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June 18, 2020

Kennebec Savings to merge with smaller Kennebec Federal Savings

Kennebec Savings Bank headquarters building in Augusta Photo / Maureen Milliken Kennebec Savings Bank, which is headquartered in Augusta, is merging with smaller peer Kennebec Federal Savings.
About the two banks 
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Augusta-based Kennebec Savings Bank and Kennebec Federal Savings and Loan Association of Waterville, two central Maine banks whose names are often confused with each other, are joining forces to form an entity with 165 employees and $1.25 billion in assets.

The merger, announced Thursday morning, does not involve any change in ownership or assets changing hands.

Under the terms of an agreement unanimously approved by the boards of both institutions, Kennebec Federal will be merged into the larger Kennebec Savings, and customers of Kennebec Federal will become customers of Kennebec Savings.

"We've joked a little bit about trying to eliminate the name confusion in the marketplace," Andrew Silsby, president and CEO of Kennebec Savings, told Mainebiz by phone this morning from his home in Winthrop. "We're certainly having fun with that."

On a more serious note, he said his relationship with Kennebec Federal President and CEO Allan Rancourt goes back about 10 years, and that they met about twice a year for breakfast when the subject came up of a possible merger between the two "fierce but friendly competitors." 

Andrew Silsby at a bank brand
Photo / Tim Greenway
Andrew Silsby, president and CEO ofKennebec Savings Bank...

Silsby said talks started to pick up steam about three years ago and got more serious in the last six months.

"This is a mutual to mutual merger," he underscored, "so we're not paying for any stock," he said. "This is more about making sure that the values of the two organizations are similar, and I would call it more about social issues than monetary."

Silsby said he will continue in his current role after the merger, while Rancourt will retire, and that no cost-cutting measures are foreseen.

The agreement follows the formation of Maine Community Bank from the combination of Biddeford Savings and Mechanic Bank, completed on Jan. 1, and Bangor Savings Bank's acquisition of Damariscotta Bank & Trust Co., for about $35 million, in a deal announced last December.  A spokeswoman told Mainebiz that that merger has not yet been completed.

Upon completion of the deal announced Thursday, Kennebec Federal's two Waterville branches will remain in operation and its 21 employees will join the Kennebec Savings team of 145, putting the total at 165. Silsby said that while there are some current openings, it's been harder to interview and onboard people in the current work-from-home environment with branches still closed.

Kennebec Savings currently has locations in Augusta, Waterville, Farmingdale, Winthrop and Freeport. Once the merger is completed, Kennebec Federal customers will have access to Kennebec Savings branches and vice versa; in the meantime, the banks said that customers of both banks will see no change to their accounts or service levels.

The merger is expected to be completed in the fourth quarter of 2020 subject to customary closing conditions, including regulatory approvals that Silsby does not anticipate being problematic.

"Both banks are good banks, they get good grades, and I really don't anticipate any difficulty there," he told 

Kennebec Savings was advised on the deal by the Kafafian Group Inc., with legal representation by Pillar + Aught.

Kennebec Federal Savings took advice from New England Business Advisors Inc. with legal representation by Bernstein, Shur, Saywer & Nelson P.A.

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