Market Overview

Boston Private Financial Holdings, Inc. Reports Second Quarter 2017 Results

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Second Quarter Highlights:

  • Profitability Improvement: Net Income Attributable to the
    Company increased 43% year-over-year and 49% linked quarter to $23.4
    million, while Return on Average Common Equity increased to 12.12%
    from 8.26% in the previous quarter.
  • Net Interest Income Growth: Net Interest Income increased 16%
    year-over-year and 7% linked quarter to $57.1 million, while the Net
    Interest Margin expanded to 3.07% from 2.94% in the previous quarter.
  • Deposit and Loan Growth: Average Total Deposits increased 13%
    year-over-year to $6.5 billion, and Average Total Loans increased 10%
    year-over-year to $6.3 billion.
  • Assets Under Management: Total Assets Under Management/Advisory
    ("AUM") increased 7% year-over-year to $29.1 billion.
  • Provision Credit: The Company recorded a provision credit of
    $6.1 million during the second quarter.

Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) (the "Company" or
"BPFH") today reported second quarter 2017 GAAP Net Income Attributable
to the Company of $23.4 million, compared to $15.7 million for the first
quarter of 2017 and $16.4 million for the second quarter of 2016. Second
quarter 2017 diluted earnings per share were $0.27, compared to $0.17 in
the first quarter of 2017, and $0.18 in the second quarter of 2016.

"Our Company delivered strong earnings during the second quarter," said
Clayton G. Deutsch, CEO. "The Private Bank showed robust Net Interest
Income growth as our balance sheet positioning, overall loan growth, and
core deposit strength drove expansion of Net Interest Margin and Pre-Tax
Pre-Provision Income, with recoveries also assisting earnings. At the
same time, our Wealth Advisory and Investment Management segments
demonstrated operating leverage translating into revenue growth and
improved profitability."

"We are pleased with the AUM development, revenue build, and improving
financial performance of our Boston Private Wealth business. We remain
focused on increasing shareholder value by positioning all of our
businesses for long-term success and attractive returns while
maintaining strong credit quality and a favorable risk profile," he
concluded.

Core Fees and Income/Assets Under Management

Core Fees and Income for the second quarter were $37.2 million, a 3%
increase on a linked quarter basis and a 1% decline year-over-year. Core
Fees and Income increased linked quarter with contributions from all
business segments, while the year-over-year decrease was primarily due
to lower swap fee income.

AUM was $29.1 billion at the end of the second quarter, an increase of
1% from the previous quarter and 7% year-over-year. The Company
experienced net flows of negative $180 million during the second
quarter, compared to $267 million and negative $199 million in the first
quarter of 2017 and second quarter of 2016, respectively. During the
second quarter, net flows by segment were $63 million for Wealth
Management & Trust, negative $176 million for Investment Management, and
negative $67 million for Wealth Advisory.

Net Interest Income

Net Interest Income for the second quarter was $57.1 million, an
increase of 7% from $53.6 million for the first quarter of 2017 and an
increase of 16% from $49.2 million for the second quarter of 2016. The
current quarter includes $2.0 million of interest recovered on previous
nonaccrual loans compared to $0.3 million for the first quarter and $0.6
million for the second quarter of 2016. Excluding interest recovered on
previous nonaccrual loans, Net Interest Income on an FTE basis increased
3% linked quarter and 14% year-over-year.

Net Interest Margin was 3.07% for the second quarter of 2017, an
increase of 13 basis points from the first quarter of 2017 and 16 basis
points from the second quarter of 2016. Excluding interest recovered on
previous nonaccrual loans, Net Interest Margin for the second quarter
was 2.97%, an increase of 5 basis points from the first quarter of 2017
and an increase of 9 basis points from the second quarter of 2016.

Total Operating Expense

Total Operating Expense for the second quarter of 2017 was $67.8
million, down 1% linked quarter from $68.8 million primarily due to
seasonal compensation expense in the first quarter. On a year-over-year
basis, Total Operating Expense increased 5% from $64.7 million due to
increased compensation expense and technology initiatives.

Provision and Asset Quality

The Company recorded a provision credit of $6.1 million for the second
quarter of 2017, compared to a provision credit of $0.2 million for the
first quarter and $2.5 million for the second quarter of 2016. The
provision credit in the second quarter of 2017 was due to net
recoveries, declines in quantitative loss factors, a decrease in
Criticized loans, and a decline in commercial loans, partially offset by
residential loan growth.

Criticized Loans decreased 4% linked quarter and 14% year-over-year to
$130 million. Nonaccrual Loans ("Nonaccruals") decreased 22% to $16.2
million on a linked quarter basis. On a year-over-year basis,
Nonaccruals decreased 16% from $19.2 million. As a percentage of Total
Loans, Nonaccruals were 26 basis points at June 30, 2017, down 8 basis
points compared to March 31, 2017, and down 7 basis points from June 30,
2016.

Additional credit metrics are listed below:

           
(In millions) June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
  June 30,
2016
Total Criticized Loans $ 129.5 $ 135.1 $ 118.5 $ 158.8 $ 150.7
Total Loans 30-89 Days Past Due and Accruing (13) $ 3.2 $ 28.7 $ 15.1 $ 4.6 $ 7.6
Total Net Loans (Charged-off)/ Recovered $ 3.1 $ 0.1 $ 1.5 $ 2.1 $ 1.9
Allowance for Loan Losses/

Total Loans

1.19 % 1.25 % 1.28 % 1.32 % 1.32 %
 

Capital Ratios

Capital ratios are listed below:

           
June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
  June 30,
2016
BPFH Ratios:
Total Risk-Based Capital * 14.1 % 13.8 % 13.9 % 14.0 % 14.0 %
Tier I Risk-Based Capital * 12.9 % 12.6 % 12.6 % 12.7 % 12.7 %
Tier I Leverage Capital * 9.3 % 9.2 % 9.4 % 9.5 % 9.6 %
TCE/TA (4) 7.4 % 7.0 % 7.1 % 7.4 % 7.4 %
Tier I Common Equity/

Risk Weighted Assets *

10.3 % 10.0 % 10.0 % 10.0 % 10.0 %
 

*June 30, 2017 information is presented based on estimated data.

Dividend Payments
Concurrent with the
release of second quarter 2017 earnings, the Board of Directors of the
Company declared a cash dividend to common shareholders of $0.11 per
share. The record date for this dividend is August 9, 2017, and the
payment date is August 18, 2017.

The Board of Directors of the Company also declared a cash dividend to
holders of the Non-Cumulative Perpetual Preferred Stock, Series D of
$17.375 per share, which will result in a dividend of $0.434375 per
depositary share. The record date for this dividend is August 15, 2017,
and the payment date is September 15, 2017.

Non-GAAP Financial Measures
The
Company uses certain non-GAAP financial measures, such as tangible book
value per share; the TCE/TA ratio; return on average common equity;
return on average tangible common equity; pre-tax, pre-provision income;
total operating expense excluding intangibles, goodwill impairment, and
restructuring; the efficiency ratio (FTE basis); the efficiency ratio
(FTE basis) excluding amortization of intangibles, goodwill impairment,
and restructuring; net income attributable to the Company excluding
notable items; diluted earnings per share excluding notable items; and
Net Interest Income and Net Interest Margin excluding interest recovered
on previous nonaccrual loans; to provide information for investors to
effectively analyze financial trends of ongoing business activities, and
to enhance comparability with peers across the financial sector. A
detailed reconciliation table of the Company's GAAP to the non-GAAP
measures is attached.

Conference Call
Management will hold a
conference call at 8 a.m. Eastern Time on Thursday, July 27, 2017, to
discuss the financial results, business highlights and outlook. To
access the call:

Dial In #: (888) 317-6003
Elite Entry Number: 7163444

Replay Information:
Available from July 27, 2017 at 12 noon until
August 3, 2017
Dial In #: (877) 344-7529
Conference Number:
10110081

The call will be simultaneously webcast and may be accessed on www.bostonprivate.com.

Boston Private Financial Holdings, Inc.
Boston
Private Financial Holdings, Inc. is a national financial services
organization that owns Wealth Management, Trust, and Private Banking
affiliates with offices in Boston, New York, Los Angeles, San Francisco,
San Jose, Florida, and Wisconsin. The Company has total assets of
approximately $8 billion, and manages over $29 billion of client assets.

The Company's affiliates serve the high net worth marketplace with high
quality products and services of unique appeal to private clients. The
Company also provides strategic oversight and access to resources, both
financial and intellectual, to support affiliate management, marketing,
compliance and legal activities. (NASDAQ:BPFH)

For more information about BPFH, visit the Company's website at www.bostonprivate.com.

Forward-Looking Statements
Certain
statements in this press release that are not historical facts may
constitute forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and are intended to be
covered by the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve risks
and uncertainties. These statements include, among others, statements
regarding our strategy, evaluations of future interest rate trends and
liquidity, prospects for growth in assets, and prospects for overall
results over the long term. You should not place undue reliance on our
forward-looking statements. You should exercise caution in interpreting
and relying on forward-looking statements because they are subject to
significant risks, uncertainties and other factors which are, in some
cases, beyond the Company's control. Forward-looking statements are
based on the current assumptions and beliefs of management and are only
expectations of future results. The Company's actual results could
differ materially from those projected in the forward-looking statements
as a result of, among other factors, adverse conditions in the capital
and debt markets and the impact of such conditions on the Company's
private banking, investment management and wealth advisory activities;
changes in interest rates; competitive pressures from other financial
institutions; the effects of weakness in general economic conditions on
a national basis or in the local markets in which the Company operates;
changes in loan defaults and charge-off rates; changes in the value of
securities and other assets, adequacy of loan loss reserves, or
decreases in deposit levels necessitating increased borrowing to fund
loans and investments; changes in government regulation; the risk that
goodwill and intangibles recorded in the Company's financial statements
will become impaired; the risk that the Company's deferred tax asset may
not be realized; risks related to the identification and implementation
of acquisitions, dispositions and restructurings; changes in assumptions
used in making such forward-looking statements; and the other risks and
uncertainties detailed in the Company's Annual Report on Form 10-K and
updated by the Company's Quarterly Reports on Form 10-Q and other
filings submitted to the Securities and Exchange Commission.
Forward-looking statements speak only as of the date on which they are
made. The Company does not undertake any obligation to update any
forward-looking statement to reflect circumstances or events that occur
after the date the forward-looking statement is made.

Note to Editors:
Boston Private
Financial Holdings, Inc. is not to be confused with Boston Private Bank
& Trust Company. Boston Private Bank & Trust Company is a wholly-owned
subsidiary of BPFH. The information reported in this press release is
related to the performance and results of BPFH.

 

Boston Private Financial Holdings, Inc.
Selected
Financial Data (Unaudited)

           
June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
(In thousands, except share and per share data)
Assets:
Cash and cash equivalents $ 97,032 $ 165,186 $ 106,557 $ 67,631 $ 126,167
Investment securities available-for-sale 1,188,720 1,256,208 1,264,132 1,249,578 1,191,523
Investment securities held-to-maturity 99,024 98,424 93,079 98,881 105,297
Stock in Federal Home Loan Banks 45,568 50,133 44,077 36,084 44,374
Loans held for sale 2,870 350 3,464 5,316 4,677
Total loans 6,279,928 6,250,217 6,114,354 5,869,498 5,751,497
Less: Allowance for loan losses   75,009     78,031     78,077     77,669   75,753
Net loans 6,204,919 6,172,186 6,036,277 5,791,829 5,675,744
Other real estate owned ("OREO") 1,690 1,800 2,042
Premises and equipment, net 34,135 32,974 31,827 32,089 31,752
Goodwill 142,554 142,554 142,554 152,082 152,082
Intangible assets, net 23,873 25,299 26,725 28,267 29,836
Fees receivable 12,639 12,230 13,400 11,185 11,129
Accrued interest receivable 20,680 20,790 20,479 18,062 18,061
Deferred income taxes, net 49,827 53,686 55,460 39,319 36,942
Other assets   185,805     185,100     130,753     149,427   149,975
Total assets $ 8,107,646   $ 8,215,120   $ 7,970,474   $ 7,681,550 $ 7,579,601
Liabilities:
Deposits $ 6,381,339 $ 6,246,620 $ 6,085,146 $ 5,812,243 $ 5,536,092
Deposits held for sale 105,788 110,558
Securities sold under agreements to repurchase 29,232 67,249 59,624 77,466 43,304
Federal funds purchased 40,000 80,000 125,000 180,000
Federal Home Loan Bank borrowings 618,989 885,445 734,205 522,681 678,012
Junior subordinated debentures 106,363 106,363 106,363 106,363 106,363
Other liabilities   115,088     110,310     119,683     134,322   135,289
Total liabilities   7,291,011     7,415,987     7,185,021     6,883,863   6,789,618
Redeemable Noncontrolling Interests ("RNCI") 17,216 17,232 16,972 16,199 15,843
Shareholders' Equity:
Preferred stock, $1.00 par value; authorized: 2,000,000 shares 47,753 47,753 47,753 47,753 47,753
Common stock, $1.00 par value; authorized: 170,000,000 shares 84,015 84,134 83,732 83,195 83,380
Additional paid-in capital 602,507 602,748 597,454 597,209 597,989
Retained earnings 66,807 53,510 47,929 39,415 28,985
Accumulated other comprehensive income/ (loss)   (6,038 )   (10,237 )   (12,548 )   10,134   12,654
Total Company's shareholders' equity   795,044     777,908     764,320     777,706   770,761
Noncontrolling interests   4,375     3,993     4,161     3,782   3,379
Total shareholders' equity   799,419     781,901     768,481     781,488   774,140
Total liabilities, redeemable noncontrolling interests and
shareholders' equity
$ 8,107,646   $ 8,215,120   $ 7,970,474   $ 7,681,550 $ 7,579,601
 
 

Boston Private Financial Holdings, Inc.
Selected
Financial Data (Unaudited)

   
Three Months Ended
June 30,
2017
  March 31,
2017
  December 31,
2016
  September 30,
2016
  June 30,
2016
Interest and dividend income: (In thousands, except share and per share data)
Loans $ 57,736 $ 53,636 $ 51,499 $ 50,074 $ 49,731
Taxable investment securities 1,592 1,670 1,592 1,537 1,507
Non-taxable investment securities 1,655 1,606 1,520 1,444 1,400
Mortgage-backed securities 3,495 3,504 3,290 3,079 2,982
Federal funds sold and other   831     600     508     469     405  
Total interest and dividend income   65,309     61,016     58,409     56,603     56,025  
Interest expense:
Deposits 4,949 4,531 4,152 4,163 4,075
Federal Home Loan Bank borrowings 2,489 2,111 1,987 1,929 2,139
Junior subordinated debentures 716 671 674 591 584
Repurchase agreements and other short-term borrowings   10     61     77     49     58  
Total interest expense   8,164     7,374     6,890     6,732     6,856  
Net interest income 57,145 53,642 51,519 49,871 49,169
Provision/ (credit) for loan losses   (6,114 )   (181 )   (1,128 )   (138 )   (2,535 )
Net interest income after provision/ (credit) for loan losses   63,259     53,823     52,647     50,009     51,704  
Fees and other income:
Investment management fees 11,081 10,839 12,408 10,717 10,627
Wealth advisory fees 12,961 12,823 12,568 12,750 12,551
Wealth management and trust fees 11,161 10,826 11,031 10,826 11,208
Other banking fee income 1,964 1,694 2,387 3,447 2,982
Gain on sale of loans, net   59     138     105     156     197  
Total core fees and income   37,226     36,320     38,499     37,896     37,565  
Gain/ (loss) on sale of investments, net 237 19 2 273 245
Gain/ (loss) on OREO, net (46 ) (110 ) 137
Gain on sale of offices 2,862
Other   555     213     2,705     1,706     (1,015 )
Total other income   792     186     5,459     2,116     (770 )
Operating expense:
Salaries and employee benefits 43,493 45,825 39,669 40,924 40,614
Occupancy and equipment 10,779 10,649 10,039 9,521 9,928
Professional services 3,106 3,314 2,756 2,290 3,015
Marketing and business development 1,971 1,660 2,022 1,623 1,811
Contract services and data processing 1,641 1,580 1,743 1,865 1,737
Amortization of intangibles 1,426 1,426 1,542 1,568 1,586
Impairment of goodwill 9,528
FDIC insurance 879 766 727 722 1,015
Restructuring 905
Other   4,526     3,560     3,817     3,157     4,120  
Total operating expense   67,821     68,780     71,843     61,670     64,731  
Income before income taxes 33,456 21,549 24,762 28,351 23,768
Income tax expense   9,963     6,553     7,247     8,652     7,626  
Net income from continuing operations 23,493 14,996 17,515 19,699 16,142
Net income from discontinued operations (1)   1,063     1,632     1,184     1,047     1,245  
Net income before attribution to noncontrolling interests 24,556 16,628 18,699 20,746 17,387
Less: Net income attributable to noncontrolling interests   1,150     966     1,147     1,110     989  
Net income attributable to the Company $ 23,406   $ 15,662   $ 17,552   $ 19,636   $ 16,398  
 
 

Boston Private Financial Holdings, Inc.
Selected
Financial Data (Unaudited)

   
Six Months Ended
June 30,
2017
  June 30,
2016
Interest and dividend income: (In thousands, except share and per share data)
Loans $ 111,372 $ 99,777
Taxable investment securities 3,262 3,101
Non-taxable investment securities 3,261 2,790
Mortgage-backed securities 6,999 6,047
Federal funds sold and other   1,431     912  
Total interest and dividend income   126,325     112,627  
Interest expense:
Deposits 9,480 8,257
Federal Home Loan Bank borrowings 4,600 4,092
Junior subordinated debentures 1,387 1,162
Repurchase agreements and other short-term borrowings   71     68  
Total interest expense   15,538     13,579  
Net interest income 110,787 99,048
Provision/ (credit) for loan losses   (6,295 )   (5,668 )
Net interest income after provision/ (credit) for loan losses   117,082     104,716  
Fees and other income:
Investment management fees 21,920 21,285
Wealth advisory fees 25,784 25,263
Wealth management and trust fees 21,987 22,124
Other banking fee income 3,658 6,215
Gain on sale of loans, net   197     406  
Total core fees and income   73,546     75,293  
Gain/ (loss) on sale of investments, net 256 246
Gain/ (loss) on OREO, net (46 ) 280
Other   768     (1,002 )
Total other income   978     (476 )
Operating expense:
Salaries and employee benefits 89,318 83,174
Occupancy and equipment 21,428 19,515
Professional services 6,420 6,530
Marketing and business development 3,631 3,981
Contract services and data processing 3,221 3,416
Amortization of intangibles 2,852 3,172
FDIC insurance 1,645 2,035
Restructuring 2,017
Other   8,086     7,600  
Total operating expense   136,601     131,440  
Income before income taxes 55,005 48,093
Income tax expense   16,516     15,064  
Net income from continuing operations 38,489 33,029
Net income from discontinued operations (1)   2,695     3,310  
Net income before attribution to noncontrolling interests 41,184 36,339
Less: Net income attributable to noncontrolling interests   2,116     1,900  
Net income attributable to the Company $ 39,068   $ 34,439  
 
 

Boston Private Financial Holdings, Inc.
Selected
Financial Data (Unaudited)

   
Three Months Ended
PER SHARE DATA: June 30,
2017
  March 31,
2017
  December 31,
2016
  September 30,
2016
  June 30,
2016
(In thousands, except share and per share data)
Calculation of Income for EPS:
Net income attributable to the Company $ 23,406 $ 15,662 $ 17,552 $ 19,636 $ 16,398
Adjustments to Net Income Attributable to the Company to arrive at
Net Income Attributable to Common Shareholders, treasury stock
method (2)
  (577 )   (1,166 )   (1,798 )   (1,006 )   (970 )
Net Income Attributable to the Common Shareholders, treasury
stock method
$ 22,829   $ 14,496   $ 15,755   $ 18,630   $ 15,428  
 
End of Period Common Shares Outstanding 84,015,141 84,134,104 83,731,769 83,194,714 83,380,426
 
Weighted Average Shares Outstanding:
Weighted average basic shares outstanding 82,298,493 81,951,179 81,217,391 81,301,499 81,236,809
Weighted average diluted shares outstanding (3) 84,741,680 84,560,918 83,438,137 83,562,283 83,519,939
 
Diluted Total Earnings per Share $ 0.27 $ 0.17 $ 0.19 $ 0.22 $ 0.18
 
   
Six Months Ended
PER SHARE DATA: June 30,
2017
  June 30,
2016
(In thousands, except share

and per share data)

Calculation of Income for EPS:
Net income attributable to the Company $ 39,068 $ 34,439

Adjustments to Net Income Attributable to the Company to arrive at
Net Income Attributable to
Common Shareholders, treasury
stock method (2)

  (1,743 )   (1,259 )
Net Income Attributable to the Common Shareholders, treasury
stock method
$ 37,325   $ 33,180  
 
Weighted Average Shares Outstanding:
Weighted average basic shares outstanding 82,125,795 81,269,154
Weighted average diluted shares outstanding (3) 84,658,309 83,391,057
 
Diluted Total Earnings per Share $ 0.44 $ 0.40
 
 

Boston Private Financial Holdings, Inc.
Selected
Financial Data (Unaudited)

           
(In thousands, except per share data) June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
FINANCIAL DATA:
Book Value Per Common Share $ 8.95 $ 8.73 $ 8.61 $ 8.82 $ 8.71
Tangible Book Value Per Share (4) $ 6.97 $ 6.73 $ 6.59 $ 6.65 $ 6.53
Market Price Per Share $ 15.35 $ 16.40 $ 16.55 $ 12.83 $ 11.78
 
ASSETS UNDER MANAGEMENT AND ADVISORY:
Wealth Management and Trust $ 7,429,000 $ 7,260,000 $ 7,008,000 $ 7,334,000 $ 7,313,000
Investment Managers 10,901,000 10,907,000 10,571,000 10,176,000 10,006,000
Wealth Advisory 10,744,000 10,579,000 9,989,000 10,028,000 9,974,000
Less: Inter-company Relationship   (11,000 )   (11,000 )   (11,000 )   (11,000 )   (17,000 )
Total Assets Under Management and Advisory $ 29,063,000   $ 28,735,000   $ 27,557,000   $ 27,527,000   $ 27,276,000  
 
FINANCIAL RATIOS:
Total Equity/ Total Assets 9.86 % 9.52 % 9.64 % 10.17 % 10.21 %
Tangible Common Equity/ Tangible Assets (4) 7.37 % 7.04 % 7.07 % 7.38 % 7.36 %
Tier I Common Equity/ Risk Weighted Assets (4) 10.28 % 9.97 % 10.00 % 10.02 % 9.95 %
Allowance for Loan Losses/ Total Loans 1.19 % 1.25 % 1.28 % 1.32 % 1.32 %
Allowance for Loan Losses/ Nonaccrual Loans 464 % 373 % 451 % 471 % 395 %
Return on Average Assets - Three Months Ended (Annualized) 1.15 % 0.79 % 0.89 % 1.03 % 0.88 %
Return on Average Common Equity - Three Months Ended (Annualized) (5) 12.12 % 8.26 % 9.07 % 10.20 % 8.68 %
Return on Average Tangible Common Equity - Three Months Ended
(Annualized) (5)
16.27 % 11.43 % 12.75 % 14.30 % 12.43 %
Efficiency Ratio - Three Months Ended (6) 67.69 % 72.45 % 61.87 % 65.04 % 70.41 %
 
DEPOSIT DETAIL:
Demand deposits (noninterest-bearing) $ 1,935,622 $ 1,772,854 $ 1,753,648 $ 1,770,631 $ 1,636,273
NOW 631,973 620,280 578,657 557,482 547,777
Savings 69,892 74,293 74,162 73,480 70,553
Money market 3,055,642 3,176,472 3,102,048 2,879,952 2,771,080
Certificates of deposit   688,210     602,721     576,631     530,698     510,409  
Total Deposits $ 6,381,339   $ 6,246,620   $ 6,085,146   $ 5,812,243   $ 5,536,092  
 
 

Boston Private Financial Holdings, Inc.
Selected
Financial Data (Unaudited)

       
(In thousands) Average Balance
Three Months Ended
Interest Income/Expense
Three Months Ended
Average Yield/Rate
Three Months Ended
AVERAGE BALANCE SHEET: 06/30/17   03/31/17   06/30/16 06/30/17   03/31/17   06/30/16 06/30/17   03/31/17   06/30/16
AVERAGE ASSETS
Interest-Earning Assets:
Cash and Investments:
Taxable investment securities $ 363,166 $ 395,728 $ 372,413 $ 1,592 $ 1,670 $ 1,507 1.75 % 1.69 % 1.62 %
Non-taxable investment securities (9) 294,836 295,015 261,678 2,546 2,471 2,153 3.45 % 3.35 % 3.29 %
Mortgage-backed securities 653,201 672,683 588,419 3,495 3,504 2,982 2.14 % 2.08 % 2.03 %
Federal funds sold and other 199,230     160,001     124,790   831     600     405   1.66 %   1.51 %   1.29 %
Total Cash and Investments 1,510,433     1,523,427     1,347,300   8,464     8,245     7,047   2.24 %   2.17 %   2.09 %
Loans (10):
Commercial and Industrial (9) 987,144 983,697 1,084,821 9,773 9,303 10,813 3.92 % 3.78 % 3.94 %
Commercial Real Estate (9) 2,358,409 2,324,367 1,910,968 26,433 23,544 19,559 4.43 % 4.05 % 4.05 %
Construction and Land 119,366 113,963 150,927 1,377 1,244 1,456 4.56 % 4.36 % 3.82 %
Residential 2,489,072 2,424,772 2,256,296 19,574 18,991 17,441 3.15 % 3.13 % 3.09 %
Home Equity 109,942 117,702 123,687 1,085 1,089 1,073 3.96 % 3.75 % 3.49 %
Other Consumer 195,384     192,136     177,805   1,526     1,420     1,073   3.13 %   3.00 %   2.43 %
Total Loans 6,259,317     6,156,637     5,704,504   59,768     55,591     51,415   3.79 %   3.61 %   3.58 %
Total Earning Assets 7,769,750     7,680,064     7,051,804   68,232     63,836     58,462   3.49 %   3.33 %   3.30 %
LESS: Allowance for Loan Losses 80,614 78,122 77,345
Cash and due From Banks (Non-Interest Bearing) 42,166 41,469 40,253
Other Assets 450,703     398,751     427,013  
TOTAL AVERAGE ASSETS $ 8,182,005     $ 8,042,162     $ 7,441,725  
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities:
Interest-Bearing Deposits (10):
NOW $ 640,378 $ 576,915 $ 554,565 $ 172 $ 110 $ 104 0.11 % 0.08 % 0.08 %
Savings 71,505 75,123 75,431 15 18 23 0.08 % 0.10 % 0.12 %
Money Market 3,173,768 3,213,092 2,897,151 3,244 3,122 2,836 0.41 % 0.39 % 0.39 %
Certificates of Deposit 665,668     589,900     559,271   1,518     1,281     1,112   0.91 %   0.88 %   0.80 %
Total Interest-Bearing Deposits (14) 4,551,319 4,455,030 4,086,418 4,949 4,531 4,075 0.44 % 0.41 % 0.40 %
Junior Subordinated Debentures 106,363 106,363 106,363 716 671 584 2.67 % 2.52 % 2.17 %
FHLB Borrowings and Other 703,149     726,978     719,655   2,499     2,172     2,197   1.41 %   1.19 %   1.21 %
Total Interest-Bearing Liabilities 5,360,831     5,288,371     4,912,436   8,164     7,374     6,856   0.61 %   0.56 %   0.56 %
Non-interest Bearing Demand

Deposits (10) (14)

1,899,916 1,843,830 1,628,057
Payables and Other Liabilities 106,657     117,132     116,444  
Total Average Liabilities 7,367,404 7,249,333 6,656,937
Redeemable Noncontrolling Interests 21,075 18,578 19,725
Average Shareholders' Equity 793,526     774,251     765,063  
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY $ 8,182,005     $ 8,042,162     $ 7,441,725  
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) $ 60,068 $ 56,462 $ 51,606
LESS: FTE Adjustment (9) 2,923     2,820     2,437  
Net Interest Income (GAAP Basis) $ 57,145     $ 53,642     $ 49,169  
Interest Rate Spread 2.88 % 2.77 % 2.74 %
Bank only Net Interest Margin 3.12 % 2.98 % 2.95 %
Net Interest Margin 3.07 % 2.94 % 2.91 %
 
 

Boston Private Financial Holdings, Inc.
Selected
Financial Data (Unaudited)

       
(In thousands) Average Balance
Six Months Ended
Interest Income/Expense
Six Months Ended
Average Yield/Rate
Six Months Ended
AVERAGE BALANCE SHEET: 06/30/17   06/30/16 06/30/17   06/30/16 06/30/17   06/30/16
AVERAGE ASSETS      
Interest-Earning Assets:
Cash and Investments:
Taxable investment securities $ 379,164 $ 373,486 $ 3,262 $ 3,101 1.72 % 1.66 %
Non-taxable investment securities (9) 294,925 261,952 5,017 4,291 3.40 % 3.28 %
Mortgage-backed securities 662,888 576,623 6,999 6,047 2.11 % 2.10 %
Federal funds sold and other 179,901     163,965   1,431     912   1.10 %   1.11 %
Total Cash and Investments 1,516,878     1,376,026   16,709     14,351   2.15 %   2.09 %
Loans (10):
Commercial and Industrial (9) 985,430 1,075,217 19,076 21,732 3.85 % 4.00 %
Commercial Real Estate (9) 2,341,482 1,885,263 49,977 39,356 4.25 % 4.13 %
Construction and Land 116,679 162,897 2,621 3,104 4.47 % 3.77 %
Residential 2,457,100 2,242,988 38,565 34,743 3.14 % 3.10 %
Home Equity 113,801 121,518 2,174 2,155 3.85 % 3.57 %
Other Consumer 193,769     167,657   2,946     2,039   3.07 %   2.45 %
Total Loans 6,208,261     5,655,540   115,359     103,129   3.70 %   3.62 %
Total Earning Assets 7,725,139     7,031,566   132,068     117,480   3.40 %   3.32 %
LESS: Allowance for Loan Losses 79,375 78,809
Cash and due From Banks (Non-Interest Bearing) 41,929 40,136
Other Assets 426,349     424,402  
TOTAL AVERAGE ASSETS $ 8,114,042     $ 7,417,295  
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities:
Interest-Bearing Deposits (10):
NOW $ 608,822 $ 548,591 $ 283 $ 191 0.09 % 0.07 %
Savings 73,304 75,432 33 47 0.09 % 0.12 %
Money Market 3,193,336 2,976,057 6,365 5,737 0.40 % 0.39 %
Certificates of Deposit 627,993     568,791   2,799     2,282   0.90 %   0.81 %
Total Interest-Bearing Deposits (14) 4,503,455 4,168,871 9,480 8,257 0.42 % 0.40 %
Junior Subordinated Debentures 106,363 106,363 1,387 1,162 2.59 % 2.16 %
FHLB Borrowings and Other 714,998     622,273   4,671     4,160   1.30 %   1.32 %
Total Interest-Bearing Liabilities 5,324,816     4,897,507   15,538     13,579   0.59 %   0.55 %
Non-interest Bearing Demand
Deposits (10) (14)
1,871,924 1,624,928
Payables and Other Liabilities 112,157     113,747  
Total Average Liabilities 7,308,897 6,636,182
Redeemable Noncontrolling Interests 21,208 20,497
Average Shareholders' Equity 783,937     760,616  
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY $ 8,114,042     $ 7,417,295  
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) $ 116,530 $ 103,901
LESS: FTE Adjustment (9) 5,743     4,853  
Net Interest Income (GAAP Basis) $ 110,787     $ 99,048  
Interest Rate Spread 2.81 % 2.77 %
Bank only Net Interest Margin 3.05 % 2.98 %
Net Interest Margin 3.00 % 2.94 %
 
 

Boston Private Financial Holdings, Inc.
Selected
Financial Data (Unaudited)

           
(In thousands) June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
LOAN DATA (11):
Other Commercial and Industrial Loans:
New England $ 429,598 $ 458,687 $ 493,451 $ 461,201 $ 428,515
San Francisco Bay Area 49,163 55,289 50,578 59,936 64,762
Southern California 62,995   66,378   67,341   67,583   66,379
Total Other Commercial and Industrial Loans $ 541,756   $ 580,354   $ 611,370   $ 588,720   $ 559,656
Commercial Tax Exempt Loans:
New England $ 312,783 $ 318,137 $ 317,691 $ 263,418 $ 260,739
San Francisco Bay Area 91,666 79,517 69,064 69,366 51,462
Southern California 11,708   11,778   11,849   11,918   11,986
Total Commercial Tax Exempt Loans $ 416,157   $ 409,432   $ 398,604   $ 344,702   $ 324,187
Total Commercial and Industrial Loans $ 957,913   989,786   1,009,974   933,422   883,843
Commercial Real Estate Loans:
New England $ 993,426 $ 1,017,565 $ 1,012,284 $ 987,758 $ 923,035
San Francisco Bay Area 688,751 686,019 637,042 611,224 633,735
Southern California 674,168   665,043   652,918   621,336   579,616
Total Commercial Real Estate Loans $ 2,356,345   $ 2,368,627   $ 2,302,244   $ 2,220,318   $ 2,136,386
Construction and Land Loans:
New England $ 74,919 $ 58,737 $ 47,434 $ 56,268 $ 90,408
San Francisco Bay Area 22,177 28,148 29,629 26,400 36,808
Southern California 33,808   30,122   27,776   16,028   15,333
Total Construction and Land Loans $ 130,904   $ 117,007   $ 104,839   $ 98,696   $ 142,549
Residential Loans:
New England $ 1,540,393 $ 1,508,138 $ 1,456,592 $ 1,409,385 $ 1,385,102
San Francisco Bay Area 488,854 474,294 473,102 476,986 470,694
Southern California 495,978   481,184   450,167   429,719   424,320
Total Residential Loans $ 2,525,225   $ 2,463,616   $ 2,379,861   $ 2,316,090   $ 2,280,116
Home Equity Loans:
New England $ 71,953 $ 80,904 $ 87,280 $ 90,592 $ 91,728
San Francisco Bay Area 28,400 26,006 25,129 23,826 26,714
Southern California 8,196   7,626   6,408   6,851   7,044
Total Home Equity Loans $ 108,549   $ 114,536   $ 118,817   $ 121,269   $ 125,486
Other Consumer Loans:
New England $ 175,644 $ 175,096 $ 186,680 $ 167,140 $ 166,998
San Francisco Bay Area 17,909 17,163 7,517 6,764 8,299
Southern California 7,439   4,386   4,422   5,799   7,820
Total Other Consumer Loans $ 200,992   $ 196,645   $ 198,619   $ 179,703   $ 183,117
Total Loans:
New England $ 3,598,716 $ 3,617,264 $ 3,601,412 $ 3,435,762 $ 3,346,525
San Francisco Bay Area 1,386,920 1,366,436 1,292,061 1,274,502 1,292,474
Southern California 1,294,292   1,266,517   1,220,881   1,159,234   1,112,498
Total Loans $ 6,279,928   $ 6,250,217   $ 6,114,354   $ 5,869,498   $ 5,751,497
 
 

Boston Private Financial Holdings, Inc.
Selected
Financial Data (Unaudited)

           
(In thousands) June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
CREDIT QUALITY (11):
Special Mention Loans:
New England $ 34,538 $ 21,596 $ 14,750 $ 25,248 $ 27,903
San Francisco Bay Area 23,399 23,850 21,901 22,786 24,381
Southern California 4,327   4,350   884   6,278   15,044  
Total Special Mention Loans $ 62,264   $ 49,796   $ 37,535   $ 54,312   $ 67,328  
Accruing Substandard Loans (12):
New England $ 10,185 $ 12,157 $ 10,972 $ 19,748 $ 17,447
San Francisco Bay Area 6,574 15,824 15,890 19,157 19,750
Southern California 34,339   36,398   36,809   49,148   27,027  
Total Accruing Substandard Loans $ 51,098   $ 64,379   $ 63,671   $ 88,053   $ 64,224  
Nonaccruing Loans:
New England $ 9,880 $ 14,407 $ 10,081 $ 11,020 $ 13,028
San Francisco Bay Area 1,857 2,312 2,989 3,543 4,196
Southern California 4,439   4,226   4,245   1,928   1,964  
Total Nonaccruing Loans $ 16,176   $ 20,945   $ 17,315   $ 16,491   $ 19,188  
Other Real Estate Owned:
New England $ $ $ 1,690 $ 1,800 $ 2,042
San Francisco Bay Area
Southern California          
Total Other Real Estate Owned $   $   $ 1,690   $ 1,800   $ 2,042  
Loans 30-89 Days Past Due and Accruing (13):
New England $ 3,182 $ 9,843 $ 10,311 $ 2,735 $ 5,213
San Francisco Bay Area 12 10,111 591 1,018 70
Southern California   8,771   4,235   836   2,343  
Total Loans 30-89 Days Past Due and Accruing $ 3,194   $ 28,725   $ 15,137   $ 4,589   $ 7,626  
Loans (Charged-off)/ Recovered, Net for the Three Months Ended:
New England $ 667 $ 79 $ 1,120 $ 1,704 $ 1,276
San Francisco Bay Area 2,856 35 384 318 537
Southern California (431 ) 21   33   32   48  
Total Net Loans (Charged-off)/ Recovered $ 3,092   $ 135   $ 1,537   $ 2,054   $ 1,861  
Loans (Charged-off)/ Recovered, Net for the Six Months Ended:
New England $ 746 $ (870 )
San Francisco Bay Area 2,891 3,991
Southern California (410 ) (200 )
Total Net Loans (Charged-off)/ Recovered $ 3,227   $ 2,921  
 
 
Boston Private Financial Holdings, Inc.
Selected
Financial Data

(Unaudited)
           
FOOTNOTES:
 

(1)

Net income from discontinued operations consists of contingent
payments or expenses related to our divested affiliates, including
Westfield Capital Management Company, LLC.

 

(2)

Adjustments to net income attributable to the Company to arrive at
net income attributable to the common shareholders, as presented
in these tables, include decrease/ (increase) in noncontrolling
interests redemption value and dividends paid on preferred stock.

 

(3)

When the Company has positive net income from continuing
operations attributable to the common shareholders, the Company
adds additional shares to basic weighted average shares
outstanding to arrive at diluted weighted average shares
outstanding for the diluted earnings per share calculation. These
additional shares reflect the assumed exercise, conversion, or
contingent issuance of dilutive securities. If the additional
shares would result in anti-dilution they would be excluded from
the diluted earnings per share calculation. The potential dilutive
shares relate to: unexercised stock options, unvested restricted
stock, and unexercised stock warrants. See Part II. Item 8.
"Financial Statements and Supplementary Data - Note 16: Earnings
Per Share" in the Company's Annual Report on Form 10-K for the
year ended December 31, 2016 for additional information.

 

(4)

The Company uses certain non-GAAP financial measures, such as:
Tangible Book Value Per Share and the Tangible Common Equity
("TCE") to Tangible Assets ("TA") ratio to provide information for
investors to effectively analyze financial trends of ongoing
business activities, and to enhance comparability with peers
across the financial sector.

 

Reconciliations from the Company's GAAP Total Equity to Total
Assets ratio to the Non-GAAP TCE to TA ratio, and from GAAP Book
Value to Non-GAAP Tangible Book Value are presented below:

 

The Company calculates Tangible Assets by adjusting Total Assets
to exclude Goodwill and Intangible Assets.

 

The Company calculates Tangible Common Equity by adjusting Total
Equity to exclude non-convertible Series D Preferred stock and
exclude Goodwill and Intangible Assets, net.

 

(In thousands, except share and per share data)

June 30,
2017

March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
Total Balance Sheet Assets $ 8,107,646 $ 8,215,120 $ 7,970,474 $ 7,681,550 $ 7,579,601
LESS: Goodwill and Intangible Assets, net   (166,427 )   (167,853 )   (169,279 )   (180,349 )   (181,918 )
Tangible Assets (non-GAAP) $ 7,941,219 $ 8,047,267 $ 7,801,195 $ 7,501,201 $ 7,397,683
Total Shareholders' Equity $ 799,419 $ 781,901 $ 768,481 $ 781,488 $ 774,140
LESS: Series D Preferred Stock (non-convertible) (47,753 ) (47,753 ) (47,753 ) (47,753 ) (47,753 )
LESS: Goodwill and Intangible Assets, net   (166,427 )   (167,853 )   (169,279 )   (180,349 )   (181,918 )
Total adjusting items   (214,180 )   (215,606 )   (217,032 )   (228,102 )   (229,671 )
Tangible Common Equity (non-GAAP) $ 585,239   $ 566,295   $ 551,449   $ 553,386   $ 544,469  
Total Equity/Total Assets 9.86 % 9.52 % 9.64 % 10.17 % 10.21 %
Tangible Common Equity/Tangible Assets (non-GAAP) 7.37 % 7.04 % 7.07 % 7.38 % 7.36 %
 
Total Risk Weighted Assets * $ 5,765,470 $ 5,806,853 $ 5,716,037 $ 5,534,711 $ 5,464,529
Tier I Common Equity * $ 592,845 $ 578,941 $ 571,663 $ 554,368 $ 543,801
Tier I Common Equity/ Risk Weighted Assets 10.28 % 9.97 %

10.00

% 10.02 % 9.95 %
 
End of Period Shares Outstanding 84,015,141 84,134,104 83,731,769 83,194,714 83,380,426
 
Book Value Per Common Share $ 8.95 $ 8.73 $ 8.61 $ 8.82 $ 8.71
Tangible Book Value Per Share (non-GAAP) $ 6.97 $ 6.73 $ 6.59 $ 6.65 $ 6.53
 
* Risk Weighted Assets and Tier I Common Equity for June 30, 2017
are presented based on estimated data.
 
 
Boston Private Financial Holdings, Inc.
Selected
Financial Data

(Unaudited)
           

(5)

The Company uses certain non-GAAP financial measures, such as:
Return on Average Common Equity and Return on Average Tangible
Common Equity to provide information for investors to effectively
analyze financial trends of ongoing business activities, and to
enhance comparability with peers across the financial sector.

 
Reconciliations from the Company's GAAP Return on Average Equity
ratio to the Non-GAAP Return on Average Common Equity ratio, and the
Non-GAAP Return on Average Tangible Common Equity ratio are
presented below:
 
The Company annualizes income data based on the number of days in
the period presented and a 365 day year. The Company calculates
Average Common Equity by adjusting Average Equity to exclude Average
Preferred Equity. The Company calculates Average Tangible Common
Equity by adjusting Average Equity to exclude Average Goodwill and
Intangible Assets, net and Average Preferred Equity.
 
Three Months Ended
(In thousands)

June 30,
2017

March 31,
2017

December 31,
2016
September 30,
2016
June 30,
2016
Total average shareholders' equity $ 793,526 $ 774,251 $ 777,466 $ 778,098 $ 765,063
LESS: Average Series D preferred stock (non-convertible)   (47,753 )   (47,753 )   (47,753 )   (47,753 )   (47,753 )
Average common equity (non-GAAP)   745,773     726,498     729,713     730,345     717,310  
LESS: Average goodwill and intangible assets, net   (167,204 )   (168,681 )   (179,535 )   (181,191 )   (182,787 )
Average Tangible Common Equity (non-GAAP) $ 578,569   $ 557,817   $ 550,178   $ 549,154   $ 534,523  
 
Net income attributable to the Company $ 23,406 $ 15,662 $ 17,552 $ 19,636 $ 16,398
LESS: Dividends on Series D preferred stock   (869 )   (869 )   (869 )   (868 )   (869 )
Common net income (non-GAAP) 22,536 14,793 16,683 18,768 15,529
ADD: Amortization of intangibles, net of tax (35%)   927     927     1,002     1,019     1,031  
Tangible common net income (non-GAAP) $ 23,463   $ 15,720   $ 17,685   $ 19,787   $ 16,560  
 
Return on Average Equity - (Annualized) 11.83 %

8.20

% 8.96 % 10.01 %

8.60

%
Return on Average Common Equity - (Annualized) (non-GAAP) 12.12 % 8.26 % 9.07 %

10.20

% 8.68 %
Return on Average Tangible Common Equity - (Annualized) (non-GAAP) 16.27 % 11.43 % 12.75 %

14.30

% 12.43 %

 

Six Months Ended

(In thousands)

 

 

June 30,
2017

June 30,
2016

Total average shareholders' equity

 

$

783,937

$

760,616

LESS: Average Series D preferred stock (non-convertible)

 

 

(47,753

)

 

(47,753

)

Average common equity (non-GAAP)

 

 

736,184

   

712,863

 
LESS: Average goodwill and intangible assets, net

 

 

(167,939

)

 

(183,601

)

Average Tangible Common Equity (non-GAAP)

 

$

568,245

 

$

529,262

 
 
Net income attributable to the Company

 

$

39,068

$

34,439

LESS: Dividends on Series D preferred stock

 

 

(1,738

)

 

(1,738

)

Common net income (non-GAAP)

 

37,330

32,701

ADD: Amortization of intangibles, net of tax (35%)

 

 

1,854

   

2,062

 
Tangible common net income (non-GAAP)

 

$

39,184

 

$

34,763

 
 
Return on Average Equity - (Annualized)

 

10.05

%

9.13

%

Return on Average Common Equity - (Annualized) (non-GAAP)

 

10.23

%

9.25

%

Return on Average Tangible Common Equity - (Annualized) (non-GAAP)

 

13.91

%

13.25

%

 
   
Boston Private Financial Holdings, Inc.
Selected
Financial Data

(Unaudited)
       

(6)

The Company uses certain non-GAAP financial measures, such as:
pre-tax, pre-provision income, total operating expenses excluding
amortization of intangibles, goodwill impairment, and
restructuring expense, and the efficiency ratio to provide
information for investors to effectively analyze financial trends
of ongoing business activities, and to enhance comparability with
peers across the financial sector.

 

Reconciliations from the Company's GAAP income from continuing
operations before income taxes to non-GAAP pre-tax, pre-provision
income; from GAAP total operating expense to non-GAAP total
operating expense excluding amortization of intangibles, goodwill
impairment, and restructuring; and from GAAP efficiency ratio to
Non-GAAP efficiency ratio (FTE basis), excluding amortization of
intangibles, goodwill impairment, and restructuring, are presented
below:

 
Three Months Ended
(In thousands) June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
Income before income taxes (GAAP) $ 33,456 $ 21,549 $ 24,762 $ 28,351 $ 23,768
ADD BACK: Provision/ (credit) for loan losses   (6,114 )   (181 )   (1,128 )   (138 )   (2,535 )

Pre-tax, pre-provision income (non-GAAP)

$ 27,342 $ 21,368 $ 23,634 $ 28,213 $ 21,233
 
Total operating expense (GAAP) $ 67,821 $ 68,780 $ 71,843 $ 61,670 $ 64,731
Less: Amortization of intangibles 1,426 1,426 1,542 1,568 1,586
Less: Goodwill impairment 9,528
Less: Restructuring                   905  
Total operating expense (excluding amortization of intangibles,
goodwill impairment, and restructuring) (non-GAAP)
$ 66,395 $ 67,354 $ 60,773 $ 60,102 $ 62,240
 
Net interest income $ 57,145 $ 53,642 $ 51,519 $ 49,871 $ 49,169
Total core fees and income 37,226 36,320 38,499 37,896 37,565
Total other income 792 186 5,459 2,116 (770 )
FTE income   2,923     2,820     2,754     2,523     2,437  
Total revenue (FTE basis) $ 98,086 $ 92,968 $ 98,231 $ 92,406 $ 88,401
Efficiency Ratio (GAAP) 71.27 %

76.30

% 75.25 % 68.61 %

75.30

%
Efficiency Ratio, FTE Basis excluding amortization of intangibles,
goodwill impairment, and restructuring (non-GAAP)
67.69 % 72.45 % 61.87 % 65.04 % 70.41 %
 

 

Six Months Ended

(In thousands)

June 30,
2017

June 30,
2016

Income before income taxes (GAAP)

$

55,005

$

48,093

ADD BACK: Provision/ (credit) for loan losses  

(6,295

)

 

(5,668

)

Pre-tax, pre-provision income (non-GAAP)

$

48,710

$

42,425

 
Total operating expense (GAAP)

$

136,601

$

131,440

Less: Amortization of intangibles

2,852

3,172

Less: Restructuring  

   

2,017

 
Total operating expense (excluding amortization of intangibles,
goodwill impairment, and restructuring) (non-GAAP)

$

133,749

$

126,251

 
Net interest income

$

110,787

$

99,048

Total core fees and income

73,546

75,293

Total other income

978

(476

)

FTE income  

5,743

   

4,853

 
Total revenue (FTE basis)

$

191,054

$

178,718

Efficiency Ratio (GAAP)

73.71

%

75.60

%

Efficiency Ratio, FTE Basis excluding amortization of intangibles,
goodwill impairment, and restructuring (non-GAAP)

70.01

%

70.64

%

 
 

(7)

The Company uses certain non-GAAP financial measures, such as: net
income attributable to the Company excluding notable items and
diluted earnings per share excluding notable items to provide
information for investors to effectively analyze financial trends
of ongoing business activities, and to enhance comparability with
peers across the financial sector.

         
Reconciliations from the Company's GAAP net income attributable to
the Company to non-GAAP net income attributable to the Company
excluding notable items and from GAAP diluted earnings per share to
non-GAAP diluted earnings per share excluding notable items are
presented below:
 
Three Months Ended
(In thousands, except share and per share data) June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
Net income attributable to the Company (GAAP) $ 23,406 $ 15,662 $ 17,552 $ 19,636 $ 16,398
LESS: Gain on sale of offices 2,862
ADD BACK: Impairment of goodwill 9,528
Tax effect at 35% statutory rate           (2,333 )        
Net income attributable to the Company $ 23,406 $ 15,662 $ 21,885 $ 19,636 $ 16,398
 
excluding notable items (non-GAAP)
 
Net Income Attributable to the Common Shareholders, treasury stock
method (GAAP)
$ 22,829 $ 14,496 $ 15,755 $ 18,630 $ 15,428
LESS: Gain on sale of offices 2,862
ADD BACK: Impairment of goodwill 9,528
Tax effect at 35% statutory rate           (2,333 )        
Net Income Attributable to the Common Shareholders, treasury stock
method, excluding notable items (non-GAAP)
$ 22,829 $ 14,496 $ 20,088 $ 18,630 $ 15,428
 
Weighted average diluted shares outstanding (3) 84,741,680 84,560,918 83,438,137 83,562,283 83,519,939
 
Diluted Total Earnings per Share (GAAP) $ 0.27 $ 0.17 $ 0.19 $ 0.22 $ 0.18
Diluted Total Earnings per Share, excluding notable items (non-GAAP) $ 0.27 $ 0.17 $ 0.24 $ 0.22 $ 0.18
 

(8)

The Company uses certain non-GAAP financial measures, such as: net
interest income excluding interest recovered on previous
nonaccrual loans and net interest margin excluding interest
recovered on previous nonaccrual loans to provide information for
investors to effectively analyze financial trends of ongoing
business activities, and to enhance comparability with peers
across the financial sector.

 
Reconciliations from the Company's GAAP net interest income to
non-GAAP net interest income excluding interest recovered on
previous nonaccrual loans; and from GAAP net interest margin to
non-GAAP net interest margin excluding interest recovered on
previous nonaccrual loans, are presented below:
 
Three Months Ended
(In thousands) June 30,
2017
March 31,
2017
December 31,
2016
September 30,
2016
June 30,
2016
Net interest income (GAAP basis) $ 57,145 $ 53,642 $ 51,519 $ 49,871 $ 49,169
ADD: FTE income   2,923     2,820     2,754     2,523     2,437  
Net interest income, FTE basis 60,068 56,462 54,273 52,394 51,606
LESS: Interest recovered on previously nonaccrual loans   1,971     299     365     343     565  
Net interest income, FTE basis, excluding interest recovered on
previously nonaccrual loans (non-GAAP)
  58,097

 

    56,163     53,908     52,051     51,041  
 
Net Interest Margin (FTE basis) 3.07 % 2.94 % 2.88 % 2.88 % 2.91 %
Net Interest Margin, FTE basis, excluding interest recovered on
previously nonaccrual loans (non-GAAP)
2.97 % 2.92 % 2.86 % 2.86 % 2.88 %
 

(9)

Interest income on Non-taxable Investments and Loans are presented
on an FTE basis using the federal statutory rate of 35% for each
period presented.

 

(10)

Average Loans includes Loans Held for Sale and Nonaccrual Loans.
Average Deposits includes Deposits Held for Sale, if any.

 

(11)

The concentration of the Private Banking loan data and credit
quality is primarily based on the location of the lender's
regional offices.

 

(12)

Accruing substandard loans include loans that are classified as
substandard but are still accruing interest income. Boston Private
Bank & Trust Company may classify a loan as substandard where
known information about possible credit problems of the related
borrowers causes management to have doubts as to the ability of
such borrowers to comply with the present repayment terms and
which may result in disclosure of such loans as nonaccrual at some
time in the future.

 

(13)

At June 30, 2017, March 31, 2017, December 31, 2016, and September
30, 2016, the Company had no loans outstanding more than 90 days
past due but still on accrual status. In addition to loans 30-89
days past due and accruing, at June 30, 2016, the Company had one
loan totaling $0.1 million that was more than 90 days past due but
still on accrual status. This loan originated in the San Francisco
Bay Area region.

 

(14)

Average Total Deposits is the sum of Average Total
Interest-Bearing Deposits and Average Noninterest Bearing Demand
Deposits.

 

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