GARDINER -- Kennebec Savings Bank announced it intends to open a new branch in Gardiner before year end.

The project is subject to approvals from the Maine Bureau of Financial Institutions and the Federal Deposit Insurance Corporation, according to a statement from President and CEO Mark L. Johnston.

Bank officials signed a lease agreement with Cobbossee Leasing LLC on Friday for space in the Walker Building formerly occupied by Gardiner Federal Credit Union. The site is adjacent to Hannaford.

"This lease is a temporary fix while we find available land space for a more permanent location," said Andrew E. Silsby, executive vice president and treasurer. "We continue to look for an option that will meet our needs into the long term.

Silsby added that terrain and flood-zone concerns have presented challenges with several building site options to date.

Bank officials said they will hire a branch manager, assistant branch manager, customer service representative and several tellers to support the new branch.

"We've already begun advertising both internally and externally," Regional Vice President William S. Hill said. "Our goal is to have a team in place for an opening before year end."

Kennebec Savings Bank is a $703 million state-chartered mutual savings bank with branches in Winthrop and Waterville and a main office in Augusta. It employs 81 people.

The bank recently lost a bid to merge with the Kennebec Valley Federal Credit Union after credit union members voted it down.