-----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, AnyWJdJZEv/ym/SPmR3cI9tHv3aGTnfoQ76shI/k3Y2JczW3SOf7H0g3GK88KvRg GFO8Ny2VBNcYOBPkaWuIMg== 0000750686-98-000008.txt : 19980518 0000750686-98-000008.hdr.sgml : 19980518 ACCESSION NUMBER: 0000750686-98-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 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: SEC FILE NUMBER: 001-13227 FILM NUMBER: 98624018 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 March 31, 1998 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 March 31, 1998: Common stock (no par value) 2,270,210 shares. CAMDEN NATIONAL CORPORATION Form 10-Q for the quarter ended March 31, 1998 TABLE OF CONTENTS OF INFORMATION REQUIRED IN REPORT PART I. ITEM 1. FINANCIAL INFORMATION PAGE Consolidated Statements of Income Three Months Ended March 31, 1998 and 1997 3 Consolidated Statements of Comprehensive Income Three Months Ended March 31, 1998 and 1997 4 Consolidated Statements of Conditions March 31, 1998 and 1997 and December 31, 1997 5 Consolidated Statement of Cash Flows Three Months Ended March 31, 1998 and 1997 6 Notes to Consolidated Financial Statements Three Months Ended March 31, 1998 and 1997 7 Analysis of Change in Net Interest Margin Three Months Ended March 31, 1998 and 1997 8 Average Daily Balance Sheets Three Months Ended March 31, 1998 and 1997 9 Analysis of Volume and Rate Changes on Net Interest Income & Expenses March 31, 1998 over March 31, 1997 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 11-15 PART II. ITEM 6. Exhibits and Reports on Form 8-K 15-16 SIGNATURES 17 EXHIBITS 18 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) Three Months Ended March 31 1998 1997 Interest Income Interest and fees on loans $ 8,680 $ 7,492 Interest on U.S. Government and agency obligations 2,576 2,707 Interest on state and political subdivisions 31 61 Interest on interest rate swap agreements 33 184 Interest on federal funds sold and other investments 241 168 ------- ------- Total interest income 11,561 10,612 Interest Expense Interest on deposits 3,679 3,251 Interest on other borrowings 1,539 1,507 Interest on interest rate swap agreements 32 176 ------- ------- Total interest expense 5,250 4,934 ------- ------- Net interest income 6,311 5,678 Provision for Loans Losses 324 287 ------- ------- Net interest income after provision for loan losses 5,987 5,391 Other Income Service charges on deposit accounts 360 357 Other service charges and fees 356 294 Other 293 264 ------- ------- Total other income 1,009 915 Operating Expenses Salaries and employee benefits 1,940 1,714 Premises and fixed assets 581 526 Other 1,155 921 ------- ------- Total operating expenses 3,676 3,161 ------- ------- Income before income taxes 3,320 3,145 Income Taxes 1,086 1,056 ------- ------- Net Income $ 2,234 $ 2,089 ======= ======= Per Share Data Earnings per share $0.98 $0.91 (Net income divided by weighted average shares outstanding) Cash dividends per share .40 .32 Weighted average number of shares outstanding 2,270,210 2,287,083
Statement of Comprehensive Income (unaudited) Three Months Ended March 31 (in thousands) 1998 1997 Net income Other comprehensive income, net of tax: Change in unrealized gains on securities 5 (23) ------- ------- Comprehensive income $ 5 $ (23) ======= =======
Camden National Corporation and Subsidiaries Consolidated Statement of Condition (unaudited) (In Thousands, except number March 31, December 31, shares and per share data) 1998 1997 Assets Cash and due from banks $ 22,332 $ 13,451 Federal funds sold 0 1,100 Securities available for sale 2,317 4,312 Securities held to maturity 139,430 160,894 Other securities 14,084 14,084 Residential mortgages held for sale 11,796 7,094 Loans, less allowance for loan losses of $5,876 and $5,640 at March 31,1998 and December 31, 1997 355,854 350,415 Bank premises and equipment 9,173 8,786 Other real estate owned 1,244 1,373 Interest receivable 3,656 3,924 Other assets 16,618 8,459 -------- -------- Total assets $576,504 $573,892 ======== ======== Liabilities Deposits: Demand $ 51,615 $ 51,422 NOW 49,522 42,796 Money market 42,183 23,452 Savings 69,056 66,723 Certificates of deposit 224,253 189,016 -------- -------- Total deposit 436,629 373,409 Borrowings from Federal Home Loan Bank 52,076 98,514 Other borrowed funds 15,721 33,964 Accrued interest and other liabilities 8,106 5,364 Minority interest in subsidiary 86 85 -------- -------- Total liabilities 512,618 511,336 -------- -------- Stockholders' Equity Common stock, no par value; authorized 5,000,000, issued 2,376,080 shares 2,436 2,436 Surplus 1,410 1,410 Retained earnings 64,250 62,925 Net unrealized appreciation on securities available for sale, net of income tax 10 5 -------- -------- 68,106 66,776 Less cost of 105,870 of treasury stock on March 31, 1998 and December 31, 1997 4,220 4,220 -------- -------- Total stockholders' equity 63,886 62,556 -------- -------- Total liabilities and stockholders' equity $576,504 $573,892 ======== ========
Camden National Corporation and Subsidiaries Consolidated Statement of Cash Flows (unaudited) (In Thousands) Three Months Ended March 31, 1998 1997 Operating Activities Net Income $ 2,234 $ 2,089 Adjustment to reconcile net income to net cash provided by operating activities: Provision for loan losses 324 287 Depreciation and amortization 164 134 Decrease in interest receivable 268 254 (Increase) decrease in other assets (8,145) (464) Increase in other liabilities 2,738 1,030 Cash receipts from sale of residential loans 167 0 Origination of mortgage loans held for sale (4,869) (45) Loss on disposal of assets 0 0 Other, net 1 7 ------- ------- Net cash provided by operating activities (7,118) 3,292 ------- ------- Investing Activities Proceeds from maturities of securities held to maturity 21,514 11,221 Proceeds from maturities of securities available for sale 2,000 2,000 Purchase of securities held to maturity 0 (39,475) Purchase of securities available for sale 0 0 Purchase of Federal Home Loan Bank Stock 0 (4,641) Increase in loans (5,763) (8,721) Net decrease in other real estate 129 323 Purchase of premises and equipment (613) (319) Proceeds from sale of premises and equipment 0 0 Decrease (increase)in minority position 1 (4) Net purchase of federal funds 1,100 2,075 ------- ------- Net cash used by investing activities 18,368 (37,541) ------- ------- Financing Activities Net increase (decrease) in demand deposits, NOW accounts, and savings accounts 27,983 (4,312) Net increase in certificates of deposit 35,237 5,928 Net (decrease)increase in short-term borrowings (64,681) 33,897 Purchase of treasury stock 0 (937) Sale of treasury stock 0 0 Cash Dividends (908) (735) ------- ------- Net cash provided by financing activities (2,369) 33,841 ------- ------- Increase in cash and equivalents 8,881 (408) Cash and cash equivalents at beginning of year 13,451 17,233 ------- ------- Cash and cash equivalents at end of period $22,332 $16,825 ======= =======
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 March 31, 1998, and December 31, 1997, the consolidated statements of income for the three months ended March 31, 1998 and March 31, 1997, the consolidated statements of comprehensive income for the three months ended March 31, 1998 and March 31, 1998 and the consolidated statements of cash flows for the three months ended March 31, 1998, and March 31, 1997. All significant intercompany transactions and balances are eliminated in consolidation. The income reported for 1998 period is not necessarily indicative of the results that may be expected for the full year. NOTE 2 - Earnings Per Share Earnings Per Share. Basic earnings per share data is computed based on the weighted average number of common shares outstanding during each year. Potential common stock is considered in the calculation of weighted average shares outstanding for diluted earnings per share. The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31 1998 1997 Net income, as reported 2,234 2,089 Weighted average shares 2,270,210 2,287,083 Effect of dilutive securities: Employee stock options 51,796 39,372 Dilutive potential common shares Adjusted weighted average shares and assumed conversion 2,322,006 2,326,455 Basic earnings per share $ 0.98 $ 0.91 Diluted earnings per share 0.96 0.90 NOTE 3 - Excess of Cost Over Fair Value of Assets Acquired The excess of cost over fair value of net assets acquired in branch acquisitions is amortized to expense using the straight line method over ten years. In March, 1998 the Bank acquired the Bucksport, Vinalhaven, Waldoboro, and Damariscotta, Maine branches of KeyBank of Maine. The acquisition was accounted for under the purchase method of accounting for business combinations. The following is a summary of the transaction: Loans Acquired 7,298 Fixed Assets 365 Premium on Deposits 4,760 Other Assets 651 Deposits Assumed 52,421 Other Liabilities 75 Net Cash Received 39,422 ANALYSIS OF CHANGE IN NET INTEREST MARGIN Three Months Ending Three Months Ending March 31, 1998 March 31, 1997 ------------------- ------------------- Dollars in thousands Amount Average Amount Average of Yield/ of Yield/ interest Rate interest Rate -------- ------- -------- ------- Interest-earning assets: Securities - taxable $ 2,810 6.78% $ 2,873 6.54% Securities - nontaxable 47 6.95% 92 6.73% Federal funds sold 11 5.57% 8 4.52% Loans 8,734 9.59% 7,533* 9.52% -------- ------- -------- ------- Total earning assets 11,602 8.70% 10,506 8.43% Interest-bearing liabilities: NOW accounts 129 1.21% 130 1.32% Savings accounts 543 3.31% 522 3.31% Money Market accounts 289 3.69% 191 3.17% Certificates of deposit 2,718 5.52% 2,407 5.35% Short-term borrowings 1,539 5.45% 1,508 5.28% -------- ------- -------- ------- Total interest-bearing liabilities 5,218 4.64% 4,758 4.52% Net interest income (fully-taxable equivalent) 6,384 5,748 Less: fully-taxable equivalent adjustment (73) (70) -------- -------- $ 6,311 $ 5,678 ======== ======== Net Interest Rate Spread (fully-taxable equivalent) 4.06% 3.91% Net Interest Margin (fully-taxable equivalent) 4.79% 4.61%
*Includes net swap income figures (in thousands) - March 1998 $1 and March 1997 $8. 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 Three Months Ended March 31, 1998 1997 ---- ---- Interest-earning assets: Securities - taxable $165,749 $175,774 Securities - nontaxable 2,705 5,467 Federal funds sold 790 708 Loans 364,306 316,674 -------- -------- Total earning assets 533,550 498,623 Cash and due from banks 14,038 13,112 Other assets 25,644 20,837 Less allowance for loan losses (5,640) (4,762) -------- -------- Total assets $567,592 $527,810 ======== ======== Interest-bearing liabilities: NOW accounts $ 42,712 $ 39,438 Savings accounts 65,627 63,103 Money market accounts 31,348 24,069 Certificates of deposits 197,019 179,945 Short-term borrowings 112,956 114,261 -------- -------- Total interest-bearing liabilities 449,662 420,816 Demand deposits 48,738 43,165 Other liabilities 5,971 5,809 Shareholders' equity 63,221 58,020 -------- -------- Total liabilities and stockholders' equity $567,592 $527,810 ======== ========
ANALYSIS OF VOLUME AND RATE CHANGES ON NET INTEREST INCOME AND EXPENSES March 1998 Over March 1997 ---------------------------------- Change Change Due to Due to Total In thousands Volume Rate Change ------- ------- ------- Interest-earning assets: Securities--taxable (164) 101 (63) Securities--nontaxable (46) 1 (45) Federal funds sold 1 2 3 Loans 1,133 68 1,201 ------- ------- ------- Total interest income 924 172 1,096 Interest-bearing liabilities: NOW accounts 11 (12) (1) Savings accounts 21 0 21 Money market accounts 58 40 98 Certificates of deposit 228 83 311 Short-term borrowings (17) 48 31 ------- ------- ------- Total interest expense 301 159 460 Net interest income 623 13 636 (fully taxable equivalent) ======= ======= =======
ITEM II. MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATION FINANCIAL CONDITION During the first three months of 1998, consolidated assets increased by $2.6 million to $576.5 million. This increase was the result of an increase in the loan portfolio of $10.1 million or 2.8%. This increase was in part the result of acquired loan assets from the purchase of four branches by one of the Company's bank subsidiaries, Camden National Bank. This purchase accounted for $7.2 million of the growth in the loan portfolio. The increase in loans was somewhat offset by a reduction in the investment portfolio. During the first quarter of 1998, the funds resulting from the cash flows and maturities in the investment portfolio were used to fund loan growth and to pay down borrowings. The Company did not want to aggressively purchase securities during a time of relatively low interest rates. 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, 1997, deposits have increased by $63.2 million or 16.9%. The major reason for this increase was the deposits acquired when the Company's subsidiary, Camden National Bank, purchased four branches from KeyBank during the first quarter of 1998. Total deposits obtained through the purchase of the four branches were $52.4 million. When the new branches were acquired, excess deposits were ultized by paying back borrowed funds to the Federal Home Loan Bank. Both of the Company's banking subsidiaries continue to experience extreme competition by competitors for deposits. Therefore, other funding sources continue to be pursued and utilized. Borrowings 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 decreased by $64.7 million or 48.8% since December 31, 1997. The major reason for this decrease was the deposits acquired with the four new branches. The Company does however,views borrowed funds as a reasonably priced alternative funding source that should be utilized. Borrowings have continued to be a viable source of funding. 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 three months of 1998, $324,000 was added to the reserve for loan losses, resulting in an allowance of $5.9 million, or 1.57%, 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 March 31, 1998, of 17.57% and 18.82% respectively, exceed regulatory guidelines. The Company's ratios at December 31, 1997 were 18.2% and 19.5%. 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 three months of 1998 Camden National Bank paid dividends to the Company in the amount of $.9 million. The Company paid dividends to shareholders in the amount of $.9 million or .40 cents per share. RESULTS OF OPERATIONS Net income for the three months ended March 31, 1998 was $2,234,000, an increase of $145,000 or 6.9% above 1997's first three month's net income of $2,089,000. The major contributing factor was the increase in loans, which resulted in an increase in net interest income. NET INTEREST INCOME Net interest income, on a fully taxable equivalent basis, for the three months ended March 31, 1998 was $6.4 million, a 11.1% or $.6 million increase over the net interest income for the first three months of 1997 of $5.7 million. Interest income on loans increased by $1.2 million. This increase was primarily due the increase in loan volume, with a slight accompanying increase in yields from 9.52% during the first three months of 1997 to 9.59% during the first three months of 1998. The Company experienced a decrease in interest income on investments during the first three months of 1998 compared to the same period in 1997 due to decline in volume, which was offset slightly by an increase in yield. The Company's net interest expense on deposits and borrowings increased by $.5 million during the first three months of 1998 compared to the same period in 1997. This increase was due to a combination of volume and rate increases. 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 three months ended March 31, 1998 and 1997. The second of these tables presents average assets liabilities and stockholders' equity for the three months ended March 31, 1998 and 1997. The third table presents an analysis of volume and rate change on net interest income and expense from March 31, 1997 to March 31, 1998. 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 $1,000 in the first three months of 1998 compared to an increase of $8,000 in the first three months of 1997. NONINTEREST INCOME There was a $94,000 or 10.3% increase in total noninterest income in the first three months of 1998 compared to the first three months of 1997. Service charges on deposit accounts remained relatively level for the first three months of 1998 compared to 1997 with a slight increase of $3,000 or .8%. Other service charges and fees increased by $62,000 or 21.0% in the first three months of 1998 compared to 1997. The largest contributing factor to this increase was the fee income generated by merchant assessments. Other income increased by $29,000 from $264,000 in the first three months of 1997 to $293,000 in 1998. The major contributing factor for this increase was trust fees. NONINTEREST EXPENSE There was a $515,000 or 16.3% increase in total noninterest expenses in the first three months of 1998 compared to the first three months of 1997. Salaries and employee benefits cost increased by $226,000 or 13.2% in the first three months of 1998 compared to 1997. This increase was the result of normal annual increases, additions to staff and higher pension benefit costs. Other operating expenses increased by $234,000 or 25.4%. The major contributing factors for this increase were equipment costs, credit card expenses, marketing, and supply costs. With the addition of four new branches to the Camden National Bank subsidiary higher than normal expenses were incurred in the areas of marketing and supplies. 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 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 did not have a material effect on the financial statements. The Financial Accounting Standards Board issued the following statements of accounting standards (SFAS) during 1997: SFAS No. 128 Earnings Per Share SFAS No. 129 Disclosure of Information about Capital Structure SFAS No. 130 Reporting Comprehensive Income SFAS No. 131 Disclosures about Segments of an Enterprise and Related Information These four statements do not change the measurement or recognition methods used in the financial statement but rather deal with disclosure and presentation requirements. The financial statements for 1998 and all prior periods include the additional disclosure requirements relating to diluted earnings per share which are required under SFAS No. 128. Financial statement disclosures also comply with SFAS No. 129, which summarized but does not change the Company's requirements to disclosure information about capital structure. SFAS No. 130 and No. 131 are effective for periods beginning after December 15, 1997. The adoption of these standards did not have a material effect on the financial statements. In February 1998, the Financial Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 132, "Employers' Disclosures about Pensions and Other Post Retirement Benefits" effective for financial statements for the fiscal year beginning after December 15, 1997. SFAS No. 132, which supersedes the benefit disclosure requirements in FASB Statements No's 87, 88 and 106, requires entities to standardize the disclosure requirements for pension and other post retirement benefits to the extent practicable, requires additional information on changes in the benefit obligations and fair value of plan assets that will facilitate financial analysis. The Company expects no material impact from adopting SFAS No. 132. 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 March 31, 1998, a total of 76,493 shares had been repurchased through this plan. EXPANSION. The Company's subsidiary, Camden National Bank, entered into a definitive agreement to purchase four KeyBank branches in the Mid- Coast Maine area during the third quarter of 1997. These branches are located in the communities of Waldoboro, Damariscotta, Vinalhaven and Bucksport. The Company considered the acquisition of these branches a logical move in expanding its current service area. The acquisition of these branches was completed March 16, 1998. 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) 05/14/98 - ------------------------------------- -------- Keith C. Patten Date President and Chief Executive Officer Susan M. Westfall (signature) 05/14/98 - ------------------------------------- -------- Susan M. Westfall Date Treasurer and Chief Financial Officer EX-27 2
9 3-MOS YEAR DEC-31-1998 DEC-31-1997 MAR-31-1998 DEC-31-1997 22,332 13,451 385,014 321,987 0 1,100 0 0 2,317 4,312 139,430 160,894 143,591 164,286 373,526 363,149 5,876 5,640 576,504 573,892 436,629 373,409 67,797 132,478 8,192 5,449 0 0 0 0 0 0 2,436 2,436 61,450 60,120 576,504 573,892 8,680 32,845 2,848 12,796 33 410 11,561 46,051 3,679 13,484 5,250 21,229 6,311 24,822 324 1,677 0 0 3,676 13,294 3,320 13,601 3,320 13,601 0 0 0 0 2,234 9,148 $.98 $4.02 $.96 $3.93 8.63 8.72 1,214 1,215 669 1,004 0 0 1,883 2,219 5,640 4,472 135 1,092 47 583 5,876 5,640 5,876 5,640 0 0 591 412
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