8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15 (d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 29, 2008

CAMDEN NATIONAL CORPORATION

(Exact name of Registrant as specified in charter)

MAINE	01-28190	01-0413282
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS employer Identification No.)

Two Elm Street, Camden, Maine	04843
(Address of principal executive offices)	(Zip Code)

(207) 236-8821

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 -    Results of Operations and Financial Condition

Camden National Corporation issued a press release on July 29, 2008 announcing earnings for the six months and fiscal quarter ended June 30, 2008.

Item 9.01 -    Financial Statements and Exhibits

            (d)          Exhibits.

                         99.1    Press release announcing earnings for the six months and fiscal quarter ended June 30, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be filed on its behalf by the undersigned thereunto duly authorized.

CAMDEN NATIONAL CORPORATION
By:	/s/ Susan M. Westfall	Date: July 29, 2008
	Susan M. Westfall
	SVP Corporate Controller and Principal Financial & Accounting Officer

EX-99.1

Exhibit 99.1

Camden National Corporation Announces a 17.7% Increase in First Half 2008 Earnings Per Share Results

CAMDEN, Maine--(BUSINESS WIRE)--Robert W. Daigle, president and chief executive officer of Camden National Corporation (NASDAQ: CAC; the "Company"), today announced 2008 year-to-date earnings per diluted share of $1.73, a $0.26, or 17.7%, increase over the first six months of 2007, which includes the impact of the Company’s acquisition of Union Bankshares Company (“Union”). The second quarter 2008 earnings per diluted share were $0.92, which was $0.17, or 22.7%, over the $0.75 per diluted share for the second quarter of 2007.

Net income for the first six months of 2008 increased 36.8% to $13.3 million, compared to the $9.7 million reported for the six months ended June 30, 2007, and net income for the recently completed second quarter was $7.1 million, an increase of 43.8% over the $4.9 million earned in the same three-month period in 2007. Increases in both periods primarily reflect the impact of the January 3, 2008 addition of Union’s $547.4 million asset base.

For the six months ended June 30, 2008, the returns on average equity and average assets were 15.77% and 1.17%, compared to 17.97% and 1.12%, respectively, for the six months ended June 30, 2007. The decline in return on average equity is primarily the result of $38.4 million of goodwill created from the Union acquisition. During the first half of 2008, return on average tangible equity (which excludes goodwill and other intangibles) was 22.21% compared to 18.75% for the same period in 2007.

Daigle commented, “We believe that a successful strategic acquisition and a steady, conservative and disciplined approach in carrying on normal day-to-day activities have produced solid operating results.”

Net interest income for the second quarter of 2008 increased 45.1% to $17.9 million, compared to $12.3 million for same period of 2007. This increase in net interest income was primarily attributable to a $463.2 million, or 27.8%, increase in average earning assets resulting from the Union acquisition. In addition, the net interest margin increased 31 basis points to 3.37% for the first half of 2008, compared to the same period in 2007, as a result of the recent rate moves by the Federal Reserve and a positively sloped yield curve.

During the second quarter of 2008, the Company provided $450,000 to the allowance for loan and lease losses (“ALLL”) compared to no provision to the ALLL for the same quarter of 2007. The increase in the provision to the ALLL resulted from an increase in non-performing loans as a percentage of total loans to 0.90% at June 30, 2008, compared to 0.56% at June 30, 2007. Additionally, net charge-offs to average loans increased to 0.11% for the six months ended June 30, 2008, compared to 0.09% for the six months ended June 30, 2007. The ALLL was 1.13% of total loans outstanding at June 30, 2008, compared to 1.17% of loans outstanding on the same date in 2007. The ALLL was 125.6% of total non-performing loans at June 30, 2008, compared to 207.2% at June 30, 2007.

With respect to credit quality, Daigle commented, “Despite being proactive in re-tooling our loan origination practices and increasing our vigilance on all matters relating to risk management, we have not been immune from the adverse effects of a weakening economy. These indicators are not where we are accustomed to seeing them, however, I have the utmost confidence in the people and processes we have in place to guide us through these difficult times.”

Non-interest income of $4.7 million for the quarter ended June 30, 2008 was up 45.0% from the same quarter a year ago. Resulting primarily from the customer relationships gained in the acquisition of Union, the Company recorded increases in service charges on deposit accounts, income from fiduciary services at Acadia Trust, N.A., and brokerage commission income at Acadia Financial Consultants (“AFC”).

Non-interest expense for the second quarter of 2008 was $11.9 million, an increase of $3.4 million, or 40.2%, over the same quarter in the prior year primarily due to the Union acquisition. The Company’s efficiency ratio for the six-month period ended June 30, 2008 was 54.80%, compared to 55.00% for the six months ended June 30, 2007.

In comparing the second and first quarters of 2008, which represent the first two quarters following the Union acquisition, the Company highlighted the following results:

• Earnings per diluted share of $0.92 were $0.12, or 15.0%, higher than the $0.80 reported in the first quarter.
• Net income of $7.1 million was $913,000, or 14.8%, greater than the $6.2 million reported in the first quarter.
• Net interest income for the second quarter increased $736,000, or 4.3%, over the first quarter primarily due to a reduction in the cost of funds.
• Non-interest income for the second quarter increased $249,000, or 5.7%, over the first quarter due to increased service charges on deposit accounts and brokerage commission income at AFC.
• Non-interest expenses decreased $348,000 reflecting non-recurring integration-related costs recorded in the first quarter, and the run-off of core deposit intangible amortization related to the 1998 branch acquisition.
• The efficiency ratio improved to 52.83% for the second quarter compared to 56.85% for the first quarter.
• Total assets increased $15.1 million from March 31 to June 30, which included an $8.8 million increase in the loan portfolio and a $2.7 million increase in the investment portfolio.
• Total deposits increased $18.2 million during the second quarter to end at $1.4 billion.
• Asset quality data improved quarter-on-quarter, as measured by a decrease in non-performing assets of $2.1 million, or 12.8%, a decrease in quarterly net charge-offs which were $1.5 million in the first quarter compared to $163,000 in the second quarter, and a decrease in non-performing loans to total loans which improved to 0.90% from 1.02%. The Company reduced the provision to $450,000 for the second quarter compared to $500,000 in the first quarter.

The Company reported earlier that the Board of Directors approved a dividend of $0.25 per share, payable on July 31, 2008 for shareholders of record on July 15, 2008, which is a 4.2% increase over the dividend declared in the same period last year. In addition, the Board of Directors approved the extension of the Company’s Common Stock Repurchase Program for an additional one-year term.

At June 30, 2008, the Company’s total risk-based capital ratio of 11.95% and Tier 1 capital ratio of 10.77% compared favorably to the minimum ratios of 10.0% and 6.0%, respectively, required by the Federal Reserve for a bank holding company to be considered “well capitalized.” In addition, the capital ratios at June 30th compared favorably to the capital ratios at March 31, 2008, which were 11.69% and 10.53%, respectively.

“We are committed to preserving capital to withstand the adverse effects of an economic down cycle, while at the same time ensuring for well-supported dividend distributions, share repurchases when the market is not properly valuing our stock, and opportunistic acquisitions aimed at strengthening the future of our existing franchise,” Daigle noted in concluding his remarks.

Camden National Corporation, ranked in the top 20 in US Banker's 2008 list of top-performing mid-tier banks, headquartered in Camden, Maine, and listed on the NASDAQ^® Global Select Market (“NASDAQ”) under the symbol CAC, is the holding company employing 440 Maine residents for two financial services companies, including Camden National Bank (CNB), a full-service community bank with a network of 37 banking offices serving coastal, western, central, and eastern Maine, and Acadia Trust, N.A., offering investment management and fiduciary services with offices in Portland, Bangor, and Ellsworth. Acadia Financial Consultants is a division of CNB, offering full-service brokerage services.

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

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

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

Income Statement Data (unaudited)
		Six Months Ended				Three Months Ended
		June 30,				June 30,
(In thousands, except number of shares & per share data)		2008		2007		2008		2007
Interest income
Interest and fees on loans	$	49,724	$	43,057	$	24,410	$	21,558
Interest on securities and other investments		15,316		11,113		7,721		5,623
Total interest income		65,040		54,170		32,131		27,181
Interest expense
Interest on deposits		16,501		18,652		7,559		9,182
Interest on borrowings		13,478		10,744		6,674		5,667
Total interest expense		29,979		29,396		14,233		14,849
Net interest income		35,061		24,774		17,898		12,332
Provision for loan and lease losses		950		100		450		-
Net interest income after provision		34,111		24,674		17,448		12,332
Non-interest income
Service charges on deposit accounts		2,692		1,744		1,465		899
Other service charges and fees		1,335		878		696		451
Income from fiduciary services		3,378		2,428		1,701		1,229
Other income		1,650		1,201		789		628
Total non-interest income		9,055		6,251		4,651		3,207
Non-interest expenses
Salaries and employee benefits		13,051		9,285		6,399		4,639
Premises and fixed assets		3,915		2,495		1,974		1,263
Other expenses		7,208		5,284		3,540		2,597
Total non-interest expenses		24,174		17,064		11,913		8,499
Income before income taxes		18,992		13,861		10,186		7,040
Income taxes		5,691		4,136		3,080		2,097
Net income	$	13,301	$	9,725	$	7,106	$	4,943
Efficiency Ratio (1)		54.80%		55.00%		52.83%		54.69%
Per Share Data
Basic earnings per share	$	1.73	$	1.47	$	0.92	$	0.75
Diluted earnings per share		1.73		1.47		0.92		0.75
Cash dividends per share	$	0.49	$	0.48	$	0.25	$	0.24
Weighted average number of shares outstanding		7,694,326		6,601,741		7,695,798		6,582,291
Tangible book value per share (2)	$	16.16	$	15.78
(1) Computed by dividing non-interest expense by the sum of net interest income and non-interest income.
(2) Computed by dividing total shareholders’ equity less goodwill and other intangible assets by the number of common shares outstanding.

Statement of Condition Data (unaudited)
		June 30,		June 30,		December 31,
(In thousands, except number of shares)		2008		2007		2007
Assets
Cash and due from banks	$	36,373	$	31,629	$	28,790
Federal funds sold		-		300
Securities available for sale, at market value		554,516		424,858		423,108
Securities held to maturity		42,132		33,723		40,726
Loans, less allowance for loan losses of $17,266, $13,927 and $13,653  at June 30, 2008 and 2007 and December 31, 2007, respectively		1,509,692		1,176,175		1,131,986
Premises and equipment, net		27,068		19,774		19,650
Other real estate owned		296		-		400
Goodwill		42,383		3,991		3,991
Other assets		101,135		70,653		68,137
Total assets	$	2,313,595	$	1,761,103	$	1,716,788
Liabilities
Deposits:
Demand	$	184,409	$	150,485	$	141,858
NOW		198,191		130,695		132,331
Money market		289,875		278,098		298,677
Savings		131,328		87,573		85,931
Certificates of deposit		605,427		486,127		459,254
Total deposits		1,409,230		1,132,978		1,118,051
Borrowings from Federal Home Loan Bank		453,716		376,687		271,558
Other borrowed funds		206,261		92,534		142,492
Junior subordinated debentures		43,342		36,083		36,083
Note payable		202		-		10,000
Due to broker		5,000		-		-
Accrued interest and other liabilities		23,699		15,312		18,401
Total liabilities		2,141,450		1,653,594		1,596,585
Shareholders' Equity
Common stock, no par value; authorized 20,000,000 shares, issued and  outstanding 7,686,441, 6,512,980 and 6,513,573 shares on June 30,   2008 and 2007 and December 31, 2007, respectively		2,814		2,530		2,522
Surplus		46,051		2,481		2,629
Retained earnings		123,831		108,430		114,289
Accumulated other comprehensive (loss) income
Net unrealized (losses) gains on securities available for sale, net of tax		(197)		(4,936)		1,516
Net unrealized losses on derivative instruments, marked to market, net of tax		-		(218)		-
Net unrealized losses on post-retirement plans, net of tax		(354)		(778)		(753)
Total accumulated other comprehensive (loss) income		(551)		(5,932)		763
Total shareholders' equity		172,145		107,509		120,203
Total liabilities and shareholders' equity	$	2,313,595	$	1,761,103	$	1,716,788

Average Balance Sheet Data (unaudited)
		June 30,		June 30,		December 31,
(In thousands)		2008		2007		2007
Assets
Investments	$	616,894	$	461,011	$	472,345
Loans		1,517,522		1,203,897		1,187,627
Cash and due from banks		36,079		28,814		29,357
Other assets		139,643		72,651		73,000
Allowance for loan losses		(17,450)		(14,842)		(14,393)
Total Assets	$	2,292,688	$	1,751,531	$	1,747,936
Liabilities and Shareholders Equity
Demand deposits	$	176,916	$	141,785	$	148,751
NOW accounts		185,235		103,035		106,920
Savings accounts		132,862		90,299		89,705
Money market accounts		346,954		307,174		311,171
Certificates of deposit		500,163		392,184		389,565
Brokered certificates of deposit		67,142		135,671		121,221
Junior subordinated debentures		43,331		36,083		36,083
Borrowings		644,728		421,652		418,894
Other liabilities		25,699		14,495		15,032
Shareholders equity		169,658		109,153		110,594
Total Liabilities and Shareholders Equity	$	2,292,688	$	1,751,531	$	1,747,936
Interest-earning Assets and Interest-bearing Liabilities Yields Data (unaudited)
		For the Six Months Ended				For the Year Ended
		June 30,				December 31,
		2008		2007		2007
Interest-earning Assets
Investments		5.20%		5.03%		5.08%
Loans		6.61%		7.26%		7.17%
Total Interest-earning Assets		6.20%		6.63%		6.57%
Interest-bearing Liabilities
NOW accounts		0.94%		0.36%		0.40%
Savings accounts		0.64%		0.34%		0.37%
Money market accounts		2.48%		4.57%		4.32%
Certificates of deposit		3.81%		4.45%		4.39%
Brokered certificates of deposit		4.51%		4.11%		4.22%
Junior subordinated debentures		6.70%		6.60%		6.60%
Borrowings		3.75%		4.57%		4.54%
Total Interest-bearing Liabilities		2.88%		3.65%		3.93%
Net Interest Rate Spread (fully-taxable equivalent)		3.32%		2.98%		2.64%
Net Interest Margin (fully-taxable equivalent)		3.37%		3.06%		3.09%

Asset Quality Data (unaudited)
	June 30,	June 30,	December 31,
(In thousands)	2008	2007	2007
Loans 90 days past due and still accruing	158	40	6
Non-accrual loans	13,586	6,682	10,625
Other real estate owned	296	-	400
Net charge-offs	1,706	1,106	1,380
Allowance for loan and lease losses	17,266	13,927	13,653
Allowance for loan and lease losses to total loans	1.13%	1.17%	1.19%
Non-performing loans to total loans	0.90%	0.56%	0.93%
Non-performing assets to total assets	0.61%	0.38%	0.64%
Allowance for loan and lease losses to non-performing loans	125.62%	207.18%	128.43%
Other Data (unaudited)
	For the Six Months Ended		For the Year Ended
	June 30,		December 31,
	2008	2007	2007
Tier 1 Leverage Capital Ratio	6.89%	7.83%	8.20%
Tier 1 Risk-based Capital Ratio	10.77%	11.80%	12.82%
Total Risk-based Capital Ratio	11.95%	13.00%	14.04%
Tangible equity to total assets	5.37%	5.84%	6.75%
Return on average equity	15.77%	17.97%	18.34%
Return on average tangible equity	22.21%	18.75%	19.14%
Return on average assets	1.17%	1.12%	1.16%

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