A month and a half after senior management was forced to resign, Boston Bancorp has replaced its outside auditor and legal counsel to "improve operations" and respond to regulatory criticism.
The $2 billion-asset corporation has hired Big Six accounting firm KPMG Peat Marwick to take over from T.C. Edwards & Co. of Woburn, Mass. The company retained the Boston law firm of Ropes & Gray to replace Washington law firm Hogan & Hartson.
Boston also named two new directors, including one from outside the bank, to replace former chairman and chief executive Richard R. Laine and president Paul A. Archibald.
The two senior officials resigned under pressure Feb. 10 after the board of directors received a stinging examination report from the Federal Deposit Insurance Corp. Peter H. Hersey, an outside director, took over as chairman as well as acting president and chief executive.
The company is preparing to search for a new chief executive by developing the criteria to evaluate candidates.
Regulators blasted the management in their January report for questionable conditions at the company, citing nepotism, unusually high executive salaries, and the leasing of facilities to the bank by a real estate partnership controlled by management.
Examiners also found accounting problems at Boston Bancorp that prompted a restatement of earnings for fiscal 1994.
"It makes sense to me," said James Moynihan, senior vice president of Advest Group in Boston. "That board now wants to be above criticism, and certainly what they're doing puts them in that position."
But spokesman Richard E. Nicolazzo declined to comment on whether the changes were prompted by the regulators.
The decision to switch accountants, he said, was made "because of the growth of the bank." And bank officials chose Ropes & Gray because "they simply felt that they would be better served by working with a local firm," he explained.
Boston also hired Professional Banking Services Inc. of Louisville, Ky., to review management and revise internal policies, Capital Markets Risk Advisors to develop a risk management plan, and William M. Mercer Inc. to ensure that management salaries are in line with industry standards.
The company has retained Tucker Anthony Inc. as financial adviser to explore "all options to enhance shareholder value."
Mr. Moynihan also speculated that if the company hires a new chief executive who has run a full-service bank or thrift, "I think you'll very quickly see them change their strategy and get into the lending business."
