Boston Bancorp has named a new top executive almost eight months after its top two officials resigned following regulatory criticism. The move could put to rest rumors that the company is preparing to sell.
The $2.1 billion-asset holding company has appointed Robert E. Lee as chairman, president, and chief executive, replacing Peter H. Hersey. Mr. Lee, 53, who had been a vice president, was also named president and chief executive of Boston Bancorp's state-chartered savings bank subsidiary, South Boston Savings Bank.
Mr. Hersey, who became chairman, acting president, and chief executive in February following the resignations of former chairman and CEO Richard R. Laine and president Paul A. Archibald, will return to his original position as a director of the company.
The board vote promoting Mr. Lee was unanimous. The changes are effective immediately.
"I don't see why it took them so long to make a decision," said James Moynihan, senior vice president of Advest Group in Boston. "Clearly they were trying to shop the company around and they had no takers."
The announcement comes after several weeks of speculation that Boston Bancorp was exploring a sale to $45 billion-asset Bank of Boston.
Bank of Boston chief financial officer William Shea confirmed last week that the two banks had held preliminary talks and said Bank of Boston was still interested in buying Boston Bancorp's deposits for a reasonable price - but not its investment portfolio - according to a Bloomberg Business News report.
Boston Bancorp's portfolio of $1.6 billion comprises more than two- thirds of its total assets.
Mr. Lee declined to comment.
Mr. Moynihan said the company's board had been divided over whether to sell. He said a deal with Bank of Boston hadn't worked because the larger bank was only willing to offer between $40 and $45 per share. Boston Bancorp directors, prompted by Mr. Laine and Mr. Archibald, felt the company was worth between $50 and $55.
Regulators had criticized Boston Bancorp for paying what was called unusually high salaries to Mr. Laine and Mr. Archibald, using Mr. Archibald's brother to build the company's securities portfolio on a commission basis, and leasing several branches from a limited partnership dominated by the two former executives.
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San Francisco-based First Nationwide Bank, the former Ford Motor Co. subsidiary, has agreed to sell its Long Island franchise, with $590 million in deposits, to North Fork Bancorp. for $37.5 million.
The Mattituck, N.Y.-based banking company is paying a 6.35% deposit premium for the 10 branches, seven of which are in Suffolk County, two in Nassau County, and one in Queens County.
The $2.9 billion-asset North Fork expects the purchase, which will add about 50,000 customers, will add to earnings immediately.