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Banker & Tradesman file photo
East Boston Savings Bank had a 14 percent decrease in net income for the first quarter compared to the same period last year. Net income was $13 million, or $0.25 per diluted share, in the first quarter compared to $15.1 million, or $0.29 per diluted share, for the first quarter of 2019. Fourth quarter earnings were $17.1 million, or $0.33 per diluted share.
Despite the income drop and the coronavirus pandemic, President and CEO Richard Gavegnano said in a statement that the bank still planned to open three new branches in Brookline, Salem and Woburn by June 30.
Total assets were $6.35 billion on March 31 compared to $6.34 billion at Dec.31 and $6.28 billion on March 31, 2019.
The bank’s provision for loan losses was $725,000 for the first quarter compared to $843,000 for the same quarter last year. The fourth quarter saw a reversal of $504,000. The bank said the provision for the quarter reflected a $2.8 million increase for inherent losses in its loan portfolio “based on management’s assessment of qualitative economic factors related to the effects of COVID-19, which offset changes in other key factors that would have resulted in a provision reversal.”
The allowance for loan losses was $50.9 million or 0.89 percent of total loans on March 31 compared to $50.3 million or 0.87 percent of total loans on Dec. 31 and $54 million or 0.94 percent of total loans on March 31, 2019.
“We do not take the current strength of our asset quality for granted,” Gavegnano said. “However, as our successful track record has demonstrated during past periods of economic disruption, we expect to prudently manage any resulting issues that may arise.”
East Boston Savings, like Century Bank, decided not to adopt the new current expected credit loss methodology this quarter. The CARES Act allowed banks to temporarily defer implementing the new CECL standard. Other banks, including Webster Bank, began using the CECL methodology in the first quarter.
The bank said in a statement that the previous methodology, incurred loss impairment, provided “a more practical measurement of credit losses in the current economic environment.
