Wainwright Bank seeks merger

July 9, 2010
By

John Ruch

Web Exclusive

JP CENTER—Wainwright Bank & Trust Company, a “socially progressive” bank with a Jamaica Plain branch at 687 Centre St., is seeking to merge with Eastern Bank. The deal would erase the Wainwright name, but keep its JP branch and its social activism in place, bank officials said.

Both banks are headquartered in the Financial District downtown. Wainwright is owned by stockholders, while Eastern Bank is a mutual bank, meaning it is owned by its depositors. The merger is aimed for completion late this year and still requires approval by regulators and Wainwright shareholders.

“How can you call yourself a Greater Boston bank and not have a branch in Jamaica Plain or Watertown or Somerville?” said Eastern spokesperson Joe Bartolotta when asked the reason for the merger. “[Wainwright’s] locations fill gaps in our retail banking footprint.”

Uncertainty about the potential costs of increased federal banking regulations made it a good time to seek a merger partner, added Jan Miller, Wainwright’s president and chief executive officer, in a Gazette interview.

The merger will help Eastern, a 192-year-old regional bank, remain competitive with national banks, while better serving existing customers of both banks, Bartolotta said. Eastern is much larger than the 23-year-old Wainwright, with approximately $6.6 billion in assets compared to Wainwright’s $1 billion.

If the merger goes through, Wainwright customers should see no changes in bank services, Bartolotta and Miller said. All existing Wainwright branches will remain open. The JP branch recently got a makeover, including a new lobby space, and a grand re-opening likely will happen in the fall, Miller said.

“It is our hope and expectation that the [staff] people you see today will be the same people you see tomorrow,” Bartolotta said.

Wainwright’s progressive lending practices and its annual Wainwright Social Justice Award will continue under Eastern, which also has a strong commitment to charitable giving, according to a press release. Wainwright is known for lending and donating to organizations focused on such issues as homelessness, environmentalism, affordable housing, immigration rights, rights of people with HIV/AIDS, and gay/lesbian/bisexual/transgender rights.

“I cannot think of a more appropriate partnership than this one, combining a 192-year-old mutual company with the banking industry’s leader on socially progressive issues,” said Richard Holbrook, Eastern’s chairman and chief executive officer, in a press statement.

Miller called Eastern a perfect partner as well with a similar culture.

“The Wainwright brand, which is unique—you can’t go into a larger organization and expect it’s not going to be diluted in some way,” Miller acknowledged. But, he added, Eastern is known for its community-based lending practices, and Wainwright’s expertise can “help take that to another level.”

As part of the merger deal, Miller is slated to become an Eastern Bank vice president, and president of the main Eastern Bank Corporation of which the bank is a part. Other prominent Wainwright officials will retain bank positions as well, including co-founders Robert Glassman and John Plukas.

One thing that won’t remain is the Wainwright name, which has a little-known and surprising history of its own, according to Miller. Glassman and Plukas worked many years at H.C. Wainwright, a historic Boston investment banking firm that now operates from New York City. Glassman and Plukas later started their own company, HCW Oil and Gas, named as a tip of the hat to H.C. Wainwright. Then, when they decided to start their own bank, they got permission to use the Wainwright name again.

The idea was that Wainwright “has a ring to it that sounds older than [it is],” Miller said. He noted that the name’s origins aren’t exactly socially progressive, but the bank has attached that meaning to it over the years.

Mergers and other big organizational changes have become common among the independent banks that serve JP. Peoples Federal Savings Bank will transform this week from a mutual to a stock-based bank. [See related article.] The historic, one-branch Roxbury Highland Bank merged two years ago with Mt. Washington Bank, which then merged last year with East Boston Savings Bank.

Miller said that Wainwright is in good financial shape, which made for a good chance to shop itself around to merger partners. He said the trend toward fewer banks appears likely to continue, particularly because the “high cost of increased regulatory requirements is going to force mergers of smaller banks.”

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