According to a Camden National release, the banks signed an agreement Monday. The deal will expand Camden National’s franchise to 53 branches and “result in the largest market share of deposits held by any independent community bank headquartered in the state of Maine.”
Upon completion of the branch acquisition, which is subject to federal approval, Camden National expects to have approximately $2.7 billion in assets and $2 billion in deposits.
According to Bank of America’s website, this acquisition represents approximately half of the company’s 35 branches in Maine.
Branches to be acquired include individual branches in Auburn, Brewer, Gardiner, Lewiston, Newport, Old Town, Rockland and Waterville as well as three branches in both the Augusta and Bangor markets. Camden National also expects to reopen the Orono branch, the bank said.
“This is a strategically compelling opportunity to expand and strengthen Camden National’s franchise, while deepening our commitment to our existing markets,” said Gregory A. Dufour, president and CEO of Camden National. “These branches will enhance Camden National’s presence in the Bangor and Lewiston/Auburn markets while accelerating our expansion strategy in the Augusta market.”
Dufour said Camden National planned to “preserve jobs” as the bank assesses the acquisition and its impact on processes and staffing levels. Dufour said the acquisition will bring his bank’s work force to more than 500, up from about 425 now.
According to an investor presentation Camden National prepared for its shareholders, this acquisition will increase its market share in Maine to 9.13 percent, up from 7.22 percent. That will put it ahead of Bank of America (which was at 7.77 percent before the acquisition, and will be 5.86 after) and Bangor Savings Bank, at 8.45 percent. It will have the third largest market share in Maine after Key Bank at 11.34 percent and TD Bank at 15.91 percent.
Dufour told the Bangor Daily News that almost more important than increasing overall market share in the state was increasing its presence in three key counties – Penobscot, Kennebec and Androscoggin. In Penobscot, Camden National goes from having the seventh highest market share to third; in Kennebec from zero market share to fourth; and in Androscoggin, from eighth to fourth.
On a community level, Dufour said the acquisition increases Camden National’s footprint in areas where it needed additional coverage, including Bangor, Augusta, Waterville and Lewiston/Auburn.
“On many levels, it’s just a really great thing for us and for the communities,” he said.
The transaction will expand Camden National’s presence along the I-95 corridor, and will add $414 million in core deposits. Camden National noted in its investor presentation that it may have to divest of a branch in Rockland, where it has an operation currently. If required to do so by federal regulators, Camden National would seek to divest of the Bank of America branch it is acquiring in Rockland.
“This acquisition is a major investment in the state of Maine and a significant commitment to its people,” said Dufour.
He made particular note of the plans to re-open the Orono branch.
“For me, that’s making a commitment.We believe in these downtown communities, we respect the Orono community, and these people, and we’re willing to commit resources to it,” Dufour said.
In a statement, Bank of America said, “This is the right decision for the community, our employees and our customers. By selling these banking centers, the community will continue to have access to a banking center, more employees will keep their jobs, and customers will have the ability to keep banking at the same branch that is most convenient for them.”
The massive national bank announced last year that it planned to lay off some 30,000 workers across the country over the next few years.
In a similar, but smaller, move on Tuesday, Northwest Bank said it was acquiring four Bank of American branches in Iowa, according to a report at DesMoinesRegister.com.
During the bank’s quarterly conference call last week, BofA CEO Brian Moynihan discussed the company’s plans to lessen its footprint across the country, according to published reports.
The Charlotte Business Journal reported that BofA cut 3,000 jobs in the first quarter, and about 10,000 last year. It also dropped 53 branches in the first quarter, the Journal reported, as part of its plan to cut 750 branches nationwide. The Journal said Moynihan wants to focus on “large, growing cities” and that he would consider selling branches “in less populated, slower-growing areas.”
Bank of America, which trades on the New York Stock Exchange under the symbol BAC, has about 57 million consumer and business customers and 5,700 retail banking offices. In the latest quarter, it reported profits of $653 million.
Camden National trades on the NASDAQ under the symbol “CAC.” In January, it reported full-year 2011 record profits of $26.2 million. Also on Tuesday, Camden National released its first quarter earnings. The bank saw profits of $6.6 million, up 4 percent from the same period a year ago.
Dufour said Camden National has done similarly sized acquisitions in the past, and the 2008 purchase of Union Trust was a larger deal.
“We want to grow when it’s the right thing to do, when we believe we’ll be very successful at it,” said Dufour. “That’s where this transaction really fell into it.”
Dufour said he wasn’t looking ahead to the next acquisition target.
“We’ve got plenty on our plate today. The main focus it to make sure it’s smooth for Bank of America’s customers, for employees that will transition, and our own employees, our own customers.”