GARDINER

May 28, 2010

Investors take over leadership of Savings Bank of Maine

Two new senior managers are taking over at Gardiner-based Savings Bank of Maine after the investment group they led injected $60 million into the 32-branch institution that was short on cash.

click image to enlarge

The new president and the new chief executive officer of Savings Bank of Maine: Willard Soper, left, and John Everets.

Staff photo by Andy Molloy

The members of a new board of directors -- including the co-founder of Lending Tree, BankNorth's former chief banking officer and a former Maine Public Broadcasting president -- also are taking their seats.

In the process, longtime Savings Bank of Maine president Arthur Markos, who started at the bank in 1981, will retire; and the bank's current directors will be replaced.

"I think there's a good management team, and the bank is really positioned well to have a great future," Markos said. "Pretty impressive people that we've got lined up."

John Everets, a longtime Boston financier and former head of the medical finance firm HPSC Inc., will be the bank's new chairman and chief executive officer.

Willard Soper, the former senior vice president of Boston's Shawmut Bank and former chief executive officer of Florida's Kislak National Bank, will be the bank's president.

Both plan to move to Maine and work at Savings Bank of Maine full time, Everets said.

"We feel like we've been entrusted with one of Maine's treasures," Everets said. "We're going to be very much aware of that."

The cash infusion and ownership change came in response to a series of orders from Savings Bank of Maine's federal regulator, the Office of Thrift Supervision, to boost its capital holdings, stop issuing high-risk loans and end "unsafe or unsound practices."

A "prompt corrective action" directive issued in March required that the bank boost its cash holdings by Sept. 30 -- to 10.76 percent of its assets -- or else be liquidated or taken over.

That directive also imposed tighter lending restrictions and demanded internal restructuring.

The $60 million in investor cash will help Savings Bank of Maine exceed the capital requirements set by the OTS, Everets said.

"We're going to have a lot of capital," he said. "We're probably going to be one of the most well-capitalized banks in New England. That gives us a lot to work with."

The investors are funneling the cash to Savings Bank of Maine through the new holding company they formed, SBM Financial Inc. That holding company absorbed Savings Bank of Maine's two existing holding companies and acquired the bank.

Everets said the new management team plans to invest in the bank's infrastructure and information technology functions.

Asked for his vision of the bank's future, Everets said he hopes Savings Bank of Maine will expand beyond its current 32 branches.

"We definitely are interested in growing the bank in a responsible, prudent manner," Everets said, "and if that meant a good acquisition came our way, we would be interested in it."

Savings Bank of Maine, which incorporated in 1834, has grown rapidly through acquisitions over the past decade. It acquired Augusta Federal Savings Bank in 2001, First Citizens Bank of Presque Isle in 2006, Calais Federal Savings and Loan in 2007 and Rivergreen Bank of Kennebunk in 2008.

Savings Bank of Maine defaulted on a multimillion dollar loan it took out to acquire Rivergreen Bank, according to the OTS, and the $60 million cash infusion will allow the bank to pay down that loan.

The bank recorded $929.1 million in assets as of March 31, with $65.4 million of that in cash, according to OTS filings.

Aside from Everets and Soper, the bank's new board of directors includes:

* David Ott, the former chief banking officer of Banknorth;

* Richard Field, the co-founder of Lending Tree, former executive vice president of Bank of New York and MasterCard International chairman;

* James Ozanne, former executive vice president of GE Capital;

* Ronald Roark, the U.S. chief executive of Crown Westfalen Bank; and

* Robert Gardiner, president of Brunswick-based Independence Wind and former president of the Maine Public Broadcasting Network.

While the investors' cash infusion will help the bank exceed the capital requirements set by the OTS, Savings Bank of Maine still will be under the watchful eye of its regulator.

The bank needs to clear its arrangements for compensating officers and directors with the OTS regional director, according to an OTS document that approves the bank's recapitalization strategy.

In addition, the bank needs to stick to the business plan it outlined for the next three years, and it must obtain OTS approval for any "major deviations" from that plan.

Matthew Stone -- 623-3811, ext. 435

mstone@centralmaine.com

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