Maine bank ordered to boost capital

Posted March 26, 2010, at 1:44 p.m.

GARDINER, Maine — The president of Savings Bank of Maine says he’s confident the bank can meet federal regulators’ demand that it increase its capital reserves.

The Gardiner-based bank received a “prompt corrective action” directive, which follows an order nearly a year ago imposing tighter lending restrictions.

Savings Bank of Maine President Arthur Markos tells the Kennebec Journal that the bank is having difficulty covering loan losses stemming from the weak economy. The federal government says the level of bank loans that are likely to go unpaid at the end of 2009 grew to $82.1 million from $18.5 million the previous year.

Markos says the bank’s deposits are growing. But he declined to discuss the bank’s plan for raising capital by the September deadline.

Savings Bank of Maine has 32 branches in Maine, including those in Calais, Caribou, Fort Kent, Houlton, Linclon, Machias and Presque Isle,

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