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V O L . X X I X N O. V I I A P R I L 3 , 2 0 2 3 16 B A N K I N G / F I N A N C E / I N S U R A N C E Spooked investors selling shares in bank stocks nationwide are the opposite of relaxed, pushing the KRE index that charts the stock market perfor- mance of smaller regional banks across the United States down 30% between Feb. 22 and March 22. (See chart.) at compares to a 1.5% drop in the broader S&P 500 Index over the same period. While declines were less steep for the handful of Maine's publicly traded banks, three of them experienced drops in the double digits. Decliners include Camden National Bank, whose shares fell 11%. Camden National CEO Gregory A. Dufour says that his institution maintains its credit quality in several ways, including prudent risk management when start- ing loan talks with a borrower. He also says the bank works carefully with regu- lators, auditors and third-party teams "to ensure we have the most robust risk practices and gover- nance standards," adding: "Our strong credit quality, diversified customer base and strong capital are all contributors to our strength." At Bangor Savings Bank, Maine's largest in terms of assets as of June 3, 2022, CEO Bob Montgomery- Rice says that only 15% of deposits are above the FDIC's $250,000 insurance cap — well below the 40% industry average. "is is a considerably lower risk exposure, which is actively managed and safeguarded," he says. He's not worried about flattening deposit growth in 2023 amid increased consumer spend- ing and investments by businesses, he says. "rough the priority of safeguarding customer deposits and our diversified deposit base, we are in a strong position." At Machias Savings, Barker says his CFO knows of only one customer who has moved funds out of the bank in reaction to the current turmoil, and says that his bank's loans, deposits and balance sheets are well-diversified. "I can say with confidence the same thing I said over and over during the pandemic: Community banking never looked so good," he says. Trade groups weigh in Despite bank woes in other parts of the country, neither the Maine Bankers Association nor the Maine Credit Union League perceive any red flags for the state's financial sector. Maine Credit Union League President and CEO Todd Mason says that while the bank closures in California and New York are "troubling," they haven't sounded any alarms over liquidity at Maine institutions. "A fundamental tenet of running a healthy financial institution is diversification," he says. "at is exactly what our credit unions do, and exactly what SVB and Signature did not do." For small businesses or entre- preneurs who belong to credit unions, Mason says he would tell them that those institutions are the safest place to keep their money. Looking ahead, Mason says that Maine credit unions will continue to invest heavily in compliance and risk management to avoid the "fatal flaw" that SVB and Signature made of having heavy concentrations, be that in types of deposits, loans or investments. "As an additional check beyond the internal and third-party audits credit unions do, regulators also regularly review for concentration risk, among other areas, to further help ensure the safety and soundness of the Maine financial service industry." Mason also notes that in contrast to banks, credit unions are not-for-profit entities. "Members place their trust in credit unions to safe- guard their assets and secure their financial futures," he says. "Carrying out this responsibility is our top priority." Along similar lines at the Maine Bankers Association, President and CEO Jim Roche under- scores that Maine banks are well-run and without heavy concentrations of tech or crypto currency start- ups like Silicon Valley Bank and Signature Bank had. "Most Maine banks are community banks pro- viding residential mortgages, small business loans » C O N T I N U E D F RO M P R E V I O U S PA G E F O C U S P H O T O / C O U R T E S Y O F B A N G O R S AV I N G S B A N K Bangor Savings Bank CEO Bob Montgomery-Rice

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