Officials at Kennebec Savings Bank and Kennebec Federal Savings have announced they will merge under the Kennebec Savings Bank name.

The deal, announced to employees Wednesday and the public Thursday, has been in the works for months. It is expected to be completed by the end of the year, subject to the approval by state and federal banking regulators.

The company that is expected to emerge will keep its existing locations and employees, with its headquarters in Augusta, and offer a wider array of services to customers.

Both Andrew Silsby, president and chief executive officer of Kennebec Savings Bank, and Allan Rancourt, president of Kennebec Federal Savings, said the culture and mission of their respective organizations were considerations in reaching the agreement.

“Kennebec Savings shares the same values we have: A commitment to our customers, our community and our people,” Rancourt said Thursday. “It couldn’t be more perfect.”

This deal is one of many recent consolidations in the banking and credit union industries across Maine and the nation.

“There was, for all of us, a much simpler life and world before the immense (impact) of technology on everyone,” said Chris Pinkham, president of the Maine Bankers Association.

As the complexity of the banking business has grown to keep pace with customers’ expectations, Pinkham said, the cost of technology has skyrocketed.

“It’s not good or bad. It’s just the reality,” he said. “Because we are banks and expected to be the model of safety and soundness, it’s agenda item No. 1 to make sure the public feels comfortable with banking practices.”

Pinkham said the cost of providing secure transactions and near-instant access to information about transactions and bank balances has prompted consolidation, even as technology has erased the restrictions of geography by allowing banks to expand beyond their home counties and states.

“The beneficiary is the consumer,” Pinkham said. “As banks grow, they tend to have a wider variety of service and product offerings.”

Rancourt said the decision to seek a merger with a larger bank was the result of strategic planning after he told his board of directors he planned to retire at the end of 2020.

“We actually started talking about this 10 years ago,” Silsby said Thursday.

At the time, Silby’s predecessor, Mark Johnson, would meet occasionally over breakfast with Rancourt, and suggested if Rancourt ever considered a merger, KSB would be a strong partner. Informal conversations have continued since then.

Silsby said the banks compete in Waterville, but characterized it as a friendly competition.

“We’re thrilled to to welcome KFS’s talented employees and valued customers to the KSB family,” Silsby said.

Rancourt said letters and emails have been sent to its customers, notifying them of the change.

Silsby said the deal was announced on the 25th anniversary of Kennebec Savings Bank’s merger with Waterville Savings and Loan Association.

Headquartered in Augusta, Kennebec Savings Bank at the end of March reported $1.154 billion in total assets, $817 million in deposits and $147 in equity capital.

Founded 150 years ago, it has branches in Augusta, Waterville, Farmingdale, Winthrop and Freeport.

Kennebec Federal Savings, with two locations in Waterville, is a community bank founded 84 years ago. At the end of March, it reported total assets of $95 million, total deposits of $71 million and total equity capital of $9 million.

The combined bank is expected to have $1.25 billion in assets.

“You can be a $100 million bank and be financially strong,” Rancourt said, “but it’s not the same as being a $1 billion bank and being financially strong.”

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