Camden National Corporation Announces an 11.1% Increase in First Quarter 2008 Earnings Per Share Results

Business Wire, April 29, 2008

CAMDEN, Maine -- Camden National Corporation (NASDAQ: CAC; the "Company"), today announced first quarter 2008 earnings were $6.2 million, or $0.80 per diluted share, compared to $4.8 million or $0.72 per diluted share in the first quarter of 2007.

During the quarter, the Company completed its acquisition of Union Bankshares Company ("Union"), which had total assets of $547.4 million. The acquisition of Union expands the Company's presence in Maine to Hancock and Washington Counties, where Union Trust Company, a subsidiary of Union, will maintain its brand identity as a division of Camden National Bank. Additionally, the Company completed the operational integration of Union on March 15, 2008. The financial results of Union are included in the Company's quarterly results beginning on the January 3, 2008 acquisition date.

For the three months ended March 31, 2008, the returns on average equity and average assets were 14.83% and 1.09%, compared to 18.01% and 1.11%, respectively, for the three months ended March 31, 2007. The decline in these ratios primarily resulted from $38.8 million of goodwill created with the acquisition of Union. For the three months ended March 31, 2008, the return on average tangible equity (which excludes goodwill and other intangibles) was 20.50% compared to 18.87% for the three months ended March 31, 2007.

Net interest income for the first quarter of 2008 increased 37.9% to $17.2 million, compared to $12.4 million for same period of 2007. This increase in net interest income was primarily attributable to a $463.2 million or 27.8% increase in average earning assets resulting from the Union acquisition. In addition, the net interest margin increased 24 basis points to 3.31% for the first quarter 2008 as a result of the recent rate moves by the Federal Reserve and a positively sloped yield curve.

During the first quarter of 2008, the Company provided $500,000 to the allowance for loan and lease losses ("ALLL") compared to $100,000 for the same quarter of 2007. The increase in the provision to the ALLL resulted from an increase in non-performing loans as a percentage of total loans to 1.02% at March 31, 2008, compared to 0.66% at March 31, 2007. Additionally, net charge-offs to average loans increased to 0.10% for the quarter ended March 31, 2008 compared to 0.01% for the quarter ended March 31, 2007. The ALLL was 1.12% of total loans outstanding at March 31, 2008, compared to 1.24% of loans outstanding on the same date in 2007.

Non-interest income of $4.4 million for the quarter ended March 31, 2008 was up 44.7% from the same quarter a year ago. This was primarily the result of an increase in income from fiduciary services resulting from a 34.3% increase in assets under administration at Acadia Trust, N.A., and an increase in service charges on deposits resulting from a 17.0% increase in deposits, both resulting primarily from the acquisition of Union. Additionally, the Company recorded an $180,000 gain on sale of investments from a restructuring of the investment portfolio acquired as part of the Union acquisition.

Non-interest expense for the first quarter of 2008 was $12.3 million, an increase of $3.7 million, or 43.2%, over the same quarter in the prior year. The results included approximately $500,000 of merger expenses, including systems integration costs, redundant operational compensation costs to support the integration which occurred late in the first quarter, and other integration related costs. The Company's efficiency ratio for the quarter ended March 31, 2008 was 56.85%, compared to 55.31% for the first quarter of 2007.

At March 31, 2008, the Company's total risk-based capital ratio of 11.69% and tier 1 capital ratio of 10.53% compared favorably to the minimum ratios of 10.0% and 6.0%, respectively, required by the Federal Reserve for a bank holding company to be considered "well capitalized."

The Company reported earlier that the Board of Directors approved a dividend of $0.25 per share, payable on April 30, 2008 for shareholders of record on April 15, 2008. At the end of the first quarter of 2008, the price of Camden National Corporation stock closed at $33.64 per share, an increase of $5.25, or 18.5%, above the closing price of $28.39 at December 31, 2007.

Camden National Corporation, a 2006 Best Places to Work in Maine company headquartered in Camden, Maine, and listed on the NASDAQ([R]) Global Select Market ("NASDAQ") under the symbol CAC, is the holding company for a family of two financial services companies, including Camden National Bank (CNB), a full-service community bank with a network of 37 banking offices serving coastal, western, central, and eastern Maine, and recipient of the Governor's Award for Business Excellence in 2002, and Acadia Trust, N.A., offering investment management and fiduciary services with offices in Portland, Bangor, and Ellsworth. Acadia Financial Consultants is a division of CNB, offering full-service brokerage services.

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