The bank is setting aside $5.4 million to pay additional state taxes resulting from the new law taking away deductions for REIT dividends, retroactive to 1999.
"We believe this new legislation applies to numerous financial institutions throughout Massachusetts," says president and co-CEO Richard Wayne in an earnings conference call. "We intend to challenge this new legislation, especially the retroactive provision, on constitutional and other grounds, and we vigorously defend our position."
Meanwhile, the bank reported that it paid $44.8 million for commercial real estate loans in leases during the first quarter, with principal balances of $56.1 million. About $5 million of that was in non-performing loans and leases, which the bank believes can be restructured.
The bank also recorded a $3.2-million gain on the sale of its 1220 Boylston St. location to Century Bank, says chairman and co-CEO Nicholas W. Lazares.
The change in state law results in the bank paying an effective tax rate of 43%, up from 37.6%, company officials say.
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