This story was updated at 11:50 a.m. March 23, 2010 to correct the number of Maine-based employees.

 

In 2004, during a flurry of bank consolidations, William Ryan dropped a bombshell in Maine: Portland-based Banknorth Group would give a controlling interest to a Toronto bank, TD Bank Financial Group, as the first step toward an outright purchase.

Maine officials feared it was the first step to a takeover that would send jobs from one of the state’s largest employers to Canada. Ryan, Banknorth’s president and chief executive, said that wouldn’t happen.

Banknorth had 2,600 employees in Maine at the time. Today, TD Bank has a Maine work force of 2,745 and will add another 300 by the end of the year when it opens a new call center in Auburn.

On Friday, Ryan retired as the bank’s chairman. He leaves a legacy as one of Maine’s most influential bankers, who grew a troubled, local bank into a regional powerhouse, then negotiated a sale that benefited both shareholders and the state’s economy.

“We’ve been lucky,” Ryan said this week. “It’s been good for Maine and all the employees.”

Ryan, who is 66, said he plans to remain in the state and stay busy helping his son, Bill Jr., a co-owner of the Maine Red Claws basketball team.

Ryan came to Maine in 1989, after serving as a top executive for banks in Massachusetts. He was named chief executive of what was then Peoples Heritage Financial Group in 1990.

Ryan took the helm at a tough time. New England’s banks were being battered by a deep recession. Burdened by bad loans, Peoples saw its stock fall to an all-time low and was in danger of being shut down by regulators.

Ryan turned the bank around and, by 1993, saw an opportunity to grow by buying smaller Maine banks. As the economy recovered, that strategy laid the groundwork for expansion.

Ryan and his management team bought nearly 30 banks and insurance companies in New England and New York over the next decade, making Banknorth the region’s largest homegrown banking company.

Banknorth’s rapid growth made it a takeover target. A merger with a domestic bank might have pulled jobs out of Maine. A Canadian bank with no presence in the United States had a different perspective. It needed the back-office, operations centers that Banknorth had set up in Lewiston and Falmouth.

“They used Banknorth as a beachhead,” said Gerard Cassidy, a bank analyst for RBC Capital Markets in Portland.

Ryan seized that opportunity and struck a deal that served shareholders and employees, Cassidy said. The timing was right. Today, Cassidy said, so much bank consolidation has already happened, and local bankers generally lack the power that Ryan had to carry out regional expansion plans.

“Bill was a real moving force in the banking industry,” Cassidy said. “He’s in his own class here in the state of Maine.”

TD Bank doubled its size in 2008, when it merged with Commerce Bank of New Jersey. It now has branches from Maine to Florida. To support the acquisitions, employment at the Maine operation centers has grown.

“Globalization tends to hurt us in Maine,” Ryan said. “But in this case, globalization has had the opposite effect.”

That is especially noteworthy because a takeover at another top financial institution in Portland had a different result, said Steve Hirshon, vice president of Maine Securities.

Maine lost hundreds of jobs and the chief executive left with a multimillion-dollar severance package in 1998, when Unum merged with Tennessee-based Provident Cos.

Ryan also was well-compensated, but he stayed to help manage the bank and set a course that keeps Maine tied directly to the company’s growth.

“In this case,” Hirshon said of TD Bank, “the power not only stayed here, but grew.”

It’s true that the bank’s decision-making has shifted to Toronto. But there’s good reason to believe that jobs will continue to be added in Maine as TD Bank expands, most likely in the Southeast, Ryan said.

Ongoing internal studies show that the operations centers in Maine are highly productive, and the costs of running them are less than in, say, New Jersey.

“I don’t see that changing,” he said.

 

Staff Writer Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com