MBank’s Board of Directors announced last week that Jef Baker has been named president and chief executive officer for the Gresham-based bank, ending months of speculation over the bank’s future and financial stability.

“This is a very exciting time at MBank,” Baker said. “We are seeing the positive results of the efforts of our board and employees to position the bank for the future. We are proud to be community bankers and to serve our customers in Gresham and the Portland-metro area.”

Baker has been acting interim president and CEO since October 2011. He succeeded Rex Brittle, MBank’s founder, who came out of retirement in 2009 to help the struggling bank regain its financial footing.

Brittle and six others opened MBank in 1995 with $3 million from 310 investors. Eventually, as the bank prospered, they expanded into Gladstone, Lake Grove and Portland, with $300 million in assets and nearly 115 employees.

But in late 2007, bad loans and the recession took a toll on MBank. The bank reported losses annually between 2008 and early 2011, and in November 2010 was ordered by the Federal Deposit Insurance Corp., to either find capital funding or be acquired by another bank.

MBank and its holding company, Merchants Bancorp, aligned with Lake Oswego investor LIME Financial earlier this year to infuse the bank with capital necessary to satisfy state and federal regulators. That deal was called off in May.

According to MBank Board Chairman Stan Morris, Baker’s guidance since he took over as interim president and CEO has helped the bank remain on a path toward financial stability and compliance with regulatory requirements.