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ECB Bancorp

ECB Bancorp
Leadership team

Mr. Richard J. O'Neil Jr. (CEO, Pres & Director)

Mr. John A. Citrano (Sec., COO, CFO & Exec. VP)

Mr. Brandon Lavertu (Chief Accounting Officer)

Products/ Services
Banking, Finance, Financial Services
Number of Employees
50 - 100
Headquarters
Frankfurt, Hessen, Germany
Established
1998
Company Registration
SEC CIK number: 0001914605
Net Income
2M - 5M
Revenue
20M - 100M
Social Media
Overview
Location
Summary
ECB Bancorp, Inc. focuses on operating as a holding company for Everett Co-operative Bank that provides various banking products and services. The company accepts various deposit products, including certificate of deposit accounts, IRAs, money market accounts, savings accounts, demand deposit accounts, and interest-bearing and noninterest-bearing checking accounts. It also offers one- to four-family residential real estate, commercial real estate and multifamily real estate, construction and land, commercial, and consumer loans, as well as home equity loans and lines of credit. In addition, the company invests in securities, consisting primarily of U.S. government and federal agency obligations, mortgage-backed securities, and corporate bonds. It operates through two full-service banking offices located in Everett, Massachusetts and Lynnfield, Massachusetts. The company was founded in 1890 and is based in Everett, Massachusetts.

History

Early years of the ECB

The European Central Bank is the de facto successor of the European Monetary Institute . The EMI was established at the start of the second stage of the EU's Economic and Monetary Union to handle the transitional issues of states adopting the euro and prepare for the creation of the ECB and European System of Central Banks . The EMI itself took over from the earlier European Monetary Cooperation Fund .The ECB formally replaced the EMI on 1 June 1998 by virtue of the Treaty on European Union , however it did not exercise its full powers until the introduction of the euro on 1 January 1999, signalling the third stage of EMU. The bank was the final institution needed for EMU, as outlined by the EMU reports of Pierre Werner and President Jacques Delors. It was established on 1 June 1998 The first President of the Bank was Wim Duisenberg, the former president of the Dutch central bank and the European Monetary Institute. While Duisenberg had been the head of the EMI just before the ECB came into existence, the French government wanted Jean-Claude Trichet, former head of the French central bank, to be the ECB's first president. The French argued that since the ECB was to be located in Germany, its president should be French. This was opposed by the German, Dutch and Belgian governments who saw Duisenberg as a guarantor of a strong euro. Tensions were abated by a gentleman's agreement in which Duisenberg would stand down before the end of his mandate, to be replaced by Trichet.Trichet replaced Duisenberg as president in November 2003. Until 2007, the ECB had very successfully managed to maintain inflation close but below 2%.

The ECB's response to the financial crises

The European Central Bank underwent through a deep internal transformation as it faced the global financial crisis and the Eurozone debt crisis.

Early response to the Eurozone debt crisis

The so-called European debt crisis began after Greece's new elected government uncovered the real level indebtedness and budget deficit and warned EU institutions of the imminent danger of a Greek sovereign default.

Foreseeing a possible sovereign default in the eurozone, the general public, international and European institutions, and the financial community reassessed the economic situation and creditworthiness of some Eurozone member states, in particular Southern countries. Consequently, sovereign bonds yields of several Eurozone countries started to rise sharply. This provoked a self-fulfilling panic on financial markets: the more Greek bonds yields rose, the more likely a default became possible, the more bond yields increased in turn.This panic was also aggravated because of the inability of the ECB to react and intervene on sovereign bonds markets for two reasons. First, because the ECB's legal framework normally forbids the purchase of sovereign bonds , This prevented the ECB from implementing quantitative easing like the Federal Reserve and the Bank of England did as soon as 2008, which played an important role in stabilizing markets.

Secondly, a decision by the ECB made in 2005 introduced a minimum credit rating for all Eurozone sovereign bonds to be eligible as collateral to the ECB's open market operations. This meant that if a private rating agencies were to downgrade a sovereign bond below that threshold, many banks would suddenly become illiquid because they would lose access to ECB refinancing operations. According to former member of the governing council of the ECB Athanasios Orphanides, this change in the ECB's collateral framework "planted the seed" of the euro crisis.Faced with those regulatory constraints, the ECB led by Jean-Claude Trichet in 2010 was reluctant to intervene to calm down financial markets. Up until 6 May 2010, Trichet formally denied at several press conferences the possibility of the ECB to embark into sovereign bonds purchases, even though Greece, Portugal, Spain and Italy faced waves of credit rating downgrades and increasing interest rate spreads.

ECB's market interventions

In a remarkable u-turn, the ECB announced on 10 May 2010, the launch of a "Securities Market Programme" which involved the discretionary purchase of sovereign bonds in secondary markets. Extraordinarily, the decision was taken by the Governing Council during a teleconference call only three days after the ECB's usual meeting of 6 May . The ECB justified this decision by the necessity to "address severe tensions in financial markets." The decision also coincided with the EU leaders decision of 10 May to establish the European Financial Stabilisation mechanism, which would serve as a crisis fighting fund to safeguard the euro area from future sovereign debt crisis.The ECB's bond buying focused primarily on Spanish and Italian debt. They were intended to dampen international speculation against those countries, and thus avoid a contagion of the Greek crisis towards other Eurozone countries. The assumption is that speculative activity will decrease over time and the value of the assets increase.

Although SMP did involve an injection of new money into financial markets, all ECB injections were "sterilized" through weekly liquidity absorption. So the operation was neutral for the overall money supply.In September 2011, ECB's Board member Jürgen Stark, resigned in protest against the "Securities Market Programme" which involved the purchase of sovereign bonds from Southern member states, a move that he considered as equivalent to monetary financing, which is prohibited by the EU Treaty. The Financial Times Deutschland referred to this episode as "the end of the ECB as we know it", referring to its hitherto perceived "hawkish" stance on inflation and its historical Deutsche Bundesbank influence.As of 18 June 2012, the ECB in total had spent €212.1bn for bond purchases covering outright debt, as part of the Securities Markets Programme. Controversially, the ECB made substantial profits out of SMP, which were largely redistributed to Eurozone countries. In 2013, the Eurogroup decided to refund those profits to Greece, however the payments were suspended over 2014 until 2017 over the conflict between Yanis Varoufakis and ministers of the Eurogroup. In 2018, profits refunds were reinstalled by the Eurogroup. However, several NGOs complained that a substantial part of the ECB profits would never be refunded to Greece.

Role in the Troika

The ECB played a controversial role in the "Troika" by rejecting all forms of debt restructuring of public and private debts, forcing governments to adopt bailout programmes and structural reforms through secret letters to Italian, Spanish, Greek and Irish governments. It has further been accused of interfering in the Greek referendum of July 2015 by constraining liquidity to Greek commercial banks.

In November 2010, it became clear that Ireland would not be able to afford to bail out its failing banks, and Anglo Irish Bank in particular which needed around 30 billion euros, a sum the government obviously could not borrow from financial markets when its bond yields were soaring to comparable levels with the Greek bonds. Instead, the government issued a 31bn EUR "promissory note" to Anglo – which it had nationalized. In turn, the bank supplied the promissory note as collateral to the Central Bank of Ireland, so it could access emergency liquidity assistance . This way, Anglo was able to repay its bondholders. The operation became very controversial, as it basically shifted Anglo's private debts onto the government's balance sheet.

It became clear later that the ECB played a key role in making sure the Irish government did not let Anglo default on its debts, in order to avoid a financial instability risks. On 15 October and 6 November 2010, the ECB President Jean-Claude Trichet sent two secret letters to the Irish finance Minister which essentially informed the Irish government of the possible suspension of ELA's credit lines, unless the government requested a financial assistance programme to the Eurogroup under condition of further reforms and fiscal consolidation.

Over 2012 and 2013, the ECB repeatedly insisted that the promissory note should be repaid in full, and refused the Government's proposal to swap the notes with a long-term bond until February 2013. In addition, the ECB insisted that no debt restructuring should be applied to the nationalized banks' bondholders, a measure which could have saved Ireland 8 billion euros.In April 2011, the ECB raised interest rates for the first time since 2008 from 1% to 1.25%, with a further increase to 1.50% in July 2011. However, in 2012–2013 the ECB sharply lowered interest rates to encourage economic growth, reaching the historically low 0.25% in November 2013. Soon after the rates were cut to 0.15%, then on 4 September 2014 the central bank reduced the rates by two thirds from 0.15% to 0.05%. Recently, the interest rates were further reduced reaching 0.00%, the lowest rates on record.

The European Central Bank was not ready to manage the money supply under the crisis of 2008, therefore, it started using the instrument of quantitative easing only in 2015.In a report adopted on 13 March 2014, the European Parliament criticized the "potential conflict of interest between the current role of the ECB in the Troika as ‘technical advisor’ and its position as creditor of the four Member States, as well as its mandate under the Treaty". The report was led by Austrian right-wing MEP Othmar Karas and French Socialist MEP Liem Hoang Ngoc.

The ECB's response under Mario Draghi

On 1 November 2011, Mario Draghi replaced Jean-Claude Trichet as President of the ECB. This change in leadership also marks the start of a new era under which the ECB will become more and more interventionist and eventually ended the Eurozone sovereign debt crisis.

Draghi's presidency started with the impressive launch of a new round of 1% interest loans with a term of three years – the Long-term Refinancing operations . Under this programme, 523 Banks tapped as much as €489.2 bn . Observers were surprised by the volume of the loans made when it was implemented. By far biggest amount of €325bn was tapped by banks in Greece, Ireland, Italy and Spain. Although those LTROs loans did not directly benefit EU governments, it effectively allowed banks to do a carry trade, by lending off the LTROs loans to governments with an interest margin. The operation also facilitated the rollover of €200bn of maturing bank debts in the first three months of 2012.

"Whatever it takes"

Facing renewed fears about sovereigns in the eurozone continued Mario Draghi made a decisive speech in London, by declaring that the ECB "...is ready to do whatever it takes to preserve the Euro. And believe me, it will be enough." In light of slow political progress on solving the eurozone crisis, Draghi's statement has been seen as a key turning point in the eurozone crisis, as it was immediately welcomed by European leaders, and led to a steady decline in bond yields for eurozone countries, in particular Spain, Italy and France.Following up on Draghi's speech, on 6 September 2012 the ECB announced the Outright Monetary Transactions programme . Unlike the previous SMP programme, OMT has no ex-ante time or size limit. However, the activation of the purchases remains conditioned to the adherence by the benefitting country to an adjustment programme to the ESM. The program was adopted with near unanimity, the Bundesbank president Jens Weidmann being the sole member of the ECB's Governing Council to vote against.Even if OMT was never actually implemented until today, it made the "Whatever it takes" pledge credible and significantly contributed in stabilizing financial markets and ended the sovereign debt crisis. According to various sources, the OMT programme and "whatever it takes" speeches were made possible because EU leaders previously agreed to build the banking union.

Low inflation and quantitative easing

In November 2014, the bank moved into its new premises, while the Eurotower building was dedicated to host the newly established supervisory activities of the ECB under the Single Supervisory Mechanism.Although the sovereign debt crisis was almost solved by 2014, the ECB started to face a repeated decline in the Eurozone inflation rate, indicating that the economy was going towards a deflation. Responding to this threat, the ECB announced on 4 September 2014 the launch of two bond buying purchases programmes: the Covered Bond Purchasing Programme and Asset-Backed Securities Programme .On 22 January 2015, the ECB announced an extension of those programmes within a full-fledge "quantitative easing" programme which also included sovereign bonds, to the tune of 60 billion euros per month up until at least September 2016. The programme was started on 9 March 2015.On 8 June 2016, the ECB added corporate bonds to its asset purchases portfolio with the launch of the corporate sector purchase programme . Under this programme, it conducted net purchase of corporate bonds until January 2019 to reach about €177 billion. While the programme was halted for 11 months in January 2019, the ECB restarted net purchases in November 2019.As of 2021, the size of the ECB's quantitative easing programme had reached 2947 billion euros.

Christine Lagarde's era

In July 2019, EU leaders nominated Christine Lagarde to replace Mario Draghi as ECB President. Lagarde resigned from her position as managing director of the International Monetary Fund in July 2019 and formally took over the ECB's presidency on 1 November 2019.Lagarde immediately signaled a change of style in the ECB's leadership. She embarked the ECB's into a strategic review of the ECB's monetary policy strategy, an exercise the ECB had not done for 17 years. As part of this exercise, Lagarde committed the ECB to look into how monetary policy could contribute to address climate change, and promised that "no stone would be left unturned." The ECB president also adopted a change of communication style, in particular in her use of social media to promote gender equality, and by opening dialogue with civil society stakeholders.

Response to the COVID-19 crisis

However, Lagarde's ambitions were quickly slowed down with the outbreak of the COVID-19 pandemic crisis.

In March 2020, the ECB responded quickly and boldly by launching a package of measures including a new asset purchase programme: the €1,350 billion Pandemic Emergency Purchase Programme which aimed to lower borrowing costs and increase lending in the euro area. The PEPP was extended to cover an additional €500 billion in December 2020. The ECB also re-launched more TLTRO loans to banks at historically low levels and record-high take-up . Lending by banks to SMEs was also facilitated by collateral easing measures, and other supervisory relaxations. The ECB also reactivated currency swap lines and enhanced existing swap lines with central banks across the globe.

Strategy Review

As a consequence of the COVID-19 crisis, the ECB extended the duration of the strategy review until September 2021. On 13 July 2021, the ECB presented the outcomes of the strategy review, with the main following announcements:

The ECB announced a new inflation target at 2% instead of its "close but below two percent" inflation target. The ECB also made it clear it could overshoot its target under certain circumstances.

The ECB announced it would try to incorporate the cost of housing into its inflation measurement

The ECB announced an action plan on climate changeThe ECB also said it would carry out another strategy review in 2025.


Mission
Our mission is to provide a full range of financial services to meet the needs of our customers in eastern North Carolina.

Vision
Our vision is to be the premier community bank in eastern North Carolina that is highly respected for our customer service and commitment to the communities we serve.

Key Team

Ms. Karen L. Chasse (Sr. VP, Compliance Officer & BSA Officer)

Ms. Carmela Vitale (Sr. VP & Treasurer)

Ms. Emily M. Cieri (Sr. VP & Sr. Credit Officer)

Mr. John Migliozzi (Exec. VP & Chief Lending Officer)

Mr. Sean Cummings (Sr. VP of Commercial Lending)


Recognition and Awards
ECB Bancorp and its subsidiaries have earned numerous awards and recognition for our commitment to our customers, our employees and our communities. We have been named one of the Top 200 Community Banks in the United States by SNL Financial, and have been recognized by Greenwich Associates for Customer Satisfaction and Technology Excellence.

References
ECB Bancorp
Leadership team

Mr. Richard J. O'Neil Jr. (CEO, Pres & Director)

Mr. John A. Citrano (Sec., COO, CFO & Exec. VP)

Mr. Brandon Lavertu (Chief Accounting Officer)

Products/ Services
Banking, Finance, Financial Services
Number of Employees
50 - 100
Headquarters
Frankfurt, Hessen, Germany
Established
1998
Company Registration
SEC CIK number: 0001914605
Net Income
2M - 5M
Revenue
20M - 100M
Social Media