Unassociated Document
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 11-K

 (Mark one)

x
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2008

OR
 
¨
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _____ to _____

Commission file number 01-28190

Full title of the plan and the address of the plan, if different from that of the issuer named below:

Camden National Corporation
Retirement Savings 401(k) Plan

Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Camden National Corporation
2 Elm Street
Camden, Maine 04843

REQUIRED INFORMATION

The Camden National Corporation Retirement Savings 401(k) Plan (the Plan) is subject to the Employee Retirement Income Security Act of 1974 (ERISA). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial statements and supplemental schedule of the Plan for the two fiscal years ended December 31, 2008 and 2007, have been prepared in accordance with the financial reporting requirements of ERISA, are attached hereto as Appendix 1 and incorporated herein by reference.

 
 
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Committee to administer the Camden National Corporation Retirement Savings 401(k) Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

Camden National Corporation Retirement Savings 401(k) Plan

By:
/s/Carolyn C. Crosby
   Date:
June 25, 2009
       
 
Carolyn C. Crosby
    
 
Vice President Human Resources
    
 
By:
/s/Gregory A. Dufour
   Date:
June 25, 2009
       
  Gregory A. Dufour  
 
 
President & CEO
  
 
 
 
 
 
 
Appendix 1

CAMDEN NATIONAL CORPORATION
RETIREMENT SAVINGS 401(k) PLAN

FINANCIAL STATEMENTS

and

SUPPLEMENTAL INFORMATION

December 31, 2008 and 2007

With Report of Independent Registered Public Accounting Firm

 
 
 
 
INDEPENDENT AUDITORS' REPORT
 
Audit Committee
Camden National Corporation Retirement Savings 401(k) Plan

We have audited the accompanying statements of net assets available for benefits of Camden National Corporation Retirement Savings 401(k) Plan as of December 31, 2008 and 2007, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with U.S. 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 net assets available for benefits of Camden National Corporation Retirement Savings 401(k) Plan as of December 31, 2008 and 2007 and the changes in net assets available for benefits for the years then ended in conformity with U.S. generally accepted accounting principles.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplementary information is the responsibility of the Plan's management. The supplemental information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
 
/s/ Berry, Dunn, McNeil & Parker
 
Portland, Maine
June 25, 2009

 
 
 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
Audit Committee
Camden National Corporation Retirement Savings 401(k) Plan

We have audited the accompanying statements of net assets available for benefits of Camden National Corporation Retirement Savings 401(k) Plan as of December 31, 2008 and 2007, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 net assets available for benefits of Camden National Corporation Retirement Savings 401(k) Plan as of December 31, 2008 and 2007 and the changes in net assets available for benefits for the years then ended in conformity with U.S. generally accepted accounting principles.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplementary information is the responsibility of the Plan's management. The supplemental information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
 
/s/ Berry, Dunn, McNeil & Parker
 
Portland, Maine
June 25, 2009

 
 
 

CAMDEN NATIONAL CORPORATION RETIREMENT SAVINGS 401(k) PLAN

Statements of Net Assets Available for Benefits

December 31, 2008 and 2007

   
2008
    
2007
  
             
Investments, at fair value
   $ 18,059,669     $ 19,074,476  
                 
Contributions receivable
                
Participants'
     3       34,894  
Employer
     454,041       324,718  
                 
Total contributions receivable
     454,044       359,612  
                 
Net assets available for benefits
   $ 18,513,713     $ 19,434,088  

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

 
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CAMDEN NATIONAL CORPORATION RETIREMENT SAVINGS 401(k) PLAN
 
Statements of Changes in Net Assets Available for Benefits

Years Ended December 31, 2008 and 2007

   
2008
    
2007
  
             
Additions to net assets attributed to:
            
Investment income (loss)
            
Interest and dividends
   $ 1,278,658     $ 1,035,798  
Net depreciation in fair value of investments
     (7,304,535 )     (373,783 )
                 
Net investment income (loss)
     (6,025,877 )     662,015  
                 
Contributions
                
Employer
     1,106,921       782,209  
Participants'
     1,419,464       1,078,386  
Rollovers
     7,611       287,561  
                 
Total contributions
     2,533,996       2,148,156  
                 
Transfer from Union Trust Company 401(k) Profit Sharing Plan
     5,269,724       -  
                 
Total additions
     1,777,843       2,810,171  
                 
Deductions from net assets attributed to:
                
Benefits paid to participants
     2,690,518       2,491,127  
Administrative fees
     7,700       7,334  
                 
Total deductions
     2,698,218       2,498,461  
                 
Increase (decrease) in net assets available for benefits
     (920,375 )     311,710  
                 
Net assets available for benefits
                
                 
Beginning of year
     19,434,088       19,122,378  
                 
End of year
   $ 18,513,713     $ 19,434,088  

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

 
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CAMDEN NATIONAL CORPORATION RETIREMENT SAVINGS 401(k) PLAN

Notes to Financial Statements

December 31, 2008 and 2007

1.
Description of Plan

The following description of the Camden National Corporation Retirement Savings 401(k) Plan (the Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.

General

The Plan is a defined contribution plan covering all employees of Camden National Corporation (the Corporation) and its subsidiaries, Camden National Bank and Acadia Trust, N.A., who have at least 30 days of service and are age eighteen or older. Under the provisions of the Plan, investment activity is directed by individual participants. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

Contributions

Participants may contribute up to the maximum percentage of compensation and dollar amount permissible under Section 402(g) of the Internal Revenue Code (Code), not to exceed the limits of Code Sections 401(k), 404, and 415. Participants may direct investments into various investment options offered by the Plan. The Corporation matches 100% of participants’ contributions up to 3% of salary, and 50% of participants’ contributions that exceed 3% of salary, but do not exceed 5% of salary. The Corporation may also make additional discretionary matching and profit sharing contributions. Contributions are subject to certain limitations.

Vesting

Participants are immediately vested in their voluntary contributions plus actual earnings thereon, safe harbor matching contributions and discretionary matching contributions. Vesting in the Corporation profit sharing portion of their accounts, plus earnings thereon, is based on a six-year graded vesting schedule.

Forfeited Accounts

At December 31, 2008 and 2007 forfeited nonvested accounts totaled $43,975 and $69,838, respectively.  These accounts will be used to reduce future employer contributions.  Also, in 2008 and 2007, employer contributions were reduced by $43,975 and $69,838, respectively, from forfeited nonvested accounts.

Participant Loans

Participants may borrow from their accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50 percent of their vested account balance, whichever is less. The loans are secured by the balance in the participant’s account and bear interest at rates which are commensurate with local prevailing rates as determined by the plan administrator. Principal and interest is paid ratably through payroll deductions.
 
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CAMDEN NATIONAL CORPORATION RETIREMENT SAVINGS 401(k) PLAN

Notes to Financial Statements

December 31, 2008 and 2007

Administrative Expenses

Substantially all administrative expenses are paid by the Corporation.

Payment of Benefits

On termination of service due to death, disability or retirement, a participant may elect to receive an amount equal to the value of the participant’s vested interest in his or her account in either a lump-sum amount, or in installment payments over any period that does not exceed the life expectancy of the beneficiary. For termination of service due to other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution.

2. 
Summary of Accounting Policies

Benefit Payments

Benefits are recorded when paid.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and changes therein, and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

3. 
Investments

Investments are reported at fair value.  Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  See Note 9 for discussion of fair value measurements.

 
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CAMDEN NATIONAL CORPORATION RETIREMENT SAVINGS 401(k) PLAN

Notes to Financial Statements

December 31, 2008 and 2007

Investments that represent 5% or more of the Plan’s net assets are as follows:

   
2008
    
2007
  
             
Camden National Bank FDIC Insured Fund
   $ 3,506,935     $ 2,214,584  
Fidelity Contrafund
     1,684,448       2,211,100  
Vanguard Total Bond Market Index Fund
     1,163,163       562,429  
Vanguard 500 Index Fund
     1,158,885       1,264,434  
Fidelity Low-Priced Stock Fund
     1,141,300       1,794,554  
Dodge & Cox Stock Fund
     1,133,334       1,623,107  
Dodge & Cox International Stock Fund
     1,073,233       1,771,047  
Vanguard LifeStrategy Moderate Growth Fund
     1,008,417       272,683  
Franklin Mutual Series Beacon Fund
     680,277       1,306,924  
Brandywine Fund
     662,217       1,169,934  

The Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value as follows:

   
2008
    
2007
  
             
Mutual funds
   $ (7,280,102 )   $ (28,525 )
Common stock
     (24,433 )     (345,258 )
                 
    $ (7,304,535 )   $ (373,783 )

4. 
Tax Status

The Plan obtained its latest determination letter dated January 2009, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Corporation believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code.

5. 
Plan Termination

Although it has not expressed any intention to do so, the Corporation has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions set forth in ERISA.

 
- 6 -
 
CAMDEN NATIONAL CORPORATION RETIREMENT SAVINGS 401(k) PLAN

Notes to Financial Statements

December 31, 2008 and 2007

6. 
Party-In-Interest Transactions

Acadia Trust, N.A. (Acadia) is the Plan’s trustee. Employees of Acadia are also covered by the Plan because Acadia is a wholly-owned subsidiary of Camden National Corporation. Compensation for services provided is paid directly by the Corporation.

The Plan did not own any shares of Camden National Corporation common stock at December 31, 2008.  The Plan owned 19,111 shares of Camden National Corporation common stock valued at $542,561 at December 31, 2007. The shares of Camden National Corporation common stock were sold during 2008.  Also included in the Plan’s net assets at December 31, 2008 and 2007 were $3,506,935 and $2,214,584 of Camden National Bank FDIC Insured Fund, respectively. Accordingly, transactions within these funds qualify as party-in-interest.

7. 
Risks and Uncertainties

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statement of net assets available for benefits.

8. 
Significant Event

Due to Union Bankshares Company merger with Camden National Corporation, Union Trust Company (a wholly owned subsidiary of Union Bankshares Company) rolled over the Union Trust Company 401(k) Profit Sharing Plan into the Camden National Corporation Retirement Savings 401(k) Plan, with the actual transfer of funds occurring on May 23, 2008.  Plan assets of $5,269,724 were transferred to Acadia Trust, N.A., the trustee of the Camden National Corporation Retirement Savings 401(k) Plan.

9. 
Fair Value Measurements

Financial Accounting Standards Board Statement No. 157, Fair Value Measurements (FASB No. 157), establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under FASB No. 157 are described below:  

 
- 7 -
 
 
CAMDEN NATIONAL CORPORATION RETIREMENT SAVINGS 401(k) PLAN

Notes to Financial Statements

December 31, 2008 and 2007
 
Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.    

Level 2:  Inputs to the valuation methodology include:
Quoted prices for similar assets or liabilities in active markets;
Quoted prices for identical or similar assets or liabilities in inactive markets;
Inputs other than quoted prices that are observable for the asset or liability;
Inputs that are derived principally from or corroborated by observable market data by correlation or other means.  

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.   

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.   

Following is a description of the valuation methodologies used for assets measured at fair value at December 31, 2008.

Mutual funds and money market funds: Valued at the net asset value (‘NAV”) of shares held by the Plan at year end.

Participant loans: Valued at amortized cost, which approximates fair value.   

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.  
 
 
- 8 -
 
 
CAMDEN NATIONAL CORPORATION RETIREMENT SAVINGS 401(k) PLAN

Notes to Financial Statements

December 31, 2008 and 2007
 
The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2008:

   
Assets at Fair Value as of December 31, 2008
  
                         
   
Level 1
    
Level 2
    
Level 3
    
Total
  
                         
Mutual funds
   $ 13,361,021     $ -     $ -     $ 13,361,021  
Participant loans
     -       -       436,964       436,964  
Money market / cash management
     4,261,684       -       -       4,261,684  
                                 
Total assets at fair value
   $ 17,622,705     $ -     $ 436,964     $ 18,059,669  
 
Level 3 Fair Value Changes  
 
The table below sets forth a summary of changes in the fair value of the Plan’s level 3 assets for the year ended December 31, 2008.   
  
   
Level 3 Assets
  
   
Year Ended
  
   
December 31, 2008
  
   
Participant Loans
  
       
Balance, beginning of year
   $ 296,760  
Purchases, sales, issuances and settlements (net)
     140,204  
         
Balance, end of year
   $ 436,964  

 
- 9 -
 

Schedule 1

CAMDEN NATIONAL CORPORATION RETIREMENT SAVINGS 401(k) PLAN

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

EIN: 01-0413282  Plan #002
Required for IRS Form 5500

December 31, 2008
 
       
(c)
          
       
Description of Investment
          
   
(b)
  
Including Maturity Date,
      
(e)
  
   
Identity of Issue, Borrower,
  
Rate of Interest, Collateral,
  
(d)
  
Current
  
(a)
  
Lessor, or Similar Party
  
Par or Maturity Value
  
Cost (1)
  
Value
  
                   
   
Matrix Cash Money Market Account
  
Money Market
       $ 237,843  
*
  
Camden National Bank FDIC Insured Fund (2)
  
Money Market
         3,506,935  
   
Vanguard Retirement Savings Trust
  
Money Market
         516,864  
   
Vanguard Total Bond Market Index Fund
  
Mutual Fund
         1,163,163  
   
Vanguard Wellesley Income Fund
  
Mutual Fund
         923,290  
   
Vanguard LifeStrategy Income Fund
  
Mutual Fund
         235,287  
   
Vanguard LifeStrategy Conservative Growth Fund
  
Mutual Fund
         282,377  
   
Vanguard LifeStrategy Moderate Growth Fund
  
Mutual Fund
         1,008,417  
   
Vanguard LifeStrategy Growth Fund
  
Mutual Fund
         134,931  
   
Vanguard Short-Term Bond Index Fund
  
Mutual Fund
         728,165  
   
Vanguard 500 Index Fund
  
Mutual Fund
         1,158,885  
   
Franklin Mutual Series Beacon Fund
  
Mutual Fund
         680,277  
   
Brandywine Fund
  
Mutual Fund
         662,217  
   
Fidelity Low-Priced Stock Fund
  
Mutual Fund
         1,141,300  
   
T. Rowe Price New Horizons Fund
  
Mutual Fund
         559,869  
   
Artisan International Fund
  
Mutual Fund
         404,795  
   
Dodge & Cox International Stock Fund
  
Mutual Fund
         1,073,233  
   
Fidelity Contrafund
  
Mutual Fund
         1,684,448  
   
Dodge & Cox Stock Fund
  
Mutual Fund
         1,133,334  
   
Royce Total Return Fund
  
Mutual Fund
         387,033  
   
Federated U.S. Treasury Cash Reserve
  
Cash management asset
         42  
 *
  
Participant loans
  
4.00% - 9.25%, 10 years
         436,964  
        or less maturity             
                $ 18,059,669  

* 
Indicates party-in-interest to the Plan.
(1) 
Participant directed, information not required.
(2) 
FDIC Insured up to $250,000 per participant

 
- 10 -
 
 
Consent of Independent Registered Public Accounting Firm
 
As the independent registered public accountants of Camden National Corporation, we hereby consent to the incorporation by reference in Registration Statement No. 333-108214 of Camden National Corporation on Form S-8 of our report dated June 25, 2009, appearing in this Annual Report on Form 11-K of Camden National Corporation Retirement Savings 401(k) Plan for the year ended December 31, 2008.
 
/s/ Berry, Dunn, McNeil & Parker

Portland, Maine
June 25, 2009