KENNEBEC SAVINGS WEATHERS WALL STREET STORM

 march, 2009: AUGUSTA, ME - Mark L. Johnston, President & CEO of Kennebec Savings Bank (KSB) announced today that the Bank has once again received a five-star rating from BAUERFINANCIAL, the nation’s leading independent bank rating firm.  This rating was based on 4th quarter performance for 2008.

Under the rating system, a five star rating is “superior” and means that Kennebec Savings Bank is on BAUERFINANCIAL’s “recommended” report, which is prepared quarterly.  The Bank has received this five-star rating for the past 77 consecutive quarters.  According to BAUERFINANCIAL, only 4.9% of the nation’s banks have achieved this rating for 19 years contiguously.

The BAUERFINANCIAL website commented on the anomalous 4th quarter of 2008, “We knew year-end numbers weren’t going to be pretty and we were right. The number of banks on our Problem list (rated 2-Stars or below) has increased dramatically from a year ago. Using year-end 2007 data there were 175 banks (2.1% of the industry) considered problematic. That number has jumped to 710, or 8.6% of the total banking industry. That being said, 55% of U.S. banks are still recommended (rated 5-Stars or 4-Stars) and 33% fall in between (either 3-Stars or 3½-Stars). Twelve months ago a full 70% of the nation’s banks were recommended and 23% rated in between.”

According to a BAUERFINANCIAL representative, “Each of the institutions on the Recommended Bank & Thrift Report is safe, financially sound and is operating well above its regulatory capital requirements. Each had a tangible capital ratio greater than 6% and a total risk-based capital ratio greater than 10%. Five-star institutions generally have twice the capital required by regulators.”

In addition to the capital ratio, other criteria are used to determine Bauer's Star Rating. Some of these include but are not limited to: profitability/loss trend, evaluating the level of delinquent loans and repossessed assets, the market versus book value of the investment portfolio, regulatory supervisory agreements, the community reinvestment rating (CRA), and liquidity. Potential losses on available-for-sale securities, delinquent loans and repossessed assets are forecasted in assigning our star rating.

“Given the extraordinary challenges that financial institutions had across the country in the fourth quarter, we are particularly pleased to have weathered the storm,” said Bank President & CEO, Mark Johnston.  “We’ve always known and promoted that Kennebec Savings Bank is a safe and sound place for our customers to do their banking.  It is nice to hear it from a nationally-recognized and respected independent rating firm, though,” he said.

Established in 1983, BAUERFINANCIAL, Inc. analyzes and reports on the financial condition of the nation's banks and credit unions. Each bank and credit union is required to file a detailed financial report with its government regulators. BAUERFINANCIAL obtains the raw data from the federal government and analyzes it completely and independently, supplementing it with additional research and historical data. Upon completion of the analysis, a star-rating is assigned. (The star-ratings range from zero-stars to five-stars with five-stars being the highest.).  Banks and Credit Unions do not pay for this service, nor do they have the option of avoiding it. All banks and credit unions are rated, without prejudice.

The five-star rating system, which Bauer introduced in 1988, is nationally recognized as "the bank rating system." Bauer provides these ratings FREE as a consumer service.

Kennebec Savings Bank is a $672 million state-chartered mutual savings bank, headquartered in Augusta.  With 81 employees, and offices located in Waterville and Winthrop, Kennebec Savings Bank prides itself on being the bank where “the feeling is mutual.”