The former head of the Martha’s Vineyard Savings Bank who left last year under circumstances that were never fully explained, has been permanently barred from banking by the Federal Deposit Insurance Corporation.
An “order of prohibition from further participation” was issued against Christopher Wells by the FDIC.
The order was issued in late February and publicly released by the FDIC last week. Mr. Wells signed a consent agreement with the FDIC in which he does not admit the claims against him.
But the order claims among other things that Mr. Wells “engaged or participated in violations of law and/or regulations, unsafe or unsound banking practices, and/or breaches of fiduciary duty as an institution-affiliated party of Martha’s Vineyard Savings Bank.” The order also says: “. . . the bank has suffered or will probably suffer financial loss or other damage, the interests of the bank’s depositors have been or could be prejudiced and/or (Wells) received financial gain or other benefit.”
Paul Falvey, who took the helm as chief executive officer at the savings bank six months ago, said Sunday he could not comment directly on the FDIC order, but he did say the financial position of the bank without question remains strong.
“The bank is in terrific financial shape,” Mr. Falvey said. “There are 152 banks in Massachusetts and we are in the top 30 among our peers in terms of capital and earnings.”
Mr. Wells, who was president and chief executive officer at the bank, resigned abruptly in May 2012. He had been at the helm of the bank since 2004 and had presided over a period of growth and prosperity at the bank. The bank merged with the Martha’s Vineyard Cooperative Bank in 2007 under Mr. Wells’s leadership to become the largest banking institution on the Island. The bank also operates a trust investment division as an affiliate.
Mr. Wells’s departure sparked a period of change and internal turmoil at the bank. The Gazette learned later that the bank was under investigation the FDIC and had received a letter from federal regulators in June 2012 that had flagged the bank for administrative deficiencies and also cited the board of trustees for poor leadership and oversight. In an interview with the Gazette last fall, bank leaders acknowledged the problems and that they had led to Mr. Wells’s resignation, although they could only describe them in the broadest terms because they were bound by rules of confidentiality.
“Through discussions with regulators we learned about credit matters where maybe the Is were not dotted or the Ts crossed and Chris decided that the best thing for him and the bank was to resign,” board chairman Philip J. Norton Jr. told the Gazette at the time.
In October Mr. Falvey, a Hingham banker with long experience in community banking, including working with federal regulators, was hired for the top post at the bank.
Total assets at the bank were $520 million at the end of last summer, with another $180 million in assets in the trust division.
Net earnings at the bank declined from $4.6 million in 2011 to $3.9 million in 2012, but Mr. Falvey said that follows a trend seen in banks across the country. “Our earnings continue to be strong and our chargeoff ratios on bad loans are very modest," he said.