Camden National Corp – ‘10-K’ for 12/31/98 – EX-13

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

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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 

EX-13   —   Annual or Quarterly Report to Security Holders
Exhibit Table of Contents

Annual Report / Cover                                                           

CNC Logo  
 (sailboat with CNC in base)

Camden National Corporation 1998 Annual Report    

        Round picture with family of 8
       (6" wide x 4.5" tall)

                                       Providing Financial Solutions
                                       ---------- For Generations ----------

[Inside front cover]                                                            

Camden National Corporation Logo
 (sailboat with CNC in base)

 Generational Banking: Family Finances
For the New Millennium

Camden National Corporation and its subsidiaries
have been serving the financial needs of customers
for generations. In 1998, the Company embraced the
theme of generational banking and introduced the
innovative Generations Gold Family Club Checking
 Account. Generations Gold has become our banks'
 signature account, offering families valuable
 discounts in a number of significant areas. In 1999
and beyond, Camden National will continue to
develop products that address the specific needs
 of each generation in the communities we serve.

 Cover Photo
 The McFarlands... Generations Gold Family

 Generations Gold Logo
(sunburst with Generation Gold inside)

[Page 1]                                                                        

 Historical Financial Data
 1978 - 1998

                 Return   Return
                 on       on
Year    Total       Net       Earnings   Average  Average  Dividends   Stock    
End     Assets    Income     Per Share   Assets   Equity   Per Share   Splits   

1998   $667,951   $  9,645   $   1.43     1.62%    15.23% $.55 12/98- 3:1 Split 
1997    573,892      9,145       1.34     1.65     15.20   .45                  
1996    510,078      8,115       1.16     1.65     14.56   .32                  
1995    480,685      7,403       1.05     1.59     14.53   .20                  
1994    455,615      8,258       1.17     1.90     18.56   .15                  
1993    414,044      7,135       1.02     1.79     19.02   .10 07/93- 30:1 Split
1992    386,341      6,108        .88     1.69     19.16   .11                  
1991    336,749      4,724        .68     1.45     17.29   .05                  
1990    282,713      4,050        .62     1.51     19.67   .05                  
1989    244,913      3,984        .61     1.78     23.42   .04                  
1988    201,096      3,175        .49     1.71     23.26   .04                  
1987    175,125      2,150        .33     1.40     19.22   .03                  
1986    141,688      1,764        .27     1.45     18.40   .03                  
1985    110,389      1,470        .22     1.44     17.96   .03                  
1984     95,065      1,227        .18     1.43     17.49   .02                  
1983     80,310        952        .14     1.32     15.67   .02                  
1982     65,618        803        .12     1.26     15.08   .02                  
1981     58,965        656        .10     1.17     13.93   .02                  
1980     53,557        456        .07     0.90     10.80   .02                  
1979     46,557        477        .08     1.10     12.70   .01                  
1978     42,779        431        .07     1.10     13.40   .01                  

Per share  amounts have been restated to reflect stock splits during the periods
presented.  Data prior to 1991 excludes  United Bank and Trust Company of Maine,
Inc.                                                                            

[Page 2] Letter from CEO of the Corporation                                     

Top of page has CNC Logo (Sailboat with CNC in base)                            

Dear Shareholders:                                                              

     It is again a pleasure  to report  that Camden  National  Corporation  (the
"Company")  achieved record  operating  results for 1998. Total net earnings for
the year increased from $9,148,000 to $9,645,000.  This increase of $497,000 was
achieved during a year of expansion with Camden National Bank's purchase of four
branches  and United  Bank's  acquisition  of three  branches,  along with their
establishment of a de novo branch.  Considering the one-time expenses related to
the acquisitions and start-up,  the development costs for internet banking,  and
the  investment  to ensure the century date change (Y2K) will be a non-event for
our customers, it was a good year for the Company.                              
     Both banks  posted good deposit and loan growth even after  accounting  for
the  acquisition  totals of $87,330,000  and  $18,540,000,  respectively.  Total
deposit growth of $135,164,000 provided the source of funds for current year and
future  loan and  investment  growth,  and loan growth of  $75,795,000  produced
higher  levels of  interest  income,  all  necessary  components  for  improving
performance.                                                                    
     The  focus of your  Company  has and  will  continue  to be ever  improving
performance to enhance  shareholder  value by  concentrating on long-term growth
and  profitability.  Sometimes it is  beneficial  to forgo some level of current
income to position the Company or one of its affiliates to achieve higher levels
of performance.  It is expected that this past year's branch  expansions and the
internet banking product will provide the catalyst.                             
     As the large banks put less and less  emphasis on small town  business  and
leave rural Maine to the community banks,  their customers have become more     
disenchanted  and  appreciate  the   responsiveness  and  attention  Camden     
National Bank, United Bank and Trust Company of Maine provide.  This is our     
strength as we believe in the concept of  Community  Banking and  providing     
our  customers  with  advanced  technology,  but  never at the  expense  of     
friendly,  helpful  service.  As you  can see by  reviewing  page 1 of this     
report,  Camden  National  Corporation  is  proud  of  the  growth  it  has     
experienced in assets,  net profits and overall financial  performance over     
these many years, and we wanted to share these accomplishments with you. As     
you will  recall,  Camden  National  Corporation  was rated the sixth  best     
performing mid-sized banking company in the country in 1998 by U.S. Banker,     
and these numbers explain some of the reasons why. On a more personal note,     
it is with mixed  emotions that I acknowledge  this to be my last Letter to     
the  Shareholders,  having set May 4 as my  retirement  date.  I have truly     
enjoyed working for this very fine  organization  for the past 22 years and     
with its  talented  staff  and  Board of  Directors.  But now it is time to     
concentrate  my energies  on fishing  the rivers of the world.  I thank the     
Board of Directors,  Management, staff and you, the Shareholders,  for your     
assistance  and support.  I promised your Directors that I would not retire     
until I felt very comfortable with management succession. A plan was put in     
place more than three years ago with the hiring of Robert Daigle,  who will     
be the new President of Camden  National  Corporation  as well as retaining     
this same position with Camden National Bank.  Rendle Jones will succeed me     
as Chairman  of Camden  National  Bank in  addition to his current  role as     
Chairman of Camden National  Corporation.  Robert Daigle, a seasoned banker     
with strong people skills and a dedication to community banking,  will ably     
provide the vision to lead this  Company into the next  millennium.  Rendle     
Jones has worked  diligently  for the past  eleven  years as a Director  to     
truly understand the business of banking and is well qualified to work with     
the other  Directors in setting  policy and  providing  direction  for your     
Company.  With the  strength  and  experience  we have  gained  through the     
success of our past, we are well  positioned to meet the  challenges of the     
future.  A strong  management  team and dedicated  staff of very  competent     
people  supported by a talented  Board of  Directors  have the strength and     
vision to continue  the  forward  progress  of your  Company.  They are all     
dedicated to building shareholder value to earn your continuing support.        

      Sincerely,
                       Keith C. Patten (signature)

           Keith C. Patten
           President & CEO

[Page  3]  This  page  contains  letters  to the  shareholders  from  the  three
subsidiary companies CEO's.                                                     

United Bank LOGO                                                                

Dear Shareholders:                                                              

   As I reflect upon the many  achievements of United Bank during the past year,
I am reminded yet again that community  banking is truly a people  business.  We
have long focused upon attracting and retaining a core group of highly motivated
and results-oriented employees and providing them with the support necessary for
exceptional achievement. The success of that policy was manifested over the past
year as all staff levels exceeded  expectations and provided the most productive
year in the bank's  history.  Particularly  notable in a year of many firsts was
net earnings  performance.  United Bank exceeded its 1998 earnings  projections,
reporting net earnings in excess of $1.2 million. This represents a 28% increase
over the prior  year's  record  earnings  performance.  The 1998 asset growth of
nearly 68% was in part the result of the  purchase of existing  branch  banks in
Dover-Foxcroft,  Greenville and Milo, and the  establishment  of a new branch in
the Waldo County community of Winterport. In each community United Bank replaced
existing or  previously  closed  branches  operated by Fleet Bank of Maine.  The
assimilation of these new banks into our branch system was  accomplished  with a
minimum of customer  disruption.  Expanded service hours, local management and a
full range of bank products and services has resulted in new customer  growth in
each of these communities.                                                      
   As we prepare to enter the 21st century, I am confident that United Bank will
continue to find opportunity in the many challenges facing our industry.  To our
holding  company  and to each of its  shareholders,  our thanks for  providing a
supportive environment in which extraordinary performance may become routine.   

Sincerely,                                                                      
Bruce D. Bartlett (signature)                                                   

Bruce D. Bartlett                                                               
President, Treasurer & CEO                                                      

Camden National Bank Logo                                                       

Dear Shareholders:                                                              

   While 1998 proved to be a year of many challenges, it was filled equally with
a number of rewarding  developments.  From  expanding our franchise to getting a
leg-up preparing for the new millennium,  the entire Camden National family once
again rose to the  occasion,  contributing  to another  year of solid  financial
results.                                                                        
   Net income of $8,404,972 was up 2.6% over 1997 with the positive  effect of a
15%  increase in average  loan  outstandings  and 22% growth in average  deposit
balances  having been somewhat  muted by onetime  charges  relating to franchise
expansion and Y2K compliance,  coupled with lower  investment  income  resulting
from a falling interest rate environment.  The latter  notwithstanding,  overall
performance ratios,  including return on assets of 1.68% and return on equity of
15.36%, continued to be well above the ban s national peer group.               
   The geographic expansion into two new  counties--Lincoln  County to the south
and Hancock  County to the  north--certainly  had to be one of the highlights of
our year,  providing the  opportunity to capitalize on the natural growth of our
franchise.  In addition,  a number of new products were introduced in 1998 aimed
at providing value and convenience to our ever-increasing customer base. Leading
the way was the  introduction  of  Generations  Gold,  a  Family  Club  Checking
Account,  combining  the  essentials  of  banking  with a panoply  of  lifestyle
services  which  has at its  core  nearly  400  local  businesses  offering  our
customers a variety of cost-savings discounts ... all part of our belief that if
you call  yourself a  community  bank,  you should  engage in  initiatives  that
promote local economic vitality.  Technology advances abounded as well, with the
introduction  of a  comprehensive  cash  management  capability for our business
customers and the  development of on-line  banking for our retail  customers who
can now visit us at  www.camdennational.com.  I am encouraged by the progress we
have made this year toward sustaining our long-term goal of continuing as a     
high performing, independent community bank. Our investments in the development 
of new markets, products and technology,  together with a highly dedicated      
group of employees, has us poised for success not only in 1999 but also in the  
new millennium. As always, thank you for your ongoing encouragement and         
support!                                                                        

Sincerely,                                                                      
Robert W. Daigle (signature)                                                    

Robert W. Daigle                                                                
President & CEO                                                                 

Trust Company of Maine, Inc. Logo                                               

Dear Shareholders:                                                              

   The past year was an exciting and challenging one for Trust Company of Maine.
Our dedicated  and hard working  staff was a key factor in our continued growth 
during the year, as was the continued support of Camden National Corporation,   
its subsidiaries and their employees.                                           
Trust Company of Maine reached a major milestone during 1998, as total    
assets under management exceeded $200 million for the first time in our history.
At year end our assets had grown to $227 million,  an increase of 18% over 1997.
During 1998, a Voice Response System was installed in our Employee  Benefit Plan
Administration  division,  which allows the participants in 401(K) plans that we
administer to access their individual  accounts 24 hours a day.  Effective as of
December  31,  1998,  Fiduciary  Services,   Inc.,  our  employee  benefit  plan
subsidiary  was  merged into Trust Company  of Maine.  This will  allow us to   
streamline our organizational structure and should enhance the visibility of the
Trust Company of Maine.  Looking  forward to 1999,  our past growth will make us
better able to meet the challenges  presented to us and provide the  opportunity
for continued growth and profitability.                                         

Sincerely,                                                                      
Andrew P. Averill (signature)                                                   

Andrew P. Averill                                                               
Chairman, President & CEO                                                       

[Page 4]                                                                        

Children... hope for the future                                                 

Picture - 3 young boys playing near steps (picture size - 4.5" wide x 3.5" tall)

                                                     Passbook   and    Statement
                                                          Savings  Accounts Both
                                                          banks offer  statement
                                                          and  passbook  savings
                                                          options,  so customers
                                                          can choose the type of
                                                       account thy prefer.

                                                     Penny's Piggy Bank  Savings
                                                          Account   This  Camden
                                                          National  Bank savings
                                                          account,  designed  to
                                                          make    banking   fun,
                                                          rewards  children  for
                                                 saving money.

   Camden  National  Corporation  is helping the  customers  of tomorrow  become
   financially  savvy and responsible  adults.  Products like Penny's Piggy Bank
   savings  account  are  designed  to teach  young  people  about  banking  and
encourage them to save.                                                   

[Page 5]                                                                        

                                      Young families...just starting out

Picture of young couple         
(picture size - 3.75" wide x 6.0" tall)           

                               Overdraft Protection This service helps customers
                    avoid the  inconvenience,  expense and  embarrassment  of an
                    overdrawn  checking  account and provides access to funds in
case of an emergency.                   

                              Personal  Loans The banks offer a variety of rates
                   and terms on auto, vacation, boat, college and other types of
personal loans.                           

                              Mortgage  Loans  The  banks  offer  many  mortgage
                    options  including  low down  payment  loans and  first-time
homebuyer programs.                     

                              ATM/Debit  Cards Anyone with a busy lifestyle will
                    enjoy the convenience  offered by Camden  National's ATM and
point-of-sale network.                  

                             Internet Banking Camden National Bank customers can
                                  make  transactions  from the  comfort of their
                                  living room and enjoy convenient features like
                                  on-line loan  application and bill paying with
                                  NetBANK,  24-hour on-line banking. The address
                                  is    www.camdennational.com.    United   Bank
                                  customers   can   get   product   information,
                                 locations, and more at www.unitedbank-me.com.

Life is a balancing act for young people just starting out. Both banks of Camden
National  Corporation  help  families  with car loans and  mortgages,  and offer
time-saving products and services like debit cards and on-line banking.         

[Page 6]                                                                        

Middle years...meeting changing needs                                           

Picture of a couple weaving a basket                                            
(picture size - 3.5" wide x 5.5" tall)                                          

                                             Individual Retirement  Accounts The
                                                  banks  offer a variety  of IRA
                                                  vehicles,  from CDs to  mutual
                                                  funds,  to help customers take
                                                  advantage   of    tax-deferred
                                                  interest   and  save  for  the
                           future.

                                             Holiday Savings  Clubs Holiday club
                                                 coupons  make  saving  for  the
                                                 holiday   season  a  breeze-the
                                                 automatic  payment option makes
                                     saving even easier.

                                            Mortgage   Refinancing  /  2nd  Home
                                                Loans    The     banks     offer
                                                competitive-rate        mortgage
                                                programs  for  refinancing  your
                                                current      home,      vacation
                                                properties       and      rental
                            investments.

                                            HomeEquity Loans  Customers  can use
                                                the  equity  in their  homes and
                                                enjoy a revolving line of credit
                                                for  a  variety  of  uses,  from
                                               remodeling to family vacations.

A mortgage for a new home. A home equity loan for college  expenses.  A trust to
Help aging parents. Camden National Bank, United Bank and Trust Company of Maine
offer financial solutions for the changing needs of growing families.           

[Page 7]                                                                        

                      Retirement...planning for the future

Picture of a retired woman in her kitchen         
(picture size - 4.0" wide x 5.75" tall)         

Money Market Accounts                                                     
       Money market accounts let customers enjoy competitive interest rates with
the liquidity of a checking account-the best of both worlds.      

Certificate of Deposit                                                          
       Customers  can invest their money for a specified  period of time-from 90
       days to seven  years.  Competitive  rates  and a  variety  of  terms  are
available.                                                        

Investment Management Services                                                  
       The banks work with  customers  to  establish a  financial  plan based on
their needs and objectives.                                       

Trust Services                                                                  
      The Trust  Company of Maine  provides a full range of trust  services from
 revocable and irrevocable trusts to savings, rollovers, and SEP IRAs.

Camden  National  Corporation  helps  customers  plan for a  financially  secure
retirement with services such as certificates of deposit,  individual retirement
accounts and trust services through the Trust Company of Maine.                 

[Page 8]                                                                        

Generations Gold...                                                             
Innovative solutions for the entire family                          

Picture  One-Picture  of a man (same man as young couple  picture) and a boy ice
fishing (picture size - 2.5" wide x 3.0" tall)                                
                                                           Picture
                                                                  Two-Picture of
                                                                  the    retired
                                                                  woman   and  a
                                                                  boy at a piano
                                                                  (picture  size
                                                                  - 2.75" wide x
                                                               2.75" tall)

          Picture Three-Picture of man and two boys (same man and boys as above)
playing chess (picture size - 2.5" wide x 1.75" tall)       
Generations Gold emblem       

In 1998 Camden  National Bank and United Bank  introduced the  Generations  Gold
Family Club  Checking  Account.  Generations  Gold has  something  for everyone,
offering savings on a variety of products and services, including local merchant
discounts.  Providing  incentives  to shop  locally  has the  added  benefit  of
boosting  the economy in the  communities  we serve.  From  discounts on travel,
prescriptions  and long distance phone  service-to  lower premiums on dental and
pet insurance, Generations Gold exemplifies innovative banking at its best.     

[pages 9 - 16 contain the MD&A]                                                 

Management's Discussion and Analysis of Financial Condition                     
and Results of Operations                                                   

Management's   discussion  and  analysis  reviews  the  consolidated   financial
condition of the Company at December 31, 1998 and 1997, the consolidated results
of operations for the past three years and, where appropriate,  factors that may
affect  future  financial  performance.   This  discussion  should  be  read  in
conjunction with the Consolidated  Financial  Statements,  Notes to Consolidated
Financial Statements and Selected Consolidated Financial Data.                  

Forward Looking Information                                                     

     The  Private  Securities  Litigation  Reform  Act of 1995  provides a "safe
harbor" for forward-looking  statements.  Certain information  contained in this
discussion,  or in any other written or oral statements made by the Company, are
or may be considered as  forward-looking.  Forward-looking  statements relate to
future  operations,  strategies,  financial results or other  developments,  and
contain  words  or  phrases  such  as  "may,"  "expects,"  "should"  or  similar
expressions. Forward-looking statements are based upon estimates and assumptions
that  are   subject  to   significant   business,   economic   and   competitive
uncertainties,  many of which are beyond the Company's control or are subject to
change.                                                                         

     Inherent in the  Company's  business are certain  risks and  uncertainties.
Therefore, the Company cautions the reader that revenues and income could differ
materially  from those  expected to occur  depending  on factors such as general
economic  conditions  including changes in interest rates and the performance of
financial markets,  changes in domestic and foreign laws, regulations and taxes,
competition,  industry  consolidation,  credit  risks and other  factors.  Other
factors that could cause or contribute to such differences  include, but are not
limited to, variances in the actual versus projected growth in assets, return on
assets, loan losses,  expenses,  rates charged on loans and earned on investment
securities,  rates  paid  on  deposits,   competitive  effects,  fee  and  other
noninterest  income earned, as well as other factors.  The Company disclaims any
obligation to publicly update or revise any forward-looking statements,  whether
as a result of new information, future developments, or otherwise.              

GENERAL                                                                         

Overview of Company.                                                            
    Camden  National  Corporation  ("the  Company") is a  multi-bank,  financial
services  holding company  headquartered  in Camden,  Maine.  The Company's bank
subsidiaries,  both of which are wholly  owned,  are  Camden  National  Bank,  a
national  banking  organization,  based in Camden,  Maine,  and United  Bank,  a
banking  organization  chartered under the laws of the State of Maine,  based in
Bangor,  Maine.  The Company also has a 51% ownership in a non-bank  subsidiary,
Trust Company of Maine,  Inc.,  which provides  trust and retirement  management
services throughout central and mid-coast Maine.                                

Business.                                                                       
    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 loans to individuals, businesses and organizations
in its service  area. In addition,  the Company also invests in  mortgage-backed
securities  and securities  issued by the United States  Government and agencies
thereof.                                                                        

    The Company's majority-owned trust 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  Company's  goal is to balance  profit with growth and quality with
productivity.  Therefore,  emphasis  is placed on  increasing  loan and  deposit
market share in the communities its bank  subsidiaries  serve by offering a wide
range of quality  financial  products and services  coupled with local  decision
making.  In addition,  the Company  closely  manages yields on  interest-earning
assets  and  rates on  interest-bearing  liabilities  and  strives  to  increase
noninterest income while controlling the growth of noninterest  expenses.  It is
also part of the business strategy of the Company to supplement  internal growth
with  acquisitions  of other  banks  and/or  branches  of other  banks when such
purchases are determined to add long-term shareholder value.                    

REVIEW OF FINANCIAL STATEMENTS                                                  

    The discussion and analysis which follows  focuses on the factors  affecting
the Company's  financial  condition at December 31, 1998 and 1997, and financial
results of operations  during 1998,  1997 and 1996. The  Consolidated  Financial
Statements and related Notes  beginning on page 19 of this report should be read
in conjunction with this review.                                                

RESULTS OF OPERATIONS                                                           

Overview.                                                                       
    The Company  reported  net income of $9.6  million in 1998,  $9.1 million in
1997 and $8.1  million  in 1996.  Basic  earnings  per share were $1.43 in 1998,
$1.34 in 1997 and $1.16 in 1996.  Return  on  average  assets  was 1.62% in 1998
compared  with  1.65% in 1997 and 1.65% in 1996.  Return on  average  equity was
15.23% in 1998 compared to 15.20% and 14.56% in 1997 and 1996, respectively.    

    The Company's  improved earnings in 1998 were attributable to an increase in
net  interest  income,  which is the  difference  between  interest and dividend
income on loans and securities, and interest expense on deposits and borrowings.
The Company's  results of operations are also affected by the provision for loan
losses, resulting from the Company's assessment of the adequacy of the allowance
for loans  losses,  and other  noninterest  income and  expenses.  Each of these
principal  components  of the  Company's  operating  results is discussed on the
following pages.                                                                

Net Interest Income.                                                            
Net  interest  income,  when  expressed as a percentage  of average  assets,  is
referred to as net interest margin. The following tables,  which present changes
in interest  income and interest  expense by major asset and liability  category
for 1998, 1997 and 1996, illustrate the impact of average volume growth and rate
changes.  Figures are adjusted to a taxable  equivalent  basis to recognize  the
income from tax-exempt assets as if the interest was taxable, thereby allowing a
uniform comparison to be made between asset yields.                             

Analysis of Changes in Net Interest Margin on Earning Assets                    

(Dollars in thousands)                    December 31, 1998                     

                       Average              Yield/
                      Balance   Interest    Rate
Assets                                                                          
Interest-earning assets:                                                        
Securities--taxable.............   $153,073    $10,641    6.95%             
Securities--                                                                
nontaxable (1)................      3,126        209    6.69%           
Federal funds sold .............      3,817        158    4.14%             
Loans (1) (2) (3)...............    393,214     38,105    9.69%             
                      --------    -------    -----
Total interest-earning assets .    553,230     49,113    8.88%            
                      --------    -------    -----

Cash and due from banks .......     16,949                                
Other assets ..................     31,548                                
Less allowance for loan losses       6,112                                
  --------
Total assets ..................   $595,615                                
  ========

Liabilities & Shareholders' Equity                                              
Interest-bearing liabilities                                                    
NOW accounts ...............   $ 42,384    $   580    1.37%         
Savings accounts ...........     70,754      2,229    3.15%         
Money market accounts ......     52,337      1,607    3.07%         
Certificates of deposit ....    224,275     12,380    5.52%         
Broker certificates of deposit    3,847        221    5.74%         
Short-term borrowings ......     72,300      3,701    5.13%         
                      --------    -------    -----
Total interest-bearing liabilities 465,897     20,718    4.45%            
                      --------    -------    -----

Demand deposits ...............     59,911                                
Other liabilities .............      6,478                                
Shareholders' equity ..........     63,329                                
   -------
Total liabilities &                                                       
shareholders' equity .......   $595,615                             
  ========

Net interest income ..............               $ 28,395                       
(fully-taxable equivalent)                                                

Less: fully-taxable equivalent adjustment            (330)                      
                          --------
                          $ 28,065
                          ========

Net interest rate spread .........                          4.43%               
                                             =====
(fully-taxable equivalent)                                                

Net interest margin ..............                          5.13%               
                                             =====
(fully-taxable equivalent)                                                

(Dollars in thousands)                    December 31, 1997                     

                       Average              Yield/
                      Balance   Interest    Rate
Assets                                                                          
Interest-earning assets:                                                        
Securities--taxable.............   $185,580    $12,549    6.76%             
Securities--                                                                
nontaxable (1)................      4,566        311    6.81%           
Federal funds sold .............        826         42    5.08%             
Loans (1) (2) (3)...............    336,030     33,053    9.84%             
                      --------    -------    -----
Total interest-earning assets .    527,002     45,955    8.72%            
                      --------    -------    -----

Cash and due from banks .......     13,869                                
Other assets ..................     22,850                                
Less allowance for loan losses       4,874                                
  --------
Total assets ..................   $558,847                                
  ========

Liabilities & Shareholders' Equity                                              
Interest-bearing liabilities                                                    
NOW accounts ...............   $ 41,152    $   535    1.30%         
Savings accounts ...........     64,269      2,158    3.36%         
Money market accounts ......     24,147        772    3.20%         
Certificates of deposit ....    183,134      9,996    5.46%         
Broker certificates of deposit      356         23    6.46%         
Short-term borrowings ......    132,298      7,324    5.54%         
                      --------    -------    -----
Total interest-bearing liabilities 445,356     20,808    4.67%            
                      --------    -------    -----

Demand deposits ...............     48,190                                
Other liabilities .............      5,112                                
Shareholders' equity ..........     60,189                                
   -------
Total liabilities &                                                       
shareholders' equity .......   $558,847                             
  ========

Net interest income ..............               $ 25,147                       
(fully-taxable equivalent)                                                

Less: fully-taxable equivalent adjustment            (325)                      
                          --------
                          $ 24,822
                          ========

Net interest rate spread .........                          4.05%               
                                             =====
(fully-taxable equivalent)                                                

Net interest margin ..............                          4.77%               
                                             =====
(fully-taxable equivalent)                                                

(Dollars in thousands)                    December 31, 1996                     

                       Average              Yield/
                      Balance   Interest    Rate
Assets                                                                          
Interest-earning assets:                                                        
Securities--taxable.............   $154,102    $ 9,793    6.35%             
Securities--                                                                
nontaxable (1)................      7,279        472    6.48%           
Federal funds sold .............      3,369        177    5.25%             
Loans (1) (2) (3)...............    298,596     29,737    9.96%             
                      --------    -------    -----
Total interest-earning assets .    463,346     40,179    8.67%            
                      --------    -------    -----

Cash and due from banks .......     13,250                                
Other assets ..................     20,076                                
Less allowance for loan losses       4,290                                
  --------
Total assets ..................   $492,382                                
  ========

Liabilities & Shareholders' Equity                                              
Interest-bearing liabilities                                                    
NOW accounts ...............   $ 39,745    $   531    1.34%         
Savings accounts ...........     63,536      2,130    3.35%         
Money market accounts ......     25,340        809    3.19%         
Certificates of deposit ....    182,926     10,257    5.61%         
Broker certificates of deposit    3,910        255    6.52%         
Short-term borrowings ......     73,069      3,983    5.45%         
                      --------    -------    -----
Total interest-bearing liabilities 388,526     17,965    4.62%            
                      --------    -------    -----

Demand deposits ...............     41,569                                
Other liabilities .............      3,116                                
Shareholders' equity ..........     59,171                                
   -------
Total liabilities &                                                       
shareholders' equity .......   $492,382                             
  ========

Net interest income ..............               $ 22,214                       
(fully-taxable equivalent)                                                

Less: fully-taxable equivalent adjustment            (304)                      
                          --------
                          $ 21,910
                          ========

Net interest rate spread .........                          4.05%               
                                             =====
(fully-taxable equivalent)                                                

Net interest margin ..............                          4.79%               
                                             =====
(fully-taxable equivalent)                                                

(1)  Reported  on  tax-equivalent  basis  calculated  using  a rate  of 34%  for
fully-taxable  equivalent.  (2) Non-accrual  loans are included in total average
loans. (3) Includes net swap income figures 1998 $1, 1997 $(11), and 1996 $111. 

Analysis of Volume and Rate Changes on Net Interest Income                      

                        Year Ended December 31,    Year Ended December 31,
                       1998 vs 1997               1997 vs 1996
(Dollars in thousands)                                                          
                         Increase (Decrease)         Increase (Decrease)
                        Due to                      Due to

                        Volume   Rate    Total      Volume   Rate    Total
Interest-earning Assets:                                                        
Securities--taxable       $(2,198) $ 290   $(1,908)   $ 2,000  $  756  $ 2,756
 Securities--nontaxable        (98)    (4)     (102)      (176)     15     (161)
 Federal funds                 152    (36)      116       (134)     (1)    (135)
Loans (1)                   5,625   (573)    5,052      3,728    (412)   3,316
                          -------  -----   -------    -------  ------  -------
  Total interest income   $ 3,481  $(323)  $ 3,158    $ 5,418  $  358  $ 5,776
                          -------  -----   -------    -------  ------  -------

Interest-bearing Liabilities:                                                   
 NOW accounts             $    16  $  29        45    $    19  $  (15)       4
 Savings accounts             218   (147)       71         25       3       28
  Money Market accounts        901    (66)      835        (38)      1      (37)
  Certificates of deposit    2,246    138     2,384         12    (273)    (261)
  Broker certificates          226    (28)      198       (232)      0     (232)
 Short-term borrowings     (3,321)  (302)   (3,623)     3,229     112    3,341
                          -------  -----   -------    -------   -----  -------
  Total interest expense  $   286  $(376)  $   (90)   $ 3,015   $(172) $ 2,843
                          -------  -----   -------    -------   -----  -------

Net interest income                                                             
(fully-taxable                                                            
      equivalent)         $ 3,195  $  53   $ 3,248    $ 2,403   $ 530  $ 2,933
                          =======  =====   =======    =======   =====  =======

    The Company's net interest income,  on a fully-taxable  equivalent basis was
$28.4  million,  $25.1  million  and  $22.2  million  in 1998,  1997  and  1996,
respectively.  Changes in net  interest  income are the result of interest  rate
movements,  changes  in the  amounts  and  mix of  interest-earning  assets  and
interest-bearing  liabilities,  and changes in the level of non-interest-earning
assets and non-interest-bearing liabilities.                                    

    Net interest  income  increased by $3.2 million or 12.9%, on a fully-taxable
equivalent  basis in 1998  compared to 1997.  This increase was primarily due to
the increase in loan volume,  even though loans experienced a slight decrease in
yields.  During 1997, net interest income increased by $2.9 million or 13.2%, on
a fully-taxable  equivalent basis compared to 1996. This increase was due to the
increase  in loan and  investment  volumes  despite  a slight  decrease  in loan
yields.   Net  interest   income,   expressed   as  a   percentage   of  average
interest-earning assets, was 5.13% in 1998, 4.77% in 1997, and 4.79% in 1996.   

    The average amount of loans outstanding  increased by $57.2 million or 17.0%
in 1998  over  1997  and by $37.4  million  or 12.5%  in 1997  over  1996  which
contributed  to the  increase  in  interest  income.  Interest  income  on loans
increased by $5.1  million in 1998  compared to 1997 and by $3.3 million in 1997
compared to 1996.  The weighted  average yield on loans  decreased from 9.96% in
1996 to 9.84% in 1997 and 9.69% in 1998.                                        

    The average  amount of  non-accrual  loans can also affect the average yield
earned on all  outstanding  loans.  However,  the average  amount of non-accrual
loans for 1998, 1997 and 1996 were minimal and, therefore,  had an insignificant
effect on average loan yield.                                                   

    Interest and dividends on investment  securities  decreased by $1.9 million,
on a  fully-taxable  equivalent  basis, in 1998 compared with 1997. This was the
result of a poor reinvestment market for maturing securities.  In 1997, interest
and  dividends  on  investment  securities  increased  by  $2.5  million,  on  a
fully-taxable  equivalent basis,  compared with 1996. The primary reason for the
increase was increased  volume and yields.  The average  balance of  investments
outstanding  increased from $164.8 million in 1996 to $191.0 million in 1997 and
then  declined  to  $160.0  million  in  1998.  The  weighted  average  yield on
investment securities increased from 6.34% in 1996 to 6.76% in 1997 and 6.88% in
1998.  During 1997 the Company  recovered  $107,312 of principal and interest on
several  municipal  investments  that had  previously  defaulted and for which a
permanent  writedown had been recognized.  The Company also recovered $54,000 of
principal and interest on those same investments in 1996.                       

    Interest  expense on deposits  and  borrowings  decreased by $90,000 in 1998
compared with 1997. This decrease was primarily  attributable to the purchase of
$87.3 million in deposits which resulted in a reduction to the Company's cost of
funds.  Interest expense on deposits and borrowings increased by $2.8 million or
15.8% in 1997  compared  with 1996.  The  increase  was due to increases in both
borrowings and certificates of deposit, and to the increased interest rates paid
on these borrowings and  certificates of deposits.  The weighted average rate on
interest-bearing  liabilities  increased from 4.62% in 1996 to 4.67% in 1997 and
then decreased to 4.45% in 1998.                                                

    The  following  discussion  about the Company's  risk-management  activities
includes  "forward-looking  statements"  that  involve  risk and  uncertainties.
Actual   results   could  differ   materially   from  those   projected  in  the
forward-looking statements (see "Forward Looking Information" on page 9).       

    Additionally,  the Company periodically uses interest rate swaps, floors and
caps, which are common derivative financial instruments,  to hedge interest rate
risk associated with  anticipated  purchases and sales of investments and loans,
as well as deposit  practices (see Note 17 "Financial  Instruments"  of Notes to
Consolidated  Financial  Statements  on page  35,  for  further  information  on
derivative financial instruments).                                              

    The off-balance sheet instruments have an effect on net interest income. The
net result of the Company's interest rate swap agreements was an offset to gains
in net interest  income of $1,000 in 1998,  and $111,000 in 1996,  and a loss in
net  interest  income of  $11,000  in 1997.  Entering  into  interest  rate swap
agreements  involves not only the risk of dealing with  counterparties and their
ability  to meet the terms of the  contracts,  but also the  interest  rate risk
associated  with unmatched  positions.  Notional  principal  amounts are used to
express the volume of these transactions, but the amounts potentially subject to
credit risk are much  smaller.  During  1998,  1997 and 1996,  the Company was a
party in several agreements to assume variable  market-indexed interest payments
in exchange for fixed-rate  interest payments (interest rate swaps). At December
31,  1998,  the Company had no  outstanding  interest  rate swaps.  The notional
principal  amount of interest rate swaps  outstanding was $5 million at December
31, 1997 and $20 million at December 31, 1996.  During 1997 two swap  agreements
with notional  principal  amounts totaling $15 million matured resulting in only
one swap with a notional  principal of $5 million  remaining.  The variable rate
being paid by the Company on the  remaining  swap was higher than the rate being
paid to the Company, therefore,  resulting in a decrease of income. The variable
rates being paid by the Company on the swaps decreased  during 1996 resulting in
an increase in the spread  between what the Company was paying  (variable  rate)
and receiving (fixed rate) on these agreements.                                 

    During 1998,  1997 and 1996, the Company  entered into several floor and cap
contracts. The Company amortized the cost over the term of each contract.       

Noninterest Income.                                                             
    Noninterest  income was $4.5 million,  $3.8 million and $3.4 million for the
years  ended  December  31,  1998,  1997 and  1996,  respectively.  There was an
increase of $748,000 or 19.9% in total noninterest  income during 1998.  Service
charges on deposit accounts  increased $95,000 or 10.5% over 1997. Other service
charges and fees which  include  merchant  assessments  increased by $580,000 or
21.3% over the same period. The largest contributing factor to this increase was
the fee income  generated by merchant  assessments.  Other income also increased
over 1997 by $73,000 or 59.8%. The major  contributing  factor for this increase
was trust fees.                                                                 

    Total  noninterest  income  increased by $339,000 in 1997  compared to 1996.
Service  charges on  deposit  accounts  increased  by $36,000 or 4.2% over 1996.
Other service charges and fees which include merchant  assessments  increased by
$222,000 or 15.9% over the same period. The largest  contributing factor was the
fee income generated by merchant  assessments.  Other income decreased from 1996
to 1997 by $161,000 or 56.8%.                                                   

Noninterest Expenses.                                                           
    Noninterest  expense was $17.1 million,  $13.3 million and $12.3 million for
the years ended  December 31, 1998,  1997 and 1996,  respectively.  There was an
increase of $3.8 million or 28.4% in total noninterest  expense during 1998. The
largest  increase was in salaries and employee  benefits  which  increased  $1.6
million or 23.5% from $7.0  million in 1997.  The major  contributing  factor to
this increase was the  additional  staff as a result of the branch  acquisitions
during 1998. In 1997 salaries and employee benefits  increased $689,000 or 10.9%
from $6.3  million  in 1996.  This  increase  was the  result  of normal  annual
increases,  additions to staff and higher pension benefit costs. In addition,  a
new performance compensation program was introduced to all employees during 1997
which resulted in additional compensation paid over 1996.                       

    Other  operating  expenses  increased  by $2.1 million or 33.8% in 1998 over
1997.  The  major  contributing  factors  for this  increase  were  credit  card
expenses, data processing, marketing, supply costs, and amortization of the core
deposit intangibles.  With the addition of eight new branches higher than normal
expenses were incurred in the areas of data processing,  marketing and supplies.
In addition,  the  amortization of the core deposit  intangibles of $471,000 was
recorded in 1998, which was the result of the new branches acquired in March and
October.  In 1997 other operating  expenses  remained  relatively level, with no
unusual increases or decreases in any category.                                 

FINANCIAL CONDITION                                                             

Overview.                                                                       
    The  year  1998  was  highlighted  by  branch  acquisitions  by  both of the
Company's bank subsidiaries. On March 13, 1998, the Company's subsidiary, Camden
National Bank,  purchased four branches,  and assumed $52.4 million in deposits,
and $7.3  million in loans  from  KeyBank.  These  branches  are  located in the
communities of Bucksport,  Damariscotta,  Vinalhaven  and Waldoboro.  On October
2,1998, the Company's  subsidiary,  United Bank,  purchased three branches,  and
assumed $34.9  million in deposits,  and $11.2 million in loans from Fleet Bank.
These  branches  are  located in the  communities  of Milo,  Dover-Foxcroft  and
Greenville.  United Bank also  established  a de novo branch  during 1998 in the
community of Winterport. The Company considers the acquisition of these branches
by its subsidiary banks a logical expansion of their current service areas.     

    At December 31, 1998, the Company had consolidated assets of $668.0 million,
an increase of $94.1  million or 16.4%,  from  December 31, 1997.  The change in
assets consisted  primarily of a $75.8 million increase in loans, an increase in
other  assets of $11.2  million and an increase  of $7.5  million in  investment
securities.  The asset  growth  was  supported  by a change in  liabilities  and
shareholders' equity consisting of a $135.2 million increase in deposits, a $1.5
million  increase in total  shareholders'  equity,  combined  with a decrease of
$42.3 million in total borrowings.                                              

Investment Securities.                                                          
    With increased loan demand during 1998 and 1997, additions to the investment
portfolio  have  been  minimal.  In  addition,  the  Company  did  not  want  to
aggressively  purchase new  securities  during a time of relatively low interest
rates. Most new investment  purchases  replaced  investments that matured during
1998.                                                                           

    Total  investment  securities  increased  by $7.5  million or 4.2% to $186.8
million at December 31, 1998. The Company has investment  securities in both the
available-for-sale  and  held-to-maturity  categories.  During  1998 the Company
increased the available-for-sale portion of the investment portfolio. The change
in the  investment  portfolio  reflects the Company's  efforts to meet asset and
liability  objectives  and manage its  liquidity  and funding  needs  within the
parameters  of  current  accounting  polices.  The  available-for-sale  category
increased  during 1998 by $79.8 million.  A portion of the Company's  investment
portfolio is also  classified as held to maturity,  meaning that the Company has
both the intent and ability to hold the securities  until maturity.  The ability
to use these  securities as collateral for Federal Home Loan Bank loans enhances
the Company's  ability to hold the  securities  to maturity.  In 1997, to better
position the balance sheet for a potential  downward  interest  rate shift,  the
Company  purchased  longer-term  investments  funded by shorter-term  borrowings
primarily through the Federal Home Loan Bank of Boston ("FHLB"). Additional FHLB
stock was purchased to support the Company's increased borrowing activity.      

Loans.                                                                          
    During 1998, the loan portfolio experienced growth in every category.  Loans
and loans held for sale in the portfolio totalled $438.9 million at December 31,
1998, a 20.9%  increase from total loans of $363.1 million at December 31, 1997.
This resulted from a continuation of the loan growth  experienced by the Company
for the past several years and the $18.5 million  acquired  loans as part of the
branch acquisitions by the Company's bank subsidiaries in 1998.                 

    Residential  real estate mortgage loans increased by $2.1 million or 1.8% in
1998.  Residential  real estate loans  consist of loans  secured by  one-to-four
family residences.  The Company generally retains  adjustable-rate  mortgages in
its portfolio but will,  from time to time,  retain  fixed-rate  mortgages.  The
Company also originates  fixed-rate  residential  loans for sale to investors in
the secondary  market.  During 1998, $22.3 million of the fixed rate residential
loans originated and classified as sale pending were held by the Company. All of
the mortgage  loans in the  Company's  loan  portfolio are secured by properties
located in Maine.                                                               

    Commercial loans increased by $36.1 million or 20.0% during 1998. Commercial
business loans consist of loans secured by various  corporate assets, as well as
loans to provide  working  capital in the form of lines of credit,  which may be
secured or unsecured.  The  commercial  category also includes  commercial  real
estate loans secured by income  producing  commercial real estate.  In addition,
the Company makes loans for the  acquisition,  development  and  construction of
commercial  real  estate.  The  Company  focuses on lending to sound  small- and
medium-sized business customers within its geographic marketplace.              

    Consumer loans  increased by $14.1 million or 30.5% in 1998.  Consumer loans
are  provided  for a wide  variety of  purposes  to meet our  customers'  needs.
Consumer loans are  originated  directly by the Company and include credit card,
overdraft protection,  automobile, boat, recreation vehicles, mobile homes, home
equity, and secured and unsecured personal loans.                               

    Non-performing  loans,  defined as non-accrual  loans plus accruing loans 90
days or more past due,  totaled  $2.3 million or .53% of total loans at December
31, 1998,  compared to $2.2 million or .61% of total loans at December 31, 1997.
It is the Company's policy to discontinue the accrual of interest on loans when,
in the opinion of  management,  there is an indication  that the borrower may be
unable to meet  payments  as they  become  due.  Upon such  discontinuance,  all
accrued but unpaid interest is reversed.                                        

    Delinquent real estate loans are not reclassified as Other Real Estate Owned
("OREO")  until  the  Company  takes  title  to  the  property,  either  through
foreclosure  or  upon  receipt  of a  deed  in  lieu  of  foreclosure.  In  such
situations, the secured loan is reclassified on the balance sheet as OREO at the
lesser of the fair value of the underlying  collateral  less  estimated  selling
costs,  or the recorded  amount of the loan. The balance of OREO was $.9 million
and  $1.4  million,  as of  December  31,  1998  and  1997,  respectively.  As a
percentage of total loans OREO represented .21% and .38% as of December 31, 1998
and 1997,  respectively.  Losses arising from the acquisition of such properties
are charged  against the Allowance for Loan Losses ("ALL").  Operating  expenses
and any  subsequent  provisions  to reduce  the  carrying  value are  charged to
operations. Gains and losses upon disposition are reflected in earnings as other
noninterest income when realized.                                               

Allowance for Loan Losses / Provision for Loan Losses.                          
    In determining the adequacy of the ALL,  management  relies primarily on its
review of the loan portfolio both to ascertain whether there are probable losses
to be  charged  off,  and  to  assess  the  loan  portfolio  in  the  aggregate.
Non-performing  loans  are  examined  on an  individual  basis to  determine  an
estimated  probable  loss on these  loans.  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 ALL as conditions dictate.                                                  

    During 1998,  the Company  provided  $1.4 million for possible  loan losses,
compared to $1.7 million and $.8 million in 1997 and 1996, respectively.  During
1998,  the increase in the  allowance was due to the increase in loan volume and
was not due to a deterioration of loan quality. Determining an appropriate level
of ALL  involves  a high  degree  of  judgment.  Management  believes  that  the
allowance  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.  The ALL
as a  percentage  of total loans  outstanding  was 1.55% and 1.44%,  in 1997 and
1996, respectively.                                                             

LIQUIDITY                                                                       

    The  primary  objective  of  liquidity  management  is to maintain a balance
between  sources and uses of funds to meet the cash flow needs of the Company in
the most economical and expedient  manner.  The liquidity needs of the Company's
bank  subsidiaries  require  the  availability  of cash to meet  the  withdrawal
demands  of  depositors  and the credit  commitments  to  borrowers.  Due to the
potential  for  unexpected  fluctuations  in  both  deposits  and  loans  active
management of the Company's liquidity is critical. The Company seeks to maintain
various  sources  of funding  and  prudent  levels of liquid  assets in order to
satisfy  its  varied  liquidity  demands.  In order to  respond  to the  various
circumstances, the Company has both on- and off-balance sheet funding in place. 

Each of the Company's banking subsidiaries monitors its                 
liquidity  in  accordance  with  guidelines   established  by  the  Company  and
applicable  regulatory  requirements.  As of  December  31,  1998 and 1997,  the
Company's level of liquidity exceeded its target level. Management believes that
the Company's banking  subsidiaries  currently have adequate liquidity available
to respond to both expected and unexpected  liquidity demands.  Sources of funds
utilized by the Company's banking subsidiaries  consist of deposits,  borrowings
from  the  FHLB of  Boston  and  other  sources,  cash  flows  from  operations,
prepayments and maturities of outstanding loans, investments and mortgage-backed
securities,  and the  sale of  mortgage  loans.  Deposits  still  represent  the
Company's  primary source of funds.  In 1998 total deposits  increased by $135.2
million or 36.2% over 1997.  Part of this  increase was the result of the branch
acquisitions  in 1998 where the  subsidiary  banks  purchased  $87.3  million in
deposits.  However,  in addition to the  deposits  acquired  with the  purchased
branches,  the Company  experienced  growth in all deposit categories in 1998 of
$47.9 million or 12.8% over 1997.  Transaction  accounts (DDA and NOW) increased
by $8.8  million,  money markets by $12.9  million,  savings by $6.9 million and
certificates  of deposit by $19.3  million.  This  increase in deposits  was the
result of aggressive marketing of the Company's deposit products.  In 1997 total
deposits increased by $20.2 million or 5.7% over 1996. Transaction accounts (DDA
and NOW) increased by $4.8 million or 5.3%,  savings accounts  increased by $3.1
million or 4.9%, and certificates of deposit increased by $12.9 million or 7.3%.

    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 FHLB.  Total  borrowings were $90.2 million at December
31, 1998,  compared to $132.5  million at December 31, 1997, a decrease of $42.3
million or 31.9%.  The decrease was the result of more funds being  generated in
the form of deposits  during 1998. The majority of the borrowings  were from the
Federal   Home  Loan  Bank  of  Boston.   FHLB   advances   remain  the  largest
nondeposit-related  interest-bearing  funding  source  for the  Company in 1998.
These borrowings are secured by qualified residential real estate loans, certain
investment  securities  and certain  other assets  available to be pledged.  The
Company views  borrowed  funds as an  alternative  funding source that should be
utilized.                                                                       

CAPITAL RESOURCES                                                               

    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
8.0%, of which at least 4.0% must be in the form of core capital. The Company's,
and its bank  subsidiaries',  ratios at December  31, 1998 and December 31, 1997
exceeded  regulatory   guidelines.   For  actual  ratios  see  Note  18  to  the
Consolidated   Financial   Statements.   In  addition  to   risk-based   capital
requirements,  the FRB  requires  bank  holding  companies to maintain a minimum
leverage capital ratio of core capital to total assets of 4.0%. Total assets for
this  purpose  do not  include  goodwill  and any other  intangible  assets  and
investments that the FRB determines should be deducted.  The Company's  leverage
ratios at December 31, 1998 and 1997 were 9.5% and 10.6%, respectively.         

    As part of the  Company's  goal to  operate a safe,  sound,  and  profitable
financial organization, the Company is committed to maintaining a strong capital
base. The Company's shareholders' equity totaled $64.1 million and $62.6 million
or 9.6% and 10.9% of total assets at December  31, 1998 and 1997,  respectively.
The  $1.5  million  or 2.5%  increase  in  shareholders'  equity  was  primarily
attributable to net income of $9.6 million,  less net share  repurchases of $3.1
million,  the exercise and  repurchase of stock options of $1.1 million and $3.8
million in cash dividends.                                                      

    The principal  cash  requirement of the Company is dividends on common stock
when declared.  Dividends paid on the Company's common stock in 1998 represented
a 23.0% increase over 1997. The Company is primarily  dependent upon the payment
of cash  dividends  by Camden  National  Bank to service  its  commitments.  The
Company,  as the sole  shareholder  of Camden  National Bank and United Bank, is
entitled to dividends  when and as declared by each Bank's  Board of  Directors,
out  of  funds  legally  available;  therefore,  the  Company's  ability  to pay
dividends is subject to the powers of the State of Maine and Federal regulators.
Camden National Bank declared  dividends in the aggregate  amount of $12,534,000
and $4,356,000 in 1998 and 1997, respectively. In 1998 the dividends declared by
Camden National Bank included $3,750,000 payable to shareholders,  $3,058,000 to
repurchase stock, $4,000,000 to invest in other bank subsidiary,  and $1,726,000
to repurchase stock options. United Bank declared no dividends in 1998 and 1997.
As of December 31, 1998, and subject to the limitations and  restrictions  under
applicable law, Camden National Bank and United Bank had $12.2 million available
for dividends to the Company, although there is no assurance that dividends will
be paid at any time in any amount.                                              

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.                                                         

Year 2000 Risk Assessment and Action Plan.                                      
    The Year 2000 issue refers to the fact that many computers  were  originally
programmed  using two digits  rather  than four  digits  when  referring  to the
applicable year. When the year 2000 occurs,  these systems will read the year as
1900 rather than 2000.  Unless software and hardware systems are corrected to be
Year  2000  compliant,  computers  could  generate  miscalculations  and  create
operational  problems.  Year 2000 compliant means having  computer  systems that
accurately  process date and time data from, into, and between the twentieth and
twenty-first centuries. Furthermore, Year 2000 compliant information technology,
when used in combination  with other  information  technology,  will  accurately
process  date  and  time  data  if the  other  information  technology  properly
exchanges date and time data with it.                                           

    To assist in identifying any and all exposures that the Company may have and
to help  make  all the  appropriate  changes  necessary  to  allow  for a smooth
transition  into the new millennium the Company  engaged Vitex Inc. to assist in
development  of a  Year  2000  Plan.  The  Company's  Executive  Operations  and
Technology  Committee manages the Year 2000 project with the assistance of Vitex
Inc. The Committee  developed a Year 2000 Plan to address the Company's exposure
to  potential  problems  arising  from the Year  2000.  The plan is based on the
Federal Financial Institution Examination Council ("FFIEC") Guidelines.         

    The Company  has been  working  since June 1997 to  identify,  test,  and if
necessary,  upgrade key systems such as checking,  savings, general ledger, wire
transfer,  consumer and commercial loans, and other core computer systems. These
are the Company's "mission critical" systems.  Currently,  100% of the Company's
"mission  critical"  systems are ready for the Year 2000.  All other systems are
undergoing rigorous Year 2000 testing in our own environment,  and completion is
scheduled   for  June  30,  1999.   The  Company  also   operates  in  a  highly
interconnected  local and wide area network  environment.  The Company's  entire
network has been  renovated  to Year 2000 ready  versions of both  hardware  and
software.  In  addition,  a  thorough  inventory  of the  Company's  facilities,
elevators and security  systems for potential  Year 2000 issues was completed in
September 1998.                                                                 

    All software used by the Company is provided by outside  vendors,  which are
selected  based on the quality of their  products  and their  proven  ability to
deliver to the Company and its customers. The Company is actively monitoring its
approximate  50 software and hardware  suppliers for Year 2000  compliance.  The
progress  of these  vendors  is  tracked  as they  deliver  Year 2000  compliant
upgrades to their applications.                                                 

    The Company strives to strengthen  customer awareness of the Year 2000 issue
in various  forms.  An  internal  awareness  training  program  is ongoing  with
employees. This will enable our staff to effectively answer customers' concerns.
Statement  stuffers have been mailed with monthly statements to customers of the
Company's bank  subsidiaries to assure them of the Company's  readiness to serve
them in the new millennium.  The Company has sponsored  several seminars for the
community  on the  Year  2000  issues.  The  Company  has  requested  compliance
statements from over 150 companies upon which the Company relies.  Some examples
of these companies are utility providers, insurance companies, investment firms,
other  banks,  and  human  resource  service  providers.  If  providers  fail to
demonstrate  adequate  Year  2000  compliance  progress,  the  Company  has  set
deadlines for implementation of contingency plans.                              

    An essential  component of preparing for the Year 2000 problem and beyond is
developing a  Contingency  Plan if any or all of the  Company's  systems fail or
cannot be made Year 2000 ready.  The Company is developing Year 2000 contingency
plans for all of its mission  critical  products and  services.  These plans are
designed to mitigate the risks  associated  with (1) the failure to successfully
complete  renovation,  validation,  or implementation of our Year 2000 readiness
plan;  or (2) the failure to any of our systems at critical  dates.  The Company
has dedicated  staff for this critical  aspect of preparation for the Year 2000.
The Company's  Contingency Plan includes the development of a Crisis  Management
Team to handle any  unforeseen  problems.  Although  the Company does not expect
there to be any problems, it will outline procedures to handle any if there is a
mission  critical system failure.  A general  contingency plan will be developed
for non-mission  critical systems.  The intent of these plans is to describe how
the Company will resume normal business  operations if systems do not perform as
planned  and  required  before  or after  the  turn of the  century.  The  basic
priorities  for  restoring  service will be based on the  essential  application
processing   required  to  provide  the  Company's  financial  services  to  its
customers.  The Company is conducting  business impact analyses for each mission
critical area to identify  potential  disruption and the effect such  disruption
could have on business  operations  should a service provider or software vendor
be unable to  operate  in a Year 2000  compliant  environment.  The  Company  is
analyzing strategies and identifying  resources that will be required to restore
systems  and or  business  operations.  As part of the  emergency  plan for each
individual  mission  critical item, the Company will include a recovery  program
that identifies participants,  processes, and equipment that might be needed for
the Company to function at an adequate  level.  The program will ensure that all
participants  are  aware  of their  roles,  adequately  trained,  and able to do
whatever is necessary to restore operations.                                    

    The Company will monitor cash levels during 1999 in order to determine usage
trends.  The Company plans to increase its currency and coin levels  starting in
the fall of 1999 in  anticipation  of higher  liquidity  levels required to meet
cash needs during the transition to the year 2000. In addition, the Company will
confirm its available lines of credit with correspondent banks, the Federal Home
Loan Bank, and the Federal Reserve Bank to insure available liquidity in meeting
unanticipated cash demands.                                                     

    The estimated cost to address all of the Year 2000 issues is $450,000.  This
includes  approximately  $200,000  to upgrade  software  and  hardware  systems,
$100,000 for testing of systems,  $100,000 for consulting  fees, and $50,000 for
existing  personnel  costs to effectively  implement the Year 2000 Plan.  During
1998, the Company recognized $200,000 in expenses related to Year 2000.         

MARKET RISK                                                                     

    Market  risk is the  risk of loss in a  financial  instrument  arising  from
adverse changes in market rates/prices such as interest rates,  foreign currency
exchange rates, commodity prices and equity prices. The Company's primary market
risk exposure is interest rate risk.  The ongoing  monitoring  and management of
this risk is an important component of the Company's asset/liability  management
process  which is  governed by policies  established  by the bank  subsidiaries'
Boards of Directors that are reviewed and approved  annually.  Each Bank's Board
of Directors  delegates  responsibility  for  carrying  out the  asset/liability
management policies to the banks  Asset/Liability  Committee  ("ALCO").  In this
capacity  ALCO  develops  guidelines  and  strategies  impacting  the  Company's
asset/liability  management  related activities based upon estimated market risk
sensitivity, policy limits and overall market interest rate levels/trends.      

Interest Rate Risk.                                                             
    Interest  rate risk  represents  the  sensitivity  of earnings to changes in
market interest rates. As interest rates change, the interest income and expense
streams associated with the Company's financial  instruments also change thereby
impacting net interest  income ("NII"),  the primary  component of the Company's
earnings.  ALCO utilizes the results of a detailed and dynamic  simulation model
to quantify the  estimated  exposure of NII to sustained  interest rate changes.
While ALCO routinely  monitors simulated NII sensitivity over a rolling two-year
horizon,  it also utilizes  additional  tools to monitor  potential  longer-term
interest rate risk.                                                             

    The simulation  model captures the impact of changing  interest rates on the
interest  income  received  and interest  expense  paid on all interest  earning
assets and liabilities  reflected on the Company's  balance sheet as well as for
off-balance sheet derivative financial  instruments.  None of the assets used in
the simulation  were held for trading  purposes.  This  sensitivity  analysis is
compared to ALCO policy limits which specify a maximum  tolerance  level for NII
exposure over a one year horizon, assuming no balance sheet growth, given both a
200 basis point (bp) upward and downward shift in interest rates. A parallel and
pro rata  shift in rates  over a  12-month  period  is  assumed.  The  following
reflects the Company's NII sensitivity  analysis as measured  periodically  over
the past year.                                                                  

 Estimated
Rate Change                   Changes in NII                              

  High          Low        Average

+200bp               1.96%         .83%         .46%                    
-200bp               (.52%)     (3.82%)      (1.95%)                    

    The preceding sensitivity analysis does not represent a Company forecast and
should not be relied upon as being  indicative  of expected  operating  results.
These hypothetical estimates are based upon numerous assumptions including:  the
nature  and  timing of  interest  rate  levels,  including  yield  curve  shape,
prepayments on loans and securities,  deposit decay rates,  pricing decisions on
loans and deposits,  reinvestment/replacement  of asset and liability cashflows,
and others. The assumptions differed in each of the four periods included in the
sensitivity  analysis on the preceding  page.  While  assumptions  are developed
based upon current economic and local market conditions, the Company cannot make
any assurances as to the predictive  nature of these  assumptions  including how
customer preferences or competitor influences might change.                     

    When appropriate, the Company may utilize off-balance sheet instruments such
as  interest  rate  floors,  caps and  swaps to hedge  its  interest  rate  risk
position.  Board of Directors' approved hedging policy statements govern the use
of these  instruments  by our bank  subsidiaries.  As of December 31, 1998,  the
Company had a notional principal of $20 million in floor contracts  outstanding.
The estimated effects of these derivative financial instruments on the Company's
earnings are included in the sensitivity analysis presented above.              

    ALCO monitors the  effectiveness  of its derivative  hedges  relative to its
expectation that a high correlation be maintained between the hedging instrument
and  the  related  hedged  assets/liabilities.  All  outstanding  positions  are
estimated to remain highly effective.                                           

    Interest  rate floors,  caps and swaps are  accounted  for using the accrual
method  with an income  statement  adjustment  to  interest  income or  interest
expense  depending  on whether the hedged items are assets or  liabilities.  The
unamortized premiums associated with purchased options contracts (i.e., caps and
floors) are  presented  on the balance  sheet along with other  prepaid  assets.
Interest  receivable  under the cap and floor contracts and interest  receivable
and payable amounts  associated with swap contracts are reflected on the balance
sheet along with other interest receivable and payable amounts. Unrealized gains
or losses  associated  with these  positions are not recognized in the financial
statements.                                                                     

    While it is not the Company's  practice to unwind derivative hedges prior to
their  maturity,  any recognized  gains/losses  would be deferred on the balance
sheet and  amortized  to  interest  income or  expense,  as  required,  over the
remaining  period of the original  hedge.  To the extent that a hedge were to be
deemed  ineffective due to a lack of correlation with the hedged items or if the
hedged  items were to be  settled/terminated  prior to  maturity  of the hedging
instrument,   then  unrecognized   gains/losses   associated  with  the  hedging
instrument would be recognized in the income statement with subsequent  accruals
and gains/losses also included in the income statement in the period they occur.

Recent Accounting Pronouncements.                                               
During 1998, the Company adopted SFAS No. 130, No. 131 and No. 132.     
The adoption of SFAS No. 130, "Reporting Comprehensive Income," required that   
certain items be reported under a new category of income, "Other Comprehensive  
Income." Unrealized gains and losses on securities available for sale is the    
only item included in other comprehensive income. SFAS No. 131 and No. 132      
relate to disclosures about segments and employee benefits, respectively.       
The financial statements for 1998 and prior periods, where applicable, include  
the required additional disclosures for SFAS No. 130, No. 131 and No. 132. SFAS 
No. 133, "Accounting For Derivative Instruments and Hedging Activities," and    
SFAS No. 134, "Accounting for Mortgage-Backed Securities Retained After the     
Securitization of Mortgage Loans Held for Sale by a Mortgage Banking            
Enterprise," are effective for fiscal years beginning after June 15, 1999, and  
the first fiscal quarter beginning July 1, 1999, respectively. Management has   
not determined the impact of SFAS No. 133 and No. 134 on the financial          
statements.                                                                     

Common Stock Information.                                                       
    The Common Stock of Camden  National  Corporation  (ticker symbol CAC) began
trading on the American Stock Exchange  ("AMEX")  October 7, 1997. Prior to that
date,  the stock was not traded on any exchange as the Company had maintained an
informal market in its stock.  The Company  elected to repurchase  stock for its
treasury  during 1997 and 1998.  During 1998 the  Company's  stock traded in the
range of $16.33 to $27.67.  On December 4, 1998, the Company's stock split three
for one. The number of shares and per share  amounts  have been  restated in the
Consolidated  Financial Statements,  Notes to Consolidated  Financial Statements
and Selected  Consolidated  Financial Data to reflect this stock split.  Shortly
after the  listing  of the  Company's  stock on AMEX in 1997 the price per share
increased  to a high of $20.25 per share,  then  leveled to a range of $18.33 to
$20.00 per share.  In 1996,  the Company  stock traded in the range of $11.67 to
$13.33 per share.                                                               

    In November  1998,  the  shareholders  approved an increase in the number of
authorized  shares of common stock from  5,000,000 to 10,000,000  shares.  After
this  approval  the Board of  Directors  approved a  three-for-one  split of the
Company's  common stock to  shareholders  of record on November 19, 1998, with a
distribution date of December 4, 1998.                                          

    The Company has paid  quarterly  dividends  since its inception in 1985. The
market price (as quoted by the American  Stock  Exchange  since October 7, 1997)
and cash dividends  paid, per share of the Company's  common stock,  by calendar
quarter for the past two years were as follows:                                 

1998  
Fourth      Third     Second      First   
Quarter    Quarter    Quarter    Quarter  

High               $27.67     $20.00     $19.83     $20.00                      
Low                 16.33      17.08      18.92      18.33                      
Close               20.50      17.46      19.75      19.33                      
Dividend Paid         .14        .14        .14        .13                      

1997  
Fourth      Third     Second      First   
Quarter    Quarter    Quarter    Quarter  

High               $20.25         na         na         na                      
Low                 14.83         na         na         na                      
Close               19.52         na         na         na                      
Dividend Paid         .12        .11        .11        .11                      

    Information  concerning   restrictions  on  the  ability  of  the  Company's
affiliates  to transfer  funds to the Company in the form of cash  dividends  is
described in the Capital Resources section on page 14.                          

         As of December 31, 1998, there were 6,656,310 shares of Camden National
Corporation stock outstanding, held of record by approximately 802 shareholders.

[Page 17]                                                                       
Camden National Corporation and Subsidiaries

Summary of Financial Performance

The page  contains  six bar graphs  where the bar  backgrounds  are  pictures of
coins.  The data in the bar graphs is for the current year and the previous four
years.                                                                          

Net Income                    Assets                   Deposits         
(in millions)               (in millions)            (in millions)        

'94  8.258                  '94  455.6                '94  340.2        
'95  7.403                  '95  480.7                '95  369.9        
'96  8.115                  '96  510.1                '96  353.2        
'97  9.148                  '97  573.9                '97  373.4        
'98  9.645                  '98  668.0                '98  508.6        

    Loans                 Earnings per share(1)    Book Value per share(1)
(in millions)                (in dollars)             (in dollars)        

'94  265.5                  '94  1.17                 '94  6.86         
'95  285.1                  '95  1.05                 '95  7.63         
'96  311.2                  '96  1.16                 '96  8.39         
'97  363.1                  '97  1.34                 '97  9.19         
'98  438.9                  '98  1.43                 '98  9.63         

(1) The number of shares and per share  amounts have been  restated to reflect a
three-for-one stock split distributed in December 1998.                         
Selected Five-Year Financial Data                                               

(In thousands, except per share data)                                           

                        December 31,
Financial Condition Data     1998      1997      1996      1995      1994       

Assets .................. $667,951  $573,892  $510,078  $480,685  $455,615      
Loans ...................  438,947   363,149   311,246   285,102   265,476      
Allowance for Loan Losses    6,512     5,640     4,472     4,080     3,751      
Investments .............  186,813   179,290   163,379   161,332   158,434      
Deposits ................  508,573   373,409   353,240   369,880   340,244      
Borrowings ..............   90,158   132,478    93,760    51,980    62,444      
Shareholders' Equity ....   64,102    62,556    57,822    53,680    48,258      

                             Year Ended December 31,
Operations Data ...............    1998     1997     1996     1995     1994     

Interest Income ............... $48,815  $46,051  $41,015  $38,661  $33,958     
Interest Expense ..............  20,750   21,229   19,105   18,853   13,766     
                           -------  -------  -------  -------  -------
Net Interest Income ...........  28,065   24,822   21,910   19,808   20,192     
Provision for Loan Losses .....   1,376    1,677      838      899      216     
                           -------  -------  -------  -------  -------
Net Interest Income after                                                       
Provision for Loan Losses ..  26,689   23,145   21,072   18,909   19,976  
Non-interest Income ...........   4,498    3,750    3,411    3,544    3,057     
Non-interest Expense ..........  17,073   13,294   12,338   11,707   10,581     
                           -------  -------  -------  -------  -------
Income before Provision                                                         
for Income Tax ............  14,114   13,601   12,145   10,746   12,452 
Income Tax Expense ............   4,469    4,453    4,030    3,343    3,964     
Accounting Change                                                               
for Postretirement Benefits    --       --       --       --        230 
                           -------  -------  -------  -------  -------
Net Income .................... $ 9,645  $ 9,148  $ 8,115  $ 7,403  $ 8,258     
                           =======  =======  =======  =======  =======

                   At or For the Year Ended December 31,

Other Data                       1998      1997      1996      1995      1994   

Return on Average Assets         1.62%     1.65%     1.65%     1.59%     1.90%  
Return on Average Equity        15.23%    15.20%    14.56%    14.53%    18.56%  
Net Income Per Share (1)      $  1.43   $  1.34   $  1.16   $  1.05   $  1.17   
Dividends Per Share (1) .     $   .55   $   .45   $   .32   $   .20   $   .15   
Book Value Per Share (1)      $  9.63   $  9.19   $  8.39   $  7.63   $  6.86   
Allowance for Loan Losses                                                       
 to Total Loans .......        1.48%     1.55%     1.44%     1.43%     1.42%
Non-performing Loans                                                            
 to Total Loans .......         .53%      .61%      .73%     1.05%     1.08%

(1) The number of shares and per share  amounts have been  restated to reflect a
three-for-one stock split distributed in December 1998.                         

Consolidated Statements of Condition                                            

December 31,                                                                    

(In thousands, except number                                                    
of shares and per share data)                         1998        1997        

Assets                                                                          
Cash and due from banks ........................  $  14,938   $  13,451         
Federal funds sold .............................       --         1,100         
Securities available for sale, at market .......     98,243      18,396         
Securities held to maturity (market                                             
value $91,759 and $164,286 at December                                    
31, 1998 and 1997, respectively) ............     88,570     160,894      
Residential mortgages held for sale ............     24,637       7,094         
Loans, less allowance for loan losses                                           
of $6,512 and $5,640 at December 31,                                      
1998 and 1997, respectively .................    407,798     350,415      
Bank premises and equipment ....................      9,530       8,786         
Other real estate owned ........................        905       1,373         
Interest receivable ............................      3,820       3,924         
Core deposit intangibles .......................      7,219         225         
Other assets ...................................     12,291       8,234         
                                         ---------   ---------
Total assets .............................  $ 667,951   $ 573,892   
                                         =========   =========

Liabilities                                                                     
Deposits:                                                                       
Demand ......................................  $  64,303   $  51,422      
NOW .........................................     62,094      42,796      
Money market ................................     53,393      23,452      
Savings .....................................     80,908      66,723      
Certificates of deposit .....................    247,875     189,016      
                                         ---------   ---------
Total deposits ...........................    508,573     373,409   
Borrowings from Federal Home Loan Bank .........     60,265      98,514         
Other borrowed funds ...........................     29,893      33,964         
Accrued interest and other liabilities .........      5,028       5,364         
Minority interest in subsidiary ................         90          85         
                                         ---------   ---------
Total liabilities ........................    603,849     511,336   
                                         ---------   ---------

Commitments (Note 11, 13, 17 and 18)                                            
Shareholders' Equity                                                            
Common stock, no par value;                                                     
authorized 10,000,000 shares,                                             
issued 7,128,240 shares .....................      2,436       2,436      
Surplus ........................................      1,142       1,410         
Retained earnings ..............................     68,785      62,925         
Net unrealized gains and (losses)                                               
on securities available for sale,                                         
net of income tax ...........................       (129)          5      
                                         ---------   ---------
                                            72,234      66,776
Less cost of 471,930 and 317,610                                                
shares of treasury stock                                                  
on December 31, 1998 and 1997 ...............      8,132       4,220      
                                         ---------   ---------
Total shareholders' equity ...............     64,102      62,556   
                                         ---------   ---------
Total liabilities and shareholders' equity  $ 667,951   $ 573,892   
                                         =========   =========

                The   accompanying   notes  are  an   integral   part  of  these
consolidated financial statements.                                              

 Consolidated Statements of Income

                                         Year Ended December 31,

(In thousands, except number                                                    
of shares and per share data)                   1998      1997      1996      

Interest Income                                                                 
Interest and fees on loans .................  $37,845    $32,845    $29,483     
Interest on U.S. Government and                                                 
agency obligations ......................    9,737     11,710      9,321  
Interest on state and political subdivisions      138        245        338     
Interest on interest rate swap agreements ..       33        410      1,251     
Interest on federal funds sold and                                              
other investments .......................    1,062        841        622  
                                         -------    -------    -------
Total interest income ...................   48,815     46,051     41,015  
                                         -------    -------    -------

Interest Expense                                                                
Interest on deposits .......................   17,017     13,484     13,982     
Interest on other borrowings ...............    3,701      7,324      3,983     
Interest on interest rate swap                                                  
agreements ..............................       32        421      1,140  
                                         -------    -------    -------
Total interest expense ..................   20,750     21,229     19,105  
                                         -------    -------    -------
Net interest income .....................   28,065     24,822     21,910  

Provision for Loan Losses ..................    1,376      1,677        838     
                                         -------    -------    -------
Net interest income after provision                                       
 for loan losses ......................   26,689     23,145     21,072
                                         -------    -------    -------

Other Income                                                                    
Service charges on deposit accounts ........      996        901        865     
Other service charges and fees .............    2,004      1,614      1,392     
Merchant assessments .......................    1,303      1,113        871     
Other income ...............................      195        122        283     
                                         -------    -------    -------
Total other income ......................    4,498      3,750      3,411  
                                         -------    -------    -------
                                          31,187     26,895     24,483
                                         -------    -------    -------
Operating Expenses                                                              
Salaries and employee benefits .............    8,638      6,992      6,303     
Net occupancy ..............................    1,011        856        736     
Furniture, equipment and data processing ...    1,384      1,294      1,254     
Other ......................................    6,040      4,152      4,045     
                                         -------    -------    -------
Total operating expenses ................   17,073     13,294     12,338  
                                         -------    -------    -------

Income before income taxes ..............   14,114     13,601     12,145  

Income Taxes ...............................    4,469      4,453      4,030     
                                         -------    -------    -------

Net Income .................................  $ 9,645    $ 9,148    $ 8,115     
                                         =======    =======    =======

Per Share Data                                                                  
Basic earnings per share                      $  1.43    $  1.34    $  1.16     
Diluted earnings per share                       1.41       1.31       1.14     
Weighted average number                                                         
of shares outstanding                    6,763,086  6,820,752  6,989,967  

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.                                                                     

 Consolidated Statements of Changes in
 Shareholders' Equity Years Ended December
 31, 1998, 1997 and 1996

(In thousands, except number of shares and per share data)                      

                                  Net Unrealized
                                  Gains (Losses)
                                                      on               Total
                                                  Securities           Share
                            Common          Retained Available Treasury -holders
                            Stock  Surplus Earnings For Sale    Stock   Equity
Balance at January 1, 1996   $2,436  $1,226  $50,951  $  104  $ (1,037) $53,680 
                            ------  ------  -------  ------  --------  -------
Net income for 1996 .......    --      --      8,115    --        --      8,115 
Change in unrealized                                                            
gains (losses) on                                                           
securities available for                                                    
sale net of tax benefit                                                     
  of $37 ..................    --      --       --       (72)     --        (72)
                            ------  ------  -------  ------  --------  -------
Total comprehensive                                                 
        income ...........    --      --      8,115     (72)     --      8,043
Purchase of treasury stock                                                      
    (141,783 shares) ......    --      --       --      --      (1,712)  (1,712)
Sale of treasury stock                                                          
   (4,002 shares) ........    --      --       --      --          50       50
Cash dividends                                                                  
    ($.32 per share) ......    --      --     (2,239)   --        --     (2,239)
                            ------  ------  -------  ------  --------  -------
Balance at December 31, 1996 $2,436  $1,226  $56,827  $   32  $ (2,699) $57,822 
                            ------  ------  -------  ------  --------  -------

Net income for 1997 .......    --      --      9,148    --        --      9,148 
Change in unrealized                                                            
gains (losses) on                                                           
securities available for                                                    
sale, net of tax benefit                                                    
  of $14 .................     --      --       --       (27)     --        (27)
                            ------  ------  -------  ------  --------  -------
Total comprehensive                                                 
        income ..........     --      --      9,148     (27)     --      9,121
Purchase of treasury stock                                                      
    (100,422 shares) .....     --      --       --      --      (1,337)  (1,337)
Sale of treasury stock                                                          
 (15,156 shares) ......     --       184     --      --        (184)    --
Cash dividends                                                                  
    ($.45 per share) .....     --      --     (3,050)   --        --     (3,050)
                            ------  ------  -------  ------  --------  -------
Balance at December 31, 1997 $2,436  $1,410  $62,925  $    5  $ (4,220) $62,556 
                            ------  ------  -------  ------  --------  -------

Net income for 1998 ......     --      --      9,645    --        --      9,645 
Change in unrealized                                                            
gains (losses)on                                                          
securities available for                                                  
sale, net of tax benefit                                                  
   of $69 ................     --      --       --      (134)     --       (134)
                            ------  ------  -------  ------  --------  -------
Total comprehensive                                                 
        income ..........     --      --      9,645    (134)     --      9,511
                            ------  ------  -------  ------  --------  -------
Purchase of treasury stock                                                      
    (154,320 shares) .....     --      --       --      --      (3,058)  (3,058)
Exercise and repurchase                                                         
of stock options(93,000 shares)                                               
 net of tax benefit of $604    --      (268)    --      --        (854)  (1,122)
Filing fees related to                                                          
 stock split .............     --      --        (35)   --        --        (35)
Cash dividends                                                                  
   ($.55 per share) ......     --      --     (3,750)   --        --     (3,750)
                            ------  ------  -------  ------  --------  -------
Balance at December 31, 1998 $2,436  $1,142  $68,785  $ (129) $ (8,132) $64,102 
                            ======  ======  =======  ======  ========  =======

                The   accompanying   notes  are  an   integral   part  of  these
consolidated financial statements.                                              

                                       Consolidated Statements of Cash Flows
                                       Year Ended December 31,

(In thousands)                                 1998        1997        1996     

Operating Activities                                                            
Net Income .............................   $  9,645    $  9,148    $  8,115     
Adjustments to reconcile net income                                             
to net cash provided by operating                                         
activities:                                                               
 Provision for loan losses ........      1,376       1,677         838
 Depreciation and amortization ....        853         708       1,016
Decrease (increase) in                                              
   interest receivable ............        104          (4)        332
  Increase in other assets .........     (2,516)     (1,844)        (55)
(Decrease) increase in                                              
   other liabilities ..............       (379)        167         193
Sale of residential mortgage                                        
   loans held for sale ............      2,370       2,531       1,505
Origination of mortgage loans                                       
    held for sale ..................    (19,913)     (7,081)     (1,966)
 Loss on disposal of assets .......       --          --            82
 Other, net .......................       --          --             5
                                      --------    --------    --------
Net cash (used) provided by                                         
   operating activities ...........     (8,460)      5,302      10,065
                                      --------    --------    --------
Investing Activities                                                            
Proceeds from maturities of                                                     
securities held to maturity .........     72,622      46,062      32,252  
Proceeds from maturities of                                                     
securities available for sale .......      3,581       8,300       9,400  
Purchase of securities                                                          
to be held to maturity ..............       --       (63,620)    (40,332) 
Purchase of securities                                                          
available for sale ..................    (83,689)       --        (2,301) 
Purchase of Federal Home                                                        
Loan Bank Stock .....................       --        (6,568)     (1,157) 
Increase in loans ......................    (40,218)    (47,862)    (26,129)    
Net decrease (increase) in other                                                
real estate owned ...................        468        (109)       (178) 
Purchase of premises and equipment .....     (1,158)       (802)     (1,572)    
Proceeds from sale of premises                                                  
and equipment .......................       --          --             9  
Increase (decrease) in minority position          5          40         (44)    
Net sale (purchase) of federal funds ...      1,100         975        (375)    
Net cash provided by acquisitions                                               
of branches .........................     59,689        --          --    
                                      --------    --------    --------
Net cash provided (used) by                                         
    investing activities ...........     12,400     (63,584)    (30,427)
                                      --------    --------    --------
Financing Activities                                                            
Net increase (decrease) in                                                      
demand deposits, NOW accounts,                                            
money markets and savings accounts ..     28,562       7,256      (1,658) 
Net increase (decrease) in certificates                                         
of deposit ..........................     19,270      12,913     (14,982) 
Net (decrease) increase in                                                      
short-term borrowings ...............    (42,320)     38,718      41,780  
Purchase of treasury stock .............     (3,058)     (1,337)     (1,712)    
Sale of treasury stock .................       --          --            50     
Exercise and repurchase of                                                      
stock options .......................     (1,122)       --          --    
Filing fees related to stock split .....        (35)       --          --       
Cash dividends .........................     (3,750)     (3,050)     (2,239)    
                                      --------    --------    --------
Net cash (used) provided by                                         
   financing activities ...........     (2,453)     54,500      21,239
                                      --------    --------    --------
Increase (decrease) in cash                                         
   and cash equivalents ...........      1,487      (3,782)        877
Cash and cash equivalents at                                                    
beginning of year ...................     13,451      17,233      16,356  
                                      --------    --------    --------
Cash and cash equivalents                                           
   at end of year .................   $ 14,938    $ 13,451    $ 17,233
                                      ========    ========    ========
Supplemental  disclosures  of cash flow  information:  Cash paid during the year
for:                                                                            
Interest                                $ 20,390    $ 20,919    $ 19,270  
Income tax                                 5,203       4,907       3,599  
Non-cash transactions:                                                          
Transfer from loans to real estate owned     733       1,035       1,333  
Sale of treasury stock from exercised                                     
   stock options                             -         184           -

See  Note 2 of  the  Notes  to  Consolidated  Financial  Statements  for  branch
acquisition  disclosure.  The  accompanying  notes are an integral part of these
consolidated financial statements.                                              

[Pages 23 - 40 contain the notes to the financial statements]                   
Notes to Consolidated Financial Statements                                      
December 31, 1998, 1997 and 1996                                                

(Amounts in tables expressed in thousands except number of shares and           
per share data)                                                                 

 NATURE OF OPERATIONS.

    Camden  National  Corporation  (the "Company") is a multi-bank and financial
services holding company. The Company's bank subsidiaries, both of which
         are  wholly  owned,  are  Camden  National  Bank,  a  national  banking
organization, based in Camden, Maine, and United Bank, a banking
 organization chartered under the laws of the State of Maine, based in
 Bangor, Maine. The Company also has a 51% ownership in a non-bank
       subsidiary,  Trust  Company  of Maine,  Inc.,  which  provides  trust and
 retirement management services throughout the central and mid-coast Maine
 area.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

The accounting and reporting policies conform to generally  accepted  accounting
principles and to general practice within the banking industry. The following is
a summary of the significant accounting and reporting policies.                 

     Principles  of  Consolidation.   The  accompanying  consolidated  financial
statements include the accounts of Camden National Corporation, 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.                             

     Use  of  Estimates  in  the  Preparation  of  Financial   Statements.   The
preparation of the financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual  results may differ from those  estimates.  Material  estimates  that are
particularly  susceptible to  significant  change in the near term relate to the
determination  of the allowance for loan losses and the valuation of real estate
acquired  in  connection  with  foreclosures  or in  satisfaction  of loans.  In
connection  with the  determination  of the  allowance  for loan  losses and the
carrying value of real estate owned,  management obtains independent  appraisals
for significant properties.                                                     

     Cash.  The Company is required to comply with various laws and  regulations
of the Federal Reserve which requires that the Company  maintain certain amounts
of cash on deposit and is restricted from investing  those amounts.  The Company
maintains  those balances at the Federal  Reserve Bank of Boston.  In the normal
course  of  business,  the  Company  has  funds on  deposit  at other  financial
institutions  in amounts in excess of the $100,000  insured by the FDIC. For the
statement of cash flows, cash equivalents consist of cash and due from banks.   

     Investment Securities. The Company has classified its investment securities
     into investments available for sale and investments to be held to maturity.

     Securities  Available for Sale.  Debt and other  securities  that are to be
     held for indefinite periods of time, are stated at market value. Changes in
     net   unrealized   gains  or  losses  are  recorded  as  an  adjustment  to
     shareholders'  equity  until  realized.  Market  values of  securities  are
     determined by prices obtained from  independent  market  sources.  Realized
     gains and losses on  securities  sold are computed on the  identified  cost
     basis on the trade date. Federal Home Loan Bank of Boston stock and Federal
     Reserve stock are stated at cost.  The  investment in the FHLB of Boston is
required for membership and is used as collateral for borrowings.     

     Securities to be Held to Maturity.  Bonds,  notes and  debentures for which
the Company has the positive intent and ability to hold to maturity are reported
at cost,  adjusted for amortization of premiums and accretion of discounts which
are recognized in interest  income using the interest  method over the period to
maturity.                                                                       

     Residential  Mortgages Held for Sale.  Residential  mortgages held for sale
are primarily one-to-four family real estate loans which are valued at the lower
of  cost  or  market  on an  individual  basis,  as  determined  by  outstanding
commitments  from investors or current  investor yield  requirements.  Gains and
losses from sales of residential  mortgages  held for sale are  recognized  upon
settlement with investors and recorded in noninterest income.  These activities,
together  with  underwriting  residential  mortgage  loans and  servicing  loans
previously sold, comprise the Company's mortgage banking business.              

     Loan  Servicing.  SFAS No. 125,  "Accounting for Transfers and Servicing of
Financial Assets and  Extinguishments of Liabilities," was adopted on January 1,
1997. The cost of mortgage  servicing  rights is amortized in proportion to, and
over the period of,  estimated  net servicing  revenues.  Impairment of mortgage
servicing  rights is  assessed  based on the fair  value of those  rights.  Fair
values are  estimated  using  discounted  cash flows  based on a current  market
interest rate. For purposes of measuring  impairment,  the rights are stratified
based on the following predominant risk characteristics of the underlying loans:
interest rate, fixed versus variable rate, and period of origination. The amount
of  impairment  recognized  is the  amount  by which  the  capitalized  mortgage
servicing  rights for a stratum exceed their fair value.  No impairment has been
recognized during 1998 and 1997.                                                

     Loans.  Interest  on loans is accrued and  credited to income  based on the
     principal  amount  outstanding.   The  accrual  of  interest  on  loans  is
     discontinued  when,  in the opinion of  management,  there is an indication
     that the borrower may be unable to meet  payments as they become due.  Upon
     such discontinuance, all unpaid accrued interest is reversed. Fees received
     and direct  costs  incurred for the  origination  of loans are deferred and
     recognized as an adjustment of loan yield. The allowance for loan losses is
maintained at a level adequate to absorb                              
future  charge-offs  of loans deemed  uncollectible.  Management  determines the
adequacy of the allowance based upon reviews of individual credits,  recent loss
experience, current economic conditions, known and inherent risk characteristics
of the  various  categories  of loans,  adverse  situations  that may affect the
borrowers' ability to repay, estimated value of underlying collateral, and other
pertinent factors. The allowance is increased by provisions charged to operating
expense and by  recoveries  on loans  previously  charged  off.  Credits  deemed
uncollectible are charged against the allowance.                                
     Loans  considered  to be  impaired  are  reduced  to the  present  value of
expected  future cash flows or to the fair value of collateral,  by allocating a
portion of the  allowance  for loan losses to such loans.  If these  allocations
cause the  allowance  for loan losses to require an increase,  such  increase is
reported as provision for loan losses.                                          
     The carrying values of impaired loans are periodically  adjusted to reflect
cash  payments,  revised  estimates of future cash flows,  and  increases in the
present value of expected  cash flows due to the passage of time.  Cash payments
representing  interest  income are  reported as such.  Other cash  payments  are
reported as reductions in carrying  value,  while  increases or decreases due to
changes  in  estimates  of future  payments  and due to the  passage of time are
reported as provision for loan losses.                                          

     Other Real Estate  Owned.  Other real estate owned  represents  real estate
acquired through foreclosure and is recorded at the lower of cost or fair market
value,  determined by an independent appraisal,  with any difference at the time
of  acquisition  treated as a loan loss.  Subsequent  reductions  in fair market
value below cost are charged directly to other operating expenses.              

     Premises  and  Equipment.  Premises and  equipment  are stated at cost less
accumulated  depreciation  and  amortization.  Depreciation and amortization are
computed on the  straight-line  method over the  estimated  useful  lives of the
related assets.                                                                 

     Intangible  Assets.  The core deposit  intangibles are being amortized over
periods ranging from ten to fifteen years using the straight-line  method. Other
intangible  assets  including  goodwill  and  recapitalization  costs  are being
amortized  over  twenty to  twenty-five  years using the  straight-line  method.
Amortization of software is recognized using the  straight-line  method over the
estimated useful life of the various software.                                  

     Other Borrowed Funds and Securities Sold Under Repurchase Agreements. Other
borrowed  funds consist of commercial  and consumer  repurchase  agreements  and
treasury tax and loan deposits.  Securities sold under  agreements to repurchase
generally mature within thirty days. Treasury tax and loan deposits generally do
not have fixed maturity dates.                                                  

     Employee  Pension and  Postretirement  Benefits.  The Company has a defined
benefit  noncontributory  pension plan  covering  substantially  all  employees.
Actuarially  determined  pension  costs are charged to current  operations.  The
funding policy is to pay at least the minimum  amounts  required by the Employee
Retirement  Income  Security  Act  of  1974.  In  addition,  the  Company  has a
supplemental  pension plan covering several  executive  officers.  This plan was
designed to keep the  percentage  level of pension  benefits  consistent for all
employees.                                                                      
     The Company also  provides a voluntary  savings plan for the benefit of its
employees which qualifies under 401(k) of the Internal  Revenue Code.  Employees
can contribute up to the maximum  amount  allowed by law. The Company  matches a
percentage of employee  contributions.  The Company's  postretirement plans also
provide medical and life insurance to certain eligible retired employees.       

Advertising. Advertising costs are expensed as incurred.              

     Income Taxes.  Deferred tax assets and liabilities are determined  based on
the  differences  between the  financial  statement  and tax basis of assets and
liabilities  using  enacted  tax  rates in  effect  for the  year in  which  the
differences  are  expected  to reverse.  Principal  timing  differences  include
pension and other postretirement benefits,  depreciation, and provision for loan
losses.                                                                         

     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. On December 4, 1998, the Company's
stock split three for one. The number of shares and per share  amounts have been
restated  in  the  Consolidated  Financial  Statements,  Notes  to  Consolidated
Financial  Statements and Selected  Consolidated  Financial Data to reflect this
stock split.                                                                    

     Financial  Instruments  with  Off-Balance  Sheet  Risk.  The  Company  uses
     off-balance  sheet  financial  instruments  as part of its  asset/liability
     management  activities.  The  Company  does not intend to sell any of these
     instruments.  Interest Rate Exchange  Agreements  (swaps) are accounted for
     using the accrual method. Net interest income (expense)  resulting from the
     differential  between exchanging  floating and fixed-rate interest payments
     is recorded on a current basis. Interest Rate Floors are contracts in which
     a floor is established  at a specified  rate and for a specified  period of
     time.  The premium paid for the contract is  amortized  over its life.  Any
     cash  payments  received  are  recorded as an  adjustment  to net  interest
income.                                                               

     In the ordinary course of business the Company has entered into off-balance
sheet  financial  instruments   consisting  of  commitments  to  extend  credit,
commitments under credit card  arrangements,  commercial  letters of credit, and
standby  letters of credit.  Such  financial  instruments  are  recorded  in the
financial statements when they are funded.                                      

    Fair Value Disclosures. The following methods and assumptions were used by
the Company in estimating its fair value disclosures for financial instruments: 

     Cash and due from banks and federal  funds sold:  The  carrying  amounts of
cash and due from banks and federal funds sold approximates their fair value.   

      Investment  securities and securities  available for sale: Fair values for
investment  securities are based on quoted market prices,  where  available.  If
quoted market prices are not  available,  fair values are based on quoted market
prices of  comparable  instruments.  The  carrying  amounts of other  securities
approximates their fair value.                                                  

      Residential  mortgages  held for  sale:  Fair  values  are based on quoted
market prices from the Federal Home Loan Mortgage Corporation (Freddie Mac).    

     Loans receivable:  For variable rate loans that reprice frequently and have
no significant  change in credit risk, fair values are based on carrying values.
The fair value of other loans is estimated by discounting  the future cash flows
using the current rates at which  similar loans would be made to borrowers  with
similar credit ratings and for the same remaining maturities.                   

     Interest   receivable:   The   carrying   amount  of  interest   receivable
approximates fair value.                                                        

     Off-balance  sheet  instruments:  Fair values for  interest  rate swaps and
floor and cap  contracts  are  based on  quoted  market  prices.  Fair  value of
commitments  to extend  credit  has not been  presented  as the  future  revenue
derived from such commitments is not significant.                               

     Deposits: The fair value of demand deposits,  savings accounts, and certain
money  market  deposits  is the  amount  payable  on  demand.  The fair value of
fixed-maturity  certificates  of deposit is estimated  using the rates currently
offered in the Company's market for deposits of similar remaining maturities.   

     Short-term borrowings:  The carrying amounts of borrowings from the Federal
Home Loan Bank,  securities  under  repurchase  agreements and other  short-term
borrowings, approximate fair value.                                             

     Interest payable: The carrying amount of interest payable approximates fair
value.                                                                          

Effect of New Financial Accounting Standards. During 1998, the Company
adopted SFAS No. 130, No. 131 and No. 132. The adoption of SFAS No. 130,        
"Reporting Comprehensive Income," requires that certain items be reported       
under a new category of income, "Other Comprehensive Income." Unrealized gains  
and losses on securities available for sale is the only item included in other  
comprehensive income. SFAS No. 131 and No. 132 relate to disclosures about      
segments and employee benefits, respectively. The financial statements for 1998 
and prior periods where applicable, include the required additional disclosures 
for SFAS No. 130, No. 131 and No. 132. In addition, the Financial Accounting    
Standards Board issued SFAS No. 133, "Accounting For Derivative Instruments and 
Hedging Activities," and SFAS No. 134, "Accounting for Mortgage Backed          
Securities Retained After the Securitization of Mortgage Loans Held for Sale by 
a Mortgage Banking Enterprise," which are effective for fiscal years beginning  
after June 15, 1999, and the first fiscal quarter beginning July 1, 1999,       
respectively. Management has not determined the impact of SFAS No. 133 or SFAS  
No. 134 on the financial statements.                                            

Reclassification. Certain items from the prior year were restated to  
conform with current year presentation.                                         

2. BRANCH ACQUISITIONS                                                          

During 1998 the Company's two bank subsidiaries acquired seven branch locations.
The  excess of cost over  fair  value of net  assets  acquired  in these  branch
acquisitions  is amortized to expense  using the  straight-line  method over ten
years. The acquisition was accounted for under the purchase method of accounting
for business combinations.                                                      

The following is a summary of the transactions:                                 

Loans acquired                  $18,541                               
Fixed assets                        546                               
Core deposit intangibles          7,466                               
Other assets                      1,202                               
Deposits assumed                 87,332                               
Other liabilities                   112                               
Net cash received                59,689                               

Amortization expense of core deposit intangibles was $471,000 in 1998.          

3. INVESTMENT SECURITIES                                                        

The  following  tables  summarize  the  amortized  costs  and  market  values of
securities available for sale and held to maturity:                             

                               December 31, 1998

                                Amortized  Unrealized  Unrealized   Fair
                                   Cost        Gains      Losses     Value
Available for sale                                                              
U.S. Treasury securities and                                                    
obligations of U.S. Government                                            
corporations and agencies ....     $ 7,047    $    48    $  --     $ 7,095
Obligations of states and                                                       
political subdivisions .......       8,214          1       (72)     8,143
Mortgage-backed securities ......      61,121         43      (312)    60,852   
Other debt securities ...........       2,000         30        (5)     2,025   
                                   -------    -------    ------    -------
Total debt securities ........      78,382        122      (389)    78,115
                                   -------    -------    ------    -------

Federal Home Loan Bank                                                          
of Boston stock ..............      14,045        --        --      14,045
Federal Reserve Bank stock ......          39        --        --          39   
Other equity securities .........       5,972         72       --       6,044   
                                   -------    -------    ------    -------
Total equity securities ......      20,056         72       --      20,128
                                   -------    -------    ------    -------
Total securities                                                    
      available for sale .....     $98,438    $   194    $ (389)   $98,243
                                   =======    =======    ======    =======

Held to maturity                                                                
U.S. Treasury securities and                                                    
obligations of U.S. Government                                            
corporations and agencies ....     $ 6,093    $    81    $  (30)   $ 6,144
Obligations of states and                                                       
political subdivisions .......       1,338         42       --       1,380
Mortgage-backed securities ......      81,139      3,113       (17)    84,235   
                                   -------    -------    ------    -------
Total securities                                                    
      held to maturity .......     $88,570    $ 3,236    $  (47)   $91,759
                                   =======    =======    ======    =======

                               December 31, 1997

                                Amortized  Unrealized  Unrealized   Fair
                                   Cost        Gains      Losses     Value

Available for sale                                                              
U.S. Treasury securities and                                                    
obligations of U.S. Government                                              
corporations and agencies           $ 4,304    $    15    $   (7)   $ 4,312 
                                   -------    -------    ------    -------
   Total debt securities             4,304         15        (7)     4,312
                                   -------    -------    ------    -------

Federal Home Loan Bank                                                          
of Boston stock                      14,045        --        --      14,045 
Federal Reserve Bank stock                 39        --        --          39   
                                   -------    -------    ------    -------
   Total equity securities          14,084        --        --      14,084
                                   -------    -------    ------    -------
Total securities                                              
       available for sale          $18,388    $    15    $   (7)   $18,396
                                   =======    =======    ======    =======

Held to maturity                                                                
U.S. Treasury securities and                                                    
obligations of U.S. Government                                              
corporations and agencies           $48,566    $   131    $ (346)   $48,351 
Obligations of states and                                                       
political subdivisions                2,955         30        (1)     2,984 
Mortgage-backed securities            109,373      3,624       (46)   112,951   
                                   -------    -------    ------    -------
Total securities                                              
       held to maturity           $160,894    $ 3,785    $ (393)  $164,286
                                   =======    =======    ======   ========

The amortized cost and fair values of debt securities by contractual maturity at
December  31,  1998,  areshown  below.  Expected  maturities  will  differ  from
contractual  maturities  because  borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.                       

                                    Amortized       Fair
                                       Cost          Value

Available for sale                                                              
Due in one year or less                        $     700    $     704           
Due after one year through five years              1,301        1,326           
Due after five through ten years                  18,303       18,134           
Due after ten years                               58,078       57,951           
                                     --------     --------
                                      $78,382      $78,115
                                     ========     ========
                                    Amortized       Fair
                                       Cost          Value

Held to maturity                                                                
Due in one year or less                         $  5,969     $  6,052           
Due after one year through five years              4,925        4,943           
Due after five years through ten years             8,556        8,889           
Due after ten years                               69,120       71,875           
                                     --------     --------
                                      $88,570      $91,759
                                     ========     ========

For purposes of the maturity table,  mortgage-backed  securities,  which are not
due at a single  maturity  date,  have been allocated to the due after ten years
category.                                                                       

There were no sales in available-for-sale or held-to-maturity  portfolios during
1998, 1997 and 1996. At December 31, 1998, securities with a book value of $30.4
million and a fair value of $31.6 million were pledged to secure public deposits
and securities sold under  agreements to repurchase and other purposes  required
or permitted by law.                                                            

4. LOANS                                                                        

The composition of the Company's loan portfolio was as follows:                 

                December 31,

                  1998      1997
Commercial Loans ...................   $216,470   $180,327                      
Residential real estate loans ......    120,724    118,603                      
Consumer loans .....................     60,245     46,178                      
Municipal loans ....................     17,199     10,324                      
Other loans ........................        236      1,226                      
                 --------   --------
Total loans .....................    414,874    356,658                   
Less deferred loan fees, net of cost        564        603                      
Less allowance for loan losses .....      6,512      5,640                      
                 --------   --------
                 $407,798   $350,415
                 ========   ========

The Company's  lending  activities are conducted in mid-coast and central Maine.
The Company grants single family and multi-family  residential loans, commercial
real estate loans,  business and a variety of consumer loans.  In addition,  the
Company grants loans for the  construction  of residential  homes,  multi-family
properties and commercial real estate properties. The ability and willingness of
borrowers to honor their  repayment  commitments  is generally  dependent on the
level of overall  economic  activity  within the geographic area and the general
economy.                                                                        

As of  December  31,  1998  and  1997,  nonaccrual  loans  were  $1,710,000  and
$1,215,000 respectively.  Interest foregone was approximately $130,000, $147,000
and $178,000 for 1998, 1997 and 1996, respectively.                             

5. ALLOWANCE FOR LOAN LOSSES                                                    

Changes in the allowance for loan losses were as follows:                       

                                  December 31,

                                  1998       1997       1996

Beginning Balance .......                 $ 5,640    $ 4,472    $ 4,080         
Provision for loan losses                   1,376      1,677        838         
Recoveries ..............                     266        583        210         
Loans charged off .......                    (770)    (1,092)      (656)        
                                 -------    -------    -------
Net charge offs .........                    (504)      (509)      (446)        
                                 -------    -------    -------
Ending Balance ..........                 $ 6,512    $ 5,640    $ 4,472         
                                 =======    =======    =======

Information regarding impaired loans is as follows:                             

                    December 31,

                                1998       1997       1996

Average investment in impaired loans ..   $1,352     $1,520     $1,864          
Interest income recognized on impaired                                          
loans, all on cash basis ............       87         64        220        
Balance of impaired loans .............    1,710      1,215      1,674          
Portion of impaired loan balance for                                            
which an allowance for credit losses                                        
is allocated ........................    1,710      1,215      1,674        
Portion of allowance for loan losses                                            
allocated to the impaired loan balance      296        223        340         

6. MORTGAGE SERVICING                                                           

Residential  real  estate  mortgages  are  originated  by the  Company  for both
portfolio  and for sale  into the  secondary  market.  The sale of loans  are to
institutional  investors  such as the  Federal  Home Loan  Mortgage  Corporation
("Freddie Mac"). Under loan sale and servicing agreements with the investor, the
Company  generally  continues to service the residential real estate  mortgages.
The Company pays the investor an agreed-upon rate on the loan, which,  including
a guarantee  fee paid to Freddie Mac, is less than the interest rate the Company
receives from the borrower.  The  difference is retained by the Company as a fee
for servicing the  residential  real estate  mortgages.  As required by SFAS No.
125, the Company capitalizes  mortgage servicing rights at their fair value upon
sale of the related loans.  Capitalized  servicing rights totaled $69,000 during
1998.                                                                           

Mortgage  loans  serviced  for  others  are  not  included  in the  accompanying
consolidated statements of condition.  The unpaid principal balances of mortgage
loans  serviced  for others was  $36,101,669,  $41,617,228  and  $45,913,503  at
December 31, 1998, 1997 and 1996, respectively.                                 

Custodial  escrow  balances  maintained  in connection  with the foregoing  loan
servicing, and included in demand deposits, were $22,711 and $25,000 at December
31, 1998 and 1997, respectively.                                                

7. BANK PREMISES AND EQUIPMENT                                                  

Details of premises and equipment, at cost, at December 31 were as follows:     

                                      1998      1997

Land and buildings ............................   $ 9,169   $ 8,193             
Furniture, fixtures and equipment .............     7,807     7,112             
Leasehold improvements ........................       426       401             
Construction in process .......................        38        30             
                                     -------   -------
                                      17,440    15,736
Less: Accumulated depreciation and amortization     7,910     6,950             
                                     -------   -------
                                     $ 9,530   $ 8,786
                                     =======   =======

Depreciation  expense was $1.1 million,  $1.1 million and $1.0 million for 1998,
1997 and 1996, respectively.                                                    

8. OTHER REAL ESTATE OWNED                                                      

The transactions in other real estate owned for the years ended December 31 were
as follows:                                                                     

Beginning balance                                  $1,373    $1,264             
Additions .......                                     733     1,035             
Properties sold .                                   1,124       850             
Writedowns ......                                      77        76             
                                      ------    ------
Ending balance ..                                  $  905    $1,373             
                                      ======    ======

9. DEPOSITS                                                                     

The  aggregate   amount  of  certificates  of  deposit,   each  with  a  minimum
denomination of $100,000, was approximately  $50,022,926 and $32,094,000 in 1998
and 1997,  respectively.  Certificates of deposit included  brokered deposits in
the  amount  of  $6,003,000   and  $131,000  at  December  31,  1998  and  1997,
respectively.                                                                   

At December 31, 1998, the scheduled maturities of certificates of deposit are as
follows:                                                                        

             1999         $188,083
             2000           45,382
             2001            7,933
             2002            4,527
             2003            1,483
       Thereafter              467
                          --------
                          $247,875
                          ========

10. BORROWED FUNDS                                                              

A summary of the  borrowings  from the Federal Home Loan Bank ("FHLB") of Boston
is as follows:                                                                  

December 31, 1998   

Principal Amounts       Interest Rates           Maturity Date    

$40,265              4.95% - 6.58%               1999     
20,000              4.99% - 5.09%               2008    
-------                                                   
$60,265                                                   
=======                                                   

December 31, 1997   

Principal Amounts       Interest Rates           Maturity Date    

$98,236              5.59% - 7.05%               1998     
278                  6.58%                   1999 
-------                                                   
$98,514                                                   
=======                                                   

Short-  and  long-term  borrowings  from  the FHLB  consist  of both  fixed  and
adjustable rate borrowings and are collateralized by all stock in the FHLB and a
blanket lien on qualified  collateral  consisting  primarily of loans with first
mortgages  secured  by one- to four-  family  properties,  certain  unencumbered
investment securities and other qualified assets. The FHLB at its discretion can
call $20 million of the Company's long-term borrowings. The Company, through its
banking subsidiaries, has an available line of credit with FHLB of $11.2 million
and $10.2 million at December 31, 1998 and 1997,  respectively.  The Company had
$8.4 million  outstanding at December 31, 1997,  and no  outstanding  balance at
December 31, 1998.                                                              

The Company  utilizes other  borrowings in the form of federal funds  purchased;
treasury,  tax and loan  deposits;  and  repurchase  agreements  secured by U.S.
Government or agency securities as shown in the table below:                    

                                                      1998      1997

Securities sold under repurchase agreements               $29,849   $32,456     
Treasury, tax and loan deposits                                44     1,508     
                                                     -------   -------
Total other borrowed funds                             $29,893   $33,964  
                                                     =======   =======

Weighted-average rate at end of period                      4.05%     4.98%     

11. EMPLOYEE RETIREMENT PLANS                                                   

The Company has a trusteed defined benefit noncontributory pension plan covering
substantially  all  eligible  employees  over 21  years  of age with one year of
employment.  The benefits are based on years of service and salary earned during
an  employee's  last  five  years  of  employment.  The  assets  of the plan are
primarily invested in listed stocks.                                            

The Company also  provides a  supplemental  pension  plan for certain  executive
employees  to restore  pension  benefits  which have been  reduced by income tax
regulations. This plan is unfunded and nonqualified.                            

The Company's postretirement plans provide medical and life insurance to certain
eligible  retired  employees.  It is the  Company's  policy  to fund the cost of
postretirement  health  care and life  insurance  plans as  premiums  are  paid;
therefore, there are no plan assets.                                            

                                                                Postretirement
                                         Pension Benefits       Benefits

                                               1998     1997     1998     1997
Change in benefit obligation                                                    
Benefit obligation at beginning of year ...  $ 4,897  $ 4,008    $ 356    $ 315 
Service cost ..............................      440      404       21       19 
Interest cost .............................      338      317       26       23 
Actuarial (gain) loss .....................      (87)     240       15       12 
Benefits paid .............................      (69)     (72)     (19)     (13)
                                            -------  -------  -------  -------
Benefit obligation at end of year .........    5,519    4,897      399      356 
                                            -------  -------  -------  -------

Change in plan assets                                                           
Fair value of plan assets at beginning of year 2,947    2,469     --       --   
Actual return on plan assets ...............     169      197     --       --   
Employer contribution ......................     357      340     --       --   
Benefits paid ..............................     (54)     (59)    --       --   
                                            -------  -------  -------  -------
Fair value of plan assets at end of year ...   3,419    2,947     --       --   
                                            -------  -------  -------  -------

Funded status ..............................  (2,100)  (1,950)    (399)    (356)
Unrecognized net actuarial loss ............     326      256             2,712 
Unrecognized net prior service cost ........     114      314     (126)    (142)
Transition asset ...........................     (73)     (80)     --       --  
                                            -------  -------  -------  -------
Accrued benefit cost ......................  $(1,733) $(1,460) $  (498) $  (486)
                                            =======  =======  =======  =======

Weighted-average assumptions as of December 31                                  
Discount rate                                    7.5%     7.5%     7.5%     7.5%
Expected return on plan assets                   7.5%     7.5%      --       -- 
Rate of compensation increase                    6.0%     6.0%     6.0%     6.0%

For measurement  purposes, a 7.1% annual rate of increase in the per capita cost
to cover  health care  benefits  was  assumed for 1999.  The rate was assumed to
decrease gradually to a 6.0% annual growth rate after eight years, and remain at
6.0% annual  growth rate  thereafter.  A 1% increase in the assumed  health care
cost  trends  rate  would  not  have  a  material   impact  on  the  accumulated
postretirement benefit obligation due to a built-in cap on annual benefits. A 1%
decrease in the assumed health care cost trends is not readily available.       

The expected return on plan assets and rate of compensation increase for 1996 is
7.5% and 6.0%, respectively.                                                    

                     Pension Benefits    Postretirement Benefits
                 1998   1997   1996     1998  1997    1996

Components of net                                                               
periodic benefit cost                                                       
Service cost ............   $ 440  $ 404  $ 352    $  21  $  19  $  20          
Interest cost ...........     338    317    258       26     23     22          
Expected return on                                                              
plan assets ..........    (235)  (188)  (153)      --     --     --       
Amortization of prior                                                           
service cost ..........     (14)   (14)    (9)     (16)   (16)   (16)       
Recognized net                                                                  
actuarial loss ........      45     52     39       --     --     --        
                  -----  -----  -----    -----  -----  -----
Net periodic benefit cost   $ 574  $ 571  $ 487    $  31  $  26  $  26          
                  =====  =====  =====    =====  =====  =====

12. SEGMENT REPORTING                                                           

Camden National  Corporation  through its  subsidiaries  (Camden  National Bank,
United  Bank and  Trust  Company  of  Maine,  Inc.)  provides  a broad  range of
financial  services to individuals and companies in mid-coast and central Maine.
These  services  include  lending,  demand,  savings  and  time  deposits,  cash
management  and trust  services.  While the  Company's  senior  management  team
monitors the operations of each  subsidiary,  these  subsidiaries  are primarily
organized  to operate in the banking  industry.  Substantially  all revenues and
services are derived from banking  products and services in Maine.  Accordingly,
the Company's  subsidiaries are considered by management to be aggregated in one
reportable operating segment.                                                   

13. SHAREHOLDERS' EQUITY                                                        

Dividends paid by subsidiaries  are the primary source of funds available to the
Company for payment of dividends to its shareholders.  The Company's  subsidiary
banks are subject to certain  requirements  imposed by state and federal banking
laws and regulations. These requirements,  among other things, establish minimum
levels of capital and restrict the amount of dividends  that may be  distributed
by the subsidiary banks to the Company.                                         

The Company has a fixed stock option plan accounted for under APB Opinion 25 and
related  interpretations.  The plan  allows  the  Company  to grant  options  to
employees for up to 420,000 shares of common stock.  The options are immediately
vested when  granted,  and expire ten years from the date the option is granted.
The exercise price of each option equals the market price of the Company's stock
on the date of grant. Accordingly,  no compensation cost has been recognized for
the plan. Had  compensation  cost for the plan been determined based on the fair
value of the options at the grant dates  consistent with the method of Statement
of  Financial   Accounting   Standards  No.  123,  "Accounting  for  Stock-Based
Compensation,"  the  Company's  1998 and 1996 net income and  earnings per share
would have been reduced to the pro forma amounts  indicated  below.  In 1997, no
options were granted, thus pro forma amounts are the same as reported.          

                              Earnings per Share
                               Net Income       Basic          Diluted
1998                                                                            
As reported                           $9,645          $1.43          $1.41      
Pro forma                              9,524           1.41           1.39      

1997                                                                            
As reported                           $9,148          $1.34          $1.31      
Pro forma                              9,148           1.34           1.31      

1996                                                                            
As reported                           $8,115          $1.16          $1.14      
Pro forma                              7,949           1.14           1.12      

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   options-pricing   model  with  the  following   weighted-average
assumptions  used for all  grants  in  1996:  dividend  yield of 2.6%,  expected
volatility  of 5%,  risk-free  interest rate of 6.5%,  and expected  lives of 10
years; in 1998 dividend yield of 3.0%, expected  volatility of 1.35%,  risk-free
interest rate of 4.75%, and expected lives of 10 years.                         

A summary of the status of the Company's  fixed stock option plan as of December
31, 1998,  1997 and 1996,  and changes during the years ending on those dates is
presented below.                                                                
                              1998
                                       Number of    Weighted-average
                                       Shares       Exercise Price

Outstanding at beginning of year .........   259,500       $    7.82            
Granted during the year ..................    13,500           18.75            
Exercised during the year ................    93,000            6.04            
                                --------       ---------
Outstanding and exercisable at end of year   180,000       $    9.56            
                                ========       =========

Weighted-average fair value of options                                          
granted during the year                                    $13.54         

                              1997
                                     Number of    Weighted-average
                                     Shares       Exercise Price

Outstanding at beginning of year .........   287,274       $   7.65             
Granted during the year ..................      --              --              
Exercised during the year ................    27,774           6.07             
                                -------       --------
Outstanding and exercisable at end of year   259,500       $   7.82             
                                =======       ========

Weighted-average fair value of options                                          
granted during the year                                 $      -          

                                    1996
                                    Number of   Weighted-average
                                     Shares     Exercise Price

Outstanding at beginning of year .........   205,524      $    5.79             
Granted during the year ..................    81,750          12.33             
Exercised during the year ................      --              --              
                                -------      ---------
Outstanding and exercisable at end of year   287,274      $    7.65             
                                =======      =========

Weighted-average fair value of options                                          
granted during the year                                  $  3.08          

The following table summarizes  information  about stock options  outstanding at
December 31, 1998:                                                              

  Weighted-average
       Number                   Remaining             Weighted-average
  Outstanding at           Contractual Life           Exercise Price

   90,000                      5.0                     $  5.83
   76,500                      8.0                       12.33
   13,500                     10.0                       18.75
  -------                     -----                    -------
  180,000                      6.7                     $  9.56
  =======                     =====                    =======

14. EARNINGS PER SHARE                                                          

The following table sets forth the computation of basic and diluted earnings per
share:                                                                          

                        1998        1997      1996

Net income, as reported ........  $    9,645  $    9,148  $    8,115            
Weighted-average shares ........   6,763,086   6,820,752   6,989,967            
Effect of dilutive employee                                                     
stock options ...............      91,527     154,926     113,700         
Adjusted weighted-average shares                                                
and assumed conversion ......   6,854,613   6,975,678   7,103,667         
Basic earnings per share .......  $     1.43  $     1.34  $     1.16            
Diluted earnings per share .....  $     1.41  $     1.31  $     1.14            

15. INCOME TAXES                                                                

The current and deferred components of income tax expense were as follows:      
                          1998       1997         1996

Current:                                                                        
Federal                            $4,822      $4,948      $4,024         
State .                               151         181         121         
                          ------      ------      ------
                           4,973       5,129       4,145

Deferred:                                                                       
Federal                              (504)       (676)       (115)        
                          ------      ------      ------
                          $4,469      $4,453      $4,030
                          ======      ======      ======

The actual  expense  differs from the expected tax expense  computed by applying
the applicable U.S. Federal  corporate income tax rate to earnings before income
taxes, as follows:                                                              

                            1998     1997     1996

Computed tax expense .................   $ 4,940  $ 4,625  $ 4,151              
Increase (reduction) in income taxes                                            
resulting from:                                                               
Tax exempt income .................      (165)    (222)    (209)          
State taxes, net of federal benefit        98      120       79           
Income from life insurance ........       (80)     (41)     (30)          
Low income housing credits ........      (221)     (47)     --            
Other .............................      (103)      18       39           
                           -------  -------  -------
                           $ 4,469  $ 4,453  $ 4,030
                           =======  =======  =======

Items which give rise to deferred  income tax assets and liabilities and the tax
effect of each are as follows:                                                  

                                  1998                    1997

                                  Asset   Liability    Asset   Liability

Allowance for possible losses                                                   
on loans ........................   $2,053    $ --      $1,682  $    --   
Allowance for investment losses ....       90      --          90       --      
Capitalized costs ..................     --          69      --           72    
Pension and other benefits .........      777      --         671       --      
Depreciation .......................     --         222      --          141    
Deferred loan origination fees .....     --          86         6       --      
Deferred compensation and benefits .       89      --          83       --      
Unrealized gains (losses) of                                                    
investments available for sale ..     --          51      --            3 
Unrealized appreciation in loans                                                
held for sale ...................       84      --          22       --   
Valuation of other real estate owned       29      --          41       --      
Interest receivable ................       94      --          37       --      
Core deposit intangibles ...........       60      --          27       --      
Mortgage servicing rights ..........       24      --        --         --      
Other ..............................      136      --         109       --      
                                  ------    ------    ------    ------
                                  $3,436    $  428    $2,768    $  216
                                  ======    ======    ======    ======

The related income taxes have been calculated  using a rate of 35%. No valuation
allowance is deemed  necessary for the deferred tax asset,  which is included in
other assets.                                                                   

16. RELATED PARTIES                                                             

In the  ordinary  course of business,  the Company has granted  loans to certain
officers and  directors and the companies  with which they are  associated.  All
such loans were made under terms that are consistent  with the Company's  normal
lending  policies.  Changes in the  composition of the Board of Directors or the
group  comprising  executive  officers result in additions to or deductions from
loans outstanding to directors, executive officers, or principal shareholders.  

Loans to related parties which in aggregate exceed $60,000 were as follows:     

                                 1998         1997

Balance, January 1, .............             $14,254      $ 7,710              
Loans made/advanced and additions               5,986        9,505              
Repayments and reductions .......               4,637        2,961              
                                -------      -------
Balance, December 31, ...........             $15,603      $14,254              
                                =======      =======

In addition to the loans noted above,  the Company had deposits  outstanding  at
December 31, 1998 and December 31, 1997 to the same individuals of $5.3 and $6.3
million, respectively.                                                          

17. FINANCIAL INSTRUMENTS                                                       

In  the  normal  course  of  business,  the  Company  is a  party  to  financial
instruments  with  off-balance  sheet  risk,  which  are  not  reflected  in the
accompanying  consolidated  statements of condition.  The Company's  significant
off-balance  sheet risks are lending  commitments,  letters of credit,  interest
rate floors and interest rate swap agreements. Those instruments involve varying
degrees of credit and interest  rate risk in excess of the amount  recognized in
the statement of condition.                                                     

The Company  follows the same credit  policies in making  commitments  to extend
credit and conditional  obligations as it does for on-balance sheet instruments,
including  requiring  similar  collateral or other security to support financial
instruments with credit risk. The Company's exposure to credit loss in the event
of  nonperformance  by the customer is represented by the contractual  amount of
those instruments.  Since many of the commitments are expected to expire without
being drawn upon, the total amount does not  necessarily  represent  future cash
requirements.                                                                   

The Company uses  off-balance  sheet  derivative  instruments  as hedges against
significant  fluctuations in interest rates. The Company uses interest rate swap
and floor instruments to hedge against  potentially lower yields on the variable
prime rate loan  category  in a  declining  rate  environment.  If rates were to
decline,  resulting in reduced income on the adjustable rate loans,  there would
be an increased income flow from the interest rate swap and floor instruments.  

All  off-balance  sheet  positions  are reviewed as part of the  asset/liability
management  process at least  quarterly.  The  instruments are factored into the
Company's overall interest rate risk position. The Company regularly reviews the
credit  quality  of the  counterparties  from  which the  instruments  have been
purchased.  As of December  31,  1998,  the  Company  had $20 million  (notional
principal amount) in floor contracts. The two floor contracts ($10 million each)
have a strike rate of 5%, and both mature in 1999.                              

                                         1998         1997

Commitments to extend credit                      $101,724      $80,043         
Letters of credit                                    1,735        1,911         
Swaps                                                   -         5,000         
Floors                                              20,000       20,000         

The  estimated  fair  values  of the  Company's  financial  instruments  were as
follows:                                                                        

                    December 31, 1998              December 31, 1997

                                   Carrying    Fair   Carrying    Fair
                                    Amount     Value   Amount    Value

Financial assets:                                                               
Cash .................................  $ 14,938  $ 14,938  $ 14,551  $ 14,551  
Securities available for sale ........    98,243    98,243    18,396    18,396  
Securities held to maturity ..........    88,570    91,759   160,894   164,286  
Loans held for sale ..................    24,637    24,877     7,094     7,094  
Loans receivable .....................   407,798   402,612   350,415   347,681  
Interest receivable ..................     3,820     3,820     3,924     3,924  

Financial liabilities:                                                          
Deposits .............................   508,573   509,800   373,409   373,898  
Borrowings from Federal Home Loan Bank    60,265    59,163    98,514    98,502  
Other borrowed funds .................    29,893    29,893    33,964    33,964  
Interest payable .....................     3,137     3,137     3,459     3,459  

The estimated fair values of the Company's off-balance sheet instruments were as
follows:                                                                        

                                 December 31, 1998

                                                      Fair Value
                         Notional  Contract  Maturity  Including
                        Principal    Date      Date     Accruals

Interest Rate Floors             $10,000  03-Jun-94 03-Jun-99     $  8          
                        10,000  13-Sep-94 13-Sep-99       11
                       -------                          ----
                       $20,000                           $19
                       =======                          ====

                                   December 31, 1997

                                                      Fair Value
                         Notional  Contract  Maturity  Including
                        Principal    Date      Date     Accruals

Interest Rate Swaps             $  5,000  09-Feb-94 09-Feb-98     $(57)         
                      ========                          ====

Interest Rate Floors             $10,000  03-Jun-94 03-Jun-99    $   8          
                        10,000  13-Sep-94 13-Sep-99       10
                       -------                         -----
                       $20,000                         $  18
                       =======                         =====

18. REGULATORY MATTERS                                                          

The  Company,  and its bank  subsidiaries,  are  subject to  various  regulatory
capital  requirements  administered  by the  Comptroller  of the  Currency,  the
Federal Reserve Board, and the Federal Deposit Insurance Corporation. Failure to
meet minimum capital  requirements can initiate  certain  mandatory and possible
additional discretionary actions by regulations that, if undertaken,  could have
direct material affect on the Company's financial statements.                   

These  capital  requirements  represent  quantitative  measures of the Company's
assets,  liabilities,  and certain  off-balance  sheet items as calculated under
regulatory accounting  principles.  The Company's capital classification is also
subject to  qualitative  judgments  by the  regulators  about  components,  risk
weightings, and other factors.                                                  

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require  the Company to  maintain  minimum  amounts and ratios (set forth in the
table  below) of total and Tier I capital  (as  defined in the  regulations)  to
risk-weighted  assets (as defined),  and of Tier I capital to average assets (as
defined).  Management  believes that, as of December 31, 1998, the Company meets
all capital requirements to which it is subject.                                

As of December  31,  1998,  both bank  subsidiaries  were  categorized  by their
regulatory  agencies as well capitalized.  To be categorized as well capitalized
the banks must maintain minimum total risk-based,  Tier I risk-based, and Tier I
leverage ratios as set forth in the following table.  There are no conditions or
events that management believes have changed the banks' category.               

The Company's actual capital amounts and ratios are also presented in the table.

                                                              To Be Well
                                                               Capitalized
                                             For Capital        Under Prompt
                                             Adequacy      Corrective Action
                           Actual         Purposes          Provisions
                           Amount   Ratio   Amount>= Ratio>=  Amount>= Ratio>=
As of December 31, 1998                                                         
Total Capital                                                                   
(To Risk Weighted Assets):                                                    
Consolidated ..........  $62,445  14.0%   $35,602   8.0%       N/A        
Camden National Bank ..   50,111  14.2%    28,292   8.0%    $35,365  10.0%
United Bank ...........    9,773  10.7%     7,310   8.0%      9,138  10.0%

Tier I Capital                                                                  
(To Risk Weighted Assets):                                                    
Consolidated ..........  $56,882  12.8%   $17,801   4.0%       N/A        
Camden National Bank ..   45,690  12.9%    14,146   4.0%    $21,219   6.0%
United Bank ...........    8,631   9.5%     3,655   4.0%      5,483   6.0%

Tier I Capital                                                                  
(To Average Assets):                                                          
Consolidated ..........  $56,882   9.5%   $23,836   4.0%       N/A        
Camden National Bank ..   45,690   9.1%    19,982   4.0%    $24,978   5.0%
United Bank ...........    8,631   9.0%     3,842   4.0%      4,803   5.0%

                                                            To Be Well
                                                           Capitalized
                                          For Capital       Under Prompt
                                               Adequacy      Corrective Action
                            Actual          Purposes          Provisions
                           Amount   Ratio   Amount>= Ratio>=  Amount>= Ratio>=
As of December 31, 1997                                                         
Total Capital (To Risk Weighted Assets):                                        
Consolidated             $66,606  19.5%   $27,354   8.0%       N/A        
Camden National Bank      57,799  20.2%    22,841   8.0%    $28,551  10.0%
United Bank                6,820  12.1%     4,517   8.0%      5,646  10.0%

Tier I Capital (To Risk Weighted Assets):                                       
Consolidated             $62,332  18.2%   $13,677   4.0%       N/A        
Camden National Bank      54,230  19.0%    11,420   4.0%    $17,130   6.0%
United Bank                6,114  10.8%     2,258   4.0%      3,388   6.0%

Tier I Capital (To Average Assets):                                             
Consolidated             $62,332  10.6%   $23,483   4.0%       N/A        
Camden National Bank      54,230  11.2%    19,401   4.0%    $24,251   5.0%
United Bank                6,114   8.3%     2,953   4.0%      3,691   5.0%

19. BANK HOLDING COMPANY                                                        

Following are the condensed  statements of  condition,  income  statements,  and
statements  of cash flow for  Camden  National  Corporation,  a  multi-bank  and
financial services holding company.                                             

 Statements of Condition
December 31,

                                       1998       1997

Assets                                                                          
Cash ........................................  $ 2,638    $   170         
Fixed assets ................................    1,486      1,675         
Investment in subsidiaries:                                               
Banking subsidiaries .....................   61,540     60,569      
Other subsidiaries .......................       94         89      
Amounts receivable from subsidiaries ........    1,940         46         
Goodwill ....................................       51         55         
Other assets ................................      273        170         
                                      -------    -------
Total assets .............................  $68,022    $62,774      
                                      =======    =======

Liabilities & Shareholders' Equity                                              
Amounts due to subsidiaries .................  $ 3,657    $    40         
Accrued expenses ............................      263        178         
Shareholders' equity ........................   64,102     62,556         
                                      -------    -------
Total liabilities and shareholders' equity  $68,022    $62,774      
                                      =======    =======

Statements of Income
For Years Ended December 31,

                               1998      1997     1996

Operating Income                                                                
Dividend income                                                           
from subsidiaries .................  $ 8,569   $ 4,387   $ 3,951      
Fees from subsidiaries ..............    3,696     2,956        77        
                               -------    ------   -------
Total operating income ...........   12,265     7,343     4,028     
                               -------   -------   -------

Operating Expenses                                                              
Salaries and employee benefits ......    2,030     1,625      --          
Net occupancy .......................      170       156      --          
Furniture, equipment and                                                  
data processing ...................      653       612      --        
Other operating expenses ............      867       607        77        
                               -------   -------   -------
Total operating expenses .........    3,720     3,000        77     
                               -------   -------   -------
Income before equity in undistributed                                     
earnings of subsidiaries ..........    8,545     4,343     3,951      

Equity in undistributed earnings                                                
of subsidiaries ..................    1,076     4,761     4,164     
                               -------   -------   -------
Net income before tax ............    9,621     9,104     8,115     
Income tax benefit ..................       24        44      --          
                               -------   -------   -------
Net Income .............................  $ 9,645   $ 9,148   $ 8,115           
                               =======   =======   =======

Statements of Cash Flows
For Years Ended December 31,

                                 1998     1997      1996

Operating Activities                                                            
Net income ............................  $  9,645  $  9,148  $  8,115           
Adjustments to reconcile net earnings                                           
to net cash provided by                                                   
operating activities:                                                     
Undistributed net income                                            
from subsidiaries .............    (1,076)   (4,761)   (4,164)  
Depreciation and amortization ...       361       197      --       
Amortization of goodwill ........         4         3         4     
(Increase) decrease in amount                                       
receivable from subsidiaries ..    (1,894)       84       (77)  
Increase in other assets ........      (103)     (169)     --       
Increase (decrease) in payables .     3,702       232       (25)    
Other, net ......................       (34)       11      --       
                              --------  --------  --------
Net cash provided by                                                
operating activities ...........    10,605     4,745     3,853    
                              --------  --------  --------

Investing Activities                                                            
Investment in Trust Company                                               
of Maine, Inc. ...................      --         (51)     --        
Purchase of premises and equipment .      (172)     (149)     --          
                              --------  --------  --------
Net cash used in                                                    
investing activities ..............      (172)     (200)     --         
                              --------  --------  --------

Financing Activities                                                            
Proceeds from sale of treasury stock      --        --          50        
Exercised stock options ............    (1,122)     --        --          
Purchase of treasury stock .........    (3,058)   (1,337)   (1,712)       
Dividends paid .....................    (3,750)   (3,050)   (2,239)       
Filing fees related to stock split .       (35)     --        --          
                              --------  --------  --------
Net cash used in                                                    
financing activities .............    (7,965)   (4,387)   (3,901)     
                              --------  --------  --------

Net increase (decrease) in cash .......     2,468       158       (48)          
Cash at beginning of year .............       170        12        60           
                              --------  --------  --------
Cash at end of year ...................  $  2,638  $    170  $     12           
                              ========  ========  ========

20. QUARTERLY RESULTS OF OPERATIONS (Unaudited)                                 

The following is a summary of the quarterly  results of operations for the years
ended December 31, 1998 and 1997:                                               

Three Months Ended

                      Mar 31     June 30     Sept 30      Dec 31

1998                                                                            
Interest income ..........   $11,561     $11,802     $11,989     $13,463        
Interest expense .........     5,250       5,145       5,097       5,258        
Net interest income ......     6,311       6,657       6,892       8,205        
Provision for loan losses        324         324         344         384        
Income before income taxes     3,320       3,291       3,679       3,824        
Applicable income taxes ..     1,086       1,050       1,165       1,168        
Net income ...............     2,234       2,241       2,514       2,656        
Per common share:                                                               
Basic .................       .33         .33         .37         .40     
Diluted ...............       .32         .32         .37         .40     

  Three Months Ended

                        Mar 31     June 30     Sept 30      Dec 31

1997                                                                            
Interest income ..........   $10,612     $11,439     $11,566     $12,434        
Interest expense .........     4,934       5,473       5,467       5,355        
Net interest income ......     5,678       5,966       6,099       7,079        
Provision for loan losses        287         285         385         720        
Income before income taxes     3,145       3,525       3,481       3,450        
Applicable income taxes ..     1,056       1,195       1,166       1,036        
Net income ...............     2,089       2,330       2,315       2,414        
Per common share:                                                               
Basic .................       .31         .34         .34         .35     
Diluted ..............       .30         .34         .33         .34    

[Page 41]                                                                       

   This page contains a scanned in copy of Berry, Dunn, McNeil & Parker's Report
of Independent Certified Public Accountants.                                    

Camden National Corporation and Subsidiaries

Auditors' Letter

Berry, Dunn, McNeil & Parker letterhead                                         

Berry, Dunn, McNeil & Parker                                                    
Certified Public Accountants                                                    
Management Consultants                                                          
100 Middle Street / P.O. Box 1100                                               
Portland, ME  04104-1100                                                        
(207) 775-2387  Fax (207) 774-2375                                              

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Shareholders and Board of Directors                                         
Camden National Corporation                                                     

We have audited the accompanying  consolidated statements of financial condition
of Camden  National  Corporation  and  Subsidiaries  as of December 31, 1998 and
1997,   and  the  related   consolidated   statements  of  income,   changes  in
shareholders'  equity,  and cash flows for each of the three years in the period
ended December 31, 1998. These financial  statements are the  responsibility  of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.                                       

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.          

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial position of Camden National
Corporation  and  Subsidiaries  as of  December  31,  1998  and  1997,  and  the
consolidated  results of their  operations  and their cash flows for each of the
three years in the period ended December 31, 1998, in conformity  with generally
accepted accounting principles.                                                 

Berry, Dunn, McNeil & Parker (signature)                                        
Portland, Maine                                                                 
January 22, 1999                                                                

[Pages 42 - 43 list the Boards of Directors and Bank Administrations]           

Boards of Directors and Bank Administrations

In appreciation for their dedication and outstanding
 contributions To the Board of Directors of Camden
 National Corporation,
We acknowledge the retirement of

 David H. Montgomery
 Director, 1966-1998
Chairman, Camden National Corporation, 1976-1998

 And

 Kenneth C. Dickey
 Director, 1970-1997
 Vice Chairman, Camden National Corporation, 1976-1997

Directors of                                                                    
Camden National Corporation                                                     

Rendle A. Jones                                                                 
Chairman, Camden National Corporation                                           
Attorney & Partner - Harmon, Jones & Sanford                                    
Keith C. Patten                                                                 
President & CEO, Camden National Corporation                                    
Chairman, Camden National Bank                                                  
Peter T. Allen                                                                  
Private Investor                                                                
Ann W. Bresnahan                                                                
Civic Leader                                                                    
Royce M. Cross                                                                  
President, Woodrow W. Cross Agency                                              
Robert W. Daigle                                                                
President & CEO, Camden National Bank                                           
Robert J. Gagnon                                                                
Store Manager, Rockland Shop 'n Save                                            
John W. Holmes                                                                  
President, Consumers Fuel Co.                                                   
John S. McCormick, Jr.                                                          
Engineer & Developer                                                            
Consolidated Real Estate and Engineering                                        
Richard N. Simoneau, C.P.A.                                                     
Tax Partner, Simoneau & Norton, P.A.                                            
Arthur E. Strout                                                                
Attorney & Partner - Strout & Payson, P.A.                                      

Directors of Camden National Bank                                               

Keith C. Patten                                                                 
President & CEO, Camden National Corporation                                    
Chairman, Camden National Bank                                                  
Robert W. Daigle                                                                
President & CEO                                                                 
Peter T. Allen                                                                  
Private Investor                                                                
Ann W. Bresnahan                                                                
Civic Leader                                                                    
David C. Flanagan                                                               
President, Viking, Inc.                                                         
Robert J. Gagnon                                                                
Store Manager, Rockland Shop 'n Save                                            
John W. Holmes                                                                  
President, Consumers Fuel Co.                                                   
Rendle A. Jones                                                                 
Attorney & Partner - Harmon, Jones & Sanford                                    
John S. McCormick, Jr.                                                          
Engineer & Developer                                                            
Consolidated Real Estate and Engineering                                        
Richard N. Simoneau, C.P.A.                                                     
Tax Partner, Simoneau & Norton, P.A.                                            
Arthur E. Strout                                                                
Attorney & Partner - Strout & Payson, P.A.                                      
Rosemary B. Weymouth                                                            
President, Megunticook Management Co.                                           

Associate Directors of                                                          
Camden National Bank                                                            

C.R. deRochemont                                                                
Realtor, C.R. deRochemont Realtor                                               
Kenneth C. Dickey                                                               
Retired Vice Chairman,                                                          
Camden National Corporation                                                     
Haskell & Corthell Real Estate                                                  
Frederick G. "Ted" Hanley                                                       
Retired Executive Vice President,                                               
Camden National Bank                                                            
Lawrence N. Hopkins                                                             
Retired President, Camden National Bank                                         
David H. Montgomery                                                             
Retired Chairman, Camden National Corporation                                   
Past Chairman, Allen Agency                                                     

Administration of                                                               
Camden National Corporation                                                     

Keith C. Patten                                                                 
President & CEO                                                                 
Susan M. Westfall                                                               
Vice President, Clerk, Treasurer                                                
& Chief Financial Officer                                                       
Jeffrey D. Smith                                                                
Vice President & Chief Operations Officer                                       
Steven D. Dailey                                                                
Vice President & Information Systems Officer                                    
June B. Parent                                                                  
Assistant Vice President & Personnel Manager                                    
Kathryn M. Ryder                                                                
Financial Officer                                                               
Manager, Accounting Department                                                  
Brenda B. Munroe                                                                
Manager, Electronic Banking Department                                          
Robert E. Cleveland, Jr.                                                        
Senior Network Administrator                                                    
Timothy J. Pratt                                                                
Manager, Items Processing Department                                            
Jennifer F. Mazurek                                                             
Manager, Deposit Services Department                                            

Administration of                                                               
Camden National Bank                                                            

Keith C. Patten                                                                 
Chairman                                                                        
Robert W. Daigle                                                                
President & CEO                                                                 
John P. "Jack" Williams                                                         
Senior Vice President, Commercial Loan & Business Development Officer           
Michael A. McAvoy                                                               
Vice President & Senior Loan Officer                                            
Susan M. Westfall                                                               
Vice President, Cashier &                                                       
Investment and Trust Officer                                                    
Charles A. Wootton                                                              
Vice President, Branch Administration Officer &                                 
Commercial Loan Officer                                                         
Joanne T. Campbell                                                              
Vice President &                                                                
Residential Real Estate Administration Officer                                  
Stephen C. Staples                                                              
Vice President, Regional Manager &                                              
Commercial Loan Officer                                                         
James C. Ebbert                                                                 
Assistant to the President                                                      
Barbara B. Hanson                                                               
Assistant Vice President &  Commercial Loan Officer                             
Richard E. Littlefield                                                          
Assistant Vice President & Commercial Loan Officer                              
Craig S. Dahlberg                                                               
Assistant Vice President & Commercial Loan Officer                              
Kimberly J. Nason                                                               
Mortgage Loan Underwriter                                                       
Christopher A. Frohock                                                          
Commercial Loan Officer                                                         
Lee Ann Szelog                                                                  
Marketing Manager                                                               
Marie M. Charest                                                                
Training Officer                                                                
Vera E. Rand                                                                    
Commercial Credit Administrator                                                 
Jane G. Pierce                                                                  
Branch Administration Service Manager                                           

Ellen L. Ellis                                                                  
Loan Servicing Department Manager                                               
Ann E. Filley                                                                   
Call Center and NetBANK Manager                                                 

Branch Administration of                                                        
Camden National Bank                                                            

Paul C. Doody                                                                   
Vice President, Regional Manager &                                              
Manager, Belfast Office                                                         
Robert P. Wheeler                                                               
Assistant Vice President, Regional Manager & Manager, Vinalhaven Office         
Brenda J. Condon                                                                
Assistant Vice President &                                                      
Manager, Bucksport Office                                                       
Rodney L. MacDougal                                                             
Assistant Vice President &                                                      
Manager, Waldoboro Office                                                       
Sangeeta B. Norton                                                              
Manager, Rockland Office                                                        
Judith L. Brogden                                                               
Manager, Camden Square Office                                                   
Susan L. O'Brien                                                                
Manager, Union Office                                                           
R. Todd Starbird                                                                
Manager, Thomaston Office                                                       
Walter C. Reynolds                                                              
Manager, Damariscotta Office                                                    
Jane G. Pierce                                                                  
Interim Manager, Main Office                                                    

Directors of United Bank                                                        

Royce M. Cross, Chairman                                                        
President, Woodrow W. Cross Agency                                              
Bruce D. Bartlett                                                               
President, Treasurer & CEO                                                      
Kermit P. Allen                                                                 
Treasurer, G.M. Allen & Son, Inc.                                               
Edward R. Dysart                                                                
President, Dysart Transportation Services, Inc.                                 
William T. Gardner                                                              
President, William T. Gardner & Sons, Inc.                                      
Rendle A. Jones, Esq.                                                           
Attorney & Partner - Harmon, Jones & Sanford                                    
C. Charles Lumbert                                                              
President, Moose River Lumber Co., Inc.                                         
Keith C. Patten                                                                 
President & CEO, Camden National Corporation                                    
Chairman, Camden National Bank                                                  
Carroll R. Pickard                                                              
President, Pleasant Hill Diversities                                            
LaJune S. Means                                                                 
Private Investor, Director Emeritus                                             

Bank Administration of United Bank                                              

Bruce D. Bartlett                                                               
President, Treasurer & CEO                                                      
James M. Kimball                                                                
Vice President & Senior Loan Officer                                            
Paul R. Flynn                                                                   
Vice President & Branch Administrator                                           
Lori L. Martin                                                                  
Vice President & Operations Officer                                             
Daniel A. Kelley                                                                
Assistant Vice President & Loan Officer                                         
Ronald W. Taplin                                                                
Loan Officer                                                                    
Robert N. Cross                                                                 
Business Development Officer                                                    
Branch Administration of United Bank                                            

Brent A. Folster                                                                
Vice President & Manager, Bangor Office                                         
Joseph E. Hackett                                                               
Vice President & Manager, Greenville Office                                     
Linda J. Colbath                                                                
Manager, Corinth Office                                                         
William J. Crawford, III                                                        
Manager, Dover-Foxcroft Office                                                  
Michael A. Durgin                                                               
Manager, Hampden & Winterport Offices                                           
Darcel S. Bryant                                                                
Manager, Hermon Office                                                          
Marilyn J. Chalker                                                              
Manager, Jackman Office                                                         
Linda K. Russell                                                                
Manager, Milo Office                                                            

Directors of                                                                    
Trust Company of Maine, Inc.                                                    

Andrew P. Averill                                                               
Chairman, President & CEO                                                       
R. Paul Pasquine                                                                
Executive Vice President, COO &                                                 
Senior Trust Officer                                                            
Bruce D. Bartlett                                                               
President, Treasurer & CEO, United Bank                                         
Randall A. Bishop                                                               
Chief Financial Officer                                                         
William T. Gardner & Sons, Inc.                                                 

Robert W. Daigle                                                                
President & CEO, Camden National Bank                                           
Shirley B. Kile                                                                 
Executive Vice President & Treasurer                                            
Richard N. Simoneau, C.P.A.                                                     
Tax Partner, Simoneau & Norton, P.A.                                            

Officers Trust Company of Maine, Inc.                                           

Andrew P. Averill                                                               
Chairman, President & CEO                                                       
R. Paul Pasquine                                                                
Executive Vice President, COO &                                                 
Senior Trust Officer                                                            
Shirley B. Kile                                                                 
Executive Vice President & Treasurer                                            
Lynn M. Bowden                                                                  
Vice President & Trust Officer                                                  
Susan L. Kenney                                                                 
Assistant Vice President & Trust Officer                                        
Robert M. Parker, Jr.                                                           
Assistant Vice President &Trust Officer                                         

[Page 44]                                                                       

Generations Gold Emblem                    Generations Gold Family...           

Picture of family of eight on frozen pond with a sled and ice fishing  equipment
(picture size - 4.0" wide x 3.5" tall)                                          

 Thank You to the McFarlands

The  McFarland  family has been banking with Camden  National for over 50 years.
Murial McFarland,  a retired nursery school teacher,  recalls,  "Camden National
helped us finance our first house, our first car, and everything  since." Sheila
McFarland was employed at Camden  National  Bank for 20 years.  She retired from
her position as customer service officer in 1997. Sheila's husband, Paul Jr., is
general  manager of O'Hara  Corporation  in Rockland.  Paul III is the ice plant
manager at O'Hara and his wife  Deborah is a registered  nurse at Penobscot  Bay
Medical Center in Rockport.  The youngest generation of McFarlands,  Owen, Tyler
and Caleb, like to play sports and are learning the joys of saving with the help
of three Penny's Piggy Bank accounts.                                           

The following  information  is in a box and the annual  meeting  information  is
bolded:                                                                         

Annual Meeting, Camden National Corporation - Tuesday, May 4, 1999, 3:30p.m.    

The Company will provide, without charge, upon written request, a copy of Camden
National  Corporation's Annual Report to the Securities and Exchange Commission,
Form 10K for the 1998 fiscal year.                                              

 Please contact:
Susan M. Westfall - Camden National Corporation - P.O. Box 310 - Camden, Maine  
04843 - 207-236-8821                                                            

Camden National Corporation logo             Camden National Corporation        

Under the outlined box are the following credits:                               

 Credits

Benjamin Magro, Photography - Peggy Mason Graphics, Design & typesetting

Back cover                                                                      

At the bottom of the page is the following: 

Camden National Corporation logo
 Camden National Corporation

                  Picture of Camden  National  Bank's Main Office  (Camden,  ME)
(picture size - 2.25" wide x            
 1.75" tall)
 2 Elm Street - P.O. Box 310 - Camden, Maine 04843-0310 - 207-236-8821

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-K’ Filing		Date		Other Filings
		7/1/99
		6/30/99		10-Q,  10-Q/A
		6/15/99
		5/4/99
Filed on:		4/1/99
		1/22/99
For Period End:		12/31/98		10-K/A,  DEF 14A
		12/4/98
		11/19/98
		3/13/98
		12/31/97		10-K,  DEF 14A
		10/7/97
		1/1/97
		12/31/96		10-K,  DEF 14A
		1/1/96
				List all Filings