-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ILPsfKesSntZDO4+ERrf6m/zmHfdEcVMlNnUbLY50m/HTQrrKr4TT5wfK240rAa8 rSV1sp+8SW2cRdFxLpssAQ== 0000750686-96-000008.txt : 19960816 0000750686-96-000008.hdr.sgml : 19960816 ACCESSION NUMBER: 0000750686-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAMDEN NATIONAL CORP CENTRAL INDEX KEY: 0000750686 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 010413282 STATE OF INCORPORATION: ME FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-28190 FILM NUMBER: 96612004 BUSINESS ADDRESS: STREET 1: TWO ELM ST CITY: CAMDEN STATE: ME ZIP: 04843 BUSINESS PHONE: 2072368821 MAIL ADDRESS: STREET 1: 2 ELM ST CITY: CAMDEN STATE: ME ZIP: 04843 10-Q 1 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 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 Camden National Corporation and Subsidiaries Consolidated Statements of Income (Unaudited) (In Thousands, except number of shares and per share data)
Six Months Three Months Ended June 30, Ended June 30, 1996 1995 1996 1995 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
Camden National Corporation and Subsidiaries Consolidated Statements of Condition (Unaudited)
(In Thousands, except number of shares June 30, Dec 31, and per share data) 1996 1995 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 ======== ========
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)
Net Unrealized Appreciation on Securities Common Retained Available Treas Total Stock Surplus Earnings For Sale Stock Equity 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 ====== ====== ======= ====== ======= =======
Camden National Corporation and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)
(In Thousands, except number of Six Months Ended June 30, shares and per share data) 1996 1995 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 ======= =======
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. ANALYSIS OF CHANGE IN NET INTEREST MARGIN ON EARNING ASSETS
Six Months Ended Six Months Ended June 30, 1996 June 30, 1995 ---------------------- ---------------------- Average Yield/ Average Yield/ Balance Int. Rate Balance Int. Rate ------- ----- ------ ------- ----- ------ ASSETS 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% *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.
ANALYSIS OF VOLUME AND RATE CHANGE ON NET INTEREST INCOME AND EXPENSES
June 1996 Over June 1995 ----------------------------- Change Change due to due to Total Volume Rate Change ------ ------ ------ INTEREST-EARNING ASSETS: 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)
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. 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. 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 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 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. 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. 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, 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. 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 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) EX-27 2
9 6-MOS YEAR DEC-31-1996 DEC-31-1995 JUN-30-1996 DEC-31-1995 14319 16356 313015 323846 1500 1700 0 0 28322 26196 138945 135136 137377 134702 303627 285102 4120 4080 502941 480685 351681 369880 89421 51980 5558 5145 0 0 0 0 0 0 2436 2436 53845 51244 502941 480685 14052 27246 4952 9842 626 1380 19630 38468 7117 13743 9467 18853 10163 19615 324 899 0 0 5950 11707 5760 10746 5760 10746 0 0 0 0 3855 7403 1.65 3.16 1.64 3.15 8.49 8.56 941 2631 370 353 0 0 1311 2984 4080 3751 399 859 115 289 4120 4080 3888 3397 0 0 322 683
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