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Ask Stan Lukowski about Eastern Bank's commitment to the spirit
of community banking and he's quick to reply that it is an outgrowth
of the bank's culture.
As chairman and CEO of member Eastern Bank for the last 24 years,
Mr. Lukowski has played a significant role in designing that culture
by participating in community activities and encouraging his staff
to do the same.
In recent years, Mr. Lukowski has lent his expertise to organizations
dedicated to increasing the supply of affordable housing in the
region. He currently serves as chairman of the board of the Massachusetts
Housing Partnership, a state organization providing loans and expertise
to increase the supply of affordable housing, and as a board member
and chairman of the housing task force of the Greater Boston Chamber
of Commerce.
Participation in housing-related activities is an extension of
the bank's community-focused philosophy and technical expertise
in lending to housing. "When I was asked if I would go on the
board of the Massachusetts Housing Partnership, the answer was a
pretty quick yes," he says. "We believed in the mission
and had been involved with the organization through some of its
programs prior to my involvement. We just saw it as a natural extension
of our efforts to accomplish some good in the affordable-housing
arena."
Mr. Lukowski says there's an urgent need to make housing more affordable
for people at all income levels in Massachusetts — and good
business reasons for doing so. "The lack of affordable housing
has become an impediment to economic growth," he says. "We
are pricing ourselves out of the marketplace."
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Eastern
and the Bank
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Eastern Bank has received approval for five New England Fund
initiatives totaling $104.6 million to fund Chapter 40B rental
housing initiatives in Massachusetts. Twenty-five percent
of the units in these initiatives are targeted to households
earning at or below 80 percent of the area median income.
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| Pictured,
from the left, are Cynthia C. Merkle, senior vice president
/ mortgage banking and community investment at Eastern
Bank; Carmen Seales, senior community investment manager
at the Federal Home Loan Bank of Boston, and Stan Lukowski. |
In 1995, Eastern Bank received $50 million in Community Development
advances to support the refinancing activities of 500 households
earning between 81 and 115 percent of the area median income.
In addition, Eastern Bank has been the recipient of four Affordable
Housing Program awards on behalf of developers to fund more
than $1 million in affordable ownership and rental housing.
Eastern Bank was also the recipient of a 2004 Equity Builder
Program award to assist home buyers earning at or below 80
percent of the area median income with down-payment and closing
costs. - Carmen Seales
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He and others argue that the high cost of housing is keeping talented
people from seeking employment in Greater Boston and encouraging
others to leave the state. "If you talk to the major hospitals,
you'll find that this is a major problem — not only in recruiting
full-fledged doctors, but in recruiting people into the educational
programs that exist here."
Mr. Lukowski believes that the lack of affordable housing is at
root a supply problem. "If we could get more supply into the
equation, we could moderate the price of housing," he says.
"One thing bankers can do is fund rehabilitation loans to preserve
the existing housing stock, either through direct loans
or through the Massachusetts Housing Partnership."
Bankers can also lobby support for affordable housing through chambers
of commerce and other community organizations. "There's been
a lot of effort by government agencies, the chambers of commerce,
and the banks to lobby for changes in zoning regulations,"
he says. "Chapter 40R is part of it, and trying to maintain
Chapter 40B is another part of that. Everyone wants the housing
in somebody else's town. 40B has been a hotly contested piece of
legislation that most of us involved in housing believe needs to
be cleaned up a bit, but it also needs to be maintained."
Mr. Lukowski notes that the state of the regional banking business
is a reflection of the regional economy. "If the economy of
Massachusetts does well — and we manage this institution half-way
decently — we will do well," he says. "But if the
economy here struggles, no matter how well we manage our business,
the bank is going to struggle.
"When your basic customer can't repay a car, house, or business
loan, you're going to have a problem, as Massachusetts and New England
institutions did during the 1989 to 1992 period," he says.
"I don't care how well you manage the institution."
Mr. Lukowski says his work in the community has become an important
part of his life as a banker. Banking is a profession that relies
on relationships for success. "I make an enormous number of
good friends," he says. "It opens up horizons and has
enhanced the bank by allowing me to go out and recruit good people."
Employee Participation
While Mr. Lukowski's participation in housing and health-related
organizations serves as inspiration for many of his employees, he's
quick to point out that he's not alone at Eastern Bank in making
such activities an important part of his personal and professional
life. "We tend to attract people who are willing to contribute
in the community, and it makes a difference," he says. "You
basically don't come to Eastern Bank unless you're willing to do
these kinds of things — because that is what we do here."
A case in point is Rick Muraida, senior vice president / commercial
real estate at Eastern Bank, who serves as treasurer of Citizens'
Housing and Planning Association (CHAPA), chair of the investment
committee of the Massachusetts Housing Equity Fund, treasurer of
the Community Economic Development Assistance Corporation, and treasurer
of the Affordable Housing Investors Council.
Mr. Lukowski notes that each new Eastern Bank employee is introduced
to the bank's corporate values in a session with either him or Richard
E. Holbrook, the bank's president and chief operating officer. "We
set the tone of what's expected from their first few days of employment,"
says Mr. Lukowski. "They hear from us what this bank is about
— how we expect them to treat people, other employees, and
what our obligation is to the community. So they kind of get the
word."
Mr. Lukowski says Eastern Bank's three most important stakeholders
are the customers, the employees, and the communities it serves.
"We believe that third stakeholder is a very important part
of what we do," he says. "And one way to serve that stakeholder
is to encourage our people to participate in community activities."
In addition to encouraging employee participation, the bank has
originated programs that root it more deeply in the community. The
bank participates in the FDIC's Money Smart Program, which sends
trained representatives into the community to teach people of all
ages about financial responsibility, and founded the Eastern Bank
Charitable Foundation, which last year contributed $1.2 million
to nonprofit organizations across Eastern Massachusetts.
The Bank's Origins
Mr. Lukowski joined the Salem Savings Bank in 1976 after serving
in the Corporate Finance Department of Kidder Peabody in Boston.
Eastern Bank was formed with the 1981 merger of Salem Savings Bank
and the Lynn Institution for Savings.
In subsequent years Eastern Bank continued to grow through acquisitions
and mergers. It has acquired Saugus Bank and Trust Company, Malden
Trust Company, and Hibernia Bank, and merged with two fellow mutuals,
First Colonial Bank in 1993, and, most recently, Plymouth Savings
Bank.
The latter stretched the bank's retail presence from Merrimack Valley
to the Cape.
Mr. Lukowski attributes his institution's success to its ability
to stay focused on its mission and growth. Growth, he says, allows
the bank — a $6.4 billion commercial institution with 73 branches
— to provide better services through improved technology and
a more highly skilled workforce. It also makes it possible to contribute
financially to local communities through venues such as the bank's
foundation.
Over the years, Eastern Bank has also participated successfully
in the Federal Home Loan Bank of Boston's Affordable Housing Program.
"We can give money away and do subsidized loans, but we need
organizations like the Federal Home Loan Bank of Boston, Massachusetts
Housing Partnership, CHAPA, and other organizations to be involved
as well," he says. "It has to be a community effort if
you're going to have an impact on some of these issues. And we need
to have an impact on these issues. It's in our economic self-interest."
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