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 September 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 September 30, 1996: Common stock (no par value)
2,312,388 shares
CAMDEN NATIONAL CORPORATION
Form 10-Q for the quarter ended September 30, 1996
TABLE OF CONTENTS OF INFORMATION REQUIRED IN REPORT
PART I.
ITEM 1. FINANCIAL INFORMATION
PAGE
Consolidated Statements of Income
Nine Months Ended September 30, 1996 and 1995 3
Consolidated Statements of Income
Three Months Ended September 30, 1996 and 1995 4
Consolidated Balance Sheets
September 30, 1996 and December 31, 1995 5
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1996 and 1995 6
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 1996 and 1995 7
Analysis of Change in Net Interest Margin on Earning Assets
Nine Months Ended September 30, 1996 and 1995 8
Anaysis of Volume and Rate Changes on Net Interest
Income & Expenses September 30, 1996 over September 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
Camden National Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
(In Thousands, except number of shares and per share data)
Nine Months
Ended September 30,
1996 1995
Interest Income
Interest and fees on loans $21,464 $20,285
Interest on US Government and agency obligations 6,871 6,662
Interest on state and political subdivisions 272 361
Interest on interest rate swap agreements 938 1,067
Interest on federal funds sold and other investments 476 427
------- -------
Total interest income 30,021 28,802
Interest Expense
Interest on deposits 10,688 9,955
Interest on interest rate swap agreements 855 1,076
Interest on other borrowings 2,872 3,129
------- -------
Total interest expense 14,415 14,160
------- -------
Net interest income 15,606 14,642
Provision for Loan Losses 575 684
------- -------
Net interest income after provision for loan losses 15,031 13,958
Other Income
Service charges on deposit accounts 1,116 1,094
Other service charges and fees 1,190 1,191
Other 760 309
------- -------
Total other income 3,066 2,594
Operating Expenses
Salaries and employee benefits 5,028 4,256
Premises and fixed assets 1,433 1,447
Other operating expenses 2,696 3,067
------- -------
Total operating expenses 9,157 8,770
Less minority interest in net (loss) income (29) (5)
------- -------
Income before income taxes 8,969 7,787
Income Taxes 2,974 2,416
------- -------
Net Income $ 5,995 $ 5,371
======= =======
Per Share Data
Earnings per share $ 2.56 $ 2.29
(Net income divided by weighted
average shares outstanding)
Cash dividends per share $ .69 $ .43
Weighted average number of
shares outstanding 2,340,983 2,346,106
Camden National Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
(In Thousands, except number of shares and per share data)
Three Months
Ended September 30,
1996 1995
Interest Income
Interest and fees on loans $ 7,412 $ 7,017
Interest on US Government and agency obligations 2,403 2,136
Interest on state and political subdivisions 80 134
Interest on interest rate swap agreements 312 313
Interest on federal funds sold and other investments 184 203
------- -------
Total interest income 10,391 9,803
Interest Expense
Interest on deposits 3,571 3,743
Interest on interest rate swap agreements 286 312
Interest on other borrowings 1,091 857
------- -------
Total interest expense 4,948 4,912
------- -------
Net interest income 5,443 4,891
Provision for Loan Losses 251 249
------- -------
Net interest income after provision for loan losses 5,192 4,642
Other Income
Service charges on deposit accounts 370 381
Other service charges and fees 573 557
Other 274 44
------- -------
Total other income 1,217 982
Operating Expenses
Salaries and employee benefits 1,978 1,461
Premises and fixed assets 439 485
Other operating expenses 790 1,097
------- -------
Total operating expenses 3,207 3,043
Less minority interest in net (loss) income (7) (26)
------- -------
Income before income taxes 3,209 2,607
Income Taxes 1,069 856
------- -------
Net Income $ 2,140 $ 1,751
======= =======
Per Share Data
Earnings per share $ .91 $ .75
(Net income divided by weighted
average shares outstanding)
Cash dividends per share $ .26 $ .16
Weighted average number of
shares outstanding 2,339,922 2,344,974
Camden National Corporation and Subsidiaries
Consolidated Statements of Condition
(Unaudited)
(In Thousands, except number of shares Sept 30, Dec 31,
and per share data) 1996 1995
Assets
Cash and due from banks $ 18,229 $ 16,356
Federal funds sold 2,200 1,700
Investment securities:
Available for sale 19,622 26,196
Held to maturity 139,225 135,136
Residential mortgages held for sale 2,297 2,083
Loans 302,462 283,019
Less allowance for loan losses (4,309) (4,080)
-------- --------
Net loans 298,153 278,939
Bank premises and equipment 8,621 8,495
Other real estate owned 1,528 1,086
Interest receivable 3,289 4,252
Other assets 6,248 6,442
-------- --------
Total assets $499,412 $480,685
======== ========
Liabilities
Demand deposits $ 45,167 $ 46,034
NOW deposits 41,510 42,192
Money market deposits 25,033 27,066
Savings deposits 66,623 63,503
Broker deposits 2,261 9,108
Certificates of deposit under $100,000 158,474 159,310
Certificates of deposit $100,000 and over 25,840 22,667
-------- --------
Total deposits 364,908 369,880
Borrowings from Federal Home Loan Bank 51,217 39,387
Other borrowed funds 21,056 12,593
Accrued interest and other liabilities 5,323 5,056
Minority interest in subsidiary 124 89
-------- --------
Total liabilities 442,628 427,005
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 (7) 104
Retained earnings 55,331 50,951
-------- --------
58,986 54,717
Less cost of 63,694, and 31,521 shares of treasury
stock on Sept 30, 1996 and December 31, 1995 2,202 1,037
-------- --------
Total stockholders' equity 56,784 53,680
-------- --------
Total liabilities and stockholders' equity $499,412 $480,685
======== ========
Camden National Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands, except number of Nine Months Ended Sept 30,
shares and per share data) 1996 1995
Operating Activities
Net Income $ 5,995 $ 5,371
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 575 684
Depreciation and amortization 610 615
Decrease in interest receivable 963 598
Decrease (Increase) in other assets 275 (1,249)
(Decrease) Increase in accrued interest (679) 979
Increase (Decrease) in other liabilities 1,003 (1,090)
Cash receipts from sale of residential loans 0 2,546
Origination of mortgage loans held for sale (214) (2,882)
Other, net 5 0
------- -------
Net cash provided by operating activities 8,533 5,572
Investing Activities
Proceeds from maturities and calls of
securities held to maturity 26,433 14,270
Proceeds from maturities and calls of
securities available for sale 9,400 100
Purchase of securities to be
held to maturity (30,540) (4,580)
Purchase of securities available for sale (2,983) (2,256)
Increase in loans (19,789) (19,243)
Net (increase) decrease in other real estate (442) 813
Purchase of premises and equipment (816) (1,830)
Decrease (Increase) in minority position 35 (5)
Net purchase of federal funds (500) 0
------- -------
Net cash used by investing activities (19,202) (12,731)
Financing Activities
Net decrease in demand deposits,
NOW accounts, and savings accounts (462) (10,216)
Net (decrease) increase in
certificates of deposit (4,510) 38,560
Net increase (decrease) in shorrt-term borrowings 20,293 (21,038)
Acquisition of treasury stock (1,214) (937)
Sale of treasury stock 50 363
Cash dividends (1,615) (1,004)
------- -------
Net cash provided by financing activities 12,542 5,728
------- -------
Decrease in cash and cash equivalents 1,873 (1,431)
Cash and cash equivalents at beginning of period 16,356 17,159
------- -------
Cash and cash equivalents at end of period $18,229 $15,728
======= =======
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 September 30, 1996 and
December 31, 1995, the consolidated statements of income for the three and
nine months ended September 30, 1996 and September 30, 1995, and the
consolidated statements of cash flows for the nine months ended September 30,
1996, and September 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 nine months of 1996 activity in this area was minimal
and had no material effect on the financial position and results of operations.
ANALYSIS OF CHANGE IN NET INTEREST MARGIN ON EARNING ASSETS
Nine Months Ended Nine Months Ended
September 30, 1996 September 30, 1995
---------------------- ----------------------
Average Yield/ Average Yield/
Balance Int. Rate Balance Int. Rate
------- ----- ------ ------- ----- ------
ASSETS
Securities-Taxable 153,195 7,230 6.29% 145,783 7,045 6.44%
Securities-Nontaxable 7,675 371 6.45% 10,753 508 6.30%
Federal Funds Sold 3,250 127 5.21% 1,727 72 5.56%
Loans 296,395 21,658* 9.74% 279,212 20,326* 9.71%
------- ------ ----- ------- ------ -----
Total Earning Assets 460,515 29,386 8.51% 437,475 27,951 8.52%
Cash and Due from Banks 12,787 12,537
Other Assets 18,328 19,638
Less Allowance for
Loan Losses (4,251) (3,917)
------- -------
Total Assets 487,379 465,733
======= =======
LIABILITIES & SHAREHOLDERS' EQUITY
NOW Accounts 39,150 395 1.35% 39,205 498 1.69%
Savings Accounts 63,116 1,586 3.35% 62,802 1,624 3.45%
Money Market Accounts 25,678 614 3.19% 32,388 793 3.26%
Certificates of Deposit 184,562 7,869 5.68% 163,978 6,816 5.54%
Short-term Borrowings 69,977 2,872 5.47% 68,725 3,129 6.07%
Broker Certificates of Deposit 4,860 224 6.15% 4,750 224 6.29%
------- ------ ----- ------- ------ -----
Total Interest-bearing
Liabilities 387,343 13,560 4.67% 371,848 13,084 4.69%
Demand Deposits 40,513 39,109
Other Liabilities 4,291 4,948
Shareholders' Equity 55,232 49,828
------- -------
Total Liabilities &
Shareholders' Equity 487,379 465,733
======= =======
Net Interest Income 15,826 14,867
(fully-taxable equivalent)
Less: fully-taxable equivalent
adjustment (220) (225)
------ ------
15,606 14,642
====== ======
Net Interest Rate Spread
(fully-taxable equivalent) 3.84% 3.83%
Net Interest Margin
(fully-taxable equivalent) 4.58% 4.53%
<FN>
*Includes net swap income figures (in thousands) - September 1996 $83 and
September 1995 $(9)
Notes: Nonaccrual loans are included in total average loans.
Tax exempt interest was calculated using a rate of 34% for
fully-taxable equivalent.
ANALYSIS OF VOLUME AND RATE CHANGE ON NET
INTEREST INCOME AND EXPENSES
Sept 1996 Over Sept 1995
------------------------------
Change Change
due to due to Total
Volume Rate Change
------ ------ ------
INTEREST-EARNING ASSETS:
Securities-taxable 358 (173) 185
Securities-nontaxable (145) 8 (137)
Federal Funds Sold 63 (8) 55
Loans 1,251 81 1,332
----- ----- -----
Total Interest Income 1,527 (92) 1,435
INTEREST-BEARING LIABILITIES:
NOW Accounts (1) (102) (103)
Savings Accounts 8 (46) (38)
Money Market Accounts (164) (15) (179)
Certificates of Deposit 856 197 1,053
Short-term Borrowings 57 (314) (257)
Broker Certificates 5 (5) 0
----- ----- -----
Total Interest Expense 761 (285) 476
Net Interest Income 766 193 959
(fully taxable equivalent)
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
FINANCIAL CONDITION
At September 30, 1996 the Company had consolidated asset of $499.4
million, an increase of $18.7 million or 3.9%, from December 31,
1995. The major change in assets was due to an increase in the loan
portfolio of $19.7 million. The investment portfolio decreased
slightly by $2.5 million during the first nine months of 1996. Most
purchases were made during the second quarter of 1996 when more
attractive investment yields were available. Purchases have been
made in both the held to maturity and the available for sale
investment portfolios.
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 $5.0 million or
1.4%. The major decline has been in the broker certificates of
deposit, which have decreased by $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. Borrowings have
continued to be a viable source of funding during the third quarter
of 1996 as well.
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 nine months of 1996, $575,000 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.
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
September 30,1996, of 20.69% and 19.44% 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 nine months of 1996
Camden National Bank paid dividends to the Company in the amount of
$2,830,344. The Company paid dividends to shareholders in the amount
of $1,615,895 and $1,214,449 was used for treasury stock transactions
by the Company.
RESULTS OPERATION
Net income for the nine months ended September 30, 1996 was
$5,995,000, an increase of $624,000 or 11.6% above 1995's first nine
months net income of $5,371,000. 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 nine months would have exceeded those of last
year's by $758,000 or 14.1%. Earnings in the three months ended
September 30, 1995 were $389,000 or 22.2% higher than the three
months ended September 30, 1995. The major contributing factor was
the increase in earning assets, which resulted in net interest income
increasing by $550,000.
NET INTEREST INCOME
Net interest income for the nine months ended September 30, 1996 was
$15,606,000, a 6.6% or $964,000 increase over net interest income of
$14,642,000 for the first nine months of 1995. Total interest income
was $1,219,000 or 4.2% higher in the first nine months of 1996
compared to the same period in 1995. Interest income on loans
increased by $1,332,000, of which $1,251,000 was due to an increase
in volume and $81,000 was due to an increase in the average yield
from 9.71% in the first nine months of 1995 to 9.74% in 1996. The
Company also experienced a slight increase in interest income on
investments during the first nine months of 1996 compared to the same
period in 1995. This increase was due to the increase in volume. As
investments matured they were replaced with lower yielding
instruments, due to the current rate environment. The result was an
overall lower yield. The Company's interest expense of $14,415,000
is a 1.8% or $255,000 increase over the first nine months of 1995's
total interest expense of $14,160,000. This increase was due to the
increase in interest paid on certificates of deposit, which increased
by $1,053,000 due to increases in both volume and rates. The Company
experienced a decrease of interest expense on borrowed funds in the
first nine months of 1996 compared to the first nine months of 1995
of $257,000 due to rate declines.
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 7 and 8 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 nine months ended September
30, 1996 and 1995. The second of these tables presents an analysis
of volume and rate change on net interest income and expense from
September 30, 1995 to September 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 $83,000 in the
first nine months of 1996 compared to a decrease of $9,000 in the
first nine months of 1995.
NONINTEREST INCOME
There was a $472,000 or 18.2% increase in total noninterest income in
the first nine months of 1996 compared to the first nine months of
1995. Service charges and fees increased by $21,000 or 1.0%. Other
income increased by $451,000 in the first nine months of 1996,
compared to 1995. The largest increases were 1) in merchant
assessment that were $112,000 higher, 2) income on a life insurance
policy held for the SERP plan of $65,000, 3) an increase in income
from fiduciary activities of $67,000, 4) gains on properties sold of
$35,000, and 5) income from a lease agreement settlement of $32,000.
NONINTEREST EXPENSE
There was a $387,000 or 4.4% increase in total noninterest expense in
the first nine months of 1996 compared to the first nine months of
1995. Salaries and employee benefit cost increased $772,000 or 18.1%
in the first nine months of 1996 compared to 1995. This increase was
the result of normal annual increases, additions to staff and 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. Lastly, there was a reduction in other operating expenses of
$371,000 or 13.7% in the first nine months of 1996 compared to the
first nine months of 1995. There have been increases in some expense
categories, however, the temporary decrease of the FDIC assessment in
the first nine months 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
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 nine months 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
Opinion No. 25 to disclose in the notes to their financial statement
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
Board of Directors approved funding of this plan on September 4,
1996. 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, and
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 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 was issued describing this plan.
The Camden National Bank 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 shareholders return on equity.
In a letter dated August 16, 1996 from the Comptroller of the
Currency's office approval was granted with the understanding that
the reduction in capital will be accomplished through a reduction in
Camden National Bank's surplus account and a corresponding
distribution to Camden National Corporation, the bank's sole
shareholder. As of September 30, 1996, a total of 29,210 shares had
been repurchased through this plan.
Item 2. Changes in Securities.
(a) The authorized shares of "Camden National Corporation common
stock, no par value," stock has been 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.
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.
Item 6. Exhibits and Reports on Form 8-K
(a). Exhibits
(3.i.) The Articles of Incorporation of Camden National Corporation, are
incorporated herein by reference.
(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.
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) 11/13/96
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Keith C. Patten Date
President and Chief Executive Officer
Susan M. Westfall (signature) 11/13/96
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Susan M. Westfall Date
Treasurer and Chief Financial Officer