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Richard J. Gavegnano
Title: Chairman of the Board and CEO, East Boston Savings Bank
Age: 68
Experience: 50 years
Richard Gavegnano has the kind of story that makes you believe America really is the land of opportunity. At 17, he started working in a stockbroker’s mailroom and set to convincing his superiors he deserved a shot at being a stockbroker himself. In his early 20s, they relented and gave him his chance. As a native of East Boston, perhaps it wasn’t surprising that Gavegnano wound up a corporator, a trustee, a director and eventually CEO of East Boston Savings Bank. Now, nearly a year out from the bank’s second-step public offering, Gavegnano discussed his plans for Mt. Washington Bank and his branch network.
Q: East Boston Savings acquired Mt. Washington Bank in 2010. Why are you just now rebranding?
A: We were going into a very well established neighborhood that Mt. Washington was in for 100 years, and people liked to know they were still doing business with the same bank. Many times people get disenfranchised when somebody acquires them, either the employees or the customers, and we wanted to send a message loud and clear: “Hey, we want and need these employees.” We wanted to take that franchise and grow it, so we wanted to make sure everybody stayed. We did everything we could do to let people know that they’re part of a bigger picture. Plus, the customers there, they had a great deposit base, a great checking account base and we wanted the customers to know that the people they’re used to seeing, they’re still going to be there.
So we left everything alone for five years, but now both franchises are growing, we’re growing into each other, and I can’t spend money competing against myself, so what we decided to do was, everybody knew that Mt. Washington was a division of East Boston Savings Bank, so we just brought it under one brand, East Boston Savings Bank. We increased our marketing budget by 40 percent, that’s all going to be with one brand, so everybody gets the benefit as opposed to two brands competing against each other.
Everybody’s happy. I think we did a unique transaction. We didn’t lose anybody we wanted to keep. I think we retained about 95 percent of the employees, I think we retained about 98 percent of the customers. We did it the right way and we just got one powerful Boston machine right now. I am very proud of that.
Q: Since 2011, you’ve added branches in West Roxbury, the South End and Allston. You have a few more committed before the year is over, too, right?
A: Yes, two have already been committed to: one on Beacon Street in Brookline, and there’s going to be one on Morrissey Boulevard in Dorchester and then there’s going to be one in Chinatown. That’s going to bring us up to 30 at the end of the year.
Geographically, the demographics work very well where we are. We’re in the inner city of Boston. We want to be where there’s a lot of rooftops. We want to fill the gaps of where our branches are so that there’s not much distance between two branches. … If you looked at all these branches on a map, you’d see a very nice concentration of a circle, tightly woven within a 20-mile radius of Boston.
Q: That seems to run counter to this prevailing idea lately that banks’ branch networks need to shrink if they’re going to survive.
A: I tend to be a contrarian. The type of banking we do in the neighborhoods we serve, people want to come in and see who they’re doing business with. We have all the technology and all the bells and whistles if they choose not to, but our philosophy now is bigger signs, smaller branches. But we’re still very successful at gathering deposits and loans through our branch network. It serves a purpose. We still want that neighborhood visibility. We want people to know we’re there, we’re part of the community, which leads to deposit gathering, it leads to more loans, more checking accounts – and we build relationships.
Richard Gavegnano’s Top Five Athletes:
- Ted Williams
- Bobby Orr
- Tom Brady
- Rocky Marciano
- Secretariat
