Recession and Crisis
In 1989, the Maine real estate market collapsed. In this period of crisis, William J. Ryan became the new President and CEO. In 1990, the recession resulted in 111 bank closures or mergers in New England. Peoples’ stock began to fall as serious problems emerged with bad loans, particularly in the faltering real estate sector, but also in the commercial realm. In the period 1990 to 1992, Peoples was losing money, and federal regulators issued a cease and desist order restricting the bank’s freedom in the loans area. In response, the management team was shaken up, and special teams were assigned to loans review and restructuring. The bank opened an innovative storefront retail real estate office to move foreclosed properties.
Recovery began by mid-1992. The bank had aggressively reduced its portfolio of non-performing loans, and all discernible asset quality trends were positive, resulting in a favorable impact to the bottom line. In 1993, the bank again became profitable, and it re-capitalized with a rights offering in Q4 1992, generating $38 million in new capital.
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