less in the quarter ending June 30, 1996.
NET INTEREST INCOME
Net interest income for the six months ended June 30, 1996 was
$10,163,000, a 4.2% or $412,000 increase over net interest income of
$9,751,000 for the first six months of 1995. Total interest income was
$631,000 or 3.3% higher in the first six months of 1996 compared to the
same period 1995. Interest income on loans increased by $846,000, of which
$773,000 was due to an increase in volume and $73,000 was due to an
increase in the average yield from 9.66% in the first six months of
1995 to 9.71% in 1996. The Company did, however, experience a
decrease in interest income on investments during the first six
months of 1996 compared to the same period in 1995. As investments
matured they were replaced with lower yielding instruments, due to
the current rate environment. The Company's interest expense of
$9,467,000 is a 2.4% or $219,000 increase over first six months of
1995's total interest expense of $9,248,000. This increase was due
to the increase in interest paid on certificates of deposit, which
increased by $1,042,000 due to increases in both volume and rates.
During 1995 the Company had increased rates offered on certificates
of deposit to stimulate deposit growth and meet funding needs.
The Company did, however, experience a decrease of interest expense on
borrowed funds in the first half of 1996 compared to the first half of 1995
of $490,000 due to both volume and rate declines.
<PAGE>
The Analysis of Change in Net Interest Margin on Earning Assets, and
the Analysis of Volume and Rate Changes on Net Interest Income and
Expenses are provided on pages 8 and 9 of this report to enable the
reader to understand the components of the Company's interest income
and expenses. The first table provides an analysis of changes in
net interest margin on earning assets setting forth average assets,
liabilities and stockholders' equity; interest income earned and
interest expense paid and average rates earned and paid; and the net
interest margin on earning assets for the six months ended June
30, 1996 and 1995. The second of these tables presents an analysis
of volume and rate change on net interest income and expense from
June 30, 1995 to June 30, 1996.
The Company utilizes off-balance sheet instruments such as interest
rate swap agreements that have an effect on net interest income. The
net results were an increase in net interest income of $57,000 in the
first six months of 1996 and a decrease of $10,000 in the first six
months of 1995.
NONINTEREST INCOME
There was a $184,000 or 11.1% increase in total noninterest income in
the first half of 1996 compared to the first half of 1995. Service
charges increased by $33,000 or 4.6% due to changes in the service
charge structure. Other income increased by $221,000 in the first
six months of 1996, compared to 1995. The three largest increases
were 1) in merchant assessments that were $53,000 higher, 2) income on
a life insurance policy held for the SERP plan of $44,000 and 3)
gains on properties sold of $35,000.
NONINTEREST EXPENSE
There was a $223,000 or 3.9% increase in total noninterest expense in
the first half of 1996 compared to the first half of 1995.
Salaries and employee benefit cost increased $255,000 or 9.1% in the
first half of 1996 compared to 1995. This increase was the result
of normal annual increases, combined with higher pension benefit
costs. The higher pension costs were due to the addition of
employees at United Bank and a decrease in the discount rate. The
Company also experienced an increase in fixed asset costs due to the
depreciation of several large pieces of computer equipment that were
purchased in the middle of 1995. These purchases were necessary to
take advantage of new technologies that will provide new services and
enhance customer satisfaction and, in the long term, assist in
containing overhead costs. Lastly, there was a reduction in other
operating expenses of $64,000 or 3.2% in the first half of 1996
compared to the first half of 1995. There have been increases in
some expense categories, however, the temporary decrease of the FDIC
assessment in the first half of 1996 offset those increases.
RECENT ACCOUNTING PRONOUNCEMENTS
SFAS 122, "Accounting for Mortgage Servicing Rights" was issued in
May of 1995. Where mortgage loans are sold or securitized but the
<PAGE>
rights to service those loans are retained by the creditor, the
standard requires that the total cost of such loans (whether
originated or acquired) be allocated between the mortgage servicing
rights and the loans themselves based on their relative fair values.
SFAS 122 also addresses measurement of impairment of capitalized
mortgage servicing rights. The Company has adopted SFAS 122 as of
January 1, 1996. During the first half of 1996 activity in this
area was minimum and had no material effect on the financial position
and results of operations.
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation," which became effective on January 1, 1996. This Statement
establishes a fair value based method of accounting for stock-based
compensation plans under which compensation cost is measured at the grant
date based on the value of the award and is recognized over the service
period. However, the statement allows a company to continue to measure
compensation cost for such plans under Accounting Principles Board (APB)
Opinion No. 25, "Accounting for Stock Issued to Employees." Under APB
Opinion No. 25, no compensation cost is recorded if, at the grant date, the
exercise price of the options is equal to the fair market value of the
Company's common stock. The Company has elected to continue to follow the
accounting under APB No. 25. SFAS No. 123 requires companies which elect to
continue to follow the accounting in APB Opion No.25 to disclose in the
notes to their financial statements pro forma net income and earnings per
share as if the value based method of accounting had been applied.
Management has not determined the impact of the adoption of SFAS No. 123 on
the financial position or results of operations of the Company.
OTHER MATTERS
SHARE REPURCHASE PLAN. Camden National Corporation (CNC) will seek
to repurchase up to five percent of its outstanding shares during the
succeeding twelve months following the adoption of this plan. The
repurchase will be effected as follows:
1. All of CNC's bids and repurchases of its stock during a
given day shall be effected through a single broker or
dealer, except that CNC may repurchase shares from others
provided that the same have not been solicited by or on
behalf of CNC. For this purpose, CNC shall utilize the
services of Paine Webber, A.G. Edwards & Sons, Inc., Maine
Securities Corp. and Tucker Anthony;
2. All of CNC's repurchases of its stock shall be at a price
which is not higher than the lowest current independent offer
quotation determined on the basis of reasonable inquiry.
Management shall exercise its best judgement whether to
purchase stock at the then lowest current independent offer
quotation;
3. Daily volume of CNC repurchases must be in an amount that (a)
when added to the amounts of all of CNC's other repurchases
through a broker or dealer on that day, except "block
purchases," (i.e., 2,000 or more shares repurchased from a
single seller) does not exceed one "round lot" (i.e., 100
<PAGE>
shares) or (b) when added to the amounts of all of CNC's other
repurchases through a broker or dealer during that day and the
preceding five business days, except "block purchases" does
not exceed one twentieth of one percent (1/20 of 1%) of the
outstanding shares of CNC stock, exclusive of shares known to
be owned beneficially by affiliates, (i.e., approximately
1,000 shares);
4. If at any time while this plan is in effect trading in CNC's
shares of stock are reported through a consolidated system,
compliance for rule 10b-18 of the Exchange Act Rules shall be
complied with;
5. A press release shall be issued describing this plan.
The Camden National Bank has expressed, to the Comptroller of the
Currency, in a letter dated July 23, 1996, its desire to change its
capital structure by reducing its common stock or surplus in an
amount not to exceed $4,700,000 to accommodate the above described
"Share Repurchase Plan." This will reduce the Company's excess
capital position and should improve shareholder's return on equity.
<PAGE>
Item 2. Changes in Securities.
(a) The authorized shares of "Camden National Corporation common
stock, no par value," stock have increased from 2,500,000
to 5,000,000. The general effect of the increase on the rights
of shareholders is the potential for the issuance of 2,500,000
additional shares of stock by the board of directors without
further shareholder approval. Such an issuance could cause
material dilution of existing shareholders' percentage ownership
of Camden National Corporation.
<PAGE>
Item 4. Submission of Matters to Vote of Security holders.
(a) The annual meeting of shareholders was held on May 7, 1996.
(c) Matters voted upon at the meeting. 1) To elect as director the
nominees -- David H. Montgomery, Kenneth C. Dickey, Keith C.
Patten and John W. Holmes. Total votes cast: 1,744,754, with
1,744,327 FOR, and 425 WITHHELD. 2) To amend the Company's
Articles of Incorporation to authorize an additional 2.5 million
shares of common stock. Total votes cast: 1,744,754, with
1,578,344 FOR, 158,455 AGAINST, and 7,955 ABSTAIN. 3) To
approve an amendment to the Company's 1993 Stock Option Plan
such that options for 50,000 additional shares may be issued to
key employees. Total votes cast: 1,744,754, with 1,711,891
FOR, 23,807 AGAINST, and 9,056 ABSTAIN. 4) To ratify the
selection of Berry, Dunn, McNeil & Parker as the Company's
independent public accountants for 1996. Total votes cast:
1,744,754, with 1,743,929 FOR, 400 AGAINST, and 425 ABSTAIN. 5)
In their discretion, the proxy holders are authorized to vote
upon such other business as may be properly presented at the
meeting or matters incidental to the conduct of the meeting.
Total votes cast: 1,744,754, with 1,720,664 FOR, 3,660 AGAINST,
and 20,430 ABSTAIN.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a). Exhibits
(3.i.) The Articles of Incorporation of Camden National Corporation, as
amended to date.
(3.ii.) The Bylaws of Camden National Corporation, as amended to date,
Exhibit 3.ii. to the Company's Registration Statement on Form S-4
filed with the Commission on September 25, 1995, file number
33-97340, are incorporated herein by reference.
(10.1) Lease Agreement for the facility occupied by the Thomaston Branch
of Camden National Bank, filed with Form 10-K, December 31, 1995,
and is incorporated herein by reference.
(10.2) Lease Agreement for the facility occupied by the Camden Square
Branch of Camden National Bank, filed with Form 10-K, December 31,
1995, and is incorporated herein by reference.
(10.3) Lease Agreement for the facility occupied by the Camden Appraisal
Company and one other tenant, filed with Form 10-K, December 31,
1995, and is incorporated herein by reference.
(10.4) Lease Agreement for the facility occupied by the Hampden Branch
of United Bank, filed with Form 10-K, December 31, 1995, and is
incorporated herein by reference.
(10.5) Camden National Corporation 1993 Stock Option Plan, filed with
Form 10-K, December 31, 1995, and is incorporated herein by
reference.
(10.6) UnitedCorp Stock Option Plan, filed with Form 10-K, December 31,
1995, and is incorporated herein by reference.
(27) Financial Data Schedule.
(b) Reports on Form 8-K.
None Filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
CAMDEN NATIONAL CORPORATION
(Registrant)
Keith C. Patten (signature) 08/12/96
- -------------------------------------- --------
Keith C. Patten Date
President and Chief Executive Officer
Susan M. Westfall (signature) 08/12/96
- -------------------------------------- --------
Susan M. Westfall Date
Treasurer and Chief Financial Officer
<PAGE>
CAMDEN NATIONAL CORPORATION
Report of Incorporator's Action
The following person acted as Incorporator:
Rendle A. Jones
Pursuant to authorization granted to incorporators under the Maine
Business Corporation Act, the Incorporator took the following action:
The name of the corporation shall be:
Camden National Corporation
The purpose of the corporation shall be all those purposes permitted
corporations organized under the Maine Business Corporation Act.
The name of the Clerk, who is a Maine resident, and the address of
the Corporation's Registered Office shall be:
Robert Worthing
2 Elm Street
Camden, Maine 04843
The number of Directors constituting the initial Board of Directors
of the Corporation shall be thirteen (13). The initial Directors, who
shall serve until the first annual meeting of the shareholders, or until
their successors are elected and qualified, and their addresses, are set
forth in Exhibit A.
The initial Bylaws of the Corporation are set forth in Exhibit B.
There shall be only one class of shares; viz. common, which shall
have no par value. There shall be authorized 150,000 shares. There
shall be no preemptive rights.
Meetings of the shareholders may be held outside the State of Maine.
The foregoing action was adopted by the sole Incorporator on the
dated set forth below.
Camden, Maine Rendle A. Jones (signature)
March 20, 1984 Incorporator
Filing Fee $50.00 plus fee
based on authorized capital stock
For Use By The Secretary of State For Use By The Secretary of State
File No. _84153OD_ FILED
Fee Paid _$150 - $50_ _March 21, 1984_
C.B. __--__ Xxxxxxxx Xxxxxxxxx (signature)
Date __4-10-84__ Deputy Secretary of State
A True Copy When Attested By
Signature
L. Evelin Grover (signature)
Deputy Secretary of State
STATE OF MAINE
ARTICLES OF INCORPORATION
OF
Camden National Corporation
(insert corporate name)
Pursuant to 13A MRSA Section 403, the undersigned, acting as
incorporator(s) of a corporation, adopt(s) the following Articles of
Incorporation:
FIRST: The name of the corporation is Camden National Corporation
and it is located in Maine, at 2 Elm Street, Camden, ME 04843
SECOND: The name of its Clerk, who must be a Maine resident, and the
address of its registered office shall be:
Name Robert Worthing
Street & Number 2 Elm Street
City Camden, Maine 04843
THIRD: ("X" one box only)
_X_ a. The number of directors constituting the initial board of
directors
of the corporation is 13 (See Section 703,1.A.)
b. If the initial directors have been selected, the names and
addresses of the persons who are to serve as directors until the
first annual meeting of the shareholders or until their
successors are elected and shall qualify are:
Name Address
David H. Montgomery c/o Allen Agency
Main St, Camden, ME 04843
Kenneth C. Dickey c/o Haskell & Corthell
10 Main St, Camden, ME 04843
William S. Brawn c/o French & Brawn
1 Elm St, Camden, ME 04843
C.R. deRochemont 106 Pleasant St
Rockland, ME 04841
E. Maynard Graffam, Jr. c/o Penobscot Bay Ice Co., Inc.
Rockport, ME 04856
Frederick G. Hanley Camden National Bank
2 Elm St, Camden, ME 04843
Gilbert Harmon, Esq. Harmon, Jones & Sanford
20 Mechanic St, Camden ME 04843
Robert Heald Union Wood Products
Union, ME 04862
Lawrence N. Hopkins 66 Washington St.
Camden, ME 04843
John S. McCormick, Jr. Box 162
West Rockport, ME 04865
Keith C. Patten Camden National Bank
2 Elm St, Camden, ME 04843
Richard N. Simoneau 8 North Main St
Rockland, ME 04841
Arthur E. Strout, Esq. 10 Masonic St
Rockland, ME 04841
___ There shall be no directors initially; the shares of the corporation
will not be sold to more than twenty (20) persons; the business of
the corporation will be managed by the shareholders. (See section
703,1.B.)
FOURTH: ("X" one box only)
The board of directors is _X_ is not __ authorized to increase or
decrease the number of directors. If the board is so authorized, the
minimum number, if any, shall be seven (7) directors, (See section
703,A.A.) and the maximum number, if any, shall be sixteen (16)
directors.
FIFTH: ("X" one box only)
_X_ There shall be only one class of shares, viz, common.
Par value of each share (if none, so state) none.
Number of shares authorized 150,000.
___ There shall be two or more classes of shares.
The information required by Section 403 concerning each such class
is set out in Exhibit___________ attached hereto and made a part
hereof.
SUMMARY
The aggregate par value of all authorized shares (of all classes)
having a par value is $ none.
The total number of authorized shares (of all classes) without
par value is 150,000 shares.
SIXTH: ("X" one box only)
Meetings of the shareholders may _X_ may not ___ be held outside
the State of Maine.
SEVENTH: ("X" if applicable) There are no preemptive rights. _X_
EIGHTH: Other provisions of these articles, if any, including
provisions of the internal affairs of the corporation, are set
out in Exhibit _n/a_ attached hereto and made a part hereof.
DATED: March 20, 1984
INCORPORATORS RESIDENCE ADDRESSES
Rendle A. Jones (signature) Box 189
Rendle A. Jones (printed name) Camden ,Maine 04843
For Use By The Secretary of State For Use By The Secretary of State
No. _84153OD_ FILED
Fee Paid _$250 - $10_ _September 10, 1984_
C.B. _271_ Xxxxxxxxx Xxxxxxx (signature)
Date _10-12-84_ Deputy Secretary of State
A True Copy When Attested By
Signature
L. Evelin Grover (signature)
Deputy Secretary of State
STATE OF MAINE
ARTICLES OF AMENDMENT
(Amendment by Incorporator)
Pursuant to 13-A KRSA Section 803, the undersigned
corporation adopts these Articles of Amendment.
FIRST: The organizational meeting of the Board of Directors
required by Section 407 has not yet occurred.
SECOND: The amendments set out in Exhibit A attached were
adopted by the sole Incorporator, by unanimous written
consent on July 18, 1984.
THIRD: The number of shares that the Corporation has
authority to issue hereafter is as follows:
Class Series (if any) No. of shares Par value (if any)
common none 600,000 none
The aggregate par value of all such shares (of all classes
and series) having par value is none.
The total number of all such shares (of all classes and series)
without par value is 600,000 shares.
FOURTH: The address of the registered office in Maine:
2 Elm Street
Camden, Maine 04843
Dated: August 30, 1984 Camden National Corporation
by: Robert E. Worthing (signature)
Robert E. Worthing, Clerk
CAMDEN NATIONAL CORPORATION
Report of Incorporator Action
Pursuant to authorization granted to incorporators under the Maine
Business Corporation Act, the Incorporator took the following action:
The Articles of Incorporation of Camden National Corporation shall
be amended as set forth in Exhibit A attached to this report.
The Clerk of the Corporation shall file Articles of Amendment
reflecting the changes set forth in Exhibit A.
The foregoing represents the action of the sole incorporator
of the Corporation adopted by consent.
Camden, Maine
July 18, 1984 Rendle A. Jones (signature)
Incorporator
EXHIBIT A
1. The number of authorized shares of common stock with
no par value shall be increased from 150,000 shares to
600,000 shares.
2. The Directors of the Corporation shall be divided into three
classes and one-third of the Directors, or as near as one-third
as possible, shall be assigned to each class. The initial
Board of Directors shall consist of thirteen persons and
Class A and Class B shall each consist of four Directors
while Class C shall consist of five Directors. At the first annual
meeting of Shareholders, Directors of all three classes shall be
elected with the term of office of the Class A Directors expiring
at the first annual meeting of Shareholders after their election,
that of the Class B Directors expiring at the second annual
meeting after their election and that of the Class C Directors
expiring at the third annual meeting after their election.
Thereafter, as the term of office of the Class of Directors
expires, the Directors of that Class shall be elected for a three-
year term.
3. When any vacancy occurs in the Board of Directors, including
those created by an increase in the number of Directors, the remaining
members of the Board may appoint a Director to fill such vacancy
at any regular or special meeting of the Board.
4. Cumulative voting shall not be employed in voting for Directors
or for any other purpose.
5. Bylaws may be amended, altered, or appealed at any regular
meeting of the Board of Directors or Shareholders by a two-
thirds vote of the Shareholders after notice of such intended action
as required by law.
6. The Board of Directors, when evaluating any offer of another
party to (a) make a tender or exchange offer for the equity
securities of the corporation or any subsidiary, (b) merge or
consolidate the corporation or any subsidiary with another
corporation, or (c) purchase or otherwise acquire all or
substantially all of the properties and assets of the corporation,
or any subsidiary, shall, in connection with the exercise of its
judgment in determining what is in the best interests of the
corporation and its stockholders, give due consideration to all
relevant factors, including by way of illustration, but not
of limitation, any of the following:
6.1 Whether the offer is acceptable based on historical
operating results, the financial condition of the corporation
and its subsidiaries, and its future prospects;
6.2 Whether a more favorable offer could be obtained
for the securities or assets of the corporation or its subsidiary
in the foreseeable future;
6.3 The social, economic or other material impact which
an acquisition of the equity securities of the corporation
or substantially all of its assets would have upon the employees
and customers of the corporation and its subsidiaries and the
communities which they serve;
6.4 The reputation and business practices of the offeror and
its management and affiliates as they would affect the employees
and customers of the corporation and its subsidiaries and the
future value of the corporation stock;
6.5 The value of the securities, if any, which the offeror is
offering in exchanges for the corporation's or its subsidiaries'
securities or assets based on an analysis of the worth of the
corporation or of its subsidiaries as compared to the offeror
corporation or other entity whose securities are being offered;
and
6.6 Any anti-trust or other legal or regulatory issues that
are raised by the offer.
7. If the Board of Directors determines that an offer of the type
identified in paragraph 6 should be rejected, it may take any
lawful action to accomplish its purpose including, but not
limited to, any of the following:
7.1 Advising shareholders not to accept the offer.
7.2 Litigation against the offeror.
7.3 Filing complaints with any governmental and regulatory
authorities.
7.4 Acquiring the corporation's securities.
7.5 Selling or otherwise issuing authorized but unissued
securities of treasury stock or granting options with respect
thereto.
7.6 Acquiring a company to create an anti-trust or other
regulatory problem for the offeror.
7.7 Obtaining a more favorable offer from another
individual or entity.
8. The provisions of paragraph 6 and 7 and this paragraph 8
may be amended only by the affirmative vote of two-thirds of
the outstanding shares of common stock of the corporation and
by the affirmative vote of two-thirds of the outstanding shares of
preferred stock of the corporation, if any.
STATE OF MAINE
Office of the Secretary of State
Bureau of Corporations, Elections and Commissions
State House Station #101, Augusta, Maine 04333
DIVISION OF CORPORATIONS
05/28/1996
CAMDEN NATIONAL BANK
ATTN: ROBERT E. WORTHING, VICE-PRESIDENT
P.O. BOX 310
CAMDEN, ME 04843
PROOF OF FILING
WR DCN: 1961451200017
Enclosed please find copies of documents recently placed on file
with our office. Each copy has been attested as a true copy of
the original and serves as your evidence of filing. We recommend
that you retain these permanently with your records.
- -----------------------------------------------------------------
Charter #: Legal Name:
19841530 D CAMDEN NATIONAL CORPORATION
AMENDMENT
DCN: 1961451200018 2 Page(s)
Total 2 Page(s)
File No. 19841530 D Pages 2
Fee Paid $6,285.00
STATE OF MAINE DCN 1961451200018 STCK
------------ FILED ----------
ARTICLES OF AMENDMENT 05/24/1996
(Amendment by Shareholders [ Gary Cooper (signature) ]
Voting as One Class) [ Deputy Secretary of State ]
[ A True Copy When Attested ]
Pursuant to 13-A MRSA Sections 805 and [ By Signature ]
807, the undersigned corporation [ Gary Cooper (signature) ]
adopts these Articles of Amendment: [ Deputy Secretary of State ]
FIRST: All outstanding shares were entitled to vote on the following
amendment as one class.
SECOND: The amendment set out in Exhibit A attached was adopted by the
shareholders
{A}. at a meeting legally called and held on, May 7, 1996.
THIRD: Shares outstanding and entitled to vote and shares voted for and
against said amendment were:
Number of Shares Outstanding NUMBER NUMBER
and Entitled to Vote Voted For Voted Against
2,340,924 1,578,344 158,477
FOURTH: If such amendment provides for exchange, reclassification or
cancellation of issued shares, the manner in which this shall be
effected is contained in Exhibit B attached if it is not set
forth in the amendment itself.
FIFTH: (Complete if Exhibits do not give this information). If the
amendment changes the number or par values of authorized shares,
the number of shares the corporation has authority to issue
thereafter, is as follows:
Class Series(If Any) Number of Shares Par Value (if Any)
Common N/A 5,000,000 no par value
The aggregate par value of all such shares (of all classes and
series) having par value is $0.
The total number of all such shares (of all classes and series)
without par value is 5,000,000 shares.
SIXTH: Address of the registered office in Maine: PO Box 310/2 Elm St.
Camden, Maine 04843
------------------------------------
[ MUST BE COMPLETED FOR VOTE OF ] Camden National Corporation
[ SHAREHOLDERS ] (Name of Corporation)
[I certify that I have custody of the]
[minutes showing the above action by ] By R E Worthing
[ the shareholders ] (signature)
[ R E Worthing (signature) ] Robert E. Worthing, Clerk
[ signature of clerk ]
------------------------------------ By _____________________
(signature)
Dated: 05/17/96 _________________________
NOTE: This form should not be used if any class of shares is entitled to
vote as a separate class for any of the reasons set out in Section 806,
or because the articles so provide. For vote necessary for adoption see
Section 805.
{Corporation} Camden National Corporation
{ Logo } P.O. Box 310 Camden, Maine 04843 Telephone (207)236-8821
CERTIFICATE
(1) To elect as directors the nominees listed below.
1,744,329 FOR ALL nominees listed below (except as marked to the
contrary).
425 WITHHOLD AUTHORITY to vote for all nominees listed below.
Instruction: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW:
David H. Montgomery, Kenneth C. Dickey, Keith C. Patten, John W. Holmes.
(2) To amend the Company's Articles of Incorporation to authorize an
additional 2.5 million shares of common stock.
1,578,344 FOR 158,455 AGAINST 7,955 ABSTAIN
(3) To approve an amendment to the Company's 1993 Stock Option Plan
such that options for 50,000 additional shares may be issued to key
employees.
1,711,891 FOR 23,807 AGAINST 9,056 ABSTAIN
(4) To ratify the selection of Berry, Dunn, McNeil & Parker as the
Company's independent public accountants for 1996.
1,743,929 FOR 400 AGAINST 425 ABSTAIN
(5) In their discretion, the proxy holders are authorized to vote upon
such other business as may be properly presented at the meeting or
matters incidental to the conduct of the meeting.
1,720,664 3,660 AGAINST 20,430 ABSTAIN
We the Judges of Election, appointed at a regular meeting of the Board
of Directors of the Camden National Corporation, to act in such capacity
at the Annual Meeting of the Shareholders, hereby reports on the results
of the balloting.
Total Votes Cast: 1,744,754
Signed: Ann B Bixler
Paul Gibbons
Orman Goodwin
(Judges of Election)
<PAGE>
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<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
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