CAC US Equity☆

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

The discussion below focuses on the factors affecting our consolidated results of operations for the years ended

December 31, 2022, 2021 and 2020 and financial condition at December 31, 2022 and 2021 and, where appropriate, factors that may affect our future financial performance, unless stated otherwise. This discussion should be read in conjunction with the consolidated financial statements, notes to the consolidated financial statements and selected consolidated financial data.

32

ACRONYMS AND ABBREVIATIONS

The acronyms and abbreviations identified below are used throughout Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations.” The following is provided to aid the reader and provide a reference page when reviewing this section of the Form 10-K:

Acronym Description Acronym Description

ALCO: Asset/Liability Committee GDP: Gross domestic product

AOCI: Accumulated other comprehensive income (loss) HTM: Held-to-maturity

ASC: Accounting Standards Codification IRS: Internal Revenue Service

ASU: Accounting Standards Update LGD: Loss given default

BOLI: Bank-owned life insurance LTIP: Long-Term Performance Share Plan

CD: Certificate of deposits MSPP: Management Stock Purchase Plan

CECL: Current Expected Credit Losses N/A: Not applicable

Company: Camden National Corporation N.M.: Not meaningful

DCRP: Defined Contribution Retirement Plan OREO: Other real estate owned

EPS: Earnings per share PD: Probability of default

FASB: Financial Accounting Standards Board ROU: Right-of-use

FOMC: Federal Open Market Committee TDR: Troubled-debt restructured loan

FRBB: Federal Reserve Bank of Boston U.S.: United States of America

33

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION TO GAAP

In addition to evaluating the Company’s results of operations in accordance with GAAP, management supplements this evaluation with an analysis of certain non-GAAP financial measures, such as return on average tangible equity; the efficiency ratio; net interest income (fully-taxable equivalent); earnings before income taxes and provision; earnings before income taxes, provision, and SBA PPP loan income; total loans, excluding SBA PPP loans; adjusted yield on interest-earning assets (fully-taxable equivalent) and adjusted net interest margin (fully-taxable equivalent); tangible book value per share; tangible common equity ratio; and core deposits and average core deposits. We utilize these non-GAAP financial measures for purposes of measuring our performance against our peer group and other financial institutions and analyzing our internal performance. We also believe these non-GAAP financial measures help investors better understand the Company’s operating performance and trends and allow for better performance comparisons to other banks. In addition, these non-GAAP financial measures remove the impact of unusual items that may obscure trends in the Company’s underlying performance. These disclosures should not be viewed as a substitute for GAAP operating results, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other financial institutions.

Return on Average Tangible Equity. Return on average tangible equity is the ratio of (i) net income, adjusted for tax effected amortization of core deposit intangible assets and other adjustments, as necessary, to (ii) average shareholders' equity, adjusted for average goodwill and core deposit intangible assets. This adjusted financial ratio reflects a shareholders' return on tangible capital deployed in our business and is a common performance measure within the financial services industry.

For the Year EndedDecember 31,

Add: amortization of core deposit intangible assets, net of tax(1) 494 517 539

(1) Assumed a 21% income tax rate.

34

Efficiency Ratio. The efficiency ratio represents an approximate measure of the cost required for the Company to generate a dollar of revenue. This is a common measure used by financial institutions and is a key ratio for evaluating Company performance. The efficiency ratio is calculated as the ratio of (i) total non-interest expense, adjusted for certain operating expenses, as necessary to (ii) net interest income on a tax equivalent basis plus total non-interest income, adjusted for certain other income items, as necessary.

For the Year EndedDecember 31,

Less: legal settlement — — (1,200)

Less: prepayment fees on borrowings — (514) —

Add: net loss on sale of securities 912 — —

Ratio of non-interest expense to total revenues(2) 56.72 % 55.41 % 53.52 %

(1) Reported on a tax-equivalent basis using a 21% income tax rate.

(2) Revenue is the sum of net interest income and non-interest income.

Net Interest Income (Fully-Taxable Equivalent). Net interest income on a fully-taxable equivalent basis is net interest income plus the taxes that would have been paid had tax-exempt securities been taxable. This number attempts to enhance the comparability of the performance of assets that have different tax liabilities. This is a common measure with the financial services industry and is used within the calculation of net interest margin on a fully-taxable equivalent basis.

For the Year EndedDecember 31,

(1) Reported on a tax-equivalent basis using a 21% income tax rate.

Earnings before Income Taxes and Provision, and Earnings before Income Taxes, Provision and SBA PPP Loan Income. Earnings before income taxes and provision, and earnings before income taxes, provision and SBA PPP loan income are each a supplemental measure of operating earnings and performance. Earnings before income taxes and provision is calculated as net income before provision for credit losses and income tax expense, and earnings before income taxes, provision and SBA PPP loan income is calculated as net income before provision for credit losses, income tax expense and SBA PPP loan income. These supplemental measures have become more widely used by financial institutions as a measure of financial performance for comparability across financial institutions due to the impact of the COVID-19 pandemic on the provision for credit losses, as well as the origination of SBA PPP loans in response to the COVID-19 pandemic that are not a recurring and sustainable source of revenues for financial institutions.

35

For the Year EndedDecember 31,

Add: provision for credit losses, as presented 4,500 (3,190) 12,418

Adjusted Yield on Interest-Earning Assets (Fully-Taxable Equivalent). Adjusted yield on interest-earning assets (fully-taxable equivalent) normalizes the Company's reported yield on interest-earning assets for certain unusual, non-recurring items, including: (i) the impact of SBA PPP loans and (ii) excess cash/liquidity held by the Company, primarily due to Federal stimulus programs and changes in the FRB cash holding requirements for financial institutions both in response to COVID-19.

For the Year EndedDecember 31,

Adjusted Net Interest Margin (Fully-Taxable Equivalent). Adjusted net interest margin on a fully-taxable equivalent basis normalizes the Company's reported net interest margin on a fully-taxable equivalent basis for certain unusual, non-recurring items, including: (i) the impact of SBA PPP loans and (ii) excess cash/liquidity held by the Company, primarily due to Federal stimulus programs and changes in the FRB cash holding requirements for financial institutions both in response to COVID-19.

For the Year EndedDecember 31,

Adjusted net interest margin (fully-taxable equivalent) 2.85 % 2.87 % 3.10 %

Tangible Book Value per Share and Tangible Common Equity Ratio. Tangible book value per share is the ratio of (i) shareholders’ equity less goodwill, and core deposit intangible assets to (ii) total common shares outstanding at period end. Tangible book value per share is a common measure within our industry when assessing the value of a company as it removes goodwill and other intangible assets generated within purchase accounting upon a business combination.

Tangible common equity is the ratio of (i) shareholders’ equity less goodwill and core deposit intangible assets to (ii) total assets less goodwill and core deposit intangible assets. This ratio is a measure used within our industry to assess whether or not a company is highly leveraged.

36

(In thousands, except number of shares and per share data) December 31,

Tangible Book Value Per Share:

Less: goodwill and core deposit intangible assets (96,260) (96,885)

Tangible book value per share $ 24.37 $ 30.15

Tangible Common Equity Ratio:

Less: goodwill and core deposit intangible assets (96,260) (96,885)

Common equity ratio 7.96 % 9.84 %

Tangible common equity ratio 6.37 % 8.22 %

Core Deposits. Core deposits are used by management to measure the portion of the Company's total deposits that management believes to be more stable and lower cost. The Company calculates core deposits as total deposits less CDs and brokered deposits.Management believes core deposits is a useful measure to assess the Company's deposit base, including its potential volatility.

December 31,

Average Core Deposits. Average core deposits are used by management to measure the portion of the Company's total deposits that management believes to be more stable and at a lower interest rate cost. The Company calculates average core deposits as total deposits less CDs. Management believes core deposits is a useful measure to assess the Company's deposit base, including its potential volatility.

For the Year EndedDecember 31,

(1) Brokered deposits are excluded from total average deposits, as presented on the Average Balance, Interest and Yield/Rate analysis table.

37

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. In preparing the Company’s consolidated financial statements, management is required to make significant estimates and assumptions that affect assets, liabilities, revenues, and expenses reported. Actual results could materially differ from our current estimates, as a result of changing conditions and future events. Several estimates are particularly critical and are susceptible to significant near-term change, including (i) the ACL, including the ACL on loans, off-balance sheet credit exposures and investments; (ii) accounting for acquisitions and the subsequent review of goodwill and intangible assets generated in an acquisition for impairment; (iii) income taxes; and (iv) accounting for defined benefit and postretirement plans.

Refer to Note 1 of the consolidated financial statements for additional details of the Company's accounting policies, including new accounting standards recently adopted.

Allowance for Credit Losses (“ACL”). In 2020, the Company adopted the new accounting standard for credit losses, ASU No. 2016-13, Financial Instruments - Credit Losses(Topic 326):Measurement of Credit Losses on Financial Instruments, as amended (“ASU 2016-13”). This new accounting standard, commonly referred to as “CECL,” significantly changed our methodology for accounting for reserves on loans, unfunded off-balance sheet credit exposures, including certain unfunded loan commitments and standby guarantees, as well as introduced the consideration for an allowance on HTM debt investments. ASU 2016-13 replaced the “incurred loss” methodology used prior to 2020 to establish an allowance on loans and off-balance sheet credit exposures, with an “expected loss” approach. Under CECL, the ACL at each reporting period serves as our best estimate of projected credit losses over the contractual life of certain assets, adjusted for expected prepayments, given an expectation of economic conditions and forecasts as of the valuation date.

The recorded ACL on loans and HTM debt investments is determined based on the amortized cost basis of the assets and may be determined at various levels, including homogeneous loan pools, individual credits with unique risk factors, and CUSIP. Since adoption of CECL in 2020 we have used a discounted cash flow approach to calculate the ACL for each loan segment. Within the discounted cash flow model, a probability of default (“PD”) and loss given default (“LGD”) assumption is applied to calculate the expected loss for each loan segment. PD is the probability the asset will default within a given timeframe and LGD is the percentage of the assets not expected to be collected due to default. PD and LGD data may be derived using (1) internal historical default and loss experience, as well as from (2) external data if there are not statistically meaningful loss events or our own internal loss data does not span a full economic cycle for a given loan segment.

CECL may create more volatility in our ACL, particularly our ACL on loans and ACL on off-balance sheet credit exposures. Under CECL, our ACL may increase or decrease period-to-period based on many factors, including, but not limited to: (i) macroeconomic forecasts and conditions; (ii) a change in the forecast period; (iii) a change in the reversion speed; (iv) a change in the prepayment speed assumption; (v) an increase or decrease in loan balances, including changes to our loan portfolio mix; (vi) credit quality of the loan portfolio; and (vii) various qualitative factors outlined in ASU 2016-13.

ASU 2016-13 also changed our methodology and accounting for credit losses within our investment portfolio designated as AFS. To the extent the fair value of a security designated as AFS is less than its amortized cost and we either (i) intend to sell the security or (ii) it is more-likely-than-not we will be required to sell the security before recovery of its amortized cost basis, then the investment is permanently impaired and the amortized cost basis is written down to fair value and a corresponding impairment charge is recorded within the consolidated statements of income. If neither of the above is true, but the fair value of the investment is below its amortized cost basis at the reporting date, then an allowance is established on the AFS investment for the portion of the impairment that is due to credit reasons (e.g. credit rating downgrades, past due receivables, and/or other macro- or micro-adverse trends). The allowance established on an AFS investment due to credit losses is limited to the amount the fair value of the investment is below its amortized cost basis as of the reporting date. If the fair value of the investment is below its amortized cost basis for non-credit-related reasons (e.g. interest rate environment), then the impairment continues to be recognized within shareholders' equity through AOCI.

ACL on Loans. We consider the ACL on loans to be a critical accounting policy given the uncertainty in evaluating the allowance required to cover management’s estimate of all expected credit losses over the expected contractual life of the loans in its portfolio. Determining the appropriateness of the allowance is a key management function that requires significant judgment and estimate by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the current loan portfolio, in light of the factors then prevailing, may result in significant changes in the allowance in future periods. While our current evaluation indicates that the ACL on loans at December 31, 2022 and 2021 was appropriate, the allowance may need to be increased under adversely different conditions or assumptions.

38

The significant key assumptions used with the ACL on loans calculation at December 31, 2022 and 2021 using the CECL methodology, included:

•Macroeconomic factors (loss drivers): Macroeconomic factors are used within our discounted cash flow model to forecast the PD over the forecast period. As macroeconomic factor condition worsen, the PD increases, and the corresponding LGD increases, resulting in an increase in the ACL on loans. We monitor and assess Maine unemployment, changes in Maine GDP, changes in National GDP, and changes in Maine's Housing Price Index at least annually to determine if these macroeconomic factors continue to be the most predictive indicator of losses within our loan portfolio. Macroeconomic factors used in the calculation of the ACL on loans may change from time to time and in times of greater uncertainty, we may consider a range of possible forecasts and evaluate the probability of each scenario. In the fourth quarter of 2021, the Company reassessed its macroeconomic factors and, as a result, is no longer considering the changes in Maine’s Retail Sales in the calculation of the ACL as of December 31, 2021. We assessed our loss factors again in the fourth quarter of 2022 and there were no changes made to the ACL on loans calculation for reporting as of December 31, 2022.

•Forecast Period and Reversion speed: ASU 2016-13 requires a company to use a reasonable and supportable forecast period in developing the ACL, which represents the time period that management believes it can reasonably forecast the identified loss drivers. Generally, the forecast period management believes to be reasonable and supportable is set annually and validated through an assessment of economic leading indicators. In periods of greater volatility and uncertainty, such as that seen across the global markets and economies, including the U.S., we are likely to use a shorter forecast period, whereas when markets, economies and various other factors are considered more stable and certain, we are likely to use a longer forecast period. Generally, we expect our forecast period to range from one to three years. Once the reasonable and supportable forecast period is determined, ASU 2016-13 requires a company to revert its loss expectations to the long-run historical mean for the remainder of the contract life of the asset, adjusted for prepayments. In determining the length of time over which the reversion will take place (i.e. “reversion speed”), we consider such factors such as, but not limited to, historical loan loss experience over previous economic cycles, as well as where we believe we are within the current economic cycle.

At December 31, 2022 and 2021, we used a one-year forecast period and one-year reversion period for each loan segment to measure the ACL on loans.

•Prepayment speeds: Prepayment speeds are determined for each loan segment utilizing our own historical loan data, as well as consideration of current environmental factors. The prepayment speed assumption is utilized with the discounted cash flow model (i.e. the CECL model) to forecast expected cash flows over the contractual life of the loan, adjusted for expected prepayments. A higher prepayment speed assumption will drive a lower ACL, and vice versa.

•Qualitative factors: ASU 2016-13 requires companies to consider various qualitative factors that may impact expected credit losses. We continue to consider qualitative factors in determining and arriving at our ACL on loans each reporting period.

As of December 31, 2022 and 2021, the recorded ACL on loans was $36.9 million and $33.3 million, respectively, and represented our best estimate of expected credit losses within our loan portfolio as of each date. However, we may adjust our assumptions to account for differences between expected and actual losses each period. A future change of our assumptions will likely alter the level of allowance required and may have a material impact on future results of operations and financial condition. The ACL is reviewed periodically within a calendar quarter to assess trends in the aforementioned key assumptions, as well as asset quality within our loan portfolio, and we consider the impact of these trends on the ACL and the Company's financial condition, if any. The ACL on loans is reviewed and approved on a quarterly basis by the Company's Audit Committee, and later reviewed and ratified by the Bank's Board of Directors.

Refer to “—Results of Operations—Provision for Credit Losses,” “—Financial Condition—Asset Quality,” and Note 3 of the consolidated financial statements for further discussion.

ACL on Off-Balance Sheet Credit Exposures. We consider the ACL on off-balance sheet credit exposures to be a critical accounting policy given the uncertainty in evaluating the level of the allowance required to cover management’s estimate of all expected credit losses on expected future loan fundings of, primarily, unfunded loan commitments for those that are not unconditionally cancellable by the Company. The expected credit loss factor calculated for each loan segment using the ACL on loans methodology described above, as well as within Note 1 of the consolidated financial statements, is used to calculate the ACL on off-balance sheet credit exposures for each applicable loan segment, and, thus, are subject to the same level of estimation risk and volatility previously described. In addition, one other key assumption is used to derive the allowance on off-

39

balance sheet credit exposures and that is the expected funding rate. The expected funding rate is derived using historical loan-level data for credit line usage, and is applied to total off-balance sheet credit exposures at each reporting date, excluding any that are unconditionally cancellable by the Company, to determine the expected funding amount. As unfunded loan commitments are funded, the allowance migrates from that provided for off-balance sheet credit exposures to the ACL on loans. If the expected funding rate or any other key assumption used is not reasonable, then this could have an adverse impact on the total ACL upon funding.

As of December 31, 2022 and 2021, the recorded ACL on off-balance sheet credit exposures was $3.3 million and $3.2 million, respectively, and presented within accrued interest and other liabilities on the consolidated statements of condition. Increases (decreases) to the allowance are presented within provision (credit) for credit losses on the consolidated statements of income. The allowance at December 31, 2022 and 2021, represented our best estimate, however, we may adjust our assumptions to account for differences between expected and actual losses from period to period. A future change to our assumptions will likely alter the level of allowance required and may have a material impact on future results of operations and financial condition.

Refer to “—Results of Operations—Provision for Credit Losses,” “—Financial Condition—Asset Quality,” and Note 3 and 11 of the consolidated financial statements for further discussion.

ACL for HTM Debt Securities. The estimate of expected credit losses on our HTM investment portfolio is based on the expected cash flows of each individual CUSIP over its contractual life and considers historical credit loss information, current conditions and reasonable and supportable forecasts. Given the rarity of municipal defaults and losses, we utilize external third party loss forecast models as the sole source of municipal default and loss rates. Investment cash flows are modeled over a reasonable and supportable forecast period and then revert to the long-term average economic conditions on a straight line basis (similar to that of our ACL on loans policy). Management may exercise discretion to make adjustments based on various environmental factors.

At December 31, 2022 and 2021, the Company held securities in its HTM portfolio with an amortized cost basis of $546.6 million and $1.3 million, that primarily consisted of MBS and CMO debt securities issued, municipal bonds or guaranteed by U.S. government-sponsored agencies. Under ASU 2016-13 the Company has the ability to exclude certain securities when the historical credit loss information, adjusted for current conditions and forecasts, resulting in zero risk of nonpayment of the amortized cost basis of the security. Management has evaluated and determined zero risk of nonpayment on all securities guaranteed by the U.S government agencies. In 2022, the Company engaged in a third party to calculate the necessary allowances required due on all other HTM securities due to the large increase in the portfolio. However, no allowance was carried given the immaterial amount that was calculated based on the nature of such securities as of December 31, 2022 and 2021. Should our HTM portfolio continue grow in size, change its mix and/or experience credit deterioration, an allowance may be recorded at that time.

Refer to “—Financial Condition—Investments” and Note 2 of the consolidated financial statements for further discussion.

ACL on AFS Debt Securities. We consider the ACL on AFS debt securities to be a critical accounting policy given the size of the investment portfolio and level of estimation used to determine the allowance, as appropriate. As of December 31, 2022 and 2021, the Company's AFS portfolio is entirely made up of assets that are fair valued using level 2 valuation techniques in accordance with ASC 820, Fair Value Measurement. We engage a third party pricing agency to assist with the valuation of such debt securities and the assets are carried at fair value at each reporting period. An allowance is recorded on an AFS debt security to the extent an event has occurred that suggests receipt of full contractual payments are at risk. When such an event has been identified, a discounted cash flow model is used to determine the expected losses due to credit risk, and an allowance is recorded to reduce the carrying value of the debt security by the calculated expected loss amount, limited to the amount by which the fair value of the debt security is below its amortized cost basis.

As further described within “—Financial Condition—Investments,” the Company's AFS portfolio, as of December 31, 2022 and 2021, was primarily consisted of MBS and CMO debt securities issued or guaranteed by U.S. government-sponsored agencies, and, thus, presenting little to no credit risk. As of December 31, 2022 and 2021, the Company had not identified indications of credit risk and did not carry any allowance for credit losses on its AFS portfolio, nor did it record any permanent impairments during 2022, 2021 or 2020.

Refer to “—Financial Condition—Investments” and Note 2 of the consolidated financial statements for further discussion.

Purchase Price Allocation and Impairment of Goodwill and Identifiable Intangible Assets. We record all acquired assets and liabilities at fair value, which is an estimate determined by the use of internal valuation techniques. We also may engage

40

external valuation services to assist with the valuation of material assets and liabilities acquired, including, but not limited to, loans, core deposit intangibles and/or other intangible assets, real estate and time deposits. As part of purchase accounting, we typically acquire goodwill and other intangible assets as part of the purchase price. These assets are subject to ongoing periodic impairment tests under differing accounting models. We did not acquire any other company or assets during 2022 or 2021.

Goodwill impairment evaluations are required to be performed at least annually, but may be required more frequently if certain conditions indicate a potential impairment may exist. Our policy is to perform the goodwill impairment analysis annually as of November 30th, or more frequently as warranted. The goodwill impairment evaluation is required to be performed at the reporting unit level. Goodwill impairment is measured by the amount the book value of the reporting unit exceeds its fair value, and an impairment charge is recorded for the lesser of this amount or the amount to write-down goodwill to zero.

We elected to use the quantitative analysis to perform the annual goodwill impairment assessment as of November 30, 2022 and concluded that goodwill was not impaired. We may use a qualitative analysis to evaluate goodwill for impairment when it is believed that it is not more-likely-than-not that the fair value of the reporting unit is below its book value, or if a quantitative analysis was recently used to estimate the fair value of the reporting unit, and there are not any indications of events that would suggest such conclusions for impairment have changed. We performed our annual goodwill impairment assessment as of November 30, 2021 using a qualitative analysis and concluded that it was not more-likely-than-not that goodwill was impaired. The Company did not recognize any impairment of goodwill in 2022, 2021 or 2020.

The Company's core deposit intangible assets have a finite life and are amortized over their estimated useful lives. Core deposit intangible assets are subject to impairment tests if events or circumstances indicate a possible inability to realize the carrying amount. Core deposit intangible assets are measured for impairment utilizing a cost recovery model. We did not identify any events or circumstances that occurred in 2022, 2021 or 2020 that would indicate that our core deposit intangible assets may be impaired and should be evaluated for such.

Refer to “—Financial Condition—Goodwill and Core Deposit Intangible Assets” and Note 4 of the consolidated financial statements for further discussion.

Income Taxes. We account for income taxes by deferring income taxes based on the estimated future tax effects of differences between the book and tax bases of assets and liabilities, considering the provisions of enacted tax laws. These differences result in deferred tax assets and liabilities, which are included in the consolidated statements of condition.

We must also assess the likelihood that any deferred tax assets will be recovered from future taxable income and establish a valuation allowance for those assets determined not likely to be recoverable. At December 31, 2022 and 2021, the Company carried deferred tax assets totaling $50.2 million and $19.2 million, respectively, and did not record any valuation allowance on these deferred tax assets. Although we determined a valuation allowance was not required for our deferred tax assets as of December 31, 2022 and 2021, there is no guarantee that these assets will be realized. To the extent a valuation allowance on the Company's deferred tax assets is recorded in future periods, a material charge to the Company's consolidated statements of income may result and reduce net income. Judgment is required in determining the amount and timing of recognition of the resulting deferred tax assets and liabilities, including projections of future taxable income.

As of December 31, 2022, our federal and state income tax returns for 2021, 2020 and 2019 were open to audit by federal and various state authorities. If, as a result of an audit, we were to be assessed interest and penalties, the amounts would be recorded through other non-interest expense on the consolidated statements of income.

Refer to “—Results of Operations—Income Tax Expense” and Note 19 of the consolidated financial statements for further discussion.

Defined Benefit and Postretirement Plans. We use a December 31stmeasurement date to determine the expenses for the Company's defined benefit and postretirement plans and related financial disclosure information. Postretirement plan expense is sensitive to changes in the number of eligible employees, changes in the discount rate, mortality rate, and other expected

rates, such as medical cost trends rates and salary scale assumptions. There are no new entrants to the Company's defined benefit and postretirement plans.

Refer to Note 18 of the consolidated financial statements for further discussion.

41

EXECUTIVE OVERVIEW

2022 Overview. The Company reported net income and diluted EPS for the year ended 2022 of $61.4 million and $4.17, respectively, down from record financial performance levels last year of $69.0 million and $4.60, respectively. Market dynamics changed significantly in 2022, in comparison to more recent years, as short-term interest rates rose sharply and pushed the market into a prolonged and inverted yield curve beginning in the third quarter of 2022. The FOMC increased the Federal Funds Effective Rate seven times during 2022, increasing the target interest rate range from 0.00% - 0.25% to 4.25% - 4.50% at December 31, 2022. The sharp increase in Federal Funds Effective Rate was in response to rising inflation within the U.S and in an effort to bring inflation towards the FOMC’s long-term targeted annual inflationary rate. Subsequent to December 31, 2022, the FOMC again increased the Federal Funds Effective Rate another 25 basis points. Despite the macroeconomic pressures created by rapidly rising interest rates, asset quality continues to be a source of strength for the Company as of December 31, 2022, highlighted by non-performing loans of 0.13% of total loans and non-performing assets of 0.09% of total assets, in comparison 0.20% and 0.13% as of December 31, 2021, respectively. The Company posted solid financial returns for 2022, including a return on average equity of 13.15%, return on average tangible equity (non-GAAP) of 16.71% and return on average assets of 1.12%, compared to 12.72%, 15.61% and 1.31%, respectively, for the year ended December 31, 2021.

The Company continues to be well-positioned to withstand the turbulent and volatile markets we have faced the past several years, and that the Company predicts for the upcoming year, through a strong capital position and appropriate reserve levels on our loan portfolio. At December 31, 2022, all of the Company and Bank’s regulatory capital ratios were well in excess of regulatory capital requirements. While our common equity ratio decreased 188 basis points during 2022 to 7.96% and our tangible common equity ratio (non-GAAP) decreased 185 basis points over the same period to 6.37% at December 31, 2022, we recognize the decrease was driven by the sharp increase in interest rates during 2022 driving a lower valuation on our investment portfolio designated as AFS and was not credit-related. Furthermore, our ACL on loans at December 31, 2022, was 0.92% to total loans and 7.2 times non-performing loans, compared to 0.97% and 5.0 times as of December 31, 2021. Our reserve levels reflect the strength of our asset quality, which included net charge-offs of 0.02% of average loans for the year ended 2022 and past due loans of 0.06% as of December 31, 2022. We continue to actively monitor our loan portfolio and various sub-segments within the portfolio to identify early-indicators for signs of stress. To date, we have not identified any systemic trends.

During 2022, through the combination of cash dividends and share repurchases, the Company returned $33.9 million of capital to shareholders, which included the repurchase of 225,245 shares of its common stock at a weighted average price of $45.46 and cash dividends to shareholders of $1.62 per share, a 9% increase over 2021. In January 2023, we announced a new share repurchase program was approved by the Company’s Board of Directors for up to 750,000 shares, or approximately 5% of total shares outstanding as of December 31, 2022, and the termination of our share repurchase program that was opened in 2022.

Operating Results. Net income for the year ended 2022 was $61.4 million, representing a decrease of $7.6 million, or 11%, compared to 2021. Earnings before income taxes, provision for credit losses, and SBA PPP loan income (non-GAAP) for the year ended 2022 was $80.3 million, representing an increase of 7% compared to 2021.

The key drivers of the decrease in net income between periods included:

•An increase in net interest income of $10.3 million, or 7%, driven by average loan growth of 12%. Net interest margin for the year ended 2022 was 2.86%, compared to 2.84% the previous year. Interest-earning asset yields increased 27 basis points between periods to 3.34% for the year ended 2022, while funding costs also increased 27 basis points over the same period to 0.51% for the year ended 2022. Funding costs increased at a faster pace during the second half of the 2022 as the FOMC accelerated interest rate increased.

•An increase in provision for credit losses of $7.7 million. For the year ended 2022, the Company recorded a provision of $4.5 million to account for the strong end-to-end loan growth of 17% during the year and deteriorating macroeconomic projections. For the year ended 2021, the Company reported negative provision expense (or a credit) of $3.2 million as it released a portion of its ACL established in 2020 as markets improved and credit quality deterioration did not occur from the COVID-19 pandemic.

•A decrease in non-interest income of $9.0 million, or 18%, driven by lower mortgage banking income of $9.5 million, or 69%, as residential mortgage production slowed and we sold 20% of our production during 2022, compared to 44% for the year ended 2021.

42

•An increase in non-interest expense of $3.1 million, or 3%, primarily driven by higher salaries and employee benefits costs of $1.0 million, or 2%. Our ratio of non-interest expense to total revenue was 56.72% for the year ended 2022, compared to 55.41% for 2021, or, on a non-GAAP-basis, our efficiency ratio was 56.16% and 54.85% for the same periods, respectively.

43

RESULTS OF OPERATIONS

Net Interest Income and Net Interest Margin

Net interest income is the interest earned on loans, securities, and other interest-earning assets, plus net loan fees, origination costs and fair value marks on loans and/or time deposits created in purchase accounting, less the interest paid on interest-bearing deposits and borrowings. Net interest income, which is our largest source of revenue, accounted for 78% of total revenues for the year ended 2022 and 73% of total revenues for each of the years ended 2021 and 2020. Net interest income is affected by factors including, but not limited to, changes in interest rates, loan and deposit pricing strategies and competitive conditions, loan prepayment speeds, the volume and mix of interest-earning assets and interest-bearing liabilities, and the level of non-performing assets.

Net Interest Income. Net interest income on a fully-taxable equivalent basis for the year ended 2022 was $148.7 million, an increase of $10.3 million, or 7%, over 2021. The increase consisted of a $24.3 million, or 16%, increase in interest income on a fully-taxable equivalent basis, which was partially offset by an increase in interest expense of $14.0 million, or 127%, between periods.

•The increase in interest income on a fully-taxable equivalent basis was the combination of strong average interest-earning asset growth of 7% and yield expansion of 27 basis points between periods. Interest-earning asset growth was driven by (i) average loan balances, which grew $411.1 million, or 12%, between periods driven by residential real estate and commercial real estate growing 30% and 8%, respectively, and (ii) average investment balances, which increased $135.6 million, or 10%, compared to 2021, primarily due to the full year impact of investment purchases made in 2021. Our yield expansion on interest-earning assets during 2022 was the result of the significant change in the interest rate environment between periods. During 2022, interest rates rose sharply as the FOMC increased the Federal Funds Effective Rate 425 basis points to a target range of 4.25% - 4.50% at December 31, 2022 through a series of seven interest rate hikes. The 10-year U.S. Treasury increased 236 basis points during the year to 3.88% at December 30, 2022 (last business day).

•The increase in interest expense was primarily the result of a 27 basis point increase in our average cost of funds, again, driven by the sharp increase in interest rates between periods. The Company’s funding costs grew to 0.51% for the year ended 2022 as deposits costs increased 26 basis points during the year to 0.42% and borrowing costs increased 50 basis points to 1.35%. The increase in deposit costs was primarily seen within interest checking and money market accounts. These accounts generally carry more interest-rate sensitive customers, including larger commercial customers requiring higher interest rates.

Net Interest Margin. Net interest margin is calculated as net interest income on a fully-taxable equivalent basis as a percentage of average interest-earning assets. Our net interest margin on a fully-taxable equivalent basis for the years ended 2022 and 2021 was 2.86% and 2.84%, respectively, and our adjusted net interest margin on a fully-taxable equivalent basis (non-GAAP) for the year ended 2022 was 2.85%, compared to 2.87% for 2021.

The following table presents, for the periods noted, average balances, interest income, interest expense, and the corresponding average yields earned and rates paid, as well as net interest income, net interest rate spread and net interest margin:

44

Average Balance, Interest and Yield/Rate Analysis

For the Year Ended December 31,

ASSETS

Interest-earning assets:

Loans(3):

LIABILITIES & SHAREHOLDERS’ EQUITY

Deposits:

Borrowings:

Less: fully-taxable equivalent adjustment (937) (988) (1,155)

Net interest rate spread (fully-taxable equivalent) 2.83 % 2.83 % 3.07 %

Net interest margin (fully-taxable equivalent) 2.86 % 2.84 % 3.09 %

(1) Reported average balances are calculated on a daily basis.

45

(2) Reported on a tax-equivalent basis calculated using a 21% tax rate, including certain commercial loans.

(3) Non-accrual loans and loans held for sale are included in total average loans.

The following table presents certain information on a fully-taxable equivalent basis regarding changes in interest income and interest expense for the periods indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes attributable to rate and volume. The (a) changes in volume (change in volume multiplied by prior year's rate), (b) changes in rates (change in rate multiplied by current year's volume), and (c) changes in rate/volume (change in rate multiplied by the change in volume), which is allocated to the change due to rate column.

(In thousands) Volume Rate Volume Rate

Interest-earning assets:

Interest-bearing liabilities:

Net interest income included the following for the periods indicated:

Income Statement Location For the Year EndedDecember 31,

Recoveries on previously charged-off acquired loans Interest income 217 226 258

(1) For the years ended 2022 and 2021, the Company recognized $1.2 million and $6.9 million of fees associated with SBA PPP loan originations.

46

The Company's consolidated financial statements and the notes to the consolidated financial statements presented within have been prepared in accordance with GAAP, which requires the measurement of the financial position and operating results in terms of historical dollars and, in some cases, current fair values without considering changes in the relative purchasing power of money over time due to inflation. Unlike many industrial companies, substantially all of our assets and virtually all of our liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than the general level of inflation. Over short periods of time, interest rates and the yield curve may not necessarily move in the same direction or in the same magnitude as inflation.

As of the date of this Annual Report on Form 10-K, the FOMC increased the Federal Funds Effective Rate 25 basis points in February 2023 putting the target interest rate range at 4.50% - 4.75%, and has signaled additional interest rate hikes in 2023 may be necessary in an effort to continue to curb inflationary pressures and reach its long-term inflation target. The Company's interest rate risk position as of December 31, 2022 was liability sensitive and, as such, continued short-term interest rate hikes by the FOMC would likely result in lower net interest income as deposits and borrowings reprice at a faster pace than repricing of variable rate loans, and loan and investment prepayment speeds slow resulting in less cash flows to reinvest into higher yielding assets in current markets.

Subsequent to December 31, 2022, the Company executed four fixed-for-floating interest rate swaps for a total of $300.0 million of notional on a designated pool of fixed rate residential real estate loans. The derivative transaction was designated as a “fair value hedge” under ASC 815, and was done to limit the Company’s exposure to continued short-term rising interest rates in the near term. Refer to “—Risk Management—Interest Rate Risk” and Note 12 of the consolidated financial statements for further discussion.

Provision for Credit Losses

For the years ended 2022, 2021 and 2020, the Company has accounted for its provision for credit losses in accordance with ASU 2016-13, commonly referred to as the “CECL” standard. Refer to “—Critical Accounting Policies” and Note 1 of the consolidated financial statements for the Company's accounting and policies for the ACL.

The provision for credit losses was made up of the following components for the periods indicated:

For the Year EndedDecember 31, Change from2022 to 2021

Provision for loan losses. At the onset of the COVID-19 pandemic in 2020, we increased the Company's ACL on loans to account for the anticipated adverse impact of COVID-19 on our loan portfolio, based on the various macroeconomic data trends and various qualitative considerations. In 2021, we however, recorded a credit for loan losses of $3.8 million, which reflected better than expected macroeconomic times and minimal credit deterioration that allowed us to release a portion of the reserves we had established in 2020 for the pandemic. For the year ended 2022, we recorded provision for loan losses of $4.4 million due to strong loan growth of 17% during the year and a shift in the macroeconomic conditions and outlook as a fear of a recession in the near term grew as the FOMC aggressively raised short-term interest rates to curb inflation. Partially offsetting the need for provisions was continued strong asset quality across the Company’s loan portfolios with no immediate signs of deterioration, as highlighted by the following credit quality metrics: (i) net charge-offs of 0.02% of average loans for the year ended 2022, (ii) non-performing assets of 0.09% of total assets as of December 31, 2022, and (iii) and past due loans (30-89 days) of 0.06% of total loans as of December 31, 2022.

Provision for credit losses on off-balance credit exposures. At December 31, 2022, the ACL on off-balance sheet credit exposures was $3.3 million, as compared to $3.2 million as of December 31, 2021. The increase was driven by increased expected loss factor given the overall macroeconomic uncertainty between periods, partially offset by the decrease in unfunded commitments of $17.2 million between periods.

47

Non-Interest Income

The following table sets forth information regarding non-interest income for the periods indicated:

For the Year EndedDecember 31, Change from2022 to 2021

Net loss on sale of securities (912) — — (912) —

Non-interest income as a percentage of total revenues(1) 22 % 27 % 27 %

(1) Revenue is the sum of net interest income and non-interest income.

Mortgage banking income, net is generated through the sale of residential mortgage loans to secondary market investors and also includes income recognized upon the sale of residential mortgages in which we maintain the servicing rights creating a mortgage servicing asset, net of related amortization of the capitalized mortgage servicing asset. Our practice has been to sell the servicing rights for residential mortgages originated, except for certain third party relationships that require the Company to service the loan.

The decrease in mortgage banking income, net for the year ended 2022 compared to 2021, was driven by a 30% decrease in residential mortgage production between years as the shift in the interest rate environment in 2022 impacted purchase and refinance activity. Additionally, the Company sold 20% of its originated residential mortgage production in 2022, compared to 44% in 2021, which, again, reflects the shift in market dynamics between periods.

Debit card income represents theinterchange fees earned from debit card transactions of our business and consumer checking account customers, and the annual incentive bonus received from our network provider.

Service charges on deposit accounts represents the fees earned from providing various services to deposit customers, including overdraft and non-sufficient funds fees, normal fees for servicing deposit accounts, and cash management fees for business customers. Overdraft and non-sufficient fund fees totaled $5.3 million and $4.7 million for the years ended 2022 and 2021, respectively. Overdraft and non-sufficient fund fees for the year ended 2022 remained below pre-COVID-19 pandemic levels as customers continue to have elevated savings rates in comparison.

In the third quarter of 2022, the Company made certain non-sufficient funds and overdraft program changes to assist our customers and support their financial well-being. The changes are not expected to materially decrease revenues.

Income from fiduciary services represents the fees earned for investment advisory and trust services provided by Camden National Wealth Management. The fees earned are primarily a percentage of our clients' assets under management. Assets under management were $1.0 billion and $1.1 billion as of December 31, 2022 and 2021, respectively. The decrease in assets under management between periods was driven by overall portfolio performance during 2022, as seen across broader market indices for the year, and was partially offset by net inflows of cash and assets.

Brokerage and insurance commissions represent the fees earned for brokerage services, investment advisory and insurance services provided by the Bank, doing business as Camden Financial Consultants. The increase for the year ended 2022 over 2021 was driven by fees for brokerage and advisory services.

Bank-owned life insurance represents the change in cash surrender value of the Company's various BOLI policies in place for certain current and former officers of the Company and Bank. The change in cash surrender value reflects the performance of the underlying investments of the policies. The decrease in income for the year ended 2022 compared to 2021 was the result of the underlying investments in one of the Company's BOLI contracts dropping below its stable value wrapper and, thus, write

48

downs totaling $387,000 were recognized in the third and fourth quarter of 2022. A further decrease in the market value of these underlying investments within this contract may result in lower BOLI income in future periods.

Net (loss) gain on sale of securities represents the realized (loss) gain upon sale of our debt investments. In 2022, we

executed an investment portfolio restructure strategy to increase net interest income and improve our net interest margin. In doing so, we sold investments designated as AFS with a book value of $37.2 million and realized losses of $912,000, while simultaneously purchasing $32.8 million of new securities at current market rates.

We did not sell any investment securities during the years ended 2021 or 2020. Refer to “—Financial Condition—Investments,” and Note 2 of the consolidated financial statements for further discussion.

Other Income includes third party merchant and credit card commissions, customer loan swap fees and other miscellaneous fees and net gains on equity securities.

Non-Interest Expense

The following table sets forth information regarding non-interest expense for the periods indicated:

For the Year EndedDecember 31, Change from2022 to 2021

Amortization of core deposit intangible assets 625 655 682 (30) (5) %

Ratio of non-interest expense to total revenues 56.72 % 55.41 % 53.52 %

Salaries and employee benefits includes employee wages, commissions, incentives, equity compensation, employer-related taxes, insurance benefits, and other certain employee-related costs, net of direct employee-related costs incurred for loan originations. The increase for the year ended 2022 over 2021 was driven by the increase in wages and related taxes of 4% as we issued our normal annual merit increases in March 2022, partially offset by a decrease in bonuses and incentives of $1.4 million, based on annual performance-to-budget.

Furniture, equipment and data processing includes depreciation expense of capitalized furniture, equipment and data-related costs, and ongoing system and other data processing costs, including outsourced solutions. The increase for the year ended 2022 over 2021 was driven by continued investments in customer-facing technology platforms, internal systems and production platforms to drive increased productivity and efficiencies, and various information security and resiliency-related systems and enhancements.

Net occupancy costs include building and property costs associated with the operation of our branches, loan production offices and service centers, including, but not limited to, rent, depreciation, maintenance and related taxes, net of rental income earned from the lease of office space.

Consulting and professional fees include third party consulting services and other professional fees, such as audit and tax services, legal services, and Company and Bank director fees.

Debit card expense is the cost incurred for the generation of debit card income, including third party switch network provider fees and related data transmission costs, and plastic card costs for the generation of debit cards for checking account customers. Debit card expense increased 7% in 2022 compared to 2021, while debit card income increased 2% over this same period. Many of the costs associated with debit card expense are fixed per unit.

49

Regulatory assessments are the costs incurred and paid to various regulatory agencies, including the FDIC and OCC. Regulatory assessment fees are based on a number of factors, not limited to, asset growth, regulator risk assessment and positive or negative trends specific to the financial institution. The increase for the year ended 2022 over 2021 was driven by the increase in quarterly FDIC assessments primarily due to asset growth. The FDIC has approved a 2 basis point increase in the assessment rate for all insured banks, effective January 1, 2023, that will result in an increase in the Company’s FDIC costs for 2023.

OREO and collection costs, net include the costs associated with OREO, collection and foreclosure efforts for the Company's loans. Should asset quality metrics deteriorate in 2023, the associated costs with OREO, collection and foreclosure efforts would likely increase.

Amortization of core deposit intangible assets represents the amortization expense on core deposit intangible assets. Refer to “—Financial Condition—Goodwill and Core Deposit Intangible Assets,” and Note 4 of the consolidated financial statements for further details.

Other expenses include employee-related costs, such as certain SERP and other postretirement benefits expenses; hiring, training, education, meeting and business travel costs; donations and marketing costs; postage, freight and courier costs; and other expenses.

Income Tax Expense

Income tax expense for the years ended 2022 and 2021 was $15.6 million and $17.6 million, respectively, which resulted in an effective income tax rate of 20.3% for each year. The state of Maine has a state tax rate for financial institutions lower than other states in the region in which we operate. As the Company’s lending and operating footprint continues to expand outside of Maine, it is anticipated that the Company’s effective tax rate will continue to increase.

The Company's effective income tax rate for the year ended 2022 of 20.3% was lower than our marginal tax rate of 22.8%, which includes our 21.0% federal income tax rate and 1.8% state income tax rate, net of federal tax benefit, primarily due to non-taxable interest income from municipal bonds and certain qualifying loans, non-taxable BOLI, and tax credits received on qualifying investments.

The Company's deferred tax assets were $50.2 million and $19.2 million at December 31, 2022 and 2021, respectively. The increase in deferred tax assets during 2022 was driven by an increase in unrealized losses on the AFS investments portfolio, including the investments transferred from AFS to HTM in June 2022. As of December 31, 2022, we have no need for, or intention to sell, any of these investment securities in an unrealized loss position and expect full recovery of the investment as the unrealized loss was the result of the significant increase in interest during 2022 and not a reflection of credit risk within the investment portfolio. Furthermore, while not anticipated as of December 31, 2022, should the Company realize a loss on these investments, as a financial institution the loss would be characterized as an ordinary loss for income tax purposes and not as a capital loss, and thus would not carry restrictions on use of any such loss. We continuously monitor and assess the need for a valuation allowance on our deferred tax assets, and we determined that no valuation allowance was necessary as of December 31, 2022 and 2021.

Refer to “—Financial Condition—Investments,” and Note 2 of the consolidated financial statements for further discussion of investments.

Refer to Note 19 of the consolidated financial statements for further discussion of income taxes and related deferred tax assets and liabilities.

2021 Operating Results as Compared to 2020 Operating Results

Results of operations for the year ended December 31, 2021 compared to the year ended December 31, 2020 can be found in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s 2021 annual report on Form 10-K filed with the SEC on March 11, 2022.

50

FINANCIAL CONDITION

Cash and Cash Equivalents

Total cash and cash equivalents at December 31, 2022 were $75.4 million, compared to $220.6 million at December 31, 2021. Cash and cash equivalents balances decreased during 2022 as we redeployed cash to support the funding of loan growth of 17% during 2022. We continuously manage and monitor our cash levels to ensure compliance with applicable regulatory requirements.

In March 2020, the FRB reduced reserve requirement ratios to zero percent, effectively eliminating the cash reserve requirement for all depository institutions.

Investments

The Company utilizes the investment portfolio to manage liquidity, interest rate risk, and regulatory capital, as well as to take advantage of market conditions to generate returns without undue risk. At December 31, 2022 and 2021, the Company’s investment portfolio generally consisted of MBS, CMO, municipal and corporate debt securities, FHLBB and FRB common stock, and mutual funds held in a rabbi trust for purposes of Company executive and director nonqualified retirement plans. We designate our debt securities as AFS or HTM based on our intent and investment strategy and they are carried at fair value or amortized cost, respectively. Our FHLBB and FRB common stock is carried at cost; and our mutual fund investments are designated as trading securities and are carried at fair value. At December 31, 2022 and 2021, total investments were 22% and 28% of total assets, respectively.

During the quarter ended June 30, 2022, we transferred 141 securities with a fair value of $520.3 million from AFS to HTM to help manage our capital position in a rising interest rate environment. The securities were reclassified at fair value at the time of the transfer, a non-cash transaction. The unrealized losses on the AFS debt securities at the time of the transfer were $72.1 million, pre-tax, and were reported within AOCI. The weighted average life of the transferred securities as of the date of transfer was 8.8 years and the unrealized losses will be amortized over the remaining lives. At December 31, 2022, the net unrealized losses on the transferred securities reported within AOCI were $52.2 million, net of a deferred tax asset of $14.3 million and the weighted-average life on these securities was 8.8 years.

At December 31, 2022 and 2021, the Company's investments portfolio totaled $1.3 billion and $1.5 billion, respectively, representing a decrease of $264.3 million, or 17%, for the year ended December 31, 2022. The decrease was driven primarily by:

•Paydowns, calls and maturities of $174.5 million;

•Sales of AFS debt securities of $36.3 million; In 2022, we executed an investment portfolio restructure strategy to sell these securities and simultaneously purchase $32.8M of new securities to increase net interest income and improve our net interest margin.

•A net decrease in the fair value of the AFS debt securities portfolio of $99.6 million, driven primarily by rising interest rates during the year as economic policy tightened in an effort to curb inflationary pressures. As a result of rising interest rates, the 2-year U.S. Treasury increased 368 basis points and the 10-year U.S. Treasury increased 236 basis points to 4.41% and 3.88%, respectively, at December 31, 2022, causing bond prices to fall;

•A decrease of $66.4 million due to the unamortized unrealized losses on the AFS securities that were transferred to HTM in June of 2022;

•Partially offset by purchases of $138.4 million of debt securities during 2022, including the debt securities purchased as part of the Company’s investment restructuring discussed above. The weighted-average life of investments purchased during 2022 was 6.4 years.

Our AFS debt securities portfolio, which comprised 55% and 99% of our investment portfolio at December 31, 2022 and 2021, respectively, was carried at fair value using level 2 valuation techniques. Refer to Notes 1 and 21 of the consolidated financial statements for further details on the Company's fair value techniques.

The AFS and HTM debt securities portfolio has limited credit risk due to its composition, which includes securities backed by the U.S. government and government-sponsored agencies, highly rated corporate and municipal bonds by nationally recognized rating agencies. At December 31, 2022 and 2021, the fair value of U.S. government and government-sponsored agencies represented approximately 88% and 91%, respectively, of the AFS and HTM debt securities portfolio. The fair value

51

of corporate and municipal bonds carrying a credit rating of “AA” or higher at December 31, 2022 and 2021 was 6% and 6% , respectively, of the AFS and HTM debt securities

Our other investments on the consolidated statements of condition consist of FHLBB and FRB common stock. These investments are carried at cost. We are required to maintain a certain level of investment in FHLBB stock based on our level of FHLBB advances, and maintain a certain level of investment in FRB common stock based on the Bank's capital levels. As of December 31, 2022 and 2021, our investment in FHLBB stock totaled $7.3 million and $4.9 million, respectively, and our investment in FRB stock was $5.4 million.

Our investments in mutual funds are designated as trading securities and carried at fair value. These investments are held within a rabbi trust and will be used for future payments associated with the Company’s Executive and Director Deferred Compensation Plan. These investments are carried at fair value using level 1 valuation techniques.

The following table sets forth the carrying value of AFS and HTM debt securities along with the percentage distribution as of the dates indicated:

December 31,

Trading Securities (carried at fair value):

Total trading securities 3,990 — % 4,428 — %

AFS Debt Investments (carried at fair value):

Obligations of U.S. government-sponsored enterprises — — % 8,344 — %

Obligations of states and political subdivisions 49,226 4 % 117,478 8 %

HTM Debt Investments (carried at amortized cost):

Obligations of U.S. government-sponsored enterprises 7,457 1 % — — %

Obligations of states and political subdivisions 55,978 4 % 1,291 — %

Subordinated corporate bonds 20,673 1 % — — %

Other Investments (carried at cost):

The significant decrease in the AFS investments portfolio and increase in the HTM investments portfolio between December 31, 2021 and 2022 was the result of a designation transfer in 2022, refer to Note 2 of the consolidated financial statements for additional details of our transfer from AFS investments to HTM investments as of and for the year ended December 31, 2022.

We continuously monitor and evaluate our investment securities portfolio to identify and assess risks within our portfolio, including, but not limited to, the impact of the current rate environment and the related prepayment risk, and review credit ratings. The overall mix of debt securities at December 31, 2022 compared to December 31, 2021 remains relatively unchanged

52

and well positioned to provide a stable source of cash flow. The duration of our debt investment securities portfolio at December 31, 2022 was 5.8 years, compared to 4.8 years at December 31, 2021. The change in market interest rates was the primary driver in the weighted average life of our debt securities portfolio from 4.8 years at December 31, 2021 to 5.8 years at December 31, 2022. We are currently using investment cash flows to support loan growth or pay-down borrowings, with limited reinvestment back into the investment portfolio.

The Company’s AFS debt securities that are in an unrealized loss position are assessed to determine if an allowance should be recorded or if a write-down is required in accordance with ASU 2016-13. As of and for the years ended December 31, 2022, 2021 and 2020, we did not record any allowances or write-down any of our AFS debt securities in an unrealized loss position. Refer to “—Critical Accounting Policies” and Note 1 of the consolidated financial statements for further discussion of our practices and policies, and refer to Note 2 of the consolidated financial statements for additional details of our assessment of the allowance for AFS investments as of and for the year ended December 31, 2022.

In accordance with ASU 2016-13, each reporting period our HTM debt securities are assessed to determine if an allowance should be recorded or if a write-down is required. As of and for the years ended December 31, 2022, 2021 and 2020, we did not record any allowances or write-down any of our HTM debt securities as of December 31, 2022. Refer to “—Critical Accounting Policies” and Note 1 of the consolidated financial statements for further discussion of our practices and policies, and refer to Note 2 of the consolidated financial statements for additional details of our assessment of the allowance for HTM investments as of and for the year ended December 31, 2022.

The following table presents the book value and fully-taxable equivalent weighted-average yields of debt investments by

contractual maturity and the carrying value of other investments, for the periods indicated. Actual maturities of debt investments may differ from contractual maturities because borrowers may have the right to call or prepay.

December 31,

Debt investments:

Other investments(2):

Mutual funds (fair value) $ 3,990 $ 4,428

(1) Weighted average is calculated by dividing the book value by the book value times tax yield.

(2) There is no scheduled maturity date.

53

Loans

The Company provides loans primarily to customers located within our geographic market area. Our primary markets continue to be in Maine, making up 70% and 72% of our loan portfolio as of December 31, 2022 and 2021, respectively. Massachusetts and New Hampshire are our second and third largest markets, making up 15% and 14%, respectively, of our total loan portfolio as of December 31, 2022, compared to 9% and 13%, respectively, as of December 31, 2021. As of December 31, 2022, our distribution channels include 57 branches within Maine, two locations in New Hampshire, including a branch in Portsmouth and a commercial loan production office in Manchester, a mortgage loan production office in Braintree, Massachusetts, and an online residential mortgage and small business digital loan platform.

At December 31, 2022 and 2021, the non-residential building operators' industry (operators of commercial and industrial buildings, retail establishments, theaters, banks and insurance buildings) and lessors of residential buildings industry (lessors of buildings used as residences, such as single-family homes, apartments and town houses) concentrations were 34% and 28% of our total commercial real estate portfolio and 14% and 11% of total loans, respectively. At December 31, 2022, there were no other industry concentrations within our loan portfolio that exceeded 10% of total loans.

The following table sets forth the composition of our loan portfolio at the dates indicated, as well as the change during 2022:

December 31,

Loan portfolio mix:

Commercial Real Estate - Non-Owner-Occupied. Non-owner-occupied commercial estate loans are investment properties in which the primary source for repayment of the loan by the borrower is derived from rental income associated with the property or the proceeds of the sale, refinancing, or permanent refinancing of the property. Non owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, multi-family residential, commercial/retail office space, industrial/warehouse space, hotels, assisted living facilities and other specific use properties. Also included within the non-owner-occupied commercial real estate loan segment are construction projects until they are completed.

Commercial Real Estate - Owner-Occupied. Generally, owner-occupied commercial real estate loans are properties that

are owned and operated by the borrower, and the primary source for repayment is the cash flow from the ongoing operations and activities conducted by the borrower's business. Owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, commercial/retail office space, restaurants, educational and medical practice facilities and other specific use properties.

SBA PPP. SBA PPP loans are unsecured, fully-guaranteed commercial loans backed by the SBA, issued to qualifying small businesses as part of federal stimulus issued in response to the COVID-19 pandemic. Loans made under the program have terms of two or five years and are to be used by the borrower to offset certain payroll and other operating costs, such as rent and utilities. The loan and accrued interest, or a portion thereof, is eligible for forgiveness by the SBA should the qualifying small business meet certain conditions. These loans were originated under the guidance of the SBA, which has been subject to change. Effective May 31, 2021, the SBA PPP loan program ended and the Company is no longer originating loans under this program.

54

Residential Real Estate. Residential real estate loans consist of loans secured by one-to four-family properties, including for investment purposes. We generally retain in our portfolio adjustable rate mortgages, fixed rate mortgages with original terms of 30 years or less, and jumbo/non-conforming residential mortgages.

As part of our overall asset/liability management strategy, we sell residential mortgages we originate to secondary market participants to manage our interest rate risk position and generate non-interest income. Factors we consider in determining which loans to sell, include, but are not limited to, current and future outlook of the interest rate environment; loan terms, including loan size, interest rate, fixed or variable and maturity date; and estimated prepayment speed.

Consumer and Home Equity. Consumer and home equity loans are originated for a wide variety of purposes designed to meet the needs of our customers. Consumer loans include overdraft protection, automobile, boat, recreational vehicle, and mobile home loans, home equity loans and lines, and secured and unsecured personal loans.

At December 31, 2022 and 2021, 34% and 27% of the consumer loan portfolio was unsecured, respectively, and 47% of the home equity portfolio was secured by junior lien positions as of each date.

Related Party Transactions

The Bank is permitted, in its normal course of business, to make loans to certain officers and directors of the Company and Bank under terms that are consistent with the Bank’s lending policies and regulatory requirements. In addition to extending loans to certain officers and directors of the Company and Bank on terms consistent with the Bank’s lending policies, federal banking regulations also require training, audit and examination of the adherence to this policy (also known as “Regulation O” requirements). Note 3 and Note 8 of the consolidated financial statements provide information on related party lending and deposit transactions, respectively. We have not entered into significant related party transactions.

Asset Quality

Asset quality is of the upmost importance to the Company, and continues to be of great focus given current and forecasted markets conditions. Our practice is to manage the Company's loan portfolio proactively so that we are able to effectively identify problem credits and trends early, assess and implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continuously reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company continues to dedicate significant resources to monitor and manage credit risk throughout our loan portfolio and includes management and board-level oversight as follows:

55

•The Credit Risk team, Collection and Special Assets team and the Credit Risk Policy Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Risk, and Commercial and Retail Banking, oversee the Company's systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan rating system.

•The adequacy of the ACL is overseen by the Management Provision Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Compliance, and Commercial and Retail Banking. The Management Provision Committee supports the oversight efforts of the Audit Committee of the Board of Directors.

•The Directors' Credit Committee of the Board of Directors reviews large credit exposures, monitors external loan review reports, reviews the lending authority for individual loan officers when required, and has approval authority and responsibility for all matters regarding the loan policy and other credit-related policies, including reviewing and monitoring asset quality trends, and concentration levels.

•The Audit Committee of the Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.

Non-Performing Assets. Non-performing assets include non-accrual loans, accruing loans 90 days or more past due, accruing TDRs, and property acquired through foreclosure or repossession. The following table sets forth the composition and amount of our non-performing loans as of the dates indicated:

December 31,

Non-accrual loans:

Commercial real estate - non-owner-occupied $ 11 $ 51

Commercial real estate - owner-occupied 46 133

SBA PPP — —

Accruing loans past due 90 days — —

Accruing TDRs (not included above) 2,114 2,392

Other real estate owned — 165

Total non-performing assets $ 5,105 $ 6,884

Non-accrual loans to total loans 0.07 % 0.13 %

Non-performing loans to total loans 0.13 % 0.20 %

Non-performing assets to total assets 0.09 % 0.13 %

Generally, a loan is classified as non-accrual when interest and/or principal payments are 90 days past due or when management believes collecting all principal and interest owed is in doubt. All previously accrued but unpaid interest on non-accrual loans is reversed from interest income in the current period. Interest payments received on non-accrual loans are applied as a reduction of principal. A loan remains on non-accrual status until all principal and interest amounts contractually due are brought current, all future principal and interest payments are reasonably assured, and a consistent repayment record, generally six consecutive payments, has been demonstrated. At that time, we may reclassify the loan to performing. For loans that qualify as TDRs, we will classify the interest collected as interest income once the aforementioned criteria for non-accrual loans is met and demonstrated. However, loans classified as TDRs remain classified as such for the life of the loan, except in limited

56

circumstances, when it is determined that the borrower is performing under the modified terms and (i) the loan is subsequently restructured and re-written in a new agreement at an interest rate greater than or equal to an acceptable market rate for a comparable new loan at the time of the restructuring, and (ii) there has been no principal forgiveness. In 2023 the Company adopted ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02") that will eliminate the TDR recognition and measurement guidance and now require the Company to evaluate if any modifications represent a new loan or continuation of an existing loan. The Company believes there will be no material updates to 2023 results from this adoption.

The following table highlights the interest income that would have been recognized if loans on non-accrual status had been current in accordance with their original terms (i.e., “foregone interest income”) and the interest income recognized on non-performing loans and performing TDRs for the periods indicated:

For the Year EndedDecember 31,

Interest income recognized on non-performing loans and performing TDRs 80 90 128

Potential Problem Loans. Potential problem loans consist of classified accruing commercial and commercial real estate loans that were 30-89 days past due. Such loans are characterized by weaknesses in the financial condition of our borrowers or collateral deficiencies. Based on historical experience, the credit quality of some of these loans may improve due to the financial condition of the borrowers or changes in collateral values, while the credit quality of other loans may deteriorate, resulting in some amount of loss. These loans are not included in the above analysis of non-accrual loans. At December 31, 2022, potential problem loans totaled $50,000.

Past Due Loans. Past due loans consist of accruing loans that were 30-89 days past due. The following table presents the recorded investment of past due loans at the dates indicated:

December 31,

Loans 30-89 days past due:

Commercial real estate - non-owner-occupied $ 267 $ —

Commercial real estate - owner-occupied 55 47

SBA PPP 67 —

Consumer and home equity 391 509

Loans 30-89 days past due to total loans 0.06 % 0.04 %

57

ACL. The following table sets forth information concerning the components of our ACL for the periods indicated:

At or For the Year EndedDecember 31,

Impact of CECL adoption(1) — — 233

Net charge-offs (recoveries)(2):

Commercial real estate (5) (9) (17)

SBA PPP — — —

Residential real estate 66 (15) (171)

Total net charge-offs (recoveries) 764 792 754

Components of ACL:

Net charge-offs to average loans 0.02 % 0.02 % 0.02 %

Provision (credit) for loan losses to average loans 0.12 % (0.12) % 0.40 %

ACL on loans to total loans 0.92 % 0.97 % 1.18 %

(1) Effective January 1, 2020, the Company adopted ASU 2016-13, commonly referred to as “CECL.” Refer to Note 1 of the consolidated financial statements for further details.

(2) Additional information related to (credit) provision for loan losses and net (charge-offs) recoveries is presented in the following table for the periods indicated:

58

For the Year EndedDecember 31,

Commercial real estate $ — $ 5 $ (5) $ 1,532,225 — %

SBA PPP — — — 6,999 — %

Commercial real estate $ — $ 9 $ (9) $ 1,412,884 — %

The following table sets forth information concerning the allocation of the ACL on loans by loan categories at the dates indicated:

December 31,

Commercial real estate - non-owner-occupied $ 17,296 32 % $ 18,834 34 %

Commercial real estate - owner-occupied 2,362 8 % 2,539 9 %

There was no ACL on AFS or HTM debt securities as of December 31, 2022 or 2021.

Refer to “—Critical Accounting Policies” and Note 1 of the consolidated financial statements for further details of our CECL model macroeconomic factors (i.e. loss drivers), and refer to Note 3 of the consolidated financial statements for

59

discussion of the risk characteristics for each portfolio segment considered when evaluating the ACL, as well as factors driving the change in the ACL on loans at December 31, 2022 compared to December 31, 2021.

Goodwill and Core Deposit Intangible Assets

Upon completion of an acquisition the Company will likely generate goodwill and other intangible assets. Goodwill represents the price paid in excess of the fair value of acquired assets and liabilities. Through the acquisition of other financial institutions, core deposit intangible assets are recognized at the estimated fair value of the acquired non-maturity deposit customer relationships. Goodwill is reviewed for impairment as of November 30th annually, or more frequently as determined by management, and core deposit intangible assets are reviewed when a triggering event suggests such a review necessary.

At December 31, 2022 and 2021, goodwill totaled $94.7 million. Through our annual impairment analysis performed as of November 30, 2022, we determined goodwill was not impaired. Refer to “—Critical Accounting Policies” and Note 4 of the consolidated financial statements for further details of the testing performed.

At December 31, 2022 and 2021, core deposit intangible assets totaled $1.6 million and $2.2 million, respectively, and related amortization was $625,000, $655,000, and $682,000 for the years ended 2022, 2021 and 2020, respectively. There were no indications of potential risk of impairment of core deposit intangible assets for any of the aforementioned years.

Investment in BOLI

BOLI is presented in the consolidated statements of condition at its cash surrender value. Increases in BOLI’s cash surrender value are reported as a component of non-interest income in the consolidated statements of income.

BOLI was $99.1 million and $97.2 million at December 31, 2022 and 2021, respectively. The increase year-over-year reflects the increase in the cash surrender value. BOLI provides a means to mitigate increasing employee benefit costs. We expect to benefit from the BOLI contracts as a result of the tax-free growth in cash surrender value and death benefits that are expected to be generated over time. The largest risk to the BOLI program is credit risk of the insurance carriers. Currently we have on stable value account that is subject to a wrapper and approximately 10% of the portfolio while the remaining amounts are in general accounts. To mitigate this risk, annual financial condition reviews are completed on all carriers and limit each carrier to only 10% of the portfolio. BOLI is invested in the “general account” of quality insurance companies or in separate account products, 94% of our balances are with insurance carriers that had an A.M. Best rating of “B++” or better at December 31, 2022.

Deposits

The Company receives checking, savings and time deposits primarily from customers located within our geographic market area. Other forms of deposits include brokered deposits and deposits with the Certificate of Deposit Account Registry System. Total deposits at December 31, 2022 were $4.8 billion, which included brokered deposits of $181.3 million. Total deposits at December 31, 2022 increased $219.0 million, or 5%, over December 31, 2021. The increase was primarily within core deposits (non-GAAP), which grew $254.5 million, or 6%, over this period, primarily due to the sharp rise in short term interest rates. Over the same period, CDs decreased $9.2 million, or 3%.

At December 31, 2022, the Company had no customer relationships that exceeded 10% of total deposits.

Uninsured Deposits. Total deposits that exceeded the FDIC deposit insurance limit of $250,000 as of December 31, 2022 and 2021, were $2.0 billion and $1.3 billion, respectively. The Company has pledged certain securities as collateral covering certain deposits in the amount of $378.1 million and $347.0 million at December 31, 2022 and 2021, respectively.

The portion of CDs that exceeded the FDIC deposit insurance limit of $250,000, at December 31, 2022 was $84.5 million. At December 31, 2022, the Company does not have CDs that are otherwise uninsured.

Borrowings and Advances

We utilize a variety of funding sources to manage our borrowings, including, but not limited to, FHLBB and correspondent bank overnight borrowings, FHLBB advances, customer and wholesale repurchase agreements, and subordinated debentures. We proactively monitor our borrowings through Management and Board ALCO as part of prudent balance sheet, earnings, and

60

liquidity management. As part of our liquidity management, we use internal designations of “short-term” and “long-term” borrowings, and manage our borrowings within each designation:

•Short-term borrowings include, but are not limited to, FHLBB and correspondent bank overnight borrowings, FHLBB advances with maturity within one year of origination, and customer repurchase agreements.

•Long-term borrowings may include, but are not limited to, FHLBB advances with maturity greater than one year, wholesale repurchase agreements, and subordinated debentures.

At December 31, 2022, short-term borrowings were $265.2 million, representing an increase of $53.6 million, or 25%, since December 31, 2021. Short-term FHLBB borrowings were used as additional funding to supplement strong asset growth during 2022, primarily the result of loan growth.

At December 31, 2022 and 2021, the Company did not have any long-term borrowings, except for junior subordinated debentures totaling $44.3 million.

Short-Term Borrowings. The following table below provides certain information on our short-term borrowings at and for the period ended:

December 31,

FHLBB and correspondent bank overnight borrowings:

Balance outstanding at end of year $ 18,725 $ — $ —

Maximum balance outstanding at any month end 102,225 — 10,725

Weighted average interest rate for the year 2.43 % 0.40 % 1.37 %

Weighted average interest rate at end of year 4.38 % — % — %

FHLBB advances (less than one year):

Balance outstanding at end of year $ 50,000 $ — $ —

Maximum balance outstanding at any month end 50,000 — 50,000

Weighted average interest rate for the year 2.94 % — % 0.59 %

Weighted average interest rate at end of year 4.93 % — % — %

Customer repurchase agreements:

Weighted average interest rate for the year 0.51 % 0.31 % 0.64 %

Weighted average interest rate at end of year 1.00 % 0.25 % 0.34 %

Junior Subordinated Debentures. In connection with the formation of CCTA and UBCT, and the issuance and sale of trust preferred securities to the public, we received and had outstanding at December 31, 2022 and 2021, junior subordinated debentures totaling $44.3 million.

FHLBB Collateral. FHLBB short-term and long-term borrowings are collateralized by a blanket lien on qualified collateral consisting primarily of loans with first mortgages secured by one- to four-family properties, certain commercial real estate loans, certain pledged investment securities and other qualified assets. The carrying value of residential real estate and commercial loans pledged as collateral was $1.8 billion and $1.4 billion at December 31, 2022 and 2021, respectively. The carrying value of securities pledged as collateral at the FHLBB was $22,000 and $26,000 at December 31, 2022 and 2021, respectively.

61

Shareholders’ Equity

Total shareholders’ equity at December 31, 2022 was $451.3 million, which was a decrease of $90.0 million, or 17%, since December 31, 2021. The decrease was primarily driven by the following:(1) a decrease in the fair value of the Company's AFS debt securities of $130.4 million, net of tax; (2) dividends declared of $23.7 million for the year ended 2022; and (3) repurchase of 225,245 shares of the Company's common stock for a total cost of $10.2 million, partially offset by the normal operating activities, including net income of $61.4 for the year ended 2022.

At December 31, 2022 and 2021, the Company and the Bank exceeded all regulatory capital guidelines, and, specifically, the Bank met the capital ratios necessary to be considered “well capitalized” under prompt corrective action provisions for each period. There were no changes to the Company or the Bank's capital that occurred subsequent to December 31, 2022 that would change the Company or Bank's regulatory capital categorization.

In January 2023, the Company's Board of Directors authorized the repurchase of up to 750,000 shares of the Company's common stock, representing approximately 5.0% of the Company's issued and outstanding shares of common stock as of December 31, 2022. This program replaces the 2022 program and will continue until the earlier of: (1) authorized number of shares are repurchased, (2) the Company's Board of Directors terminates the program or (3) January 3, 2024. (12 months from the announcement of the new program). Purchases under the new program may be made at the Company's discretion from time to time in the open market, through block trades or otherwise, and in privately negotiated transactions, subject to market conditions and other factors, and in accordance with applicable legal and regulatory requirements.

Refer to “—Capital Resources” and Note 14 of the consolidated financial statements for further discussion of the Company's capital position.

The following table presents certain information regarding shareholders’ equity for the periods indicated:

As of and For the Year EndedDecember 31,

Financial Ratios

Tangible common equity ratio (non-GAAP) 6.37 % 8.22 % 8.99 %

Per Share Data

Tangible book value per share (non-GAAP) $ 24.37 $ 30.15 $ 28.96

Dividends declared per share $ 1.62 $ 1.48 $ 1.32

LIQUIDITY

Our liquidity needs require the availability of cash to meet the withdrawal demands of depositors and credit commitments to borrowers. Liquidity is defined as our ability to maintain availability of funds to meet customer needs, as well as to support our asset base. The primary objective of liquidity management is to maintain a balance between sources and uses of funds to meet our cash flow needs in the most economical and expedient manner. Due to the potential for unexpected fluctuations in both deposits and loans, active management of liquidity is necessary. We maintain various sources of funding and levels of liquid assets and monitor liquidity in accordance with internal guidelines and all applicable regulatory requirements. At December 31, 2022 and 2021, the Company's liquidity level exceeded its target. We believe that we currently have appropriate liquidity available to respond to demands. Sources of funds that we utilize consist of deposits; borrowings from the FHLBB and other sources; cash flows from loans and investments; and cash flows from operations, including other contractual obligations and commitments.

We believe that our level of liquidity is sufficient to meet current and future funding requirements; however, changes in economic conditions, including consumer saving habits and the availability or access to the brokered deposit and wholesale repurchase markets, could significantly affect our liquidity position.

62

Deposits. Deposits continue to represent our primary source of funds. For 2022, total deposits were $4.8 billion, an increase of 5% over December 31, 2021. Total deposit growth during 2022 was driven by growth in core deposits (which exclude CDs and brokered deposits) (non-GAAP) of $254.5 million, or 6%. Included within money market deposits for 2022 and 2021 were $73.5 million and $63.9 million, respectively, of deposits from Camden National Wealth Management, which represent client funds. These deposits fluctuate with changes in the portfolios of the clients of Camden National Wealth Management. Time deposits are generally considered to be more interest rate sensitive than other deposits and, therefore, more likely to be withdrawn to obtain higher yields elsewhere if available.

The following is a summary of the scheduled maturities of CDs as of December 31, 2022:

(In thousands) CDs

Brokered deposits totaled $181.2 million at December 31, 2022, and consisted of $98.9 million of brokered CDs and $82.3 million of brokered money market accounts. All $98.9 million of the CDs will mature during 2023.

Borrowings. Borrowings are used to supplement deposits as a source of liquidity. Our primary sources of borrowings are with the FHLBB and customer repurchase agreements, but may also include alternative sources such as various forms of subordinated debentures. For the year ended 2022, total borrowings increased $53.6 million, or 21%, to $309.5 million compared to the same period last year. Our practice is to secure borrowings from the FHLBB with qualified commercial and residential real estate loans, home equity loans and certain investment securities. At December 31, 2022, total borrowing capacity was $710.8 million. Customer repurchase agreements are secured by mortgage-backed securities and government-sponsored enterprises. Through the Bank, we also have available lines of credit with the FHLBB of $9.9 million, with a correspondent bank of $50.0 million, and with the FRB Discount Window of $42.4 million as of December 31, 2022. Additionally, the Company also has a $10.0 million line of credit with a correspondent bank that matures on December 15, 2023. We also believe that we have additional untapped access to the brokered deposit market and wholesale reverse repurchase transaction market. These sources are considered as liquidity alternatives in our contingent liquidity plan.

The following is a summary of the scheduled maturities of borrowings as of December 31, 2022:

63

Loans. Contractual loan repayments also affect our liquidity position. Actual speed and timing of repayment may differ materially from contract terms due to prepayments or nonpayment. The Company's residential mortgage loan portfolio is also a significant source of contingent liquidity for the Company that could be accessed in a reasonable time period through the sale of loans on the secondary market, as needed. As of December 31, 2022, qualifying loans with a book value of $1.6 billion were pledged as collateral.

The following table presents the contractual maturities of loans at the date indicated:

Maturity Distribution(1):

Fixed Rate:

Variable Rate:

(1) Scheduled repayments are reported in the maturity category in which payment is due. Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are reported as due in one year or less.

(2) Commercial real estate loans includes non-owner-occupied and owner-occupied properties.

Additionally, we have active relationships with various secondary market investors that purchase residential mortgage loans we originate. In addition to managing our interest rate risk position and earnings through the sale of these loans, we are also able to manage our liquidity position through timely sales of residential mortgage loans to the secondary market. For the year ended 2022, we sold 20%, or $152.7 million, of our residential mortgage loan originations to the secondary market, which was down from 44%, or $471.5 million, for 2021.

Investments. We generally invest in amortizing MBS and CMO debt securities that return cash flow at an accelerated rate in comparison to other types of debt securities that are of a bullet structure. MBS and CMO debt security cash flow will vary depending on the interest rate environment because borrowers may have the right to call or prepay obligations with or without prepayment penalties. The rise in interest rates during 2022 resulted in slowing cash flows. As of December 31, 2022 and 2021, the Company's MBS and CMO debt securities portfolio totaled 87% and 90%, respectively, of the Company's investment portfolio. The investment portfolio is also a significant source of contingent liquidity for the Company that could be accessed in a reasonable time period through the sale of investments on the secondary market, if needed. As of December 31, 2022 and 2021, $277.0 million and $867.4 million, or 40% and 58%, respectively, were designated as AFS and not pledged as collateral. As of December 31, 2022 and 2021, $210.0 million and $0, or 38% and 0%, respectively, were designated as HTM and not pledged as collateral.

64

The following is a summary of the scheduled cash flows from our debt securities portfolio, including investments designated as AFS and HTM, as of December 31, 2022:

(In thousands) ContractualCash Flows(1)

(1) Expected contractual cash flows could differ as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Other Liquidity Requirements. The Company generates cash flows from earnings through its normal course of business from earnings and, although not contractual, the Company has a history of paying a quarterly cash dividend to its shareholders and repurchasing its shares of common stock. For the year ended 2022, the Company reported $61.4 million of net income, paid cash dividends of $23.5 million to shareholders and repurchased shares of its common stock for $10.2 million.

Also through its normal operations, the Company is party to several other contractual obligations not previously discussed, such as various lease agreements on a number of its branches. Renewal options within the various lease contracts, as applicable, were considered to determine the lease term and estimate the contractual obligation and commitment for the Company's operating and finance leases. Furthermore, certain lease contracts of the Company contain language that subject its rent payment to variability, such as those tied to an index or change in an index. As a result, the future contractual obligation and commitment may differ materially from that estimated and disclosed within the table below. At December 31, 2022, we had the following lease and other contractual obligations to make future payments under each of these contracts as follows:

Total Amount Committed Payments Due Per Period

(In thousands) 1 Year or Less > 1 Year

Other contractual obligations 6,390 6,390 —

The Company's estimated lease liability for its various operating and finance leases was reported within other liabilities on our consolidated statements of condition. Please refer to Notes 1 and 6 of the consolidated financial statements for discussion and details of our leases.

In the normal course of business, we are a party to credit related financial instruments with off-balance sheet risk, which are not reflected in the consolidated statements of condition. These financial instruments include commitments to extend credit and standby letters of credit. Many of the commitments will expire without being drawn upon, and thus, the total amount does not necessarily represent future cash requirements. Refer to Note 11 of the consolidated financial statements for additional details.

We use derivative financial instruments for risk management purposes (primarily interest rate risk) and not for trading or speculative purposes. These contracts with our various counterparties may subject the Company to various cash flow requirements, which may include posting of cash as collateral (or other assets) for arrangements that the Company is in a liability position (i.e. “underwater”). Refer to Note 12 of the consolidated financial statements for further discussion of our derivatives and hedge instruments.

65

CAPITAL RESOURCES

As part of our goal to operate a safe, sound and profitable financial organization, we are committed to maintaining a strong capital base. Shareholders’ equity totaled $451.3 million and $541.3 million at December 31, 2022 and December 31, 2021, respectively, which amounted to 8% and 10% of total assets, respectively. Refer to “—Financial Condition—Shareholders' Equity” for discussion regarding changes in shareholders' equity since December 31, 2021.

Our principal cash requirement is the payment of dividends on our common stock, as and when declared by the Company's Board of Directors. We declared dividends to shareholders in the aggregate amount of $23.7 million, or $1.62 per share, $22.1 million, or $1.48 per share, and $19.8 million, or $1.32 per share, for the years ended 2022, 2021 and 2020, respectively. The Company's Board of Directors approves cash dividends on a quarterly basis after careful analysis and consideration of various factors, including the following: (i) capital position relative to total assets, (ii) risk-based assets, (iii) total classified assets, (iv) economic conditions, (v) growth rates for total assets and total liabilities, (vi) earnings performance and projections and (vii) strategic initiatives and related capital requirements. All dividends declared and distributed by the Company will be in compliance with applicable regulatory requirements and state corporate law.

We are primarily dependent upon the payment of cash dividends by the Bank, our wholly-owned subsidiary, to service our commitments. We, as the sole shareholder of the Bank, are entitled to dividends, when and as declared by the Bank's Board of Directors from legally available funds. For the years ended 2022, 2021, and 2020, the Bank declared dividends payable to the Company in the amount of $31.7 million, $41.7 million, and $39.4 million, respectively. Under OCC regulations, the Bank generally may not declare a dividend in excess of the Bank’s undivided profits or, absent OCC approval, if the total amount of dividends declared by the Bank in any calendar year exceeds the total of the Bank's retained net income for the current year plus its retained net income for the prior two years. If we are required to use dividends from the Bank to service unforeseen commitments in the future, we may be required to reduce the dividends paid to our shareholders going forward.

Please refer to Note 14 of the consolidated financial statements for discussion and details of the Company and Bank's capital regulatory requirements. At December 31, 2022 and 2021, the Company and Bank met all regulatory capital requirements and the Bank continues to be classified as “well capitalized” under prompt corrective action provisions.

66

RISK MANAGEMENT

The Company’s Board of Directors and management have identified significant risk categories which affect the Company. The risk categories include: credit; liquidity; market; interest rate; capital; operational and technology, including cybersecurity; vendor and third party; people and compensation; compliance and legal; and strategic alignment and reputation. The Board of Directors has approved an Enterprise Risk Management (“ERM”) Policy that addresses each category of risk. The direct oversight and responsibility for the Company's risk management program has been delegated to the Company's Executive Vice President, Enterprise Risk Management and Chief Risk Officer, who is a member of the Executive Committee and reports directly to the Chief Executive Officer.

During 2020 and 2021, the spread of the COVID-19 pandemic increased many of the risks that we faced, including our credit, operational, vendor and third party, and technology risks. Over the course of 2022, the Company largely experienced a return to a pre-pandemic environment, and experienced minimal business or operational disruption related to the pandemic. During 2022, the Company reevaluated its “return-to-office” strategy that was implemented late in 2021 and determined to continue to operate under such strategy, which requires certain employees to work from the Company’s offices full-time, and permits others employees to work through a hybrid model (i.e., work from home part-time and from one of the Company's physical locations part-time) or to work remotely full-time. As of December 31, 2022, approximately 55% of the Company’s non-branch employees were working under a hybrid or remote arrangement. The Company continues to monitor, evaluate and address risks that may arise in connection with hybrid and remote work arrangements, such as potential cybersecurity risks, as described in more detail below.

The Company is, and may become, subject to other risks. Refer to Item 1A. Risk Factors for further description of the Company's material risks.

Credit Risk. Credit risk is the current and prospective risk to earnings or capital arising from an obligor's failure to meet the terms of any contract with the Company or otherwise to perform as agreed. It is found in all activities in which success depends on counterparty, issuer or borrower performance. It arises any time funds are extended, committed, invested or otherwise exposed through actual or implied contractual agreements, whether reflected on or off the Company's balance sheet. The Company makes various assumptions and judgments about the collectability of its loan portfolio, including the creditworthiness of its borrowers and counterparties and the value of the real estate and other assets serving as collateral for the repayment of loans. For further discussion regarding credit risk and the credit quality of the Company’s loan portfolio, refer to “—Financial Condition—Asset Quality,” and Note 3 of the consolidated financial statements.

Liquidity Risk. Liquidity risk is the current and prospective risk to earnings or capital arising from the Company’s inability to meet its obligations when they come due, without incurring unacceptable losses. Liquidity risk includes the inability to manage unplanned decreases or changes in funding sources. Liquidity risk also arises from the failure to recognize or address changes in market conditions that affect the ability to liquidate assets quickly and with minimal loss in value. For further discussion regarding the Company's management of liquidity risk, refer to the “—Liquidity” section.

Market Risk. Market riskis the risk of loss in a financial instrument arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates, commodity prices and equity prices. Our primary market risk exposure is interest rate risk. The ongoing monitoring and management of this risk is an important component of our asset and liability management process, which is governed by policies established by the Bank’s Board of Directors that are reviewed and approved annually. The Board ALCO delegates responsibility for carrying out the asset/liability management policies to Management ALCO. In this capacity, Management ALCO develops guidelines and strategies impacting our asset/liability management-related activities based upon estimated market risk sensitivity, policy limits and overall market interest rate levels and trends. Board ALCO meets on a quarterly basis to review strategies, policies, economic conditions and various activities as part of the management of these risks.

Certain of the Company's revenues are asset-based and determined as a percentage of the value of a client's assets under management. Such values are affected by changes in financial markets, such as interest rate risk, equity prices, and foreign exchange rates, and, accordingly, declines in the financial market may negatively impact its revenue. At December 31, 2022, client assets under management by Camden National Wealth Management were $1.0 billion. It is estimated that a 1% increase or decrease in client assets under management would have resulted in an annualized increase or decrease in reported 2022 income from fiduciary services of $63,000.

Interest Rate Risk. Interest rate riskrepresents the sensitivity of earnings to changes in market interest rates. As interest rates change, the interest income and expense streams associated with our financial instruments also change, thereby impacting net interest income, the primary component of our earnings. Board ALCO and Management ALCO utilize the results of a

67

detailed and dynamic simulation model to quantify the estimated exposure of net interest income to sustained interest rate changes. While Board ALCO and Management ALCO routinely monitor simulated net interest income sensitivity over a rolling two-year horizon, they also utilize 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 interest-bearing liabilities reflected on our consolidated statements of condition, as well as for derivative financial instruments. This sensitivity analysis is compared to internal ALCO policy limits, which specify a maximum tolerance level for net interest income exposure over a one- and two-year horizon, assuming no balance sheet growth or change in composition, given a 200 basis point upward and downward shift in interest rates. Although our policy specifies a downward shift of 200 basis points, this would have resulted in negative rates as of December 31, 2021 and 2020 as many deposit and funding rates were below 2.00%. In this case, a downward shift of 100 basis points was the only down scenario performed. A parallel and pro rata shift in rates over a 12-month period is assumed. Using this approach, we are able to produce simulation results that illustrate the effect that both a gradual change of rates and a “rate shock” have on earnings expectations. In the down 100 and 200 basis points scenarios, Federal Funds and Treasury yields are floored at 0.01% while Prime is floored at 3.00%. All other market rates are floored at the lesser of current levels or 0.25%.

As of December 31, 2022, 2021 and 2020, our net interest income sensitivity analysis reflected the following changes to net interest income assuming no balance sheet growth or change in composition, and a parallel shift in interest rates. All rate changes were “ramped” over the first 12-month period and then maintained at those levels over the remainder of the ALCO simulation horizon.

Estimated Changes inNet Interest Income

As of December 31,

Year 1

-200 basis points 3.06 % N/A N/A

Year 2

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

Based upon the net interest income simulation models, the Company expects that liabilities will reprice faster than assets as market rates rise over the first year and result in lower net interest income, or conversely, net interest income would increase should market rates decline over this period. When compared to current net interest income levels, net interest income is expected to increase in year two of the net interest income simulation models in both the rising and declining rate scenarios.

Periodically, if deemed appropriate, we use interest rate swaps, floors and caps, which are common derivative financial instruments, to hedge our interest rate risk position. The Board of Directors has approved hedging policy statements governing the use of these instruments. As of December 31, 2022, we had interest rate swap agreements with a total notional of $43.0 million related to our junior subordinated debentures, $100.0 million of notional interest swap agreements on variable rate loans to mitigate exposure to falling interest rates, $50.0 million of notional interest rate swap agreements on variable rate deposits to mitigate exposure to rising rates, $50.0 million of notional interest rate swap agreements on short term funding to mitigate exposure to rising rates, which is scheduled to mature in March 2023, and $281.9 million of notional interest rate swap agreements related to commercial loan level derivative program with both our commercial customers and a corresponding swap dealer. In the first quarter of 2023, we entered into interest rate swaps to hedge fixed-rate residential mortgages using the

68

“portfolio layer” method. The Board and Management ALCO monitor derivative activities relative to their expectations and our hedging policies. Refer to Note 12 of the consolidated financial statements for further discussion of our derivatives instruments.

LIBOR is a benchmark interest rate for certain floating rate loans, deposits and borrowings, and off-balance sheet exposures of the Company. The administrator of LIBOR has announced that the publication of the most commonly used U.S. Dollar LIBOR settings will cease to be provided or will cease to be representative after June 30, 2023. The publication of all other LIBOR settings ceased to be provided or ceased to be representative as of December 31, 2021. As such, the Company has an internal project team that is focused on an orderly transition from LIBOR to alternative reference rates, including SOFR. The working group has identified its products that utilize LIBOR and has implemented fallback language to facilitate the transition to alternative rates. The Company is also currently assessing the applicability and scope of the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”), and its implementing regulations, which were finalized in December 2022. The LIBOR Act and its implementing regulations establish a process for replacing LIBOR on existing LIBOR contracts that do not provide for the use of a clearly defined or practicable replacement benchmark rate with a benchmark replacement based on SOFR. As of December 31, 2022, the Company has no LIBOR-based deposits.

Capital Risk. Capital risk is the risk that an investor may lose all or part of the principal amount invested. The Company faces this risk as it manages its balance sheet and has investments or loans that may lose all or part of the principal amount the Company has invested, which can have an impact on shareholders' equity. The Company also faces capital risk in that the entity may lose value on components of its shareholders' equity. The regulatory environment mandates the Company and Bank maintain certain levels of capital. These capital levels can change based upon regulatory changes, which can then impact what the Company is able to accomplish from a strategic perspective. For further discussion regarding capital risk and management of this risk, refer to “—Capital Resources,” and Note 14 of the consolidated financial statements.

Operational Risk. Operational riskis the current and prospective risk to earnings and capital arising from fraud, error and the inability to deliver products or services, maintain a competitive position and manage information. Risk is inherent in efforts to gain strategic advantage and in the failure to keep pace with changes in the financial services marketplace. Operational risk is evident in each product and service offered by the Company and encompasses product development and delivery, transaction processing, systems development, change management, complexity of products and services, human resource elements and the internal control environment. The risk that transactions may not be processed on time or correctly can have significant impact on the Bank’s reputation, which can result in compliance violations and fines, and/or other financial risks.

The Company manages operational risk through a series of internal programs, as well as through the assistance of third parties. These programs include various internal and external audit programs, internal committees to oversee compliance with programs and remedial actions, if necessary, and various documented policies, procedures and framework for addressing such risks.

Technology Risk, including Cybersecurity. Technology Risk is the risk offinancial loss, disruption or damage to the reputation of an organization resulting from the failure of its information technology systems, weak computing infrastructure, or a breach of information technology systems. Technology and cybersecurity risk could materialize in a variety of ways, such as unpatched or vulnerable computing systems, deliberate and unauthorized breaches of security to gain access to information systems, unintentional or accidental breaches of security, operational information technology risks due to factors such as poor system integrity, weak computing infrastructure and/or a weak Cybersecurity protection program.

Poorly managed technology and cybersecurity risk can leave an institution exposed to a variety of cyber crimes, with consequences ranging from data disruption to economic destitution. Reputation risk due to a technology and/or cybersecurity event can be significant to overcome depending on the severity of the event.

The Company manages technology and cybersecurity risks through its internal programs, as well as through the assistance of third parties. These programs include various internal and external audit programs, internal committees to oversee compliance with programs and remedial actions, if necessary, and various documented policies, procedures and framework for addressing such risks. Additionally, the Board actively oversees risks related to cybersecurity through various committees that are responsible for developing a comprehensive technology plan and monitoring and testing the Company's information security. The Company has also developed a Cybersecurity Incident Response Team (“CSIRT”) that is responsible for monitoring, detecting, responding to and reporting cybersecurity incidents. The CSIRT uses a variety of monitoring and testing techniques to protect the integrity of the Company's systems and the security of confidential information.

Vendor and Third Party Risk. Vendor and third party riskrepresents the risk related to outsourced activities and in certain situations includes reliance on vendors to deliver services on our behalf. The Company has many service partners and an

69

increasing reliance on outsourced services, which places greater risk on the Company through these many partners. These relationships are controlled by contracts and service level agreements, but represent increasing risk to the Company.

The Company manages vendor and third party risk through its vendor management program, which includes robust due diligence and risk assessment prior to engaging a new vendor, annual review of certain vendors dependent on the services provided by the vendor and the risk the vendor may present to the Company through our reliance on its services.

People and Compensation Risk. People and compensation risk includes: (1) the risk of employee dishonesty, incompetence or error; (2) the risk of not having individuals with adequate training and experience to properly discharge their responsibilities; (3) the risk of not having sufficient depth of personnel to provide back up for critical functions; (4) the risk of lawsuit by employees alleging improper actions by or on behalf of the Company; (5) succession planning; and (6) compensation risk, which includes having compensation plans that effectively allow the Company to hire and keep the right talent, and properly designed compensation and incentive programs to promote ethical behavior and assure that excessive risk is not encouraged.

The Company manages people and compensation risk through annual risk assessments of various compensation and incentive plans, oversight by the Compensation Committee of the Board of Directors, the use of third party compensation consultants, and various insurance programs.

Compliance and Legal Risk. Compliance and legal riskis the current and prospective risk to earnings or capital arising from violations of, or nonconformance with, laws, rules, regulations, prescribed practices, internal policies and procedures, or ethical standards. This risk exposes the Company to fines, civil money penalties, payment of damages, and the voiding of contracts. Compliance risk can lead to diminished reputation, reduced franchise value, limited business opportunities, reduced expansion potential, and an inability to enforce contracts. Legal risk exists in generally all activity of the Company where there is any possibility that the Company will become subject to liability for improper actions.

The Company manages compliance and legal risk through various internal and external audit programs, use of third parties for consulting and legal support, ongoing compliance risk assessments, the ERM Committee and various insurance programs.

Strategic Alignment Risk. Strategic alignment riskis the current and prospective impact on earnings or capital arising from adverse business decisions, improper implementation of decisions, or lack of responsiveness to industry changes. This risk is a function of the compatibility of the Company's strategic goals, the business strategies developed to achieve those goals, the resources deployed against these goals, and the quality of implementation.

Reputation Risk. Reputation risk is the current and prospective impact on earnings and capital arising from negative public opinion. The reputation of financial services companies can be based on brand and trust, and the loss of brand or trust can negatively impact the Company's operations and financial results. Reputation risk exposure is present throughout the organization and our interactions with our various stakeholders, including, but not limited to, our customers, communities and investors.

The Company manages its strategic alignment and reputation risk through various internal policies and programs, including, but not limited to, the Company's core values, code of ethics policy, financial code of ethics policy, Audit Committee complaint policy, employee handbook, and other policies and programs, as well as through strategic planning and oversight by the Board of Directors.

RECENT ACCOUNTING PRONOUNCEMENTS

See “—Critical Accounting Policies” and Note 1 of the consolidated financial statements for details of recently issued accounting pronouncements and their expected impact on the consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Information required by this Item 7A is included in Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management.”

70

Item 8. Financial Statements and Supplementary Data

CONSOLIDATED STATEMENTS OF CONDITION

December 31,

(In thousands, except number of shares) 2022 2021

ASSETS

Total cash, cash equivalents and restricted cash 75,427 220,625

Investments:

Less: allowance for credit losses on loans (36,922) (33,256)

Core deposit intangible assets 1,563 2,188

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities

Deposits:

Accrued interest and other liabilities 84,136 94,234

Commitments and contingencies (Note 11)

Shareholders’ Equity

Accumulated other comprehensive loss (125,955) (6,229)

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

71

CONSOLIDATED STATEMENTS OF INCOME

For the Year EndedDecember 31,

(In thousands, except number of shares and per share data) 2022 2021 2020

Interest Income

Interest Expense

Non-Interest Income

Net loss on sale of securities (912) — —

Non-Interest Expense

Amortization of core deposit intangible assets 625 655 682

Other real estate owned and collection costs (recoveries), net 29 (101) 382

Per Share Data

Diluted earnings per share $ 4.17 $ 4.60 $ 3.95

Cash dividends declared per share $ 1.62 $ 1.48 $ 1.32

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

72

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

For the Year EndedDecember 31,

Other comprehensive (loss) income:

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

73

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Other comprehensive income, net of tax — — — 27,008 27,008

Stock-based compensation expense — 1,785 — — 1,785

Other comprehensive loss, net of tax — — — (26,969) (26,969)

Stock-based compensation expense — 2,381 — — 2,381

Other comprehensive loss, net of tax — — — (119,726) (119,726)

Stock-based compensation expense — 2,553 — — 2,553

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

74

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Year Ended December 31,

Operating Activities

Investment securities amortization and accretion, net 3,831 6,722 4,803

Amortization of core deposit intangible assets 625 655 682

Purchase accounting accretion, net (280) (699) (1,304)

Net decrease (increase) in derivative collateral posted 31,830 26,700 (26,540)

Net gain on sale of premises (204) — —

Net loss (gain) on sale of investment securities 912 — —

Deferred income tax expense (benefit) 1,785 (637) (1,761)

(Decrease) increase in other liabilities (1,762) 43 2,568

Investing Activities

Proceeds from maturities of held-to-maturity securities 22,896 — —

Purchase of held-to-maturity securities (42,748) — —

Purchase of Federal Home Loan Bank stock (43,928) (68) (9,231)

Proceeds from the sale of premises 466 — —

Proceeds from other investments — — 1,712

Proceeds from sale of other real estate owned 287 465 110

Financing Activities

Proceeds from Federal Home Loan Bank long-term advances — — 25,000

Repayments of Federal Home Loan Bank long-term advances — (25,000) (10,000)

Repayment of subordinated debt — (15,000) —

Supplemental information

Transfer from premises to other real estate owned — 204 24

Transfer from loans to other real estate owned — — 236

Unsettled common stock repurchase — — 11

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

75

CAMDEN NATIONAL CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Acronyms and Abbreviations.The acronyms and abbreviations identified below are used in the notes to the consolidated financial statements. The following is provided to aid the reader and provide a reference page when reviewing the notes to the consolidated financial statements.

Acronym Description Acronym Description

ALCO: Asset/Liability Committee GDP: Gross domestic product

AOCI: Accumulated other comprehensive income (loss) HTM: Held-to-maturity

ASC: Accounting Standards Codification IRS: Internal Revenue Service

ASU: Accounting Standards Update LGD: Loss given default

BOLI: Bank-owned life insurance LTIP: Long-Term Performance Share Plan

CD: Certificate of deposits MSPP: Management Stock Purchase Plan

CECL: Current Expected Credit Losses N/A: Not applicable

Company: Camden National Corporation N.M.: Not meaningful

DCRP: Defined Contribution Retirement Plan OREO: Other real estate owned

EPS: Earnings per share PD: Probability of default

FASB: Financial Accounting Standards Board ROU: Right-of-use

FOMC: Federal Open Market Committee TDR: Troubled-debt restructured loan

FRBB: Federal Reserve Bank of Boston U.S.: United States of America

76

General Business.Camden National Corporation, a Maine corporation (the “Company”), is the bank holding company for Camden National Bank (the “Bank”) and is headquartered in Camden, Maine. The primary business of the Company is to attract deposits from and to extend loans to consumer, institutional, municipal, non-profit and commercial customers. The Company, through the Bank, offers commercial and consumer banking products and services, and through Camden Financial Consultants, a division of the Bank, and Camden National Wealth Management, a department of the Bank, offers brokerage and insurance services as well as investment management and fiduciary services. The Bank's deposits are insured by the FDIC, subject to regulatory limits.

Principles of Consolidation. The accompanying consolidated financial statements include the accounts of the Company and the Bank (which includes the consolidated accounts of HPFC and Property A, Inc.). All intercompany accounts and transactions have been eliminated in consolidation. Assets held by the Bank in a fiduciary capacity, through Camden National Wealth Management, are not assets of the Company and, therefore, are not included in the consolidated statements of condition. The Company also owns 100% of the common stock of CCTA and UBCT. These entities are unconsolidated subsidiaries of the Company.

Reclassifications. Certain reclassifications have been made to prior year amounts, without impact to net income or total shareholders' equity, to conform to the current year's presentation.

Use of Estimates. The preparation of the financial statements in conformity with GAAP 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 periods. Actual results could vary from these estimates as a result of changing conditions and future events. Several estimates are particularly critical and are susceptible to significant near-term change, such as the ACL, including the allowance for loan losses, off-balance sheet credit exposures, and AFS and HTM debt securities; the accounting for business combinations including subsequent impairment analyses for goodwill and other intangible assets; accounting for income taxes; and postretirement benefits.

Subsequent Events. The Company has evaluated events and transactions subsequent to December 31, 2022 for potential recognition or disclosure as required by GAAP and have been disclosed in Note 12.

Significant Concentration of Credit Risk.The Company makes loans primarily to customers in Maine, Massachusetts and New Hampshire. Although it has a diversified loan portfolio, a large portion of the Company's loans are secured by commercial or residential real estate and are subject to real estate market volatility within these states. Furthermore, the debtors' ability to honor their contracts is highly dependent upon other economic factors throughout Maine, Massachusetts and New Hampshire. The Company does not generally engage in non-recourse lending and typically will require the principals of any commercial borrower to obligate themselves personally on the loan. Refer to Note 3 for further discussion of credit concentrations.

Cash, Cash Equivalents and Restricted Cash. For the purpose of reporting, cash and cash equivalents consist of cash on hand and amounts due from banks. In March 2020, the FRB reduced its reserve requirement ratios to 0%, effectively eliminating cash reserve requirements for all depository institutions.

Certain cash balances will be designated as restricted as required by certain contracts with unrelated third parties.

Investments. Debt investments for which the Company has the positive intent and ability to hold to maturity are classified as HTM and recorded at amortized cost on the consolidated statements of condition.

Debt investments that are not classified as HTM or trading are classified as AFS and are carried at fair value on the Company's consolidated statements of condition with subsequent changes to fair value recorded within AOCI, net of tax.

Trading securities and equity investments with a readily determinable fair value are carried at fair value on the Company's consolidated statements of condition, with the change in fair value recognized between periods recognized within net income on the consolidated statements of income.

Purchase premiums and discounts are recognized in interest income on the consolidated statements of income using the interest method over the period to maturity or issuer call option date, if earlier, and are recorded on the trade date.

Upon sale of an investment security, the realized gain or loss on the sale is recognized within non-interest income on the consolidated statements of income. The cost basis of our investments sold is determined using the specific identification method.

77

ACL on (or Write-off of) AFS Debt Securities. Management assesses its AFS debt securities in an unrealized loss position for the following: (i) whether it intends to sell the security, or (ii) it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through net income. For AFS debt securities that do not meet either of the two criteria, management evaluates whether the decline in fair value resulted from credit losses or other factors. In making this assessment, management considers the following: (i) the extent to which fair value is less than amortized cost, (ii) credit rating of the security, (iii) macroeconomic trends of the industry specific to the security, and (iv) any other adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance on AFS debt securities is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. When assessing an AFS debt security for credit loss, securities with identical CUSIPs are pooled together to assess for impairment using the average cost basis. Any impairment that has not been recorded through an allowance is recognized in AOCI.

A change in the ACL on AFS debt securities or write-off of an AFS debt security, which may be in full or a portion thereof, is recorded as expense (credit) within provision for credit losses on the consolidated statements of income. Losses are charged against the allowance when management believes the uncollectibility of an AFS debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

As of December 31, 2022 and 2021, there was no allowance carried on the Company's AFS debt securities nor were there any permanent write-offs for the years ended December 31, 2022, 2021, or 2020. Refer to Note 2 of the consolidated financial statements for further discussion.

ACL on (or Write-off of) HTM Debt Securities. The Company estimates expected credit losses on its HTM debt securities and carry an allowance for such. Management measures expected credit losses on HTM debt securities on a collective basis by major security types that share similar risk characteristics, which may include, but is not limited to, credit ratings, financial asset type, collateral type, size, effective interest rate, term, geographical location, industry, and vintage.

The estimate of expected credit losses on the HTM portfolio is based on the expected cash flows of each individual CUSIP over its contractual life and considers historical credit loss information, current conditions and reasonable and supportable forecasts. Under ASU 2016-13 the Company has the ability to exclude certain securities when the historical credit loss information, adjusted for current conditions and forecasts, resulting in zero risk of nonpayment of the amortized cost basis of the security. The Company has evaluated and determined zero risk of nonpayment on all securities guaranteed by the U.S government agencies. Given the rarity of municipal and corporate bond defaults and losses, the Company will utilize external third party loss forecast models as the sole source of municipal and corporate bond default and loss rates. As with the loan portfolio, cash flows are modeled over a reasonable and supportable forecast period and then revert to the long-term average economic conditions on a straight line basis. Management may exercise discretion to make adjustments based on various qualitative factors.

An HTM debt security is written-off in the period in which a determination is made that all or a portion of the financial asset is uncollectible. Any previously recorded allowance, if any, is reversed and then the amortized cost basis is written-down to the amount deemed to be collectible, if any.

A change in the ACL on HTM debt securities or write-off of an HTM debt security, which may be in full or a portion thereof, is recorded as expense (credit) within provision for credit losses on the consolidated statements of income.

As of December 31, 2022 and 2021, there was no allowance carried on the Company’s HTM debt securities nor were there any permanent write-offs for the years ended December 31, 2022, 2021, or 2020. Refer to Note 2 of the consolidated financial statements for further discussion.

FHLBB and FRBB Stock. The Company, through the Bank, is a member of the FHLBB and FRBB, and, as a member, is required to hold a certain amount of FHLBB and FRB common stock. These equity stocks are non-marketable and are reported at cost within other investments on the consolidated statements of condition. The Company evaluates its FHLBB and FRB common stock for impairment based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value.

78

Loans Held for Sale. The Company has elected the fair value option for loans classified as held for sale on the consolidated statements of condition. Designation of loans as held for sale is determined based on intent and is generally completed as the loans are underwritten. The fair value for loans held for sale is determined using quoted secondary market prices. Management consistently evaluates the Company's loan portfolio in conjunction with asset/liability management practices, and will opt to sell certain residential mortgage loans to manage the Company's interest rate exposure and for other business purposes, including generating fee income through mortgage sale gains and managing its liquidity position.

Loans Held for Investment and Acquired Loans. Loans held for investment are reported at amortized cost, adjusted for any partial charge-offs and net of any deferred loan fees or costs. Interest income is accrued based upon the daily principal amount outstanding, except for loans on non-accrual status. Loan fees and certain direct origination costs are deferred and amortized into interest income over the contractual term of the loan using the level-yield method. When a loan is paid off, the unamortized portion is recognized in interest income.

Loans acquired through a business or asset purchase are reported at fair value, as of acquisition date. Interest income is accrued based upon the daily principal amount outstanding and is then further adjusted by the accretion of any discount or amortization of any premium associated with the loan that was recognized based on the acquisition date fair value using the level-yield method. When a loan is paid off, the unamortized portion is recognized in interest income.

A loan is classified as non-accrual generally when it becomes 90 days past due as to interest or principal payments, or sooner if management considers such action to be prudent. All previously accrued but unpaid interest on non-accrual loans is reversed from interest income in the period in which the loan is considered delinquent and the amortization of any unamortized net deferred origination loan fees/costs stops. Interest payments received on non-accrual loans are applied as a reduction of principal. A loan remains on non-accrual status until all principal and interest amounts contractually due are brought current and future payments are reasonably assured. Should a loan transition from non-accrual to accrual, the unrecognized interest earned during the period the loan was on non-accrual and unamortized deferred origination fees and costs are recognized over the remaining contractual life of the loan using the level-yield method.

ACL on Loans. Upon adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), as amended; effective January 1, 2020, using a modified-prospective approach. Upon adoption, the Company recorded a cumulative-effect adjustment of $2.8 million reducing retained earnings, with a corresponding adjustment of $233,000 increasing the ACL on loans, an adjustment of $3.3 million increasing other liabilities for the ACL on off-balance sheet credit exposures, and an adjustment of $769,000 increasing deferred tax assets.

The ACL on loans is based on the amortized cost basis of a loan, which is comprised of the unpaid principal balance of the loan, net deferred loan fees (costs), acquired premium (discount), and any write-downs previously taken on the loan.

The ACL on loans is increased by charges to provision for credit losses and reduced by charge-offs, net of recoveries. Management evaluates the appropriateness of the ACL on loans quarterly. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change from period to period. The ACL on loans is presented on the consolidated statements of condition.

Loans past due 30 days or more are considered delinquent. In general, secured loans that are delinquent for 90 consecutive days are placed on non-accrual status and may be subject to individual loss assessment in accordance with established internal policy. In general, unsecured loans that are delinquent for 90 consecutive days are charged-off.

In cases where a borrower experiences financial difficulties and the Company makes certain concessionary modifications to contractual terms, the loan is classified as a TDR, with the exception of loan modifications or concessions resulting directly from the effects of the COVID-19 pandemic during 2020 and 2021 that were granted to customers who were otherwise in current payment status at the time of the modification or concession.

The ACL on loans reduces the loan portfolio to the net amount expected to be collected, and represents the expected losses over the life of all loans at the reporting date. The allowance incorporates forward-looking information and applies a reversion methodology beyond the reasonable and supportable forecast.

The ACL on loans represents the Company's estimated risk of loss within its loan portfolio as of the reporting date. To appropriately measure expected credit losses, management disaggregates the loan portfolio into pools of similar risk characteristics (i.e. “segments”). The Company utilizes a discounted cash flow approach to calculate the expected loss for each segment. Within the discounted cash flow model, a PD and LGD assumption is applied to calculate the expected loss for each segment. PD is the probability the asset will default within a given timeframe and LGD is the percentage of assets not expected

79

to be collected due to default. The Company's PD and LGD assumptions may be derived from internal historical default and loss experience or from external data where there are not statistically meaningful loss events for a loan segment or it does not have default and loss data that covers a full economic cycle.

As of December 31, 2022 and 2021, the primary macroeconomic drivers used within the discounted cash flow model included forecasts of Maine Unemployment, changes in Maine and National GDP, and changes in the Maine Housing Price Index. Management monitors and assesses its macroeconomic drivers at least annually (generally in the fourth quarter) to determine if or that they continue to be the most predictive indicator of losses within the Company’s loan portfolio, and these macroeconomic drivers may change from time to time.