GARDINER -- Savings Bank of Maine has purchased Rivergreen Bank of Kennebunk in a transaction valued at $13.1 million, officials of the banks said Thursday.

Under the terms of the agreement, which has been approved by the boards of both banks, Rivergreen shareholders will receive $16.72 per share, bank officials said in a prepared announcement.

The transaction is expected to be completed by the end of 2008, they said. Savings bank of Maine will emerge form the deal with more than $1 billion in assets, serving customers from York to Fort Kent.

Established in 1834, Savings Bank of Maine, formerly Gardiner Savings Institution, is the second-oldest savings bank in the state, company officials said.

The bank's most recent purchase was Calais Federal Savings and Loan in 2007.

"Partnering with Rivergreen Bank is an exceptional opportunity for our bank to expand our presence to southern Maine," President and Chief Executive Officer Arthur C. Markos said.

"Our combined asset size will also allow us to accommodate businesses with greatly expanded loan limits," Rivergreen Bank President Noel Graydon said.

Rivergreen Bank was organized in 2002 and had $107 million in assets and $6 million in shareholder equity at the end of 2007, with offices in Kennebunk, York and Saco.

The merger is still subject to approval by regulatory authorities and Rivergreen Bank's stockholders, bank officials said.