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

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million for themselves and their beneficiaries. The bank’z holding company, Inc., reported a $1.1 millio n net loss in the first quarter, largely becausw of pay and benefits related to the retirement of Chief Financialo Officer Leonard Siuda and Philip chieflending officer. Leading the change is Chiegf ExecutiveRichard Gavegnano, an East Bostonh kid who still remembers how airplanre racket rattled his family’s tripled decker near Neptune Gavegnano made some noise of his own last June when he took over the CEO role from longtimed East Boston Savings Bank leader Robertt Verdonck.
Verdonck had spent more than 20 yearw atthe bank, overseeing steady growty as assets climbed fivefold to more than $1 Verdonck and Gavegnano clashedd over the bank’s strategy, but Gavegnano’s clout with the boarfd carried the day. Verdonck retired with severance and pension benefitsworth $3.1 million, the bank has disclosedf with regulators. What’s not in dispute is the mountain of capitalp at East BostonSavings Bank. An initialp public offering of a minoritgy stake inMeridian (Nasdaq: last year raised about $100 million. The timing of the Januargy 2008IPO couldn’t have been better as it occurred severakl months before chaos erupted withimn the U.S. banking system.
“We make no secre about how high ourcapital is,” Gavegnano said. “That’s helper us attract deposits because people have a high degrede of confidence in the soundness ofour institution.” Depositws rose 8 percent to $859.3 million in the firstg quarter and net loans rose 5 percentg to $738 million. And the bank’s total risk-based capital ratio, which measures its ability to absorb has been more than15 percent. The minimuk ratio for a well-capitalized bank in the eyes of regulators is10 percent. Meanwhile, Gavegnano said the bank’s pipelind for new loans is healthy.
He said there’es demand because some customers want to build relationships with communithy banks while large commercial lenders experience large credit The EastBoston however, set aside only $546,000 in the first quarter for anticipated loan losses, surprisin g banking analyst Damon DelMonte. The analyst said he was expectingv a provisionof $1.5 millionj after the bank set aside $2.9 milliob in the fourth quarter. The bank’ s loan portfolio has deteriorated some over the past but itremains healthy. “As of now, I feel very Gavegnano said. “But fast-forward three months, you don’t know what’s out It’s like a minefield.
But I have a very high degree of comfort with where we are For example, nonperforming assets were 1.61 percent of total assets at the end of March, compared with 1.58 percent at the end of 2008. In a rough economic environment, anything under 2 percent is considered Gavegnano said part ofthe bank’s strategt is to gravitate back toward Boston’s core. He wantzs most of the bank’s activity to happenm within a 15-mile radius of the city.
He said the bank has plands to open two new branches by the end of the He declined to identify the new possible but said plans are on the drawing Overseeing daily operations will be Deborah Jackson asthe bank’s new president and chief operatin g officer. She formerly worked as CFO for . The retirement of bank veteran Freehan means another East Boston SavingasBank veteran, John Migliozzi, will be in charge of residential and commerciap lending. And the most recent departure is that of CFO Leonard Siuda. Gavegnano said he’s looking at interna and external candidates toreplace Siuda.
Jackson will serve as interim CFO, he In a recent proxy filing, the bank said payments to Freehanb and his beneficiaries willtotalo $2.6 million. The amounf includes $1.32 million from a supplemental retirement plan for executives and two life insurancre policies that provide death benefitse equalto $1.1 million, accordiny to the bank’s proxy. Paymentds to Siuda will total about $2.5 including $1.28 million from the supplementa l retirement plan and 24 montha of salaryworth $364,226, the proxu said.