SKOWHEGAN and CAMDEN, Maine — Skowhegan Savings is purchasing five bank branches in Franklin County, as well as the associated deposits and business loans, from Camden National Bank in a deal worth nearly $4 million.
The banks announced the acquisition on Wednesday.
Skowhegan Savings will purchase Camden National branches in Farmington, Kingfield, Phillips, Rangeley and Stratton. The real estate and equipment are worth about $600,000, according to John Witherspoon, president and CEO of Skowhegan Savings.
In addition to the physical branches, Skowhegan Savings will also acquire the branch deposits, which equal roughly $86.9 million, and all business loans and certain consumer loans, which combined are worth approximately $43.7 million.
The total purchase price is approximately $3.6 million, including the value of the real estate and fixed assets, as well as a 3.5 percent premium on the branch deposits, Witherspoon told the Bangor Daily News.
The sale is subject to regulatory approval and is expected to be completed this fall or winter.
Skowhegan Savings, which was founded in 1869, currently has 10 branches in Somerset, Kennebec, and Penobscot counties. As of June 30, 2012, it had $311.5 million in deposits, making it the 21st largest bank in Maine, according to the Federal Deposit Insurance Corp.
Camden National is the fourth largest bank in the state, with roughly $1.9 billion in deposits following its acquisition of 15 branches from Bank of America in October.
The five branches Skowhegan Savings expects to gain will be the company’s first foray into Franklin County.
The banks in question were not part of the Bank of America acquisition, according to Jennifer Roper, a spokeswoman for Camden National. In fact, Camden National acquired those five branches in 2000 from Kingfield Savings Bank, which at the time Witherspoon led.
Witherspoon, a Kingfield resident, calls the acquisition the completion of a “full circle.”
The seed of Skowhegan Savings’ acquisition was planted in March, when Camden National announced it would close banks in Phillips and Stratton.
Because of Witherspoon’s history in the community, several people reached out to him to see whether Skowhegan Savings was interested in filling the void in those communities. It didn’t make sense to just acquire two branches, Witherspoon said, so he approached Gregory Dufour, president and CEO of Camden National, with the idea of owning all five of Camden National’s Franklin County branches.
Camden National wasn’t looking to sell, but after “a lot of thought and deliberation on our part” Dufour decided the deal was in the best interest of both banks.
In the last decade, the banking environment has become stricter. At the same time, customers are turning to online and mobile banking in droves, Dufour said. This acquisition will allow the banks to be better equipped to handle these changes, Dufour said.
“I think it really boils down to [the fact that] the growth of Franklin County aligns more with Skowhegan [Savings] then it does with Camden [National],” Dufour said. “It’s almost like two different organizations, structured very differently” — Camden National is owned by stockholders, while Skowhegan Savings is a mutual savings bank and is owned by its depositors — “but this is a common strategy that helps both of us, and in the middle you have the customers being served.”
The acquisition makes strategic sense for Skowhegan Savings, Witherspoon said.
“It’s challenging to grow in Maine, so this presents an opportunity for us to really gain market share in a whole new market,” he said.
Skowhegan Savings expects to retain all employees at the five branches and is working with Camden National to inform customers, Witherspoon said.
Follow BDN Business Editor Whit Richardson on Twitter at @whit_richardson.