The merger of The Bank of Maine into Camden National Bank will be completed Friday, creating Maine’s largest community bank, with 64 branches, $3.6 billion in assets and about 700 employees.

The combined bank will carry the Camden National brand. Customers will begin to see the transitioning of Bank of Maine’s 24 branches to the new brand starting Monday. Their online and mobile banking also will shift automatically to Camden National.

“We’re a different company come Monday morning,” Camden National CEO Gregory Dufour said. The combined entity will incorporate the best aspects of the two community bank chains, he said.

As a result of the acquisition, Camden National is laying off 35 employees, about 5 percent of its combined workforce, Dufour said. It is also closing four Camden National branches – one in Gardiner, two in Augusta and one in Kennebunk – that are literally across the street or parking lot from each other. Signs at the closing branches will direct customers to the nearby branches.

No retail branch employees will lose their jobs, Dufour said. Instead, they will be absorbed into the remaining 64 branches.

Former Bank of Maine customers will benefit from Camden National’s more modern website and enhanced mobile banking options, Dufour said. The bank also plans to issue EMV chip-embedded debit cards carrying the Camden National logo to all customers over the next two months. Account and PIN numbers will remain the same by default, he said.

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The combined entity will have 85 ATM machines, and customers also will have free access to roughly 200 additional ATMs through the Maine Cash Access network, Dufour said.

Phone numbers for existing Bank of Maine customer service numbers will be re-routed automatically to Camden National, which has added 10 employees to its call center to handle additional calls, he said.

The Bank of Maine purchase is the largest yet for Camden National. Formed in 1875, it has completed a series of acquisitions that began two decades ago when it bought United Bank in Bangor. Its most recent acquisition occurred in 2012, when it purchased 15 branches from Bank of America and subsequently sold off one of them. The merger follows a national consolidation trend among independent banks that has caused their numbers to decline by more than half over the past three decades.

Dufour said employees have received extensive training over the past month to prepare for the merger. All of the back-end systems also have been revamped to merge them together. Workers at the two former competitors are in good spirits, he said. “There’s an excitement level that you don’t normally see,” Dufour said of employees reaction to the merger.

Reasons for the acquisition include increasing Camden National’s footprint in the high-growth southern Maine market, and allowing it to reach economies of scale that will make it more affordable to invest in technology and handle the increasing compliance costs that banks face in the wake of the financial crisis.

Camden National was the larger of the two banks. As of June 30, it had 44 branches, $2.8 billion in assets and $2 billion in deposits, according to the FDIC. The Bank of Maine had 24 branches, $819 million in assets and $669 million in deposits.

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DOUBLES MORTGAGE LOAN BUSINESS

One area in which Bank of Maine rivaled Camden National was in its robust mortgage loan business, Dufour said. The acquisition effectively doubles that business for Camden National.

The acquisition fills in some geographical gaps for Camden National, especially along the I-95 corridor. It is gaining branches in areas it previously did not cover, including Brunswick, Bath, Topsham, Falmouth, Saco and York. The acquisition of the Bank of Maine branch at 2 Canal Plaza in downtown Portland will significantly increase Camden National’s exposure in Maine’s largest market.

With about $3.6 billion in assets and $2.5 billion in deposits, the new Camden National surpasses Bangor Savings Bank’s roughly $3.1 billion in assets and nearly $2.3 billion in deposits, making it the state’s largest community bank.

The merger marks the end of an era for Bank of Maine. It was founded in 1834 as Gardiner Savings Institution, which ran afoul of federal regulators who issued a cease-and-desist order in 2009 when it was the Savings Bank of Maine. They faulted the bank for being undercapitalized and making risky commercial loans.

Arthur Markos, who was president of Savings Bank of Maine, said at the time the bank was trying to help small businesses and consumers weather the recession and was more lenient with loan qualifications than the Office of Thrift Supervision thought prudent. In 2010, a group of investors formed SBM Financial Inc. and absorbed the bank’s holding companies, restructured its debt and poured $60 million into it, exceeding the federal requirement for capitalization.

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In 2011, it changed its name to The Bank of Maine and moved its headquarters to Portland. Since then, it has issued more than $1 billion in new and refinanced loans, and added roughly 20,000 new customers.

As part of the acquisition deal, Camden National is paying stockholders of SBM Financial a combination of stock and cash valued at roughly $135 million, according to the merger agreement filed with the U.S. Securities and Exchange Commission. The agreement calls for 80 percent of SBM Financial’s common shares to be converted to Camden National common stock, and the remaining 20 percent to be exchanged for cash.

The combined entity will continue its charitable efforts through Bank of Maine Foundation and Camden National’s Hope for Home program, which donates $100 to homeless shelters for every mortgage loan issued. It has donated $27,000 so far this year, Dufour said.

“Those are two elements that won’t change,” he said.

 


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