If you’re a bank executive in the Boston area, you probably already know you don’t have a whole lot in common with Dick Gavegnano.

He didn’t go to college. As he tells it, his introduction to finance came in the afternoons he spent at Suffolk Downs as a kid. There, he learned how to use a little bit of money to make a little bit more money. By 22, he was a stockbroker and a neighbor asked him to be a corporator at East Boston Savings Bank (EBSB). He’s been with the bank as a corporator, board member and executive ever since.

The bank went public in 2008, the same year Gavegnano, already chairman of the board, was made CEO. Since then, EBSB has grown from $988 million in assets to $1.92 billion. Here, Gavegnano talks about his career, growing the bank – and why East Boston Savings Bank is based in Peabody.

Richard J. Gavegnano

Title: Chairman and CEO, East Boston Savings Bank; Peabody

Age: 64

Experience: 37 years in banking, all at East Boston Savings Bank, CEO since 2008

You’re from East Boston. This is East Boston Savings Bank. Why are we in Peabody?

Because I couldn’t find an acre-and-a-half of land to build a 35,000-square-foot building. There’s also a unique pattern that’s involved here. The significant growth of this bank took place with the wave of Italian immigrants and Irish immigrants that settled in East Boston. When those people lived in East Boston, the bank prospered there. But what happened was as each generation became successful, the children, some of them stayed in East Boston, but anyone who grows up in Dorchester or Southie moves south. Anybody that grew up in East Boston moved north. So, when the children got educated, got better jobs, they moved to Revere, Saugus, Malden, Melrose, they moved up the North Shore, so we followed the money trail.

East Boston Savings Bank has been relatively aggressive as far as growth is concerned. What makes it work for you while a lot of other banks say interest rates are hurting them, regulation is hurting them and they feel almost paralyzed?

Well, we’re not immune to any of those things, we’re in the same environment as all banks as far as regulators go. In this environment, they dig very deep and are very concerned about the bank and the condition of the bank. We are very conservative, even though we have a very good growth pattern. I think the important thing to note is we have a very disciplined credit policy here. The biggest factor, I think, is we were able to capitalize, in January 2008, over $100 million and it put us in a very good position to take advantage of the environment that was coming ahead of us. Because of all the negative publicity and fallout from the larger banks, we have been picking up a lot of low hanging fruit. We’ve been able to capitalize on this environment because we are a community bank.

Are these new customers checking account customers, or commercial loans, or is it across the board?

It’s across the board, but a significant factor has been commercial real estate and commercial real estate lending. Banks right now are pretty flush with liquidity. With the adversity in the economic environment, (customers) are flocking to put their money to work, even if it’s for 1 percent, because community banks represent safety. So banks have a lot of liquidity right now. Deposits have enjoyed wonderful growth in the last three to five years. The missing part of the equation is it’s hard to put it out there in loans. We’ve been very fortunate in that we’ve been able to grow our loan portfolio significantly. We’ve hired a C&I division that we were very lucky to get from another bank. We’ve implemented a commercial real estate force with an additional six lenders in the last two years. So, we were prepared both with capital to lend and the facility to provide the service.

What are you seeing in the commercial real estate sector? Who’s active and what are they doing with their capital?

We’ve seen a lot of activity with refinancing. We see a lot of activity with high-quality loans coming to East Boston Savings Bank that have been with the larger banks, and they’re not happy and we’re able to structure a loan for them. And these are real sweet loans, 50-60 percent loan-to-value at 1.8 debt service coverage. This is the kind of business we like to attract. And we’re also seeing a lot of quality individuals, high net worth, good credit score people out there taking advantage of the market, buying high profile properties, and we’re able to capitalize and facilitate their desire to move quickly by putting the deal in place for them. There are opportunities out there for people to acquire real estate.

You recently announced that EBSB sold its stake in Hampshire First Bank. Tell me about that transaction and the strategy behind it.

Five years ago, a mutual bank had never used its excess capital to start an independent public institution. We wanted to capitalize on Southern New Hampshire or get into that market, and certainly the name of East Boston Savings Bank wouldn’t have played well. We were a mutual bank at that time. We wanted to take advantage of that and have a commodity that if we were successful, could be sold. It would be a public company. We raised $30 million. We took $12 million from our capital five years ago and then I went out raised $18 million, started the bank in New Hampshire, put together a management team, a board of directors, and we created some positive synergy between both banks. Through our participation, they had the punching power, as a de novo, they could virtually talk to anyone up there who needed a $5 million or $10 million loan because we could participate and help them. The bank became $273 million, became profitable after 20 months, and then the opportunity came up to capitalize on our investment, and we were able to sell our share of the bank to NBT, which is a wonderful bank out of New York. They wanted to be more present in New Hampshire. They’re already in Northern New Hampshire, so it was a win-win.

Gavegnano’s Five Favorite Things About Growing Up In East Boston:

• Great food
• Half Ball and Stick Ball
• Great neighborhood
• Suffolk Downs
• Living on the third floor of a three-decker with Italian grandparents on second floor