PRESQUE ISLE – Officials with two Maine financial institutions confirmed Thursday that a Gardiner-based savings bank has reached an agreement to acquire First Citizens Bank, headquartered in Presque Isle, in an all-cash merger valued at $20.9 million.

The two banks announced Wednesday that they have reached an agreement allowing First Citizens Bank to keep its name while operating as a division of Gardiner Savings Institution, F.S.B., after the merger. As part of the agreement, First Citizens’ shareholders will be entitled to receive $43.75 in cash for each share of common stock. The agreement has been approved by both boards of directors, but is subject to approval by regulatory authorities and First Citizens’ shareholders.

“We’re enthusiastic about getting to know these folks and working with them,” Susan Grove-Markwood, vice president of administration with First Citizens, said Thursday.

First Citizens Bank President and CEO Dennis Haggerty, board of directors Chairman Paul LeBlanc, and board Vice Chairman Carl Soderberg were unavailable Thursday for comment on the merger.

In a press release, LeBlanc said of the merger: “The breadth of Gardiner’s product offerings, which includes investment services, will allow us to maintain, expand and enhance services and products that should be very attractive to business and retail customers alike. Our combined asset size will also allow us to accommodate northern Maine businesses with greatly expanded loan limits.”

First Citizens Bank, formed in 1989, has offices in Fort Kent, Caribou, Presque Isle, Houlton and Lincoln. In June, it had total assets of $139 million and shareholders equity of $12.6 million. The bank employs 76 people. Grove-Markwood said that at this point, the process is just beginning and that it is too soon to know whether the merger will have an effect on the number of jobs at the bank.

Gardiner Savings, a mutual thrift with more than $750 million in assets, was organized in 1834 and now has 21 branches throughout central and midcoast Maine. Paul McClay, a Gardiner Savings board member who spoke on behalf of the savings institution, said that officials are excited about the expansion north.

“When this opportunity arose, it was too good to pass up, particularly when we found out First Citizens was the same kind of bank we are,” McClay said. “Our philosophies were in line. We’re delighted they gave us the opportunity to discuss it [the merger] with them.”

McClay said that the deal strengthens the institution’s asset base, putting it at more than $900 million in assets in combined banks.

“And,” he added, “it opens a new territory for us.”

Arthur C. Markos, president and CEO of Gardiner Savings, was unavailable for comment Thursday. He said in a press release: “Our focus as a community-oriented bank parallels First Citizens’ and we intend to maintain, and hopefully, enhance, that commitment to the communities and customers that First Citizens serves.”

Officials expect the transaction, if approved, to close in late 2006.