Bank seeks to merge again

July 24, 2009
By

JOHN RUCH

JP CENTER—Mt. Washington Bank is seeking to merge with another bank, only 14 months after it took over Jamaica Plain’s historic Roxbury Highland Bank at 515 Centre St.

“Everything’s going to stay the same,” said Richard Gavegnano, chairman and chief executive officer of East Boston Savings Bank, which would take over Mt. Washington under the merger terms.

The local branch would stay open, and it would keep the Mt. Washington name. So would Mt. Washington’s charitable trust, said Gavegnano, adding that he recently made a $250,000 donation to it.

“It’s very positive, first and foremost, for our customers,” said Edward Merritt, Mt. Washington’s presi-dent and chief executive officer. The merger would create a “dominant community bank” in the city that would focus on local lending and development, he said.

Roxbury Highland was a single-branch, independent bank for nearly 120 years when modern times forced merger discussions. In 2003, a proposed merger with Peoples Federal Savings Bank was shot down by a crowd of chanting protesters.

But last year, depositors approved the merger with South Boston-based Mt. Washington. That was largely because of Mt. Washington’s own history as an independent community bank—just a much larger one—and promises that nothing would change.

East Boston Savings Bank is now making similar promises. The bank is owned by a holding company that has a similar name to an out-of-state financial services company, but the bank is in fact entirely local, Gavegnano said.

“We’re a community bank through and through,” he told the Gazette. “Our name has never changed in 164 years. I grew up in East Boston. I’ve been at this bank 36 years.”

Asked whether he is aware of Roxbury Highland’s history, Gavegnano said, “I don’t have it at the tip of my fingertips, but I have all the information on that bank and what it meant. There will be no branch closings…This is for growth.”

The 13-branch East Boston Savings Bank has hundreds of millions of dollars in capitalization and operates no farther from Boston than Peabody. There is a possibility of another branch opening in the JP area, he said.

During last year’s Roxbury Highland/Mt. Washington merger discussions, Mt. Washington pledged to remain a “Boston-only” bank. East Boston Savings Bank is focused on Suffolk County, according to Gavegnano.

Gavegnano declined to say which bank proposed the merger. Merritt said the “challenges that have resulted from the economic downturn…have hit all banks hard. We’re not immune to that.”

Merritt said he is confident East Boston Savings Bank can weather the economic storm. “They are very strong financially,” he said.

Mt. Washington has operated the JP office as its “Roxbury Highland Branch.” It appears those names will stay the same. “This is something a larger corporation would never understand,” Gavegnano said of keeping the Mt. Washington name on all of that bank’s current branches. “That should not be disturbed. There’s no reason to.”

The merger proposal is under examination by banking regulators. Depositors at both banks would have to approve the deal as well, but no meetings are scheduled yet. Gavegnano said he hopes the deal will be finalized no later than October.