Camden National (CAC) 8-K Camden National Corporation Reports Second Quarter 2009 Results

Exhibit 99.1

Camden National Corporation Reports Second Quarter 2009 Results

CAMDEN, Maine--(BUSINESS WIRE)--July 28, 2009--Gregory A. Dufour, president and chief executive officer of Camden National Corporation (NASDAQ: CAC; the "Company"), reported net income for the second quarter 2009 of $5.0 million, a decrease of $2.1 million, as compared to $7.1 million earned during the second quarter of 2008. Net income for the six months ended June 30, 2009 was $11.2 million, a decrease of $2.1 million from the $13.3 million earned during the same period in 2008. Diluted earnings per share for the second quarter of 2009 were $0.65 compared to $0.92 for the same period in 2008. Year-to-date diluted earnings per share were $1.47 in 2009 compared to $1.73 in 2008.

Earnings for the second quarter of 2009, when compared to the second quarter of 2008, were negatively impacted by an increase in loan loss provision and higher FDIC insurance premiums which resulted in an additional $3.9 million in pre-tax expense or $0.33 per diluted common share after tax. The Company’s core results were solid with improvements in net interest margin, growth in fee income, and a reduction in operating expenses other than the FDIC cost.

“While the banking industry continues to face significant challenges, I am pleased that our solid earnings base is allowing us to absorb the increased FDIC assessments while continuing to strengthen our balance sheet reserves,” commented Dufour. “Our capital levels continue to exceed the minimum standards to be considered “well capitalized” and we are providing support to our local economies through lending without the assistance of bailout funds from the U.S. Treasury’s Troubled Asset Relief Program.”

Operating Highlights

Net interest income for the second quarter of 2009 increased 3% to $18.3 million compared to $17.8 million for the second quarter of 2008. The net interest margin was 3.55% in the quarter just ended compared to 3.43% in the second quarter of 2008, an increase of 12 basis points. The Company’s ability to improve pricing on deposits and borrowings and minimize the decline of interest rates on loans allowed improvement in the net interest margin.

Non-interest income for the second quarter of 2009 was $5.0 million compared to $4.7 million for the second quarter of 2008, an increase of $339,000 or 7%. The increase was primarily due to additional mortgage banking income of $501,000 related to service-retained loan sales during the quarter. Income from fiduciary services at Acadia Trust, N.A. decreased 11% primarily due to market value declines in assets under administration.

Non-interest expense for the second quarter of 2009 was $13.4 million compared to $11.9 million for the second quarter of 2008, an increase of $1.5 million or 13%. As noted above, FDIC and regulatory assessment fees increased, while other non-interest expense items for the second quarter of 2009 decreased by $139,000, or 1%, when compared to the second quarter of 2008.

For the second quarter of 2009, the returns on average equity and average assets were 11.54% and 0.88%, compared to 16.69% and 1.24%, respectively, for the second quarter of 2008.

Financial Condition

The Company’s total assets at June 30, 2009 were $2.3 billion, a decrease of $7.2 million compared to total assets at June 30, 2008. Total loans (including residential loans held for sale) at June 30, 2009 were $1.5 billion, a decrease of $11.8 million over the same period one year ago. This decrease was due to a decline in commercial loans of $28.0 million partially offset by a $13.8 million increase in the consumer loan portfolio driven by increased home equity loan demand. Historically low mortgage rates have resulted in strong residential real estate loan activity. During the first half of 2009, the Company sold $44.0 million of the mortgage production for interest-rate risk management purposes. Investments decreased $7.2 million primarily due to increased cash flows that were not reinvested into the investment portfolio due to the current low interest-rate environment.

Total deposits of $1.5 billion at June 30, 2009 increased $67.6 million over the same period one year ago, reflecting growth of $59.1 million in retail certificates of deposit related to specific marketing campaigns and an increase in interest checking, savings and money market deposits of $23.8 million. Growth in core deposits was partially offset by decreases in brokered funds of $10.4 million and demand deposits of $4.9 million. Due in part to the increase in deposit balances, the Company’s Federal Home Loan Bank borrowings decreased $120.1 million at June 30, 2009 compared to June 30, 2008.

Asset Quality

“Asset quality continues to be monitored closely at Camden National,” said Dufour. “In the current economic environment, we need to be vigilant and when necessary respond quickly to take appropriate action to mitigate risks on our balance sheet. We feel our risk management processes as well as our reserve levels provide us the flexibility to take the appropriate steps when required.”

Non-performing assets totaled $22.3 million, or 0.97%, of total assets at June 30, 2009 compared to $14.0 million, or 0.61%, of total assets at June 30, 2008 and $20.4 million, or 0.89%, of total assets at March 31, 2009. The allowance for loan losses was 1.23% of total loans at June 30, 2009 compared to 1.13% of total loans at June 30, 2008 and 1.20% of total loans at March 31, 2009.

The provision for loan losses was $2.8 million for the three months ended June 30, 2009 and $450,000 for the three months ended June 30, 2008. The Company’s loan loss reserve analysis called for an increase in loan loss provision in the second quarter due to increased charge-offs resulting from a general weakening of the economy. Net charge-offs were $1.8 million for the three months ended June 30, 2009 and $163,000 for the three months ended June 30, 2008.

Dividends and Capital

The Board of Directors approved a dividend of $0.25 per share, payable on July 31, 2009 for shareholders of record on July 15, 2009, which is equal to the dividend declared in the same period last year.

At June 30, 2009, the Company had a total risk-based capital ratio of 12.78%, a tier 1 capital ratio of 11.53%, and a tier 1 leverage capital ratio of 7.64%. At June 30, 2009, the Bank reported a total risk-based capital ratio of 11.88%, a tier 1 capital ratio of 10.63%, and a tier 1 leverage capital ratio of 6.97%. The Company and the Bank exceeded the minimum ratios of 10.0%, 6.0%, and 5.0%, respectively, required by the Federal Reserve for an institution to be considered “well capitalized.”

In closing, Dufour noted, “Camden National and all of its employees understand the important role we have as community bankers. While we are addressing issues caused by the economic downturn, we are simultaneously providing loans and savings vehicles to our Bank customers as well as providing superior investment advice to our wealth management clients.”

Camden National Corporation, headquartered in Camden, Maine, and listed on the NASDAQ^® Global Select Market under the symbol CAC, is the holding company employing more than 400 Maine residents for two financial services companies, including Camden National Bank (CNB), a full-service community bank with a network of 37 banking offices serving coastal, western, central, and eastern Maine, and Acadia Trust, N.A., offering investment management and fiduciary services with offices in Portland, Bangor, and Ellsworth. Located at Camden National Bank, Acadia Financial Consultants offers full-service brokerage and insurance services.

This press release and the documents incorporated by reference herein contain certain statements that may be considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "will," "should," and other expressions which predict or indicate future events or trends and which do not relate to historical matters. Forward-looking statements should not be relied on, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of the Company. These risks, uncertainties and other factors may cause the actual results, performance or achievements of the Company to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

Some of the factors that might cause these differences include the following: changes in general, national or regional economic conditions; changes in loan default and charge-off rates; reductions in deposit levels necessitating increased borrowing to fund loans and investments; changes in interest rates; changes in the value of investments securities or other assets; changes in laws and regulations, including changes in tax treatment; changes in the size and nature of the Company's competition; and changes in the assumptions used in making such forward-looking statements. Other factors could also cause these differences. For more information about these factors please see our Annual Report on Form 10-K, as updated by our Quarterly Reports on Form 10-Q and other filings on file with the SEC. All of these factors should be carefully reviewed, and readers should not place undue reliance on these forward-looking statements.

These forward-looking statements were based on information, plans and estimates at the date of this press release, and the Company does not promise to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Statement of Income Data (unaudited)
		Three Months Ended						Six Months Ended
		June 30,						June 30,
(In thousands, except number of shares and per share data)		2009			2008			2009			2008
Interest income
Interest and fees on loans	$	21,270		$	24,409		$	42,891		$	49,723
Interest on securities and other		7,424			7,668			15,345			15,269
Total interest income		28,694			32,077			58,236			64,992
Interest expense
Interest on deposits		5,936			7,559			12,330			16,501
Interest on borrowings		4,414			6,673			9,061			13,477
Total interest expense		10,350			14,232			21,391			29,978
Net interest income		18,344			17,845			36,845			35,014
Provision for loan losses		2,784			450			4,514			950
Net interest income after provision for loan losses		15,560			17,395			32,331			34,064
Non-interest income
Service charges on deposit accounts		1,350			1,466			2,582			2,692
Other service charges and fees		810			696			1,424			1,335
Income from fiduciary services		1,508			1,699			2,861			3,378
Mortgage banking income (loss), net		416			(85	)		871			(215	)
Bank-owned life insurance		345			285			740			578
Other income		615			644			1,120			1,154
Total non-interest income before net investment securities gains		5,044			4,705			9,598			8,922
Net investment securities gains		-			-			-			180
Total non-interest income		5,044			4,705			9,598			9,102
Non-interest expenses
Salaries and employee benefits		6,446			6,400			12,124			13,051
Net occupancy		969			1,010			2,092			2,081
Furniture and equipment		879			982			1,716			1,834
Consulting and service fees		750			729			1,442			1,443
OREO and collection costs		282			172			1,162			399
Regulatory assessments		1,740			98			2,611			259
Donations and marketing		329			472			582			820
Communication costs		407			404			824			798
Other expenses		1,614			1,646			3,154			3,489
Total non-interest expenses		13,416			11,913			25,707			24,174
Income before income taxes		7,188			10,187			16,222			18,992
Income taxes		2,184			3,080			5,004			5,691
Net income	$	5,004		$	7,107		$	11,218		$	13,301
Selected Financial and Per Share Data:
Return on average equity		11.54	%		16.69	%		13.24	%		15.77	%
Return on average tangible equity		15.79	%		23.21	%		18.24	%		22.21	%
Return on average assets		0.88	%		1.24	%		0.99	%		1.17	%
Efficiency ratio (1)		57.36	%		52.83	%		55.35	%		55.02	%
Basic earnings per share	$	0.66		$	0.92		$	1.47		$	1.73
Diluted earnings per share	$	0.65		$	0.92		$	1.47		$	1.73
Cash dividends paid per share	$	0.25		$	0.25		$	0.50		$	0.49
Weighted average number of shares outstanding		7,641,083			7,695,798			7,640,119			7,694,326
(1) Computed by dividing non-interest expense by the sum of net interest income and non-interest income (excluding net investment securities gains).

Statement of Condition Data (unaudited)
	June 30,			June 30,			December 31,
(In thousands, except number of shares)		2009			2008			2008
Assets
Cash and due from banks	$	38,657		$	36,373		$	35,195
Securities:
Securities available for sale, at fair value		554,335			554,516			606,031
Securities held to maturity, at amortized cost		40,951			42,132			42,040
Federal Home Loan and Federal Reserve Bank stock, at cost		21,965			27,786			21,969
Total securities		617,251			624,434			670,040
Trading account assets		1,495			1,636			1,304
Loans held for sale		17,364			-			-
Loans:
Residential real estate		614,072			628,285			621,048
Commercial real estate		410,625			411,373			400,312
Commercial		208,115			236,139			213,683
Consumer		264,959			251,161			265,865
Total loans		1,497,771			1,526,958			1,500,908
Less allowance for loan losses		(18,654	)		(17,266	)		(17,691	)
Net loans		1,479,117			1,509,692			1,483,217
Goodwill		41,780			42,383			41,857
Bank-owned life insurance		41,199			35,301			40,459
Premises and equipment, net		25,174			27,068			25,872
Other real estate owned		5,856			296			4,024
Other assets		38,457			36,412			39,528
Total assets	$	2,306,350		$	2,313,595		$	2,341,496
Liabilities
Deposits:
Demand	$	179,522		$	184,409		$	180,407
Interest checking, savings and money market		643,179			619,394			632,664
Retail certificates of deposit		583,942			524,887			593,013
Brokered deposits		70,155			80,540			83,433
Total deposits		1,476,798			1,409,230			1,489,517
Federal Home Loan Bank advances		217,750			337,806			258,925
Other borrowed funds		355,476			322,373			359,470
Junior subordinated debentures		43,461			43,342			43,410
Accrued interest and other liabilities		35,636			28,699			23,774
Total liabilities		2,129,121			2,141,450			2,175,096
Shareholders' Equity
Common stock, no par value; authorized 20,000,000 shares, issued and  outstanding 7,644,829, 7,686,441, and 7,638,713 on June 30, 2009  and 2008 and December 31, 2008, respectively		3,150			2,814			2,851
Surplus		46,083			46,051			46,133
Retained earnings		125,900			123,831			118,564
Accumulated other comprehensive income (loss)
Net unrealized gains (losses) on securities available for sale, net of tax		2,742			(197	)		(89	)
Net unrealized gains on derivative instruments, at fair value, net of tax		382			-			-
Net unrecognized losses on post-retirement plans, net of tax		(1,028	)		(354	)		(1,059	)
Total accumulated other comprehensive income (loss)		2,096			(551	)		(1,148	)
Total shareholders' equity		177,229			172,145			166,400
Total liabilities and shareholders' equity	$	2,306,350		$	2,313,595		$	2,341,496

Average Balance, Interest and Yield/Rate Analysis (unaudited)
	At or for the Six Months Ended								At or for the Six Months Ended
		June 30, 2009								June 30, 2008
(In thousands)		Average Balance			Interest		Yield/ Rate			Average Balance			Interest		Yield/ Rate
Assets
Interest-earning assets:
Securities - taxable	$	572,278		$	14,082		4.92	%	$	543,792		$	13,882		5.11	%
Securities - nontaxable (1)		65,978			1,929		5.85	%		70,871			2,039		5.78	%
Trading account assets		1,338			10		1.49	%		1,552			35		4.51	%
Federal funds sold		-			-		0.00	%		679			10		2.95	%
Loans: (1) (2)
Residential real estate		618,773			18,346		5.93	%		629,180			19,035		6.05	%
Commercial real estate		401,886			12,449		6.25	%		419,126			14,951		7.17	%
Commercial		185,582			5,160		5.61	%		213,229			7,731		7.29	%
Municipal		23,111			568		4.96	%		19,642			530		5.43	%
Consumer		264,087			6,557		5.01	%		236,345			7,650		6.51	%
Total Loans		1,493,439			43,080		5.80	%		1,517,522			49,897		6.61	%
Total interest-earning assets		2,133,033			59,101		5.56	%		2,134,416			65,863		6.20	%
Cash and due from banks		26,989								36,079
Other assets		153,569								139,643
Less allowance for loan losses		(18,091	)							(17,450	)
Total assets	$	2,295,500							$	2,292,688
Liabilities & Shareholders' Equity
Interest-bearing liabilities:
NOW accounts	$	193,199			454		0.47	%	$	185,235			863		0.94	%
Savings accounts		135,180			241		0.36	%		132,862			420		0.64	%
Money market accounts		296,110			1,723		1.17	%		346,954			4,233		2.48	%
Certificates of deposit		588,837			8,927		3.06	%		500,163			9,478		3.81	%
Total retail deposits		1,213,326			11,345		1.89	%		1,165,214			14,994		2.59	%
Broker deposits		77,275			985		2.57	%		67,142			1,506		4.51	%
Junior subordinated debentures		43,436			1,424		6.61	%		43,331			1,443		6.70	%
Borrowings		596,455			7,637		2.58	%		644,728			12,035		3.75	%
Total wholesale funding		717,166			10,046		2.82	%		755,201			14,984		3.99	%
Total Interest-bearing liabilities		1,930,492			21,391		2.23	%		1,920,415			29,978		3.14	%
Demand deposits		172,766								176,916
Other liabilities		21,347								25,699
Shareholders' equity		170,895								169,658
Total liabilities & shareholders' equity	$	2,295,500							$	2,292,688
Net Interest Income (fully-taxable equivalent)					37,710								35,885
Less: fully-taxable equivalent adjustment					(865	)							(871	)
				$	36,845							$	35,014
Net interest rate spread (fully-taxable equivalent)							3.33	%							3.06	%
Net interest margin (fully-taxable equivalent)							3.57	%							3.37	%
(1) Reported on tax-equivalent basis calculated using a rate of 35%.
(2) Non-accrual loans and loans held for sale are included in total average loans.

Asset Quality Data (unaudited)
	At or for the Six Months Ended June 30,						At or for the Year Ended December 31,
(In thousands)	2009			2008			2008
Non-accrual loans:
Residential real estate	$	5,454		$	2,969		$	4,048
Commercial real estate		5,831			7,255			4,957
Commercial		3,822			2,471			2,384
Consumer		1,181			891			1,112
Total non-accrual loans		16,288			13,586			12,501
Accruing loans past due 90 days		121			158			206
Total non-performing loans		16,409			13,744			12,707
Other real estate owned:
Residential real estate		2,244			34			187
Commercial real estate		3,612			262			3,575
Commercial		-			-			262
Total other real estate owned		5,856			296			4,024
Total non-performing assets	$	22,265		$	14,040		$	16,731
Loans 30-89 days past due:
Residential real estate	$	1,026		$	488		$	2,880
Commercial real estate		1,761			1,083			2,314
Commercial		1,612			932			3,601
Consumer		377			414			829
Total loans 30-89 days past due	$	4,776		$	2,917		$	9,624
Allowance at the beginning of the period	$	17,691		$	13,653		$	13,653
Acquired from Union Trust		-			4,369			4,369
Provision for loan losses		4,514			950			4,397
Charge-offs:
Residential real estate		259			40			221
Commercial real estate		1,514			734			3,236
Commercial		1,654			937			1,286
Consumer		571			360			810
Total charge-offs:		3,998			2,071			5,553
Total recoveries:		447			365			825
Net charge-offs		3,551			1,706			4,728
Allowance at the end of the period	$	18,654		$	17,266		$	17,691
Asset Quality Ratios:
Non-performing loans to total loans		1.08	%		0.90	%		0.85	%
Non-performing assets to total assets		0.97	%		0.61	%		0.71	%
Allowance for loan losses to total loans		1.23	%		1.13	%		1.18	%
Net charge-offs to average loans (annualized)
Quarter-to-date		0.49	%		0.04	%
Year-to-date		0.48	%		0.22	%		0.31	%
Allowance for loan losses to non-performing loans		113.68	%		125.62	%		139.22	%
Loans 30-89 days past due to total loans		0.32	%		0.19	%		0.64	%

Selected Financial Data (unaudited)
	At or for the Six Months Ended June 30,						At or for the Year Ended December 31,
	2009				2008		2008
Tier 1 leverage capital ratio		7.64	%		7.30	%		7.19	%
Tier 1 risk-based capital ratio		11.53	%		11.40	%		11.11	%
Total risk-based capital ratio		12.78	%		12.58	%		12.32	%
Tangible equity to total assets		5.66	%		5.37	%		5.10	%
Book value per share	$	23.18		$	22.40		$	21.78
Tangible book value per share (1)	$	17.08		$	16.16		$	15.62
Investment Data (unaudited)
	June 30, 2009
(In thousands)		Amortized Cost			Unrealized Gains			Unrealized Losses			Fair Value
Available for sale
Obligations of U.S. government sponsored enterprises	$	4,515		$	40		$	-		$	4,555
Obligations of states and political subdivisions (2)		22,637			204			(129	)		22,712
Mortgage-backed securities issued or guaranteed by
U.S. government sponsored enterprises		468,757			15,688			(203	)		484,242
Private issue collateralized mortgage obligations (CMO) (3)		49,208			2			(10,442	)		38,768
Total debt securities		545,117			15,934			(10,774	)		550,277
Equity securities (4)		5,000			-			(942	)		4,058
Total equity securities		5,000			-			(942	)		4,058
Total securities available for sale	$	550,117		$	15,934		$	(11,716	)	$	554,335
Held to maturity
Obligations of states and political subdivisions	$	40,951		$	400		$	(214	)	$	41,137
Total securities held to maturity	$	40,951		$	400		$	(214	)	$	41,137
Other securities
Federal Home Loan Bank Stock (5)	$	21,031		$	-		$	-		$	21,031
Federal Reserve Bank Stock		934			-			-			934
Total other securities	$	21,965		$	-		$	-		$	21,965
Trading account assets (6)										$	1,495
(1) Computed by dividing total shareholders’ equity less goodwill and other intangible assets by the number of common shares outstanding.
(2) Over 98% of the portfolio is rated by at least one of the three major rating agencies (Moody's, Standard & Poor's or Fitch) and all of these ratings are investment grade.
(3) $30.5 million of the CMO's are rated Triple-A by two of the three rating agencies, while two CMO's currently carry ratings below investment grade; one CMO with a fair value of $5.6 million is rated B3 by Moody's and BB by Fitch while another CMO with a fair value of $2.7 million is rated B3 by Moody's and CCC by Standard & Poor's.
(4) The Duff & Phelps (DNP) Select Income Fund Auction Preferred Stock continues to fail at auction. We are currently collecting all amounts due according to contractual terms and have the ability and intent to hold the security until it clears auction, is called or matures on December 22, 2021; therefore, the security is not considered other-than-temporarily impaired. The DNP Auction Preferred Stock is rated Triple-A by Moody’s and Standard & Poor's.
(5) The Federal Home Loan Bank of Boston has suspended its quarterly dividend payment.
(6) Investments held in mutual funds that represent deferred director and executive compensation investments.

CONTACT:
Camden National Corporation
Suzanne Brightbill, 207-230-2120
Public Relations Officer
sbrightbill@camdennational.com