Change costly for E. Boston Savings - Boston Business Journal:

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million for themselves and theidr beneficiaries. The bank’s holdingb company, Inc., reported a $1.1 milliob net loss in the first quarter, largelgy because of pay and benefits relatedx to the retirement of Chief Financialp Officer Leonard Siuda and Philip Freehan, chief lending officer. Leading the change is Chieff ExecutiveRichard Gavegnano, an East Bostomn kid who still rememberzs how airplane racket rattled his family’s triplee decker near Neptune Road. Gavegnano made some nois e of his own last June when he took over the CEO role from longtimr East Boston Savings Bank leaderRobert Verdonck.
Verdoncmk had spent more than 20 years at the overseeing steady growth as assets climbedr fivefold to morethan $1 billion. Verdoncl and Gavegnano clashed overthe bank’se strategy, but Gavegnano’s clout with the boarde carried the day. Verdonck retired with severance and pension benefitesworth $3.1 million, the bank has disclosed with What’s not in dispute is the mountaib of capital at East Boston Savings An initial public offering of a minority staked in Meridian (Nasdaq: EBSB) last year raised abouft $100 million. The timing of the January 2008IPO couldn’t have been betteer as it occurred several months beforer chaos erupted within the U.S. banking system.
“We make no secrey about how high ourcapital is,” Gavegnanol said. “That’s helped us attract depositxs because people have a high degree of confidence in the soundnesds ofour institution.” Deposits rose 8 percen t to $859.3 million in the first quarter and net loans rose 5 percenyt to $738 million. And the bank’s total risk-based capital ratio, whichh measures its ability toabsorb losses, has been more than 15 The minimum ratio for a well-capitalizec bank in the eyes of regulators is 10 Meanwhile, Gavegnano said the bank’s pipeline for new loans is healthy.
He said there’s demanfd because some customers want to build relationships with communituy banks while large commercial lenders experience largwcredit losses. The East Bosto bank, however, set aside only $546,000 in the first quarterf for anticipatedloan losses, surprising bankinv analyst Damon DelMonte. The analyst said he was expectinb a provisionof $1.5 million aftet the bank set aside $2.9 million in the fourth The bank’s loan portfolio has deteriorated some over the past but it remains healthy. “As of now, I feel very Gavegnano said. “But fast-forward three you don’t know what’s out It’s like a minefield.
But I have a very high degreew of comfort with where we are For example, nonperforming assets were 1.61 percentt of total assets at the end of compared with 1.58 percent at the end of 2008. In a rougjh economic environment, anything under 2 percent is considered Gavegnano said part ofthe bank’s strategy is to gravitatwe back toward Boston’s core. He wante most of the bank’ws activity to happen within a 15-mild radius of the city. He said the bank has plan s to open two new branches by the end of the He declined to identify the new possible but said plans are on thedrawinyg board.
Overseeing daily operationws will be Deborah Jackson asthe bank’s new president and chiev operating officer. She formerly worked as CFO for . The retiremengt of bank veteran Freehan means another East Bostobn SavingsBank veteran, John Migliozzi, will be in charge of residential and commercial lending. And the most recent departure is that of CFOLeonarsd Siuda. Gavegnano said he’s looking at internao and external candidates to replace Jackson will serve asinterim CFO, he In a recent proxy the bank said payments to Freehan and his beneficiariesw will total $2.6 The amount includes $1.
32 million from a supplementao retirement plan for executives and two life insurance policies that provide death benefitx equal to $1.1 million, accordintg to the bank’s proxy. Payments to Siudsa will total about $2.5 including $1.28 million from the supplementa retirement plan and 24 montha of salary worth theproxy said.