Central Maine bank merger gets green light from regulators
File photo / Maureen Milliken
Kennebec Savings Bank, which is headquartered in Augusta, has merged with smaller peer Kennebec Federal Savings and Loan Association.
Kennebec Savings Bank and its smaller regional peer Kennebec Federal Savings and Loan Association expect to complete their merger in the first quarter of 2021 after getting a green light from regulators this week. Kennebec Savings is based in Augusta, while Kennebec Federal is based in Waterville.
The companies said Tuesday that the Maine Bureau of Financial Institutions had approved the merger, along with Kennebec Federal Savings' application to convert to a Maine mutual institution as part of the process.
Andrew Silsby, president and CEO of Kennebec Savings Bank, told Mainebiz this marks the first time a federal savings and loan in Maine is being merged into a bank under a holding company structure.
"It is contemplated in Maine banking code, but never been done before, so we spent considerable time working with the regulators in advance of filling our applications just to be sure our legal approach and assumptions all made sense to them," he said. "That turned out to be time well spent, because our regulatory decisions were all completed within the regulators' regular time frames."
The deal was announced in June.
Tweaked timetable
While the companies had originally targeted an end-of-year completion date, Silsby told Mainebiz that early March 2021 makes more sense. After the merger, he will stay in his current role at the enlarged Kennebec Savings Bank.
"Typically, the end of year and the beginning of the new year are blackout period, with software companies and debit and credit card changes, just to ensure banking accounts and cards work okay through the highest shopping period in the U.S.," he explained. "Early March allows us to get outside of that time period and complete both the legal closing and the computer conversion necessary, all at the same time."
The banks said in Tuesday's announcement that completing the transaction remains subject to customary closing conditions, including approval from Kennebec Federal Savings members. It expects to hold a special meeting for that purpose next month.
Kennebec Savings Bank is a 150-year-old state-chartered bank with locations in Augusta, Waterville, Farmingdale, Winthrop and Freeport. At the end of the third quarter, it had reported total assets of $1.2 billion, total deposits of $917 million and total equity capital of 162 million.
Kennebec Federal Savings, whose roots go back 84 years, is a federally chartered community bank with two locations in Waterville. At the end of the third quarter, it had reported total assets of $93 million, total deposits of $72 million and total equity capital of $9 million.
Silsby, who will continue in his current role after the merger, told Mainebiz that together the banks employ 170 people — 150 employees at Kennebec Savings Bank and 20 at Kennebec Federal Savings.
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