AUBURN – Information packets about the offer of shares in Auburn Savings Bank arrived in mailboxes this week, the first public step in what the bank hopes will be a successful campaign to raise millions in new capital.

“We see a lot of opportunity in Lewiston and Auburn, with the growth of retail, industrial parks and small businesses,” said Allen T. Sterling, president and chief executive officer. “We want to position ourselves to better assist that growth and the community.”

About two years ago, the bank’s directors began investigating options to fuel the 121-year-old financial institution’s growth. One of the smallest banks in the area, Auburn Savings sees its future in its ability to serve homeowners and small businesses.

“We may be a small institution, but we’re techno savvy with products that are comparable to what the larger banks offer,” Sterling said. The bank has assets of about $65 million, up from $24 million when Sterling came on board 11 years ago.

The bank is forming a holding company, Auburn Bancorp MHC, that intends to sell up to 305,000 shares at $10 each to raise between $2.25 million and $3 million. The holding company will hold 55 percent of the shares, which protects it from a takeover by another financial institution. The remaining 45 percent will be offered to bank depositors and borrowers first, then to the general public.

Informational meetings for potential investors have been set for June 3 and June 10 at the Hilton Garden Inn at 7 p.m.

Sterling said by reaching its capital goals, the bank will be able to make larger loans, especially to the small business client.

“Not too long ago, $300,000 was a good-sized loan for a small business. Now it’s a drop in the bucket,” he said. “Without the additional capital, our regulators won’t let us loan that kind of money.”

State law restricts the amount of money available for a savings bank to loan at 15 percent of its total capital, plus the money set aside to cover loan losses. Another $2 million to $3 million in capital from the stock offering increases the pool for lending by $300,000 to $400,000.

Sterling said the new money would be used primarily for loans, not branch expansions or other bricks-and-mortar projects. The bank has two branches, one in Lewiston and the other in Auburn.

With 221 other banking offices in Androscoggin County, Auburn Savings faces stiff competition, he said. The way to stay competitive is to grow and offer focused products to its target market. Sterling said the bank’s low number of delinquent loans is an indicator of how sensible it is about loaning money.

“Our underwriting is very good, ” he said, noting senior staff have an average of 25 years in the business. “Small banks know their customers. We look at whether it’s in our customers’ best interest to take these mortgages on.”

The 160-page prospectus lays out the terms and risks associated with the stock offering. Once issued, the stocks will be quoted on the OTC Bulletin Board. The offering ends at noon on June 20.