Camden National Corp – ‘10-K’ for 12/31/98

As of:  Thursday, 4/1/99   ·   For:  12/31/98   ·   Accession #:  750686-99-5   ·   File #:  1-13227

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         20±    85K 
 3: EX-13       Annual or Quarterly Report to Security Holders        63±   254K 
 2: EX-27       Financial Data Schedule (Pre-XBRL)                     2±     6K 
 4: EX-99       Miscellaneous Exhibit                                 41±   157K 

10-K   —   Annual Report
Document Table of Contents

UNITED STATES     
SECURITIES AND EXCHANGE COMMISSION      
Washington, D.C. 20549      

FORM 10-K     

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)OF THE      
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)    

For the fiscal year ended December 31, 1998     
Commission File No.             0-28190     

CAMDEN NATIONAL CORPORATION   
(Exact name of registrant as specified in its charter)  

MAINE                             01-0413282
(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             

Securities registered pursuant to Section 12(g) of the Act    

Common Stock, without par value   
(Title of class)    

     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 by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation  S-K (229.405 of this chapter) is not  contained  herein,  and
will not be  contained,  to the best of  registrant's  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ( )                               

     The aggregate  market value of the voting stock held by  non-affiliates  of
the registrant as of March 29, 1999 is: Common stock - $98,062,905              

     The number of shares  outstanding  of each of the  registrant's  classes of
common stock, as of December 31, 1998 is: Common stock - 6,656,310              

     Listed  hereunder are documents  incorporated  by reference and the Part of
the form 10-K into which the document is incorporated:                          

     (1)  Portions  of the  Annual  Report to  Stockholders  for the year  ended
December 31, 1998 are  incorporated by reference into Part II, Items 5, 6, 7 and
8.                                                                              

     (2)  The  definitive  Proxy  Statement  for  the  1999  Annual  Meeting  of
Shareholders to be filed with the commission prior to April 30, 1999 pursuant to
Regulation  14A of the  General  Rules  and  Regulations  of The  Commission  is
incorporated into Part III of the Form 10-K.                                    

     Index

Item #    Description                                             Page          
------    -----------                                             ----          
1       Business                                                  3         

2       Properties                                                8         

3       Pending Legal Proceeding                                  9         

4       Submission of Matters to a Vote of Security Holders       9         

5       Market for Registrant's Common Equity and Related                   
Stockholders Matters                                      9 

6       Selected Financial Data                                   9         

7       Management's Discussion and Analysis of Financial                   
Condition and Results of Operation                       10 

7A      Quantitative and Qualitative Disclosures about                      
Market Risks                                             18 

8       Financial Statements and Supplementary Data              18         

9       Changes in and Disagreements With Accountants on                    
Accounting and Financial Disclosure                      18 

10       Directors and Executive Officers of the Registrant       19          

11       Executive Compensation                                   19          

12       Security Ownership of Certain Beneficial Owners                      
and Management                                           19 

13       Certain Relationships and Related Transactions           19          

14       Exhibits, Financial Statement Schedules, and Reports                 
on Form 8-K                                              19 

PART I  

Item 1.  Business                                                               

     Camden National Corporation,  ("the Company") is a multi-bank and financial
services holding company headquartered in Camden, Maine. The Company was founded
on  January  2, 1985 as a result  of a  corporate  reorganization,  in which the
shareholders of Camden National Bank, which was founded in 1875, exchanged their
stock for shares of the Company,  and Camden National Bank became a wholly-owned
subsidiary of the Company.  As of December 29, 1995 the Company acquired 100% of
the outstanding  stock of United Bank and 51% of the outstanding  stock of Trust
Company of Maine,  Inc. by merging with their then parent  company,  UNITEDCORP,
Bangor,  Maine. As of December 31, 1998, the Company's  securities  consisted of
one class of common stock,  no par value,  of which there were 6,656,310  shares
outstanding held of record by approximately 802 shareholders.                   

     The accompanying  consolidated financial statements include the accounts of
the Company and its  wholly-owned  subsidiaries,Camden  National Bank and United
Bank,  and its  majority-owned  subsidiary,  Trust  Company of Maine,  Inc.  All
intercompany accounts and transactions have been eliminated in consolidation.   

     The Company's  wholly-owned  bank  subsidiaries are independent  commercial
banks with  branches  serving both  mid-coast and central  Maine.  The banks are
full-service  financial institutions that focus primarily on attracting deposits
from the  general  public  through  their  branches  and using such  deposits to
originate residential mortgage loans, commercial business loans, commercial real
estate  loans,  and a variety  of  consumer  loans.  Camden  National  Bank is a
national banking organization based in Camden, Maine, and offers services in the
communities  of  Camden,  Union,  Rockland,   Thomaston,   Belfast,   Bucksport,
Vinalhaven,  Damariscotta,  and Waldoboro.  Camden  National Bank is the largest
independent  commercial  bank in Maine.  United  Bank is a banking  organization
chartered  under  the laws of the State of Maine  based in  Bangor,  Maine,  and
offers services in the communities of Bangor, Corinth, Hampden, Hermon, Jackman,
Greeville, Dover-Foxcroft, Milo and Winterport Maine.                           

     The Company's  majority-owned  trust company  subsidiary,  Trust Company of
Maine,  Inc.,  offers a broad range of trust and trust investment  services,  in
addition to  retirement  and pension plan  management  services.  The  financial
services provided by the Trust Company of Maine,  Inc.,  complement the services
provided by the Company's bank  subsidiaries  by offering  customers  investment
management services.                                                            

     The Company  competes  principally  in mid-coast  Maine through its largest
subsidiary, Camden National Bank. Camden National Bank considers its primary    
market areas to be in two counties, Knox and Waldo counties.  These two counties
have a combined  population of approximately  76,000 people.  The economy of the
these  counties  is based  primarily  on  tourism,  and is also  supported  by a
substantial  population of retirees.  Major competitors in these markets include
local branches of large regional bank affiliates,  as well as local  independent
banks, thrift institutions and credit unions. Other competitors for deposits and
loans within Camden National Bank's market include  insurance  companies,  money
market funds,  consumer finance  companies and financing  affiliates of consumer
durable goods manufacturers.                                                    

     The Company,  through United Bank, also competes in the central Maine area.
United Bank has  approximately  a 5% share of the market in its service area and
competes  principally  on the basis of service.  The  greater  Bangor area has a
population of approximately  100,000 people.  Major competitors in these markets
include  local  branches of large  regional  bank  affiliates,  as well as local
independent banks, thrift institutions and credit unions.  Other competitors for
deposits and loans within  United  Bank's market  include  insurance  companies,
money market funds,  consumer  finance  companies  and  financing  affiliates of
consumer durable goods manufacturers.                                           

     The Company is committed to the  philosophy of serving the financial  needs
of customers in local communities. The Company, through Camden National Bank and
United Bank has branches  that are located in small towns  within the  Company's
geographic  market areas.  The Company  believes  that the local needs,  and its
comprehensive   retail  and  small  business   products,   together  with  rapid
decision-making at the branch level, enable its banks to compete effectively. No
single person or group of persons  provides a material  portion of the Company's
deposits,  the loss of any one or more of which would have a materially  adverse
effect  on  the  business  of the  Company,  nor is a  material  portion  of the
Company's  loans  concentrated  within a  single  industry  or group of  related
industries.                                                                     

     The Company had consolidated  asset growth of 16.4% or $94.1 million during
1998.  The primary  contributing  factors to this  growth  were the  increase in
lending  activity and the  acquisition  of seven  branches by the Company's bank
subsidiaries.  As the  business  continued  to grow during this past year,  each
subsidiary  focused  on  customer  service.  Supporting  this  concept,  is  the
Company's  performance-based  compensation  program. This program is designed to
create an  environment  where  employees  take a more  personal  interest in the
performance of the Company and are rewarded for balancing profit with growth and
quality  with   productivity.   The  addition  of  new  branches  by  both  bank
subsidiaries create growth opportunities, and allows the banks to better service
its many customers already that were already in those markets.                  

     The Company  employs  approximately  233 people on a  full-time  equivalent
basis.  Management  believes that employee  relations are good, and there are no
known disputes between  management and employees.  Employees who are at least 21
years of age and who  have  worked  for the  Company  for at least  one year are
eligible for participation in the Company's  Retirement  Savings 401(k) Plan and
Defined Benefit Retirement Plan. Certain eligible employees of the Company also 
receive group insurance benefits.  Certain Executive Officers of the Company may
also participate in the 1993 Stock Option Plan and the Supplemental Executive   
Retirement Plan.                                                                

     As a registered  bank holding company under the Bank Holding Company Act of
1956 (the "BHC Act"),  the Company is subject to the regulations and supervision
of the Federal  Reserve  Bank (FRB).  The BHC Act  requires  the Company to file
reports with the FRB and provide  additional  information  requested by the FRB.
The Company  must  receive the  approval of the FRB before it may acquire all or
substantially  all of the  assets of any bank,  or  ownership  or control of the
voting shares of any bank if, after giving effect to such acquisition of shares,
the  Company  would own or control  more than 5 percent of the voting  shares of
such bank.                                                                      

     The Company and its subsidiaries,  including any it may acquire or organize
in the  future,  will be deemed to be  affiliates  of Camden  National  Bank and
United  Bank  under  the  Federal  Reserve  Act.  That Act  establishes  certain
restrictions  which limit bank  transactions  with affiliates.  The Company will
also be subject to  restrictions  on the  underwriting  and the public  sale and
distribution  of  securities.  It is prohibited  from engaging in certain tie-in
arrangements  in  connection  with any  extension  of  credit,  sale or lease of
property, or furnishing of services.                                            

     The Company will be  prohibited  from  engaging in, or acquiring  direct or
indirect ownership or control of more than 5 percent of the voting shares of any
company engaged in non-banking activities, unless the FRB by order or regulation
has found such  activities  to be so closely  related to banking or  managing or
controlling banks as to be a proper incident thereto.                           

     Federal  Reserve  Regulation  "Y" (12  C.F.R.  Part 225) sets  forth  those
activities  which are  regarded  as closely  related to banking or  managing  or
controlling  banks and, thus, are permissible  activities that may be engaged in
by bank holding  companies,  subject to approval in individual cases by the FRB.
Litigation has challenged the validity of certain  activities  authorized by the
FRB for the bank  holding  companies,  and the FRB has various  regulations  and
applications in this regard still under consideration.                          

     Under Maine law,  dividends  and other  distributions  by the Company  with
respect to its stock are subject to declaration by the Board of Directors at its
discretion  out of net assets.  Dividends  cannot be declared and paid when such
payment would make the Company insolvent or unable to pay its debts as they come
due.                                                                            

     FRB policy prohibits a bank holding company from declaring or paying a cash
dividend which would impose undue pressure on the capital of subsidiary banks or
would be  funded  only  through  borrowings  or other  arrangements  that  might
adversely affect the holding company's  financial  position.  The policy further
declares  that a bank holding  company  should not continue its existing rate of
cash  dividends on its common stock unless its net income is sufficient to fully
fund each dividend and its prospective rate of earnings retention appears       
consistent  with  its  capital  needs,   asset  quality  and  overall  financial
condition.  Other FRB policies forbid the payment by bank  subsidiaries to their
parent companies of management fees which are unreasonable in amount or exceed a
fair market  value of the services  rendered  (or, if no market  exists,  actual
costs plus a reasonable profit).                                                

     In addition, the FRB has authority to prohibit banks that it regulates from
engaging  in  practices  which in the  opinion of the FRB are unsafe or unsound.
Such  practices may include the payment of dividends  under some  circumstances.
Moreover,  the payment of dividends may be  inconsistent  with capital  adequacy
guidelines.  The Company may be subject,  under  State  and/or  Federal  law, to
assessment to restore the capital of the Bank should it become impaired.        

     The Company is subject to the minimum capital requirements of the FRB. As a
result of these requirements,  the growth in assets of the Company is limited by
the amount of its capital accounts as defined by the FRB.  Capital  requirements
may have an effect on  profitability  and the  payment of  distributions  by the
Company.  If the Company is unable to increase its assets without  violating the
minimum  capital  requirements,  or is forced to reduce  assets,  its ability to
generate earnings would be reduced.                                             

     The FRB has adopted  guidelines  utilizing a risk-based  capital structure.
These guidelines apply to the Company on a consolidated basis.                  

     The  risk-based  guidelines  require  the  Company  to  maintain a level of
capital based primarily on the risk of its assets and  off-balance  sheet items.
Assets and  off-balance  sheet items are placed in one of four risk  categories.
Assets in the first category, such as cash, have no risk and, therefore, carry a
zero percent  risk-weight  and require no capital  support.  Capital  support is
required for assets in the  remaining  three risk  categories--those  categories
having a risk-weight of 20 percent, 50 percent and 100 percent, respectively.   

     A banking organization's risk-based capital ratio is calculated by dividing
its  qualifying  total  capital  base by its  risk-weighted  assets.  Qualifying
capital is divided  into two tiers.  Core  capital  (Tier 1)  consists of common
shareholders'  equity  capital,  noncumulative  perpetual  preferred  stock  and
minority interests in equity capital accounts of consolidated subsidiaries, less
goodwill and other intangible  assets.  Supplementary  capital (Tier 2) consists
of, among other items, allowance for possible loan and lease losses,  cumulative
and  limited-life   preferred  stock,   mandatory  convertible   securities  and
subordinated  debt.  Tier 2 capital  will  qualify as a part of the Bank's total
capital up to a maximum of 100 percent of the Bank's Tier 1 capital.  Amounts in
excess of these limits may be issued but are not included in the  calculation of
the risk-based capital ratio.                                                   

     Under current guidelines,  banking organizations must maintain a risk-based
capital  ratio of 8 percent,  of which at least 4 percent must be in the form of
core  capital.  The  Company is and expects to remain in  compliance  with these
guidelines.                                                                     

     The purposes of the  risk-based  capital  guidelines are  twofold--to  make
capital  requirements  more  sensitive to  differences  in risk  profiled  among
banking  organizations,  and to aid in making  the  definition  of bank  capital
uniform internationally. To achieve these purposes, the guidelines recognize the
riskiness  of assets by  lowering  capital  requirements  for some  assets  that
clearly  have less risk than  others,  and they  recognize  that there are risks
inherent in off-balance  sheet activities.  The guidelines  require that banking
organizations  hold  capital  to  support  such  activities.  In  addition,  the
guidelines  establish a  definition  of capital and minimum  risk-based  capital
standards  which are  consistent  on an  international  basis  and that  place a
greater emphasis on equity capital.                                             

     The FRB has also  adopted a minimum  leverage  ratio  which is  intended to
supplement the risk-based capital  requirements and to insure that all financial
institutions  continue  to  maintain  a minimum  level of  capital.  As with the
risk-based  capital  guidelines,  the leverage  capital  guidelines apply to the
Company on a consolidated basis.                                                

     The   leverage-based    capital   requirement   stipulates   that   banking
organizations  maintain a minimum level of Tier 1 capital to total  assets.  The
most  highly  rated  banks in terms of safe  and  sound  operation  that are not
experiencing  or  anticipating  significant  growth are  required to have Tier 1
capital  equal to at least 3  percent  of total  assets.  All  other  banks  are
expected to maintain a minimum  leverage  capital  ratio  (i.e.,  Tier 1 capital
divided by total  assets)  in excess of the 3 percent  minimum  level.  The FDIC
regulations  require a financial  institution  to maintain a minimum  ratio of 4
percent to 5 percent, depending on the condition of the institution.            

     The Company's  leverage ratio is and its management expects it to remain in
excess of regulatory requirements.                                              

     Camden  National  Bank is a national bank  organized  under the laws of the
United States.  Camden  National Bank is a member of the Federal  Reserve System
and its deposits  are insured by the FDIC.  Camden  National  Bank is subject to
regulation, supervision and regular examination by the Office of the Comptroller
of the  Currency  (the  "OCC").  The  ability  of  Camden  National  Bank to pay
dividends is subject to the banking laws of the United  States and to the powers
of the OCC and the FDIC.  Under federal banking law,  dividends can only be paid
out of the retained earnings of Camden National Bank's current and two preceding
fiscal  years,  or with the prior  approval of the OCC.  Under  federal  banking
regulation,  a bank is prohibited  from  declaring a dividend or from making any
other capital  distribution if the payment or distribution  would cause the bank
to fail to meet minimum capital requirements.                                   

   United Bank is a banking organization chartered under the laws of the State
of  Maine.  United  Bank is  subject  to  regulation,  supervision  and  regular
examination by the Federal Deposit  Insurance  Corporation  (the "FDIC") and the
Maine  State  Bureau of  Banking.  Under  Maine law,  dividends  are  subject to
declaration  by the Board of Directors at its  discretion.  Dividends  cannot be
declared and paid when such payment would make the bank insolvent or unable to  
pay its debts as they come due.                                                 

     The principal  sources of funds essential to the business of banks and bank
holding companies are deposits,  stockholders'  equity,  and borrowed funds. The
availability of these various sources of funds and other potential sources, such
as  preferred  stock or  commercial  paper,  and the  extent  to which  they are
utilized,  depends on many  factors,  the most  important of which are the FRB's
monetary  policies  and the  relative  costs of  different  types of  funds.  An
important  function of the FRB is to regulate the national supply of bank credit
in  order  to  combat  recession  and  curb  inflationary  pressure.  Among  the
instruments of monetary policy used by the FRB to implement these objectives are
open market  operations in United States Government  securities,  changes in the
discount rate on bank  borrowings,  and changes in reserve  requirement  against
bank deposits. The monetary policies of the FRB have had a significant effect on
the  operating  results  of  commercial  banks in the past and are  expected  to
continue to do so in the future.  In view of the recent  changes in  regulations
affecting commercial banks and other actions and proposed actions by the federal
government and its monetary and fiscal  authorities,  including proposed changes
in the structure of banking in the United States,  no predication can be made as
to future changes in interest rates,  credit  availability,  deposit levels, the
overall performance of banks generally or of the Company.                       

     The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 was
enacted by Congress in September of 1994. Under the Act,  beginning on September
29, 1995, bank holding companies may acquire banks in any state, notwithstanding
contrary state law, and all banks  commonly owned by a bank holding  company may
act as agents for one another.  An agent bank may receive  deposits,  renew time
deposits,  accept payments,  and close and service loans for its principal bank,
but will not be considered a branch of that principal bank.                     

     A bank may also merge with a bank in another state or operate either office
as a branch,  notwithstanding  pre-existing  contrary state law. This interstate
merger provision became  automatically  effective in all states on June 1, 1997,
unless 1) the law became effective in a given state at any earlier date selected
by legislation in that state; or 2) the law did not become effective at all in a
given state because by  legislation  enacted before June 1, 1997 that state opts
out of coverage by the interstate  merger  provision.  Upon  consummation  of an
interstate  merger,  the resulting bank may acquire or establish branches on the
same basis that any  participant  in the Merger could have if the Merger had not
taken place.                                                                    

     Banks may also merge with branches of banks in other states without merging
with the banks themselves, or may establish de novo branches in other states, if
the laws of the other states expressly permit such mergers or such interstate de
novo branching.                                                                 

Item 2.  Properties                                                             

The Company operates in thirteen facilities.  The Main Office of the  
Company and Camden National Bank is at Two Elm Street, Camden, Maine, and is    
owned by Camden  National  Bank. The building has 15,500 square feet of space on
three  levels.  Camden  National  Bank also owns three of its  branches  and the
facility in which the operations departments of the Company are located. None of
the owned facilities is subject to a mortgage.  Camden National Bank also leases
three branches under long-term  leases,which  expire in May of 2010,  January of
2020 and December of 2077.                                                      

     The Main Office of United Bank is at 145 Exchange  Street,  Bangor,  Maine,
and is owned by United Bank. The building has 25,600 square feet of space on two
levels.  United Bank occupies  16,975  square feet of space on both floors.  The
Trust Company of Maine, Inc., a non-depository trust company and a subsidiary of
the Company  leases 2,100 square feet of office space on the second floor of the
facility and its wholly owned subsidiary, Fiduciary Services, Inc., leases 2,042
square feet on the first floor of the facility.  Other occupants of the facility
include the Law Firm of Russell,  Lingley & Silver,  P.A.,  2,533 square feet on
the  second  floor and L&H  Investors,  a  property  management  firm and Cullen
Williams,  CPA, who have a joint lease on 1,920 square feet on the second floor.
United Bank also owns three of its other facilities, none of which is subject to
a mortgage.  United Bank also leases three branches, which expire in December of
1999, May of 2001 and September of 2002.                                        

Item 3.  Pending Legal Proceedings                                              

     The Company is not  involved in any  material  pending  legal  proceedings,
other than  ordinary,  routine  litigation  incidental  to the  business  of the
Company and its subsidiaries.                                                   

Item 4.  Submission of Matters to a Vote of Security Holders                    

     There were no items submitted to a vote of security  holders of the Company
during the fourth quarter of 1998.                                              

PART II       

Item 5.  Market for Registrant's Common Equity and Related Stockholders         
Matters                                                                         

     The  information  required is contained on page 13 of the Company's  Annual
Report to Shareholders  for the year ended December 31, 1998 and is incorporated
herein by reference.                                                            

Item 6.  Selected Financial Data                                                

     Selected  year-end  financial  information  for  the  past  five  years  is
contained on page 15 of the Company's Annual Report to Shareholders for the year
ended December 31, 1998 and is incorporated herein by reference.                

Item 7.  Management's Discussion and Analysis of Financial Condition and        
Results of Operations                                                           

     The information contained in the section captioned "Management's Discussion
and  Analysis  of  Financial  Condition  and Results of  Operations"  on pages 8
through 13 of the  Company's  Annual Report to  Shareholders  for the year ended
December  31, 1998 should be read in  conjunction  with the  following  text and
tables, and is incorporated herein by reference.                                

     The following table set forth the Company's  investment  securities at book
carrying amount as of December 31, 1998, 1997, and 1996.                        

                                                                [Download Table]

Dollars in thousands                       1998        1997        1996
                                           ----        ----        ----
                                                                       
Securities available for sale:                                         
  U.S. Treasury and agency             $  7,095    $  4,312    $ 12,616
  Mortgage-backed securities             60,852         -0-         -0-
  State and political subdivisions        8,143         -0-          31
  Other debt securites                    2,025         -0-         -0-
  Equity securities                      20,128      14,084       7,516
                                       --------    --------    --------
                                         98,243      18,396      20,163
                                       --------    --------    --------
Securities held to maturity:                                           
  U.S. Treasury and agency                6,093      48,566      58,433
  Mortgage-backed securities             81,139     109,373      79,259
  State and political subdivisions        1,338       2,955       5,524
                                       --------    --------    --------
                                         88,570     160,894     143,216
                                       --------    --------    --------
                                       $186,813    $179,290    $163,379
                                       ========    ========    ========


     To enhance  the  Company's  ability  to manage  liquidity,  the  investment
portfolio  is  divided  into  two  parts:  Investments  available  for  sale and
investments  held to maturity.  The ability to use  securities as collateral for
Federal  Home Loan Bank  loans  enables  the  Company  to hold a portion  of the
portfolio to maturity.  The following table summarizes the investment  portfolio
maturities and yields at December 31, 1998.                                     

                                                                [Download Table]
                             Available for sale        Held to maturity  
                             ------------------      --------------------
                             Book      Yield to      Amortized   Yield to
                             Value     maturity         Cost     maturity
                             -------   --------      ---------   --------
Dollars in thousands                                                     
                                                                         
U.S. Treasury and Agency:                                                
  Due in 1 year or less      $   704      6.15%       $  5,793      6.99%
  Due in 1 to 5 years          1,326      5.82%            300      3.71%
  Due in 5 to 10 years         5,065      5.91%            -0-      0.00%
  Due after 10 years             -0-      0.00%            -0-      0.00%
                             -------   --------       --------   --------
                               7,095      5.92%          6,093      6.83%
                             -------   --------       --------   --------
Mortgage-backed securities:                                              
  Due in 1 year or less          -0-      0.00%            -0-      0.00%
  Due in 1 to 5 years            -0-      0.00%          3,562      6.35%
  Due in 5 to 10 years        10,349      5.79%          8,556      7.88%
  Due after 10 years          50,503      6.53%         69,021      8.23%
                             -------   --------       --------   --------
                              60,852      6.41%         81,139      8.12%
                             -------   --------       --------   --------
State and political subdivisions:                                        
  Due in 1 year or less          -0-      0.00%            176      7.27%
  Due in 1 to 5 years            -0-      0.00%          1,063      6.93%
  Due in 5 to 10 years         2,720      4.03%            -0-      0.00%
  Due after 10 years           5,423      4.18%             99      9.56%
                             -------   --------       --------   --------
                               8,143      4.13%          1,338      7.17%
                             -------   --------       --------   --------
Other debt security:                                                     
  Due in 1 year or less          -0-      0.00%            -0-      0.00%
  Due in 1 to 5 years            -0-      0.00%            -0-      0.00%
  Due in 5 to 10 years           -0-      0.00%            -0-      0.00%
  Due after 10 years           2,025      7.19%            -0-      0.00%
                             -------   --------       --------   --------
                               2,025      7.19%            -0-      0.00%
                             -------   --------       --------   --------
Other equity securities:                                                 
  Due in 1 year or less          -0-      0.00%            -0-      0.00%
  Due in 1 to 5 years            -0-      0.00%            -0-      0.00%
  Due in 5 to 10 years           -0-      0.00%            -0-      0.00%
  Due after 10 years          20,128      6.67%            -0-      0.00%
                             -------   --------       --------   --------
                              20,128      6.67%            -0-      0.00%
                             -------   --------       --------   --------
                             $98,243      6.25%       $ 88,570      8.01%
                             =======   ========       ========   ========

     Total loans  increased by $75.8 million,  or 20.9%,  in 1998. The following
table  provides  a  summary  of the  loan  portfolio  for the past  five  years.
Management  does not foresee any significant  changes  occurring in the loan mix
during the coming year.                                                         

                                                                [Download Table]

Dollars in thousands                                                           


As of December 31,             1998       1997       1996       1995       1994
                               ----       ----       ----       ----       ----
                                                                               
Commercial, other          $142,270   $121,093   $ 99,694   $ 82,622   $ 77,126
Commercial, real estate      91,399     69,558     55,104     56,397     53,766
Real estate construction      3,726      3,731      2,706      2,123      3,445
Residential real estate     141,071    121,363    116,520    107,412     96,456
Consumer                     60,481     47,404     37,222     36,548     34,683
                           --------   --------   --------   --------   --------
                           $438,947   $363,149   $311,246   $285,102   $265,476
                           ========   ========   ========   ========   ========

     Loan demand also affects the Company's liquidity position.  However, of the
loans  maturing over one year,  approximately  60% are variable rate loans.  The
following table presents the maturities of loans at December 31, 1998.          

                                                                [Download Table]
Dollars in thousands                          Through    More Than            
                                   <1 Year    5 Years     5 Years       Total 
                                   -------    -------    --------      ------ 
                                                                              
Maturity Distribution:                                                        
 Fixed Rate:                                                                  
  Commercial, other                $10,570    $23,578     $ 9,126      $43,274
  Commercial, real estate            5,157     14,611       3,470       23,238
  Real estate construction           3,726          0           0        3,726
  Residential real estate              800        524      69,022       70,346
  Consumer                           4,348     14,074      11,658       30,080

 Variable Rate:                                                               
  Commercial, other                 26,541     17,812      37,444       81,797
  Commercial, real estate            7,545      8,302      52,314       68,161
  Real estate construction               0          0           0            0
  Residential real estate                5        587      70,133       70,725
  Consumer                           5,301      6,240      18,860       30,401
  State and municipal               14,365        697       2,137       17,199
                                   -------    -------    --------     --------
                                   $78,358    $86,425    $274,164     $438,947
                                   =======    =======    ========     ========

     Management  considers  both the  adequacy of the  collateral  and the other
resources  of the  borrower  in  determining  the  steps to be taken to  collect
non-accrual  and  charged-off  loans.   Alternatives  that  are  considered  are
foreclosure,  collecting on  guarantees,  restructuring  the loan, or collection
lawsuits.                                                                       

     The following  table sets forth the amount of the Company's  non-performing
assets as of the dates indicated:                                               

                                                                [Download Table]

Dollars in thousands                                                           


As of December 31,                 1998      1997      1996      1995      1994
                                   ----      ----      ----      ----      ----
                                                                               
Nonperforming loans:                                                           
  Non-accrual loans              $1,710    $1,215    $1,674    $2,631    $1,660
  Accruing loans past due                                                      
    90 days or more                 612     1,004       599       353     1,217
  Restructured loans (in                                                       
    compliance with                                                            
    modified terms)                 -0-       -0-       -0-       -0-       -0-
                                 ------    ------    ------    ------    ------
Total nonperforming loans         2,322     2,219     2,273     2,984     2,877
Other real estate owned             905     1,373     1,264     1,086     1,606
                                 ------    ------    ------    ------    ------
Total Nonperforming assets       $3,227    $3,592    $3,537    $4,070    $4,483
                                 ======    ======    ======    ======    ======
Ratios:                                                                        
Nonperforming loans to                                                         
  total loans                     0.53%     0.61%     0.73%     1.05%     1.08%
Allowance for loan losses                                                      
  to nonperforming loans        280.45%   254.17%   196.74%   136.73%   130.38%
Nonperforming assets to                                                        
  total assets                    0.48%     0.63%     0.69%     0.85%     0.98%
Allowance for loan losses                                                      
  to nonperforming assets       201.80%   157.02%   126.43%   100.25%    83.67%


     Interest  foregone  on  non-accrual   loans  was  approximately   $130,000,
$147,000,  $178,000,  $207,000 and $98,000 for 1998,  1997, 1996, 1995 and 1994,
respectively. Interest income recognized on non-accrual loans during 1998 was   
$89,023.                                                                        

     Management  believes  that the level of the  allowance  for loan  losses at
December  31,  1998 of $6.5  million,  or 1.48% of total loans  outstanding  was
appropriate given the current economic  conditions in the Company's service area
and the overall condition of the loan portfolio.  When determining the amount of
provision for loan losses annually  management  relies on its review of the loan
portfolio both to ascertain whether there are probable losses to be written off,
projected loan mix and loan volumes, historical net loan loss experience, and to
assess the loan portfolio in the aggregate.                                     

     The  following  table  summarizes  the activity in the  allowance  for loan
losses for the years ended December 31, 1998, 1997, 1996, 1995 and 1994.        

                                                                [Download Table]

Dollars in thousands                                                       


As of December 31,             1998      1997      1996      1995      1994
                               ----      ----      ----      ----      ----
                                                                           
Balance beginning                                                          
  of period                  $5,640    $4,472    $4,080    $3,751    $4,050
Provisions for loan losses    1,376     1,677       838       899       216
Charge-offs:                                                               
  Commercial                    201       629       222       413       392
  Residential real estate       264       135       191       248       188
  Consumer                      305       328       243       198       106
                             ------    ------    ------    ------    ------
Total Charge-offs               770     1,092       656       859       686
Recoveries:                                                                
  Commercial                    136       425        55       174        62
  Residential real estate         9        36        27         4         3
  Consumer                      121       122       128       111       106
                             ------    ------    ------    ------    ------
Total Recoveries                266       583       210       289       171
Net Charge-offs                 504       509       446       570       515
                             ------    ------    ------    ------    ------
Balance end of period        $6,512    $5,640    $4,472    $4,080    $3,751
                             ======    ======    ======    ======    ======
Average loans                                                              
  outstanding              $393,214  $336,030  $298,596  $282,094  $253,439

Net charge-offs as a                                                       
 percentage of average loans  0.13%     0.15%     0.15%     0.20%     0.20%

Provision for loan losses                                                  
 to average loans             0.35%     0.50%     0.28%     0.32%     0.09%

Ending allowance for loan losses to:                                       
  Total loans at end                                                       
    of period                 1.48%     1.55%     1.44%     1.43%     1.42%
  Net charge-offs during                                                   
    period                 1292.06%  1108.06%  1002.69%   715.79%   728.35%
  Nonperforming loans at                                                   
    end of period           280.45%   254.17%   196.74%   136.73%   130.38%


     The following  table  summarizes  the  allocation of the allowance for loan
losses among the  Company's  loan  categories  for the years ended  December 31,
1998, 1997, 1996, 1995 and 1994.                                                

                                                                [Download Table]

Dollars in thousands                                                           


As of December 31,     1998       1997        1996        1995        1994     
                       ----       ----        ----        ----        ----     
Balance at                                                                     
 end of period                                                                 
 applicable to:     Amount  %   Amount  %   Amount  %   Amount   %  Amount  %  
                    ------  --  ------  --  ------  --  ------   -- ------  -- 
                                                                               
Commercial, other   $2,164  33% $2,418  34% $1,780  32% $1,536  30% $1,516  30%
Commercial,                                                                    
 real estate           903  20%  1,261  19%  1,100  18%    753  20%    658  20%
Residential                                                                    
  real estate        1,872  33%    601  34%    551  39%    347  37%    451  37%
Consumer               664  14%    582  13%    492  11%    447  13%    443  13%
Unfunded commitments   324   NA    366   NA    252   NA    211   NA    221   NA
Unallocated            585   NA    412   NA    297   NA    786   NA    462   NA
                    ------ ---- ------ ---- ------ ---- ------ ---- ------ ----
Total               $6,512 100% $5,640 100% $4,472 100% $4,080 100% $3,751 100%
                    ====== ==== ====== ==== ====== ==== ====== ==== ====== ====


     The maturity of  certificates  of deposit in  denominations  of $100,000 or
more  is  set  forth  in the  following  table.  These  deposits  are  generally
considered to be more rate sensitive than other  deposits and,  therefore,  more
likely to be withdrawn to obtain higher yields elsewhere if available.          

                                                                [Download Table]

Dollars in thousands                       

December 31,                          1998 
                                      ---- 
                                           
Time remaining until maturity:             
   Less than 3 months               $12,060
   3 months through 6 months         12,170
   6 months through 12 months        14,990
   Over 12 months                    10,902
                                    -------
                                    $50,022
                                    =======

     The dividend payout ratio was 38.88%,  33.34%,  27.59%,  18.67%, and 12.78%
for 1998, 1997, 1996, 1995 and 1994 respectively.  The average equity to average
assets ratio was 10.63%,  10.86%,  11.32%,  10.92%,  and 10.24% for 1998,  1997,
1996, 1995 and 1994 respectively.                                               

     The  borrowings  utilized by the Company  primarily have been advances from
the FHLB of Boston. In addition,  the Company utilizes fed funds,  treasury, tax
and loan  deposits,  and  repurchase  agreements,  secured by the United  States
Government or Agency securities.  The major portion of all borrowings matures or
reprices  within the next six months.  The  following  table sets forth  certain
information  regarding  borrowed  funds for the years ended  December  31, 1998,
1997, and 1996.                                                                 

                                                                [Download Table]

Dollars in thousands                                                        


Total borrowings:                                                           
At or For the year ended                                                    
  December 31,                          1998           1997          1996   
                                        ----           ----          ----   
                                                                            
Average balance outstanding          $ 72,300        $132,297        $73,069
Maximum amount outstanding at                                               
  any month-end during the year       133,378         163,884         93,760
Balance outstanding at end of year     90,158         132,478         93,760
Weighted average interest rate                                              
  during the year                        5.18%         5.53%          5.45% 
Weighted average interest rate                                              
  at end of year                         4.74%         5.49%          5.35% 


     Interest rate sensitivity or "Gap"  management  involves the maintenance of
an appropriate  balance between interest sensitive assets and interest sensitive
liabilities to reduce interest rate risk exposure while also providing liquidity
to satisfy  the cash flow  requirements  of  operations  and to meet  customers'
fluctuating  demands  for  funds,  either in terms of loan  requests  or deposit
withdrawals.  Major  fluctuations  in net interest income and net earnings could
occur due to  imbalances  between  the  amounts of  interest-earning  assets and
interest-bearing  liabilities,  as well as different repricing  characteristics.
Gap management seeks to protect  earnings by maintaining an appropriate  balance
between  interest-earning  assets and  interest-bearing  liabilities in order to
minimize  fluctuations in the net interest margin and net earnings in periods of
volatile interest rates.                                                        

     The  following  table set forth the amount of  interest-earning  assets and
interest-bearing  liabilities  outstanding,  at  December  31,  1998  which  are
anticipated by the Company, based upon certain assumptions, to reprice or mature
in each of the future time periods shown.                                       

                                                                [Download Table]


Dollars in thousands                      Through   More Than           
                                <1 Year   5 Years   5 Years        Total
Interest-earning assets:        --------  --------  --------       -----
Interest-earning assets:                                                
                                                                        
Loans                                                                   
 Fixed                          $ 38,966  $ 53,484  $ 95,413   $187,863 
 Variable                        251,084       -0-       -0-    251,084 
Investment securities                                                   
 Available for sale                  704     1,326    96,213     98,243 
 Held to maturity                  5,969     4,925    77,676     88,570 
                                --------  --------  --------   -------- 
Total interest-earning assets    296,723    59,735   269,302    625,760 
                                --------  --------  --------   -------- 
Interest-bearing liabilities:                                           
Savings accounts                  15,000       -0-    65,908     80,908 
NOW accounts                         -0-       -0-    62,094     62,094 
Money market accounts             53,393       -0-       -0-     53,393 
Certificate accounts             188,083    59,325       467    247,875 
Borrowings                        90,158       -0-       -0-     90,158 
                                --------  --------  --------   -------- 
Total interest-bearing                                                  
  liabilities                    346,634    59,325   128,469    534,428 
                                --------  --------  --------   -------- 
Interest sensitivity gap                                                
  per period                    $(49,911) $    410  $140,833            
                                ========  ========  ========            
Cumulative interest                                                     
  sensitivity gap               $(49,911) $(49,501) $ 91,332            
                                ========  ========  ========            
Cumulative interest                                                     
  sensitivity gap as a                                                  
  percentage of total assets         (8%)      (7%)      14%            

Cumulative interest-earning                                             
  assets as a percentage of                                             
  interest-sensitive liabilities     86%       88%      117%            

Item 7A.  Quantitative and Qualitative Disclosures about Market Risks.          

Included in the Company's 1998 Annual Report to  Shareholders on pages 15-16 and
is incorporated herein by reference.                                            

Item 8.  Financial Statements and Supplementary Data                            

The  following  financial  statements  and  report  of  independent  accountant,
included in the Company's 1998 Annual Report to  Shareholders,  are incorporated
herein by reference.  Page  references are to pages of the Company's 1998 Annual
Report to Shareholders.                                                         

                                                    PAGE

Report of Independent Public Accountant                          41             

Consolidated Statements of Financial Condition                                  
December 31, 1998 and 1997                              19    

Consolidated Statements of Income for the years ended                           
December 31, 1998, 1997 and 1996                            20        

Consolidated Statements of Changes in the Shareholders' Equity                  
for the years ended December 31, 1998, 1997 and 1996        21        

Consolidated Statements of Cash Flows for the years ended                       
December 31, 1998, 1997 and 1996                            22        

Notes to Consolidated Financial Statements                     23-40            

Item 9.  Changes in and Disagreements With Accountants on Accounting and        
Financial Disclosure                                                            

     During the past two years the Company  has not made  changes in and has not
had disagreements with its independent accountant.                              

PART III

Item 10.  Directors and Executive Officers of the Registrant                    

     The Company responds to this item by incorporating  herein by reference the
material responsive to such item in the Company's definitive Proxy Statement for
the 1999 Annual Meeting of Shareholders to be filed with the Commission prior to
April 30, 1999.                                                                 

Item 11. Executive Compensation                                                 

     The Company responds to this item by  incorporating  herein by reference to
the material responsive to such item in the Company's definitive Proxy Statement
for the 1999  Annual  Meeting of  Shareholders  to be filed with the  Commission
prior to April 30, 1999.                                                        

Item 12.  Security Ownership of Certain Beneficial Owners and Management        

     The Company responds to this item by  incorporating  herein by reference to
the material responsive to such item in the Company's definitive Proxy Statement
for the 1999  Annual  Meeting of  Shareholders  to be filed with the  Commission
prior to April 30, 1999.                                                        

Item 13.  Certain Relationships and Related Transactions                        

     The Company responds to this item by  incorporating  herein by reference to
the material responsive to such item in the Company's definitive Proxy Statement
for the 1999  Annual  Meeting of  Shareholders  to be filed with the  Commission
prior to April 30, 1999.                                                        

PART IV 

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K       

(a)   1.   Index to Financial Statements:                             

        A list of the  consolidated  financial  statements  of the  Company  and
report of independent public accountant  incorporated herein is included in Item
8 of this Report.                                                               

2.   Financial Statement Schedules:                       

       Schedules  have been omitted  because they are not  applicable or are not
required  under the  instructions  contained  in  Regulation  S-X or because the
information  required to be set forth  therein is  included in the  consolidated
financial statements or notes thereto.                                          

3. Exhibits filed herewith:                                 

  (3.i)  The Articles of  Incorporation  of Camden  National  Corporation,  as
         amended to date, Exhibit 3.i to the Company's  Registration statement
         Form S-4 filed with the Commission on September 25, 1995, file number
33-97340, are incorporated herein by reference.             

  (3.i)  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,  between  Knox Hotel  Associates(Lessor)  and
         Camden National Bank (Lessee)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, between Milliken, Tomlinson Company (Lessor)
        and Camden National Bank (Lessee) filed with Form 10-K, December 31,
1995, and is incorporated herein by reference.              

  (10.3)  Lease  Agreement  for the facility  occupied by the Hampden  Branch of
          United Bank, Parway Realty Development Corporation (Lessor) and United
 Bank (Lessee) filed with Form 10-K, December 31, 1995, and is
incorporated herein by reference.                           

  (10.4)  Camden National  Corporation  1993 Stock Option Plan,  filed with Form
     10-K, December 31, 1995, and is incorporated herein by reference.

  (10.5)  UNITEDCORP Stock Option Plan, filed with Form 10-K, December 31, 1995,
and is incorporated herein by reference.                    

(10.6)  Lease Agreement for the facility occupied by the Damariscotta Branch
          of Camden National Bank, between Keybank National Association (Lessor)
and Camden National Bank (Lessee).                          

  (10.7)  Lease Agreement for the facility occupied by the Milo Branch of United
   Bank, between Cabrel company (Lessor) and United Bank (Lessee).

  (10.8)  Lease Agreement for the facility occupied by the Dover-Foxcroft Branch
          of United Bank,  between  Bangor Savings Bank (Lessor) and United Bank
(Lessee).                                                   

(13)    Camden National Corporation's 1998 Annual Report to Shareholders.*  

(21)    Subsidiaries of the Company                                         

(27)    Financial Data Schedule                                             

*Deemed filed only with respect to those portions thereof incorporated herein by
reference                                                                       

(b) Reports on Form 8-K. None filed.                                            

SIGNATURES

Pursuant to the  requirement of Section 13 or 15(d) of the  Securities  Exchange
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)                     3/30/99                         
---------------------------------------------------------                       
Keith C. Patten                                  Date                           
President and Chief Executive Officer                                           

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been  signed  below by the  persons on behalf of the  Registrant  and in the
capacities and on the dates indicated.                                          

Keith C. Patten (signature)    3/30/99   Susan M. Westfall (signature)  3/30/99 
-------------------------------------    -------------------------------------  
Keith C. Patten                  Date    Susan M. Westfall                Date  
President and Director                   Treasurer and                          
Chief Executive Officer                  Chief Financial Officer                

Rendle A. Jones (signature)    3/30/99   John S McCormick, Jr.(signature)3/30/99
-------------------------------------    -------------------------------------- 
Rendle A. Jones, Director         Date   John S. McCormick, Jr., Director  Date 
Chairman and Director                                                           

Peter T. Allen (signature)     3/30/99   Richard N. Simoneau (signature) 3/30/99
-------------------------------------    -------------------------------------- 
Peter T. Allen, Director         Date    Richard N. Simoneau, Director     Date 

Ann W. Bresnahan (signature)   3/30/99   Arthur E. Strout (signature)    3/30/99
-------------------------------------    -------------------------------------- 
Ann W. Bresnahan, Director       Date    Arthur E. Strout, Director        Date 

Robert J. Gagnon (signature)   3/30/99   Robert W. Daigle (signature)    3/30/99
-------------------------------------    -------------------------------------- 
Robert J. Gagnon, Director       Date    Robert W. Daigle, Director        Date 

John W. Holmes (signature)     3/30/99   Royce M. Cross (signature)      3/30/99
-------------------------------------    -------------------------------------- 
John W. Holmes, Director         Date    Royce M. Cross, Director       Date    

Exhibit #21 Subsidiaries of the Company                                         

Camden National Bank                                                            

United Bank                                                                     

Trust Company of Maine, Inc.                                                    

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-K’ Filing		Date		Other Filings
		4/30/99
Filed on:		4/1/99
		3/29/99
For Period End:		12/31/98		10-K/A,  DEF 14A
		12/31/97		10-K,  DEF 14A
		6/1/97
		12/31/96		10-K,  DEF 14A
		12/31/95
		12/29/95
		9/29/95
		9/25/95
		12/31/94
				List all Filings