Biddeford Savings Bank and Mechanics Savings Bank have entered into an agreement to form Maine Community Bancorp, a Mutual Holding Company that will own both banks.

Approved by each bank’s Board of Directors, the agreement is still subject to approval by each bank’s corporators and depositors, as well as the State of Maine’s Bureau of Financial Institutions, the FDIC and the Federal Reserve. Closing on the transaction is targeted for early 2016.

Once finalized, Maine Community Bancorp will draw equally from each Board and Management team. Richard J. Vail, President and CEO of Mechanics Savings Bank, and Charles M. Petersen, President and CEO of Biddeford Savings Bank, will serve as co-CEOs of Maine Community Bancorp, the first multi-bank mutual holding company in Maine history. Each affiliate bank will retain its name and state charter, and each bank’s Board of Directors and senior management will continue to oversee the operations of their respective banks.

Through Maine Community Bancorp, the two banks will be in a position to build upon their respective strengths and competitive advantages. The partnership will better position each bank to serve its customers and community through significantly greater loan capacity and leading edge products and services, while preserving the status of each as a sound, stable and independent institution in the face of ongoing economic and industry challenges.

With the announcement, Petersen and Vail both expressed strong mutual respect and trust, emphasizing that the banks enjoy similar corporate structures, histories and cultures. They pointed to the advantages of their geographic proximity, complementary yet distinct market areas, and shared commitment to delivering high quality customer service.

“We are confident that entering into this alliance positions both banks for a bright future together,” noted Vail. “By growing stronger together, we will be able to continue to support our customers and communities while providing our staff with meaningful jobs,” added Petersen.

Facts about the alliance:

Mechanics Savings Bank and Biddeford Savings Bank propose partnering to jointly form Maine Community Bancorp, a Mutual Holding Company that will own both banks.

Combined, the MHC will have 152 employees, nine branches, assets exceeding $750MM and capital exceeding $80MM, doubling their individual sizes.

The combined entity will become the 20th largest banking organization in Maine, close in size to eight other banks that are between $750 and $1 billion in assets.

By forming the alliance, the two banks will have the opportunity to work more closely together to support larger and more complex loan relationships.

No positions will be eliminated; the entity will seek to gain efficiencies over time through normal attrition. However, some job responsibilities and/or reporting lines might change. It is expected that future collective growth will create employment opportunities that do not exist in either bank today.

The targeted closing date for the agreement is early 2016. Both banks will remain independent.

The consolidation will allow MSB/BSB sufficient scale to operate more efficiently.

The banks will share and adopt best practices, including policies, procedures, products and services.

BSB (chartered 1867) and MSB (chartered 1875) are similar organizations, with similar histories, asset and capital structures and cultures. There is no retail/primary market overlap. Both are financially healthy, putting the banks in a position of strength to complete this consolidation.

Mechanics Savings Bank has branches located in Auburn, Brunswick, Lewiston, and Windham. Biddeford Savings Bank has offices in Biddeford, Kennebunk, Scarborough, and Waterboro. For more information about the agreement, see www.alliance2016.com.