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, 1997
Commission File No. 0-28190
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)
Registrant'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, 1997: Common stock (no par value) 2,265,058
shares.
CAMDEN NATIONAL CORPORATION
Form 10-Q for the quarter ended September 30, 1997
TABLE OF CONTENTS OF INFORMATION REQUIRED IN REPORT
PART I.
ITEM 1. FINANCIAL INFORMATION
PAGE
Consolidated Statements of Income
Nine Months Ended September 30, 1997 and 1996 3
Consolidated Statements of Income
Nine Months Ended September 30, 1997 and 1996 4
Consolidated Statements of Conditions
September 30, 1997 and 1996 and December 31, 1996 5
Consolidated Statement of Cash Flows
Nine Months Ended September 30, 1997 and 1996 6
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 1997 and 1996 7
Analysis of Change in Net Interest Margin
Nine Months Ended September 30, 1997 and 1996 8
Average Daily Balance Sheets
Nine Months Ended September 30, 1997 and 1996 9
Analysis of Volume and Rate Changes on Net Interest Income
& Expenses September 30, 1996 over September 30, 1996 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 11-15
PART II.
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
PART I.
ITEM I. FINANCIAL INFORMATION
Camden National Corporation and Subsidiaries
Consolidated Statement of Income
(unaudited)
(In Thousands, except number
of shares and per share data) Nine Months Ended September 30
1997 1996
Interest Income
Interest and fees on loans $23,556 $21,464
Interest on U.S. Government and agency obligations 8,905 6,871
Interest on state and political subdivisions 209 272
Interest on interest rate swap agreements 344 938
Interest on federal funds sold
and other investments 603 476
------- -------
Total interest income 33,617 30,021
Interest Expense
Interest on deposits 9,967 10,688
Interest on other borrowings 5,560 2,872
Interest on interest rate swap agreements 347 855
------- -------
Total interest expense 15,874 14,415
------- -------
Net interest income 17,743 15,606
Provision for Loans Losses 957 575
------- -------
Net interest income after provision for loan losses 16,786 15,031
Other Income
Service charges on deposit accounts 1,120 1,116
Other service charges and fees 1,398 1,190
Other 887 760
------- -------
Total other income 3,405 3,066
Operating Expenses
Salaries and employee benefits 5,303 5,028
Premises and fixed assets 1,606 1,433
Other 3,132 2,696
------- -------
Total operating expenses 10,041 9,157
Less minority interest in net income (loss) (1) (29)
------- -------
Income before income taxes 10,151 8,969
Income Taxes 3,417 2,974
------- -------
Net Income $ 6,734 $ 5,995
======= =======
Per Share Data
Earnings per share (Net income divided $2.96 $2.56
by weighted average shares outstanding)
Cash dividends per share .99 .69
Weighted average number of shares outstanding 2,275,326 2,340,983
Camden National Corporation and Subsidiaries
Consolidated Statement of Income
(unaudited)
(In Thousands, except number
of shares and per share data) Three Months Ended September 30
1997 1996
Interest Income
Interest and fees on loans $ 8,207 $ 7,412
Interest on U.S. Government and agency obligations 3,022 2,403
Interest on state and political subdivisions 49 80
Interest on interest rate swap agreements 65 312
Interest on federal funds sold
and other investments 223 184
------- -------
Total interest income 11,566 10,391
Interest Expense
Interest on deposits 3,418 3,571
Interest on other borrowings 1,976 1,091
Interest on interest rate swap agreements 73 286
------- -------
Total interest expense 5,467 4,948
------- -------
Net interest income 6,099 5,443
Provision for Loans Losses 385 251
------- -------
Net interest income after provision for loan losses 5,714 5,192
Other Income
Service charges on deposit accounts 380 370
Other service charges and fees 720 573
Other 271 274
------- -------
Total other income 1,371 1,217
Operating Expenses
Salaries and employee benefits 1,857 1,978
Premises and fixed assets 549 439
Other 1,197 790
------- -------
Total operating expenses 3,603 3,207
Less minority interest in net income (loss) 1 (7)
------- -------
Income before income taxes 3,481 3,209
Income Taxes 1,166 1,069
------- -------
Net Income $ 2,315 $ 2,140
======= =======
Per Share Data
Earnings per share (Net income divided $1.02 $ .91
by weighted average shares outstanding)
Cash dividends per share .34 .26
Weighted average number of shares outstanding 2,267,336 2,339,922
Camden National Corporation and Subsidiaries
Consolidated Statement of Condition
(unaudited)
(In Thousands, except number of
shares and per share data) September 30, December 31,
1997 1996
Assets
Cash and due from banks $ 18,631 $ 17,233
Federal funds sold 0 2,075
Securities available for sale 4,628 12,647
Securities held to maturity 166,624 143,216
Other securities 13,403 7,516
Residential mortgages held for sale 4,898 2,544
Loans, less allowance for loan losses of
$5,015 and $4,472 at September 30, 1997
and December 31, 1996 336,847 304,230
Bank premises and equipment 8,947 8,944
Other real estate owned 1,209 1,264
Interest receivable 3,429 3,920
Other assets 10,845 6,489
-------- --------
Total assets $569,461 $510,078
======== ========
Liabilities
Deposits:
Demand $ 55,304 $ 47,749
NOW 43,179 41,715
Money market 24,388 24,076
Savings 66,764 63,597
Certificates of deposit 183,709 176,103
-------- --------
Total deposit 373,344 353,240
Borrowings from Federal Home Loan Bank 89,539 67,051
Other borrowed funds 38,925 26,709
Accrued interest and other liabilities 6,674 5,211
Minority interest in subsidiary 42 45
-------- --------
Total liabilities 508,524 452,256
-------- --------
Stockholders' Equity
Common stock, no par value; authorized
5,000,000, issued 2,376,080 shares 2,436 2,436
Surplus 1,226 1,226
Retained earnings 61,304 56,827
Net unrealized appreciation on securities
available for sale, net of income tax 6 32
-------- --------
64,972 60,521
Less cost of 111,022 and 77,448 shares
of treasury stock on September 30, 1997
and December 31, 1996 4,035 2,699
-------- --------
Total stockholders' equity 60,937 57,822
-------- --------
Total liabilities and stockholders' equity $569,461 $510,078
======== ========
Camden National Corporation and Subsidiaries
Consolidated Statement of Cash Flows
(unaudited)
(In Thousands)
Nine Months Ended September 30,
1997 1996
Operating Activities
Net Income $ 6,734 $ 5,995
Adjustment to reconcile net income to
net cash provided by operating activities:
Provision for loan losses 957 575
Depreciation and amortization 534 610
Decrease in interest receivable 491 963
(Increase) decrease in other assets (4,262) 275
Increase in other liabilities 1,463 324
Cash receipts from sale of residential loans 1,537 0
Origination of mortgage loans held for sale (3,891) (214)
Loss on disposal of assets 0 0
Other, net (1) 5
------- -------
Net cash provided by operating activities 3,562 8,533
------- -------
Investing Activities
Proceeds from sale and maturities of
securities held to maturity 40,300 26,433
Proceeds from sale and maturities of
securities available for sale 8,000 9,400
Purchase of securities held to maturity (63,620) (30,540)
Purchase of securities available for sale 0 (2,301)
Purchase of Federal Home Loan Bank Stock (5,887) (682)
Increase in loans (33,574) (19,789)
Net decrease(increase)in other real estate 55 (442)
Purchase of premises and equipment (725) (816)
Proceeds from sale of premises and equipment 0 0
(Increase)decrease in minority position (3) 35
Net purchase of federal funds 2,075 (500)
------- -------
Net cash used by investing activities (53,379) (19,202)
------- -------
Financing Activities
Net increase (decrease) in demand deposits,
NOW accounts, and savings accounts 12,498 (462)
Net increase(decrease)in certificates of deposit 7,606 (4,510)
Net increase in short-term borrowings 34,704 20,293
Purchase of treasury stock (1,336) (1,214)
Sale of treasury stock 0 50
Cash Dividends (2,257) (1,615)
------- -------
Net cash provided by financing activities 51,215 12,542
------- -------
Increase in cash and equivalents 1,398 1,873
Cash and cash equivalents at beginning of year 17,233 16,356
------- -------
Cash and cash equivalents at end of period $18,631 $18,229
======= =======
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, 1997,
September 30 1996 and December 31, 1996, the consolidated statements of
income for the three and nine months ended September 30, 1997 and September
30, 1996, and the consolidated statements of cash flows for the nine months
ended September 30, 1997, and September 30, 1996. All significant
intercompany transactions and balances are eliminated in consolidation. The
income reported for 1997 period is not necessarily indicative of the results
that may be expected for the full year.
NOTE 2 - SFAS No. 125 and No. 127
SFAS No. 125 and No. 127 relate to the accounting for transfers and servicing
of financial assets and extinguishment of certain liabilities and became
effective January 1, 1997. The adoption of these standards did not have a
material effect on the financial statements.
ANALYSIS OF CHANGE IN NET INTEREST MARGIN
Nine Months Ending Nine Months Ending
September 30, 1997 September 30, 1996
------------------- -------------------
Dollars in thousands Amount Average Amount Average
of Yield/ of Yield/
interest Rate interest Rate
-------- ------- -------- -------
Interest-earning assets:
Securities - taxable $ 9,507 6.75% $ 7,230 6.29%
Securities - nontaxable 256 6.75% 371 6.45%
Federal funds sold 41 5.02% 127 5.21%
Loans 23,715* 9.56% 21,658* 9.74%
-------- ------- -------- -------
Total earning assets 33,519 8.52% 29,386 8.51%
Interest-bearing liabilities:
NOW accounts 405 1.32% 395 1.35%
Savings accounts 1,588 3.35% 1,586 3.35%
Money Market accounts 576 3.18% 614 3.19%
Certificates of deposit 7,361 5.41% 7,869 5.68%
Short-term borrowings 5,560 5.52% 2,872 5.47%
Broker certificates 37 6.36% 224 6.15%
-------- ------- -------- -------
Total interest-bearing
liabilities 15,527 4.65% 13,560 4.67%
Net interest income
(fully-taxable equivalent) 17,992 15,826
Less: fully-taxable
equivalent adjustment (249) (220)
-------- --------
$17,743 $15,606
======== ========
Net Interest Rate Spread
(fully-taxable equivalent) 3.87% 3.84%
Net Interest Margin
(fully-taxable equivalent) 4.57% 4.58%
*Includes net swap income figures (in thousands) - September 1997 ($3) and
September 1996 $83.
Notes: Nonaccrual loans are included in total loans. Tax exempt
interest was calculated using a rate of 34% for fully-taxable
equivalent.
AVERAGE DAILY BALANCE SHEETS
Dollars in thousands
Nine Months Ended September 30,
1997 1996
---- ----
Interest-earning assets:
Securities - taxable $187,762 $153,195
Securities - nontaxable 5,061 7,675
Federal funds sold 1,088 3,250
Loans 330,597 296,395
-------- --------
Total earning assets 524,508 460,515
Cash and due from banks 13,313 12,787
Other assets 22,659 18,328
Less allowance for loan losses (4,723) (4,251)
-------- --------
Total assets $555,757 $487,379
======== ========
Interest-bearing liabilities:
NOW accounts $ 40,952 $ 39,150
Savings accounts 63,269 63,116
Money market accounts 24,147 25,678
Certificates of deposits 181,371 184,562
Short-term borrowings 134,263 69,977
Broker certificates 776 4,860
-------- --------
Total interest-bearing liabilities 444,778 387,343
Demand deposits 46,350 40,513
Other liabilities 5,249 4,291
Shareholders' equity 59,380 55,232
-------- --------
Total liabilities and
stockholders' equity $555,757 $487,379
======== ========
ANALYSIS OF VOLUME AND RATE CHANGES ON NET INTEREST INCOME AND EXPENSES
September 1997 Over September 1996
----------------------------------
Change Change
Due to Due to Total
In thousands Volume Rate Change
------- ------- -------
Interest-earning assets:
Securities--taxable 1,631 646 2,277
Securities--nontaxable (126) 11 (115)
Federal funds sold (84) (2) (86)
Loans 2,499 (442) 2,057
------- ------- -------
Total interest income 3,920 213 4,133
Interest-bearing liabilities:
NOW accounts 18 (8) 10
Savings accounts 4 (2) 2
Money market accounts (37) (1) (38)
Certificates of deposit (136) (372) (508)
Short-term borrowings 2,638 50 2,688
Broker deposits (188) 1 (187)
------- ------- -------
Total interest expense 2,299 (332) 1,967
Net interest income 1,621 545 2,166
(fully taxable equivalent) ======= ======= =======
ITEM II. MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
FINANCIAL CONDITION
During the first nine months of 1997, consolidated assets increased by $59.3
million or 11.6% to $569.4 million. This increase resulted from an expansion
in both the investment and loan portfolios. The investment portfolio
increased $21.2 million or 13.0%. Most purchases were made in the held to
maturity investment category. To better position the balance sheet for a
potential interest rate shift, the Company purchased longer-term investments
funded by shorter-term borrowings primarily through the Federal Home Loan
Bank of Boston (FHLB). Additional FHLB stock was purchased to support the
Company's increased borrowing activity. This increase is reflected in the
other investment category. Loans also increased $35.5 million or 11.4%, from
December 31, 1996.
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, 1996, deposits have
increased by $20.1 million or 5.7%. Both of the Company's banking
subsidiaries have experienced extreme competition by competitors for
deposits. Therefore, other funding sources have had be pursued and utilized.
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. Total borrowings
have increased by $34.7 million or 37.0% since December 31, 1996. The major
reason for this increase was to support activity in the investment portfolio.
The Company's strong capital position supports the increase in the balance
sheet. In addition, the Company views borrowed funds as a reasonably priced
alternative funding source that should be utilized. Borrowings have
continued to be a viable source of funding during the past year as the
increase of $34.7 million since December 31, 1996 reflects.
In determining the adequacy of the loan loss allowance, management relies
primarily on its review of the loan portfolio both to ascertain if there are
any 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 1997, $957,000 was added to the reserve for loan losses,
resulting in an allowance of $5.0 million, or 1.45%, of total loans
outstanding. This addition to the allowance was made as a result of loan
growth and not a reduction in loan quality. 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 risk based capital ratios for Tier 1 and Tier 2
ratios at September 30, 1997, of 17.93% and 19.18% respectively, exceed
regulatory guidelines. The Company's ratios at December 31, 1996 were 19.2%
and 20.4%.
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 1997 Camden National Bank paid
dividends to the Company in the amount of $3.6 million. The Company paid
dividends to shareholders in the amount of $2.3 million or .99 cents per
share. The remaining cash dividends of $1.3 million received from Camden
National Bank during the first nine months of 1997 were used for the
Company's stock repurchase program.
RESULTS OF OPERATIONS
Net income for the nine months ended September 30, 1997 was $6,734,000, an
increase of $739,000 or 12.3% above 1996's first nine month's net income of
$5,995,000. The major contributing factor was the increase in earning
assets, which resulted in an increase in net interest income.
NET INTEREST INCOME
Net interest income, on a fully taxable equivalent basis, for the nine months
ended September 30, 1997 was $18.0 million, a 13.7% or $2.2 million increase
over the net interest income for the first nine months of 1996 of $15.8
million. Contributing to this increase was the fact that total interest
income was $4.1 million or 14.1% higher in the first nine months of 1997
compared to the same period in 1996. Interest income on loans increased by
$2.1 million. This increase was the net of a $2.5 million increase due to an
increase in loan volume, reduced by $442,000 due to a reduction in loan
yields from 9.74% during the first nine months of 1996 to 9.56% during the
first nine months of 1997. The Company also experienced an increase in
interest income on investments during the first nine months of 1997 compared
to the same period in 1996 due to combination of volume and rate increases.
The Company's net interest expense on deposits and borrowings increased by
$2.0 million during the first nine months of 1997 compared to the same period
in 1996. This increase was the net of a $2.3 million increase due to an
increase in volume, reduced by $333,000 due to a reduction in rates.
The Analysis of Change in Net Interest Margin, the Average Daily Balance
Sheets, and the Analysis of Volume and Rate Changes on Net Interest Income
and Expenses are provided on pages 8-9 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
earnings assets; 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, 1997 and 1996. The second of these tables
presents average assets liabilities and stockholders' equity for the nine
months ended September 30, 1997 and 1996. The third table presents an
analysis of volume and rate change on net interest income and expense from
September 30, 1996 to September 30, 1997.
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
a decrease in net interest income of $3,000 in the first nine months of 1997
compared to an increase of $83,000 in the first nine months of 1996.
NONINTEREST INCOME
There was a $339,000 or 11.1% increase in total noninterest income in the
first nine months of 1997 compared to the first nine months of 1996. Service
charges on deposit accounts remained relatively level for the first nine
months of 1997 compared to 1996 with a slight increase of $4,000 or .4%.
Other service charges and fees increased by $208,000 or 17.5% in the first
nine months of 1997 compared to 1996. The largest contributing factor to
this increase was the fee income generated by merchant assessments. Other
income increased by $127,000 from $760,000 in the first nine months of 1996
to $887,000 in 1997. The major contributing factor for this increase was
trust fees.
NONINTEREST EXPENSE
There was a $882,000 or 9.6% increase in total noninterest expenses in the
first nine months of 1997 compared to the first nine months of 1996.
Salaries and employee benefits cost increased by $275,000 or 5.5% in the
first nine months of 1997 compared to 1996. This increase was the result of
normal annual increases, additions to staff and higher pension benefit costs.
Other operating expenses increased by $607,000 or 14.7%. The major
contributing factors for this increase were equipment costs, credit card
expenses, marketing, and consulting fees.
IMPACT OF INFLATION AND CHANGING PRICES
The Consolidated Financial Statements and related Notes thereto presented
elsewhere herein have been prepared in accordance with generally accepted
accounting principles which require the measurement of financial position and
operating results in terms of historical dollars without considering changes
in the relative purchasing power of money over time due to inflation.
Unlike many industrial companies, substantially all of the assets and
virtually all of the liabilities of the Company are monetary in nature. As a
result, interest rates have a more significant impact on the Company's
performance than the general level of inflation. Over short periods of time,
interest rates may not necessarily move in the same direction or in the same
magnitude as inflation.
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 adopted SFAS 122 as of
January 1, 1996. Since adoption there has been minimum activity in this area
resulting in no material effect on the financial position and results of
operation.
The Company adopted SFAS No. 123, "Accounting for Stock Based Compensation,"
and has elected the intrinsic value method whereby additional disclosures of
stock based compensation are required; however, the financial statements are
not affected.
SFAS No. 125 and No. 127 relate to the accounting for transfers and servicing
of financial assets and extinguishment of certain liabilities and are
effective for years beginning January 1, 1997. The adoption of these
standards have had no material effect on the financial statements.
SFAS No. 128, No. 130 and No. 131 are effective for years beginning January
1, 1997. The adoption of these standards have had no effect on the financial
statements as they are related to disclosure issues only.
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., Tucker Anthony, Means Investment Co., and
Edward Jones.
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 shareholder 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, 1997, a total
of 76,493 shares had been repurchased through this plan.
AMERICAN STOCK EXCHANGE. Camden National Corporation (ticker symbol "CAC")
stock began trading on October 7, 1997. The directors believe that
affiliation with the American Stock Exchange should positively impact the
stock price and the ability for stockholders to buy and sell shares of the
Company's common stock. In addition, listing on a national exchange should
enhance the opportunity for shareholders to follow the value of their
investment in Camden National Corporation.
EXPANSION. The Company's subsidiary, Camden National Bank, recently entered
into a definitive agreement to purchase four KeyBank branches in the Mid-
Coast Maine area. These branches are located in the communities of
Waldoboro, Damariscotta, Vinalhaven and Bucksport. The Company considers the
acquisition of these branches a logical move in expanding its current service
area. The acquisition of these branches, which is contingent upon regulatory
approval, is expected to be completed during the first quarter of 1998.
Item 4. Submission Matters to a Vote of Security holders
(a) The annual meeting of shareholders was held on May 6, 1997.
(c) Matters voted upon at the meeting. 1) To elect as director the nominees -
- - Ann Bresnahan, Robert W. Daigle, E. Maynard Graffam, Jr., Rendle A. Jones,
and Arthur A. Strout. Total votes cast: 1,682,841, with 1,682,441 FOR, and
400 WITHHELD. 2)To ratify the selection of Berry, Dunn, McNeil & Parker as
the Company's independent public accountants for 1997. Total votes cast:
1,682,841, with 1,678,294 FOR, 960 AGAINST, and 3,587 ABSTAIN. 3)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: 1,682,841, with 1,676,140 FOR,
2,690 AGAINST, and 4,011 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 Audit
Department 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 Acto 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) 11/14/97
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Keith C. Patten Date
President and Chief Executive Officer
Susan M. Westfall (signature) 11/14/97
- ------------------------------------- --------
Susan M. Westfall Date
Treasurer and Chief Financial Officer