CAMDEN -- Robert W. Daigle, president and chief executive officer of Camden National Corporation, recently announced 2008 year-to-date earnings per diluted share of $0.69, a $1.55 decrease from the first nine months of 2007, which includes the $14 million writedown of other-than-temporarily-impaired securities.

Reflecting the OTTI Write-down, the company's third quarter 2008 loss per diluted share was ($1.05), which was $1.82 less than the $0.77 of earnings per diluted share for the third quarter of 2007. Net income for the first nine months of 2008 decreased to $5.3 million, compared to the $14.7 million reported for the nine months ended Sept. 30, 2007, and net loss for the recently completed third quarter was $8 million, a decrease of $13 million from the $5 million earned in the same threemonth period in 2007.

For the nine months ended Sept. 30, 2008, the returns on average equity and average assets were 4.16 percent and 0.31 percent, compared to 18.08 percent and 1.13 percent, respectively, for the nine months ended Sept. 30, 2007. The decline in return on average equity is primarily the result of the OTTI Write-down and the $37.9 million of goodwill created from the Union Bankshares Company acquisition. During the first three quarters of 2008, return on average tangible equity (which excludes goodwill and other intangibles) was 5.78 percent compared to 18.85 percent for the same period in 2007.

Operating net income (excluding the OTTI Writedown) for the nine months ended Sept. 30, 2008 was $19.2 million, a $4.5 million, or 30.6 percent, increase over the same period of 2007, which includes the impact of the company's acquisition of Union. Operating net income (excluding the OTTI Write-down) for the third quarter of 2008 was $5.9 million, a $932,000, or 18.6 percent, increase over the third quarter of 2007. Increases in both periods primarily reflect the impact of the January 3, 2008 acquisition of Union's $547.4 million asset base.

The Company's $14.0 million OTTI Write-down (included in non-interest income) resulted from investments in auction pass-through certificates issued by trusts that were sponsored by Merrill Lynch & Co. The assets of the trusts consisted of Federal Home Loan Mortgage Corporation ("Freddie Mac") preferred stock. On Sept. 6, 2008, the U.S. Treasury Department placed Freddie Mac in conservatorship and, as a result of this action, the payment of dividends ceased on all Freddie Mac issued stock, including the preferred stock supporting the auction pass-through certificates. The Freddie Mac preferred stock collateralizing the securities severely declined in value resulting in the impairment of the company's investment. The OTTI Write-down has been treated as a capital loss. However regulation or IRS guidance could change the tax treatment to ordinary loss. As an ordinary loss, the company would be able to record a tax benefit related to the OTTI Write-down. If this treatment is allowed, the company would record a $4.9 million, or $0.64 per diluted share tax benefit.

At Sept. 30, 2008, the Company's total risk-based capital ratio of 11.89 percent and Tier 1 capital ratio of 10.71 percent exceeded the minimum ratios of 10 percent and 6 percent, respectively, required by the Federal Reserve for a bank holding company to be considered "well capitalized."

Daigle commented, "Including the OTTI Write-down, the company remains "well-capitalized," the highest designation accorded by our primary regulators, and continues to experience solid core operating earnings, which we expect will support future capital build-up and quarterly dividend distributions."