Bangor Savings Bank cites lack of inventory as its new mortgages plummet

Bangor Savings Bank helped nearly 500 people buy their first home in the last fiscal year, but the bank’s leaders said low inventory is the biggest hurdle it faces in getting more people to achieve the milestone. Bangor Savings provided $450 million in resident mortgage loans across Maine and New Hampshire between April 2023 and March 2024, a more than 40 percent plummet from the prior year’s residential mortgage loan total of $778 million. This sharp drop is due to high interest rates and low housing inventory, said Bob Montgomery-Rice, Bangor Savings Bank’s president and CEO, prior to Bangor Savings Banks’ Annual Meeting of Corporators on Monday. While homebuyers adjusted to the high interest rates in 2023, the lack of available homes remains. “There have been a few developments in the greater Bangor area for new housing, but not enough to meet the demand,” Montgomery-Rice said. “We still do about five pre-approvals to every one mortgage that’s made. If there were more houses, we could do more loans.” On average, people looking to buy a home in Maine make offers on 10 to 20 homes before one gets accepted, Montgomery-Rice said. This lack of housing inventory ties back to the 2008 financial crisis when developers stopped building, he said. Despite minimal growth in a region’s housing stock, the population still increased. The bank issued 57 new loans, totaling $69 million, to community developments this past fiscal year. Of that, $25 million was dedicated to 14 affordable housing projects, Montgomery-Rice said. Bangor Savings earned a net income of $15.3 million, welcomed more than 22,500 new customers and created more than 33,000 deposit accounts in the last fiscal year, the meeting revealed The 172-year-old bank opened two new branches — one in Bar Harbor and one in Kennebunk — since April 2023. The new locations bring the company’s branch total to 69 across Maine, New Hampshire and Massachusetts. While inflation appears to be weaning slowly, Montgomery-Rice said the effects can still be seen in account holders’ decreased savings. Despite this, the bank is seeing very few people miss loan payments, which Montgomery-Rice said illustrates the state’s 3.1 percent unemployment rate. “If people are employed or can find a job, even if they are tight, they can meet their needs,” he said. However, Montgomery-Rice cautioned that uncontrollable factors like a presidential election year, conflict overseas and climate change can all influence the economy. Outside of mortgage loans, Bangor Savings reported growth in its first credit card, Everblue, since it debuted last year. Bangor Savings’ Maine ABLE Benefit Checking, a program that helps people with disabilities save money through checking accounts, finished the fiscal year with more than $5 million in deposits and 1,000-plus participants. “Those people are on disability benefits and the tax law only lets them save a certain amount of money, but this vehicle lets them save more,” Montgomery-Rice said. Bangor Savings launched the program in 2021 in partnership with the Maine State Treasurer, and Montgomery-Rice said Maine is the first state in the U.S. to offer such a program.