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Blue Hills Bancorp, Inc. Reports Second Quarter Earnings

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NORWOOD, Mass., July 26, 2017 (GLOBE NEWSWIRE) -- Blue Hills Bancorp, Inc. (the "Company" or "Blue Hills Bancorp") (NASDAQ:BHBK), the parent of Blue Hills Bank (the "Bank"), today announced net income of $3.9 million, or $0.16 per diluted share, for the second quarter of 2017 compared to net income of  $7.5 million, or $0.31 per diluted share, for the first quarter of 2017 and net income of $1.4 million, or $0.05 per diluted share, for the second quarter of 2016.

The second quarter of 2017 included a pre-tax gain of $928,000 ($595,000 after-tax, or $0.02 per diluted share) from the sale of the Company's remaining available-for-sale debt securities portfolio. Excluding this item, net income was $3.3 million, or $0.14 per diluted share, for the second quarter of 2017.  As first disclosed in a Form 10-Q as filed with the Securities and Exchange Commission on May 5, 2017, the Company's Management Investment Committee approved a change in strategy to liquidate its externally managed available-for-sale debt securities portfolio (which largely consisted of corporate debt securities) during the second quarter as continued rising interest rates would likely negatively impact the returns of this portfolio over time. This portfolio had a carrying value of $164.6 million at the end of the first quarter.  The Company intends to ultimately invest approximately $100.0 million of the proceeds from the sale of these bonds in its internally managed fixed income securities portfolio, which is accounted for as held to maturity, and most of this liquidation and reinvestment had been accomplished by the end of the second quarter.  The remaining proceeds were used to fund incremental loan growth.

The first quarter of 2017 included a pre-tax gain of $5.9 million ($3.8 million after-tax, or $0.16 per diluted share) from the Company's investment in Northeast Retirement Services, Inc., which was acquired by Community Bank System, Inc., a pre-tax loss of $1.1 million ($676,000 after-tax, or $0.03 per diluted share) from the sale of the Company's investments in mutual funds, and the reversal of a valuation allowance for state taxes of $1.7 million, or $0.07 per diluted share.  Excluding these three items, net income was $2.7 million, or $0.11 per diluted share, for first quarter of 2017.

For the six months ended June 30, 2017, net income was $5.9 million, or $0.25 per diluted share, excluding the nonrecurring items discussed above, compared to net income of $3.0 million, or $0.12 per diluted share, for the six months ended June 30, 2016.  On a GAAP basis, the Company had net income of $11.4 million, or $0.47 per diluted share for the six months ended June 30, 2017 (see page 15 for a reconciliation of GAAP to non-GAAP measures).

Commenting on the Company's results, William Parent, President and Chief Executive Officer of Blue Hills Bancorp, said, "The first half of 2017 was an important period in the continued transformation of our bank.  We took some key steps to restructure our securities portfolio by selling our portfolio of mutual fund investments in the first quarter and restructuring of the remaining portfolio of available-for-sale debt securities in the second quarter.  These actions will reduce volatility in our quarterly financial statements and, together with the expansion of our loan portfolio over the past several years, have reduced the level of investment securities to just 12% of total assets at June 30, 2017.  As recently as the end of 2013, investment securities comprised approximately one-third of the Company's total assets.

Parent continued, "All of our businesses have performed well in 2017 as earnings per share from core operations more than doubled in the first half of 2017 from the comparable period in 2016.  Mortgage originations and revenues continued to climb, reflecting the successful and continued expansion of that business, our commercial lending teams have generated strong loan growth, and our retail banking team has done a great job bringing in deposits.  The three branches we have opened since the fourth quarter of 2014 have a combined deposit total of $229 million at June 30, 2017 while our division in Nantucket, which was acquired in early 2014, ended the second quarter with $339 million in deposits. Revenues, excluding securities gains and nonrecurring items, grew 31% in the second quarter compared to the year ago period and, importantly, much of the investment spending that gave rise to the revenue improvement is behind us.  The significant growth in revenue from the second quarter of last year was accompanied by a relatively modest 3% increase in noninterest expense and this has provided us with significant positive operating leverage while reducing our efficiency ratio to 67% in the second quarter from 80% a year ago.  We just crossed the three year anniversary of our mutual to stock conversion and are proud of the progress the Company has made.  We look forward to the future with enthusiasm and to creating value for our stakeholders."

BALANCE SHEET
Compared to March 31, 2017, total assets grew $17 million, or 1%, to $2.5 billion at June 30, 2017.  The increase was driven by loan growth as total loans increased $79 million, or 4%, to $2.1 billion at June 30, 2017.  By category, the increase was mainly driven by commercial real estate loans, which were up $55 million, or 8%, and commercial business loans, which were up $17 million, or 8%.  Residential mortgage loans were little changed as growth from new originations was offset by loan sales.  In addition to the increase in loans, short-term investments were up $14 million, or 73%.  These increases were partially offset by an $81 million, or 22%, decline in the combination of securities available-for-sale and held to maturity, reflecting the aforementioned sale of the remaining available-for-sale debt securities portfolio and the partial reinvestment of those proceeds into securities classified as held to maturity.  At June 30, 2017, 96% of all securities (and 100% of all debt securities) are classified as held to maturity.

Compared to June 30, 2016, total assets increased $273 million, or 12%.  Loans also drove the growth in total assets in this comparison, increasing $381 million, or 23%. By category, the increase from June 30, 2016 was due to residential mortgage loans, which were up $219 million, or 32%, commercial real estate loans, which were up $147 million, or 24%, and commercial business loans, which were up $49 million, or 28%.  Residential mortgage loan originations were $139 million in the second quarter of 2017 compared to $126 million in the second quarter of 2016 as the expanded origination team continued to grow the business and gain market share. In the second quarter of 2017, commercial loans (real estate and non-real estate combined) totaling $137 million were added to the balance sheet compared to $109 million in the second quarter of 2016.  The growth in loans was partially offset by a $107 million, or 27%, decline in the combination of securities available-for-sale and held to maturity, due to the previously discussed sales of the mutual fund investment portfolio and the remaining available-for-sale debt securities portfolio.

Compared to March 31, 2017, deposits grew $109 million, or 6%, to $2.0 billion at June 30, 2017 mainly reflecting growth in municipal deposits and brokered certificates of deposit.  Deposits at the Company's newest branch, which was opened in the fourth quarter of 2016 and is located in the Seaport District of Boston, grew $12 million during the second quarter to $63 million at June 30, 2017.  The Company's branch in Westwood, which was opened in the fourth quarter of 2015, surpassed the $100 million mark in deposits during the second quarter.  Borrowings declined to $130 million at June 30, 2017 from $223 million at March 31, 2017 due to the sale of the remaining available-for-sale debt securities portfolio and a shift in wholesale funding to a higher level of brokered certificates of deposit.

Compared to June 30, 2016, deposits grew $364 million, or 23%, and included growth in all customer segments (consumer, small business, commercial and municipal).  By category, the most significant increases were seen in money market deposits, which were up $168 million, brokered certificates of deposit, which were up $140 million, and NOW and demand deposits, which were up $62 million.  A $130 million decline in short-term borrowings was partially offset by a $45 million increase in long-term borrowings.  All borrowings at June 30, 2017 are classified as long-term.

Stockholders' equity was $397 million at June 30, 2017 and March 31, 2017 compared to $392 million at June 30, 2016. The increase from a year ago was mainly due to net income over the past four quarters, which added $17.0 million to stockholders' equity, partially offset by share repurchases that took place in the second half of 2016 and dividends, including a special dividend of $0.20 per common share in the second quarter of 2017.  There were no share repurchases in the first half of 2017.

NET INTEREST AND DIVIDEND INCOME
Net interest and dividend income was $16.4 million in the second quarter of 2017, up $527,000, or 3%, from $15.9 million in the first quarter of 2017 and up $3.1 million, or 23%, from $13.3 million in the second quarter of 2016.  Net interest margin was 2.75% in the second quarter of 2017, up from 2.70% in the first quarter of 2017 and from 2.56% in the second quarter of 2016.

Net interest and dividend income on a fully taxable equivalent basis (referred to herein as "Reported net interest and dividend income (FTE)", a Non-GAAP measure) was $16.5 million in the second quarter of 2017, up $521,000, or 3%, from $15.9 million in the first quarter of 2017, and up $3.1 million, or 23%, from $13.4 million in the second quarter of 2016.  Net interest margin on a fully taxable equivalent basis (referred to herein as "Reported net interest margin (FTE)", a Non-GAAP measure) improved to 2.76% in the second quarter of 2017 from 2.71% in the first quarter of 2017 and 2.58% in the second quarter of 2016.  

The table shown below provides a reconciliation of reported to adjusted net interest and dividend income and margin for the last five quarters (referred to herein as "Adjusted net interest and dividend income (FTE)" and "Adjusted net interest margin (FTE)", which are Non-GAAP measures).  Commentary which follows the table will focus on changes in Adjusted net interest and dividend income and Adjusted net interest margin.

(Unaudited, dollars in thousands) June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016
Net Interest and Dividend Income          
Reported net interest and dividend income $ 16,408   $ 15,881   $ 15,950   $ 14,495   $ 13,316  
FTE adjustment 60   66   78   65   77  
Reported net interest and dividend income (FTE) 16,468   15,947   16,028   14,560   13,393  
Mutual fund dividends (2)     (844 ) (96 )  
Purchase accounting accretion (2) (181 ) (107 ) (137 ) (115 ) (133 )
Accelerated bond amortization/(accretion) on note redemptions       (193 ) 203  
Adjusted net interest and dividend income (FTE) (1) $ 16,287   $ 15,840   $ 15,047   $ 14,156   $ 13,463  
           
Net Interest Margin          
Reported net interest margin 2.75 % 2.70 % 2.81 % 2.67 % 2.56 %
FTE adjustment 0.01   0.01   0.01   0.01   0.02  
Reported net interest margin (FTE) 2.76   2.71   2.82   2.68   2.58  
Mutual fund dividends (2)   0.03   (0.10 ) 0.03   0.05  
Purchase accounting accretion (2) (0.03 ) (0.02 ) (0.03 ) (0.02 ) (0.03 )
Accelerated bond amortization/(accretion) on note redemptions       (0.04 ) 0.04  
Adjusted net interest margin (FTE) (1) 2.73 % 2.72 % 2.69 % 2.65 % 2.64 %
           
(1) Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully taxable equivalent basis (FTE), using a federal statutory tax rate of 35% (a statutory tax rate of 34% was used prior to the fourth quarter of 2016). Therefore, management believes, these measures provide useful information to investors by allowing them to make peer comparisons.
(2) Note: In calculating the net interest margin impact of mutual fund dividends and purchase accounting accretion, average earning assets were adjusted to remove the average balances associated with each item. In quarters where mutual fund dividend income is low, the removal of the dividend and its related average balance has a positive impact on the adjusted net interest margin.  Management believes this adjusted net interest margin is useful because of the volatility or non-recurring nature of certain items from quarter to quarter. The Company sold its investments in mutual funds during the first quarter of 2017.
 

Adjusted net interest and dividend income on a fully tax equivalent basis increased $447,000, or 3%, to $16.3 million in the second quarter of 2017 from $15.8 million in the first quarter of 2017 and was up $2.8 million, or 21%, from $13.5 million in the second quarter of 2016.  Adjusted net interest margin improved to 2.73% in the second quarter of 2017 from 2.72% in the first quarter of 2017 and 2.64% in the second quarter of 2016.  Adjusted net interest income and net interest margin benefited in both comparisons from higher floating rate loan yields related to the interest rate increases announced by the Federal Reserve Bank in June 2017, March 2017, and December 2016.  The Company maintains an asset sensitive interest rate risk position.  In addition, adjusted net interest income was helped by loan growth as average loans increased $88 million, or 4%, from the first quarter of this year and $411 million, or 25%, from the second quarter of last year.  In both comparisons, average loan growth was driven by higher levels of commercial real estate loans, residential mortgages and commercial business loans.  Partially offsetting the improvement from loan growth was a decline in average securities which were down $88 million, or 22%, from the first quarter and $110 million, or 26%, from last year's second quarter.  These declines reflected the sales of the mutual fund investment portfolio and the remaining portfolio of available-for-sale debt securities. 

NONINTEREST INCOME
Noninterest income was $4.5 million in the second quarter of 2017, down from $6.8 million in the first quarter of 2017.  The second quarter includes a $928,000 gain on the sale of the Company's remaining available-for-sale debt securities portfolio while the first quarter included a gain of $5.9 million from the Company's investment in Northeast Retirement Services, Inc., which was acquired by Community Bank System, Inc., and a $1.1 million loss from the sale of the Company's investments in mutual funds. Excluding these items, noninterest income was $3.6 million in the second quarter of 2017, up $1.7 million, or 86%, from the first quarter of 2017.  The improvement is due to a $1.2 million increase in loan level derivative income related to the portfolio of commercial loan customer interest rate swap contracts. The amount of revenue in the loan level derivative income category can be volatile since it is a function of the amount of commercial loans that customers opt to convert from floating to fixed rate via interest rate swaps in any given quarter.  Also contributing to the increase was a $479,000 improvement in mortgage banking income reflecting a higher level of loan sale gains.

Compared to the second quarter of 2016, noninterest income increased $1.7 million, or 60%. As noted previously, the second quarter of 2017 includes a $928,000 gain on the sale of the Company's remaining available-for-sale debt securities portfolio, however, the second quarter of 2016 also includes $664,000 of securities gains.  Excluding securities gains, the improvement was driven by the same factors that caused the increase in the linked quarter comparison.  Loan level derivative income was up $1.0 million and mortgage banking income grew $688,000.

NONINTEREST EXPENSE
Noninterest expense was $13.4 million in the second and first quarters of 2017 compared to $12.9 million in the second quarter of 2016.  The $431,000, or 3%, increase from the second quarter of last year is mainly due to franchise growth and this can mainly be seen in the salaries and benefits as well as the occupancy and equipment expense categories.  The new Seaport branch, as well as the opening of new loan and mortgage production offices, contributed to the growth in both salaries and benefits expense and occupancy and equipment expense.

ASSET QUALITY
The provision for loan losses, which in all quarters reflects management's assessment of risks inherent in the loan portfolio, was $1.1 million in the second quarter of 2017 compared to $57,000 in the first quarter of 2017 and $1.1 million in the second quarter of 2016.  Loan growth and loan mix impact the level of provision needed each quarter and the increase in the provision from the first quarter reflected both factors.  Loan growth was higher in the second quarter than in the first quarter and there was a change in loan mix during the second quarter with commercial real estate loans becoming a higher percentage of the total loan portfolio and residential mortgages becoming a lower percentage.

The allowance for loan losses as a percentage of total loans was 0.97% at June 30, 2017 compared to 0.95% at March 31, 2017 and 1.07% June 30, 2016. The decline in the allowance for loan losses as a percentage of total loans from a year ago was impacted by the general improvement in historical loss rates from national FDIC data, as well as the planned migration of loss rates to those more reflective of the Company's own loan loss experience.  The Company had net loan chargeoffs of $76,000 in the second quarter of 2017 compared to net loan recoveries of $68,000 in the first quarter of 2017 and net loan chargeoffs of $19,000 in the second quarter of 2016.  

Nonperforming assets were $12.8 million at June 30, 2017 compared to $13.1 million at March 31, 2017 and $15.0 million at June 30, 2016.  The decline from a year ago was mainly due to the chargeoff of one commercial credit in the third quarter of last year.  Nonperforming assets as a percentage of total assets was 0.51% at June 30, 2017 compared to 0.53% at March 31, 2017 and 0.67% at June 30, 2016.

ABOUT BLUE HILLS BANCORP
Blue Hills Bancorp, Inc., with corporate headquarters in Norwood, MA, had assets of $2.5 billion at June 30, 2017 and operates 11 branch offices in Boston, Dedham, Hyde Park, Milton, Nantucket, Norwood, West Roxbury, and Westwood, Massachusetts. Blue Hills Bank is a full service, community bank with its main office in Hyde Park, Massachusetts. The Bank's three branches in Nantucket, Massachusetts operate under the name, Nantucket Bank, a division of Blue Hills Bank. The Bank provides consumer, commercial and municipal deposit and loan products in Eastern Massachusetts through its branch network, loan production offices and eCommerce channels. The Bank offers commercial business and commercial real estate loans in addition to cash management services and commercial deposit accounts. The Bank also serves consumers through a full suite of consumer banking products including checking accounts, mortgage loans, equity lines of credit and traditional savings and certificate of deposit accounts. The Bank has invested substantially in online technology including online account opening and funding, online mortgage applications, online banking, mobile banking, bill pay and mobile deposits. Blue Hills Bank has been serving area residents for over 140 years. For more information about Blue Hills Bank, visit www.bluehillsbank.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release, as well as other written communications made from time to time by the Company and its subsidiaries and oral communications made from time to time by authorized officers of the Company, may contain statements relating to the future results of the Company (including certain projections and business trends) that are considered "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 (the PSLRA). Such forward-looking statements may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," "intend" and "potential." For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the PSLRA.

The Company cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: our ability to implement successfully our business strategy, which includes significant asset and liability growth; changes that could adversely affect the business in which the Company and the Bank are engaged; prevailing economic and geopolitical conditions; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; and other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services.  For additional information on some of the risks and important factors that could affect the Company's future results and financial condition, see "Risk Factors" in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

Blue Hills Bancorp, Inc.
Consolidated Balance Sheets
 
(Unaudited, dollars in thousands)       % Change
    June 30, 2017     March 31, 2017     June 30, 2016     June 30, 2017  vs. 
March 31, 2017
  June 30, 2017  vs. 
June 30, 2016
Assets          
Cash and due from banks $ 17,292   $ 15,594   $ 13,710   10.9 % 26.1 %
Short term investments 33,819   19,555   29,485   72.9 % 14.7 %
Total cash and cash equivalents 51,111   35,149   43,195   45.4 % 18.3 %
Securities available-for-sale, at fair value 10,437   173,834   204,973   (94.0 )% (94.9 )%
Securities held-to-maturity, at amortized cost 283,672   201,684   196,454   40.7 % 44.4 %
Federal Home Loan Bank stock, at cost 11,943   14,828   12,833   (19.5 )% (6.9 )%
Loans held for sale 6,789   1,675   6,097             305.3 % 11.3 %
Loans:                          
1-4 family residential 895,015   896,951   675,952   (0.2 )% 32.4 %
Home equity 84,615   80,427   81,649   5.2 % 3.6 %
Commercial real estate 756,093   701,463   608,669   7.8 % 24.2 %
Construction 78,062   70,855   107,049   10.2 % (27.1 )%
  Total real estate loans 1,813,785   1,749,696   1,473,319   3.7 % 23.1 %
Commercial business 227,262   210,328   178,112   8.1 % 27.6 %
Consumer 25,047   27,325   33,707   (8.3 )%            (25.7 )%
Total loans 2,066,094   1,987,349   1,685,138   4.0 % 22.6 %
Allowance for loan losses (19,917 ) (18,875 ) (18,079 ) 5.5 % 10.2 %
Loans, net 2,046,177   1,968,474   1,667,059   3.9 % 22.7 %
Premises and equipment, net 22,004   21,858   20,136   0.7 % 9.3 %
Accrued interest receivable 5,362   5,994   5,640   (10.5 )% (4.9 )%
Goodwill and core deposit intangible 10,091   10,313   11,125   (2.2 )% (9.3 )%
Net deferred tax asset 8,184   8,751   8,958   (6.5 )% (8.6 )%
Bank-owned life insurance 32,533   32,271   31,558   0.8 % 3.1 %
Other assets 25,606   21,779   32,733   17.6 % (21.8 )%
Total assets $ 2,513,909   $ 2,496,610   $ 2,240,761   0.7 % 12.2 %
Liabilities and Stockholders' Equity                          
Deposits:                          
NOW and demand $ 359,877   $ 342,118   $ 298,178   5.2 % 20.7 %
Regular savings 246,484   265,116   274,866   (7.0 )% (10.3 )%
Money market 674,593   622,852   506,251   8.3 % 33.3 %
Certificates of deposit 362,261   348,042   339,415   4.1 % 6.7 %
Brokered money market 44,728   50,129   45,231   (10.8 )% (1.1 )%
Brokered certificates of deposit 277,320   228,465   136,965   21.4 % 102.5 %
  Total deposits 1,965,263   1,856,722   1,600,906   5.8 % 22.8 %
Short-term borrowings   118,000   130,000   NM   NM  
Long-term debt 130,000   105,000   85,000   23.8 % 52.9 %
Other liabilities 21,328   19,944   32,903   6.9 % (35.2 )%
Total liabilities 2,116,591   2,099,666   1,848,809   0.8 % 14.5 %
Common stock 259   259   265   % (2.3 )%
Additional paid-in capital 252,504   250,976   255,781   0.6 % (1.3 )%
Unearned compensation- ESOP (20,117 ) (20,306 ) (20,876 ) (0.9 )% (3.6 )%
Retained earnings 166,033   168,160   157,714   (1.3 )% 5.3 %
Accumulated other comprehensive loss (1,361 ) (2,145 ) (932 ) (36.6 )% 46.0 %
Total stockholders' equity 397,318   396,944   391,952   0.1 % 1.4 %
Total liabilities and stockholders' equity $ 2,513,909   $ 2,496,610   $ 2,240,761   0.7 % 12.2 %


 
Blue Hills Bancorp, Inc.
Consolidated Balance Sheet Trend
 
(Unaudited, dollars in thousands)   June 30, 2017     March 31, 2017     December 31, 2016     September 30, 2016     June 30, 2016  
Assets          
Cash and due from banks $ 17,292   $ 15,594   $ 14,752   $ 15,490   $ 13,710  
Short term investments 33,819   19,555   15,744   21,512   29,485  
Total cash and cash equivalents 51,111   35,149   30,496   37,002   43,195  
Securities available-for-sale, at fair value 10,437   173,834   204,836   210,273   204,973  
Securities held-to-maturity, at amortized cost 283,672   201,684   201,027   197,863   196,454  
Federal Home Loan Bank stock, at cost 11,943   14,828   13,352   13,505   12,833  
Loans held for sale 6,789   1,675   2,761   2,134   6,097  
Loans:          
1-4 family residential 895,015   896,951   854,478   746,366   675,952  
Home equity 84,615   80,427   79,132   80,604   81,649  
Commercial real estate 756,093   701,463   686,522   660,458   608,669  
Construction 78,062   70,855   75,950   71,281   107,049  
  Total real estate loans 1,813,785   1,749,696   1,696,082   1,558,709   1,473,319  
Commercial business 227,262   210,328   205,832   169,076   178,112  
Consumer 25,047   27,325   29,707   31,435   33,707  
Total loans 2,066,094   1,987,349   1,931,621   1,759,220   1,685,138  
Allowance for loan losses (19,917 ) (18,875 ) (18,750 ) (17,730 ) (18,079 )
Loans, net 2,046,177   1,968,474   1,912,871   1,741,490   1,667,059  
Premises and equipment, net 22,004   21,858   22,034   21,362   20,136  
Accrued interest receivable 5,362   5,994   6,057   5,388   5,640  
Goodwill and core deposit intangible 10,091   10,313   10,560   10,831   11,125  
Net deferred tax asset 8,184   8,751   10,146   8,780   8,958  
Bank-owned life insurance 32,533   32,271   32,015   31,743   31,558  
Other assets 25,606   21,779   23,537   33,295   32,733  
Total assets $ 2,513,909   $ 2,496,610   $ 2,469,692   $ 2,313,666   $ 2,240,761  
Liabilities and Stockholders' Equity          
Deposits:          
NOW and demand $ 359,877   $ 342,118   $ 331,508   $ 337,225   $ 298,178  
Regular savings 246,484   265,116   262,984   270,067   274,866  
Money market 674,593   622,852   573,204   518,360   506,251  
Certificates of deposit 362,261   348,042   340,114   339,064   339,415  
Brokered money market 44,728   50,129   53,357   46,235   45,231  
Brokered certificates of deposit 277,320   228,465   247,520   170,506   136,965  
  Total deposits 1,965,263   1,856,722   1,808,687   1,681,457   1,600,906  
Short-term borrowings   118,000   146,000   103,700   130,000  
Long-term debt 130,000   105,000   105,000   105,000   85,000  
Other liabilities 21,328   19,944   23,098   33,820   32,903  
Total liabilities 2,116,591   2,099,666   2,082,785   1,923,977   1,848,809  
Common stock 259   259   259   261   265  
Additional paid-in capital 252,504   250,976   249,317   251,341   255,781  
Unearned compensation- ESOP (20,117 ) (20,306 ) (20,496 ) (20,686 ) (20,876 )
Retained earnings 166,033   168,160   161,896   158,620   157,714  
Accumulated other comprehensive income (loss) (1,361 ) (2,145 ) (4,069 ) 153   (932 )
Total stockholders' equity 397,318   396,944   386,907   389,689   391,952  
Total liabilities and stockholders' equity $ 2,513,909   $ 2,496,610   $ 2,469,692   $ 2,313,666   $ 2,240,761  

 

 
Blue Hills Bancorp, Inc.
Consolidated Statements of Net Income - Quarters
 
(Unaudited, dollars in thousands, except share data) Quarters Ended % Change
    June 30, 2017     March 31, 2017     June 30, 2016     June 30, 2017  vs. 
March 31, 2017
  June 30, 2017  vs. 
June 30, 2016
Interest and fees on loans $ 18,715   $ 17,382   $ 14,138   7.7 % 32.4 %
Interest on securities 1,572   2,210   2,037   (28.9 )% (22.8 )%
Dividends 193   157   155   22.9 % 24.5 %
Other 94   32   26   193.8 %          261.5 %
Total interest and dividend income 20,574   19,781   16,356   4.0 % 25.8 %
Interest on deposits 3,523   3,254   2,484   8.3 % 41.8 %
Interest on borrowings 643   646   556   (0.5 )% 15.6 %
Total interest expense 4,166   3,900   3,040   6.8 % 37.0 %
Net interest and dividend income 16,408   15,881   13,316   3.3 % 23.2 %
Provision for loan losses 1,118   57   1,113           1,861.4 % 0.4 %
Net interest and dividend income, after provision for loan losses 15,290   15,824   12,203   (3.4 )% 25.3 %
Deposit account fees 341   320   307   6.6 % 11.1 %
Interchange and ATM fees 388   348   393   11.5 % (1.3 )%
Mortgage banking 1,219   740   531   64.7 % 129.6 %
Loan level derivative fee income 1,367   164   322   733.5 % 324.5 %
Realized securities gains (losses), net 928   (1,022 ) 664   190.8 % 39.8 %
Gain on exchange of investment in Northeast Retirement Services   5,947     NM   NM  
Bank-owned life insurance income 261   257   257   1.6 % 1.6 %
Bank-owned life insurance death benefit gains     209   NM   NM  
Miscellaneous 6   62   128   (90.3 )% (95.3 )%
Total noninterest income 4,510   6,816   2,811   (33.8 )% 60.4 %
Salaries and employee benefits 7,664   7,563   7,138   1.3 % 7.4 %
Occupancy and equipment 2,030   2,115   1,653   (4.0 )% 22.8 %
Data processing 1,022   1,044   803   (2.1 )% 27.3 %
Professional fees 526   869   678   (39.5 )% (22.4 )%
Advertising 489   367   719   33.2 % (32.0 )%
FDIC deposit insurance 223   212   352   5.2 % (36.6 )%
Directors' fees 428   374   399   14.4 % 7.3 %
Amortization of core deposit intangible 222   247   318   (10.1 )% (30.2 )%
Other general and administrative 762   609   875   25.1 % (12.9 )%
Total noninterest expense 13,366   13,400   12,935   (0.3 )% 3.3 %
Income before income taxes 6,434   9,240   2,079   (30.4 )% 209.5 %
Provision for income taxes 2,566   1,753   721   46.4 % 255.9 %
Net income $ 3,868   $ 7,487   $ 1,358   (48.3 )% 184.8 %
           
Earnings per common share:          
Basic $ 0.16   $ 0.31   $ 0.06      
Diluted $ 0.16   $ 0.31   $ 0.05      
Weighted average shares outstanding:          
Basic 23,952,443 23,911,419 24,575,211    
Diluted 24,346,553 24,275,665 24,699,794    


 
Blue Hills Bancorp, Inc.
Consolidated Statements of Net Income-Year to Date
 
(Unaudited, dollars in thousands, except share data) Year to Date
    June 30, 2017     June 30, 2016     % Change  
Interest and fees on loans $ 36,097   $ 27,741   30.1 %
Interest on securities 3,782   4,332   (12.7 )%
Dividends 350   294   19.0 %
Other 126   52   142.3 %
Total interest and dividend income 40,355   32,419   24.5 %
Interest on deposits 6,777   4,776   41.9 %
Interest on borrowings 1,289   1,126   14.5 %
Total interest expense 8,066   5,902   36.7 %
Net interest and dividend income 32,289   26,517   21.8 %
Provision for loan losses 1,175   1,086   8.2 %
Net interest and dividend income, after provision for loan losses 31,114   25,431   22.3 %
Deposit account fees 661   624   5.9 %
Interchange and ATM fees 736   740   (0.5 )%
Mortgage banking 1,959   775   152.8 %
Loan level derivative fee income 1,531   961   59.3 %
Realized securities gains (losses), net (94 ) 420       (122.4 )%
Gain on exchange of cost basis investment 5,947     NM  
Bank-owned life insurance income 518   514   0.8 %
Bank-owned life insurance death benefit gains   209   NM  
Miscellaneous 68   (55 ) (223.6 )%
Total noninterest income 11,326   4,188   170.4 %
Salaries and employee benefits 15,227   14,023   8.6 %
Occupancy and equipment 4,145   3,272   26.7 %
Data processing 2,066   1,564   32.1 %
Professional fees 1,395   1,159   20.4 %
Advertising 856   1,251   (31.6 )%
FDIC deposit insurance 435   698   (37.7 )%
Directors' fees 802   737   8.8 %
Amortization of core deposit intangible 469   660   (28.9 )%
Other general and administrative 1,371   1,639   (16.4 )%
Total noninterest expense 26,766   25,003   7.1 %
Income before income taxes 15,674   4,616   239.6 %
Provision for income taxes 4,319   1,591   171.5 %
Net income $ 11,355   $ 3,025   275.4 %
       
Earnings per common share:      
Basic $ 0.47   $ 0.12    
Diluted $ 0.47   $ 0.12    
Weighted average shares outstanding:      
Basic 23,932,044 24,817,260  
Diluted 24,311,222 24,912,729  


 
Blue Hills Bancorp Inc.
Consolidated Statements of Net Income - Trend
  Quarters Ended
(Unaudited, dollars in thousands, except share data) June 30, March 31,   December 31,     September 30,   June 30,
  2017 2017 2016 2016 2016
Interest and fees on loans $ 18,715   $ 17,382   $ 16,099   $ 15,113   $ 14,138  
Interest on securities 1,572   2,210   2,325   2,238   2,037  
Dividends 193   157   990   312   155  
Other 94   32   20   22   26  
Total interest and dividend income 20,574   19,781   19,434   17,685   16,356  
Interest on deposits 3,523   3,254   2,980   2,732   2,484  
Interest on borrowings 643   646   504   458   556  
Total interest expense 4,166   3,900   3,484   3,190   3,040  
Net interest and dividend income 16,408   15,881   15,950   14,495   13,316  
Provision for loan losses 1,118   57   927   2,872   1,113  
Net interest and dividend income, after provision (credit) for loan losses 15,290   15,824   15,023   11,623   12,203  
Deposit account fees 341   320   356   347   307  
Interchange and ATM fees 388   348   388   418   393  
Mortgage banking 1,219   740   436   1,262   531  
Loan level derivative fee income 1,367   164   640   770   322  
Realized securities gains (losses), net 928   (1,022 ) 298   562   664  
Gain on exchange of investment in Northeast Retirement Services   5,947        
Bank-owned life insurance income 261   257   272   262   257  
Bank-owned life insurance death benefit gains       297   209  
Miscellaneous 6   62   1,417   214   128  
Total noninterest income 4,510   6,816   3,807   4,132   2,811  
Salaries and employee benefits 7,664   7,563   7,234   7,596   7,138  
Occupancy and equipment 2,030   2,115   2,291   1,807   1,653  
Data processing 1,022   1,044   988   908   803  
Professional fees 526   869   736   743   678  
Advertising 489   367   677   495   719  
FDIC deposit insurance 223   212   157   270   352  
Directors' fees 428   374   377   344   399  
Amortization of core deposit intangible 222   247   271   294   318  
Other general and administrative 762   609   778   777   875  
Total noninterest expense 13,366   13,400   13,509   13,234   12,935  
Income before income taxes 6,434   9,240   5,321   2,521   2,079  
Provision for income taxes 2,566   1,753   1,323   891   721  
Net income $ 3,868   $ 7,487   $ 3,998   $ 1,630   $ 1,358  
           
Earnings per common share:          
Basic $ 0.16   $ 0.31   $ 0.17   $ 0.07   $ 0.06  
Diluted $ 0.16   $ 0.31   $ 0.17   $ 0.07   $ 0.05  
Weighted average shares outstanding:          
Basic 23,952,443 23,911,419 23,919,483 24,129,512 24,575,211
Diluted 24,346,553 24,275,665 24,032,613 24,307,540 24,699,794


 
Blue Hills Bancorp Inc.
Average Balances/Yields
(Unaudited, dollars in thousands) Quarters Ended
  June 30, 2017   March 31, 2017   June 30, 2016
  Average
balance
Interest Yield/
Cost
  Average
balance
Interest Yield/
Cost
  Average
balance
Interest Yield/
Cost
                       
Interest-earning assets                      
Total loans (1) $ 2,046,288   $ 18,770   3.68 %   $ 1,958,647   $ 17,436   3.61 %   $ 1,635,256   $ 14,191   3.49 %
Securities (1) 309,909   1,621   2.10     398,201   2,240   2.28     419,685   2,080   1.99  
Other interest earning assets and FHLB stock 36,768   243   2.65     31,842   171   2.18     36,584   162   1.78  
Total interest-earning assets 2,392,965   20,634   3.46 %   2,388,690   19,847   3.37 %   2,091,525   16,433   3.16 %
Non-interest-earning assets 102,750         93,397         100,104      
Total assets $ 2,495,715         $ 2,482,087         $ 2,191,629      
                       
Interest-bearing liabilities                      
NOW $ 150,711   $ 17   0.05 %   $ 145,396   $ 16   0.04 %   $ 139,100   $ 16   0.05 %
Regular savings 255,255   208   0.33     262,578   218   0.34     276,451   233   0.34  
Money market 688,600   1,669   0.97     653,165   1,519   0.94     479,564   983   0.82  
Certificates of deposit 573,997   1,629   1.14     567,642   1,501   1.07     458,328   1,252   1.10  
Total interest-bearing deposits 1,668,563   3,523   0.85     1,628,781   3,254   0.81     1,353,443   2,484   0.74  
Borrowings 204,786   643   1.26     256,500   646   1.02     271,242   556   0.82  
Total interest-bearing liabilities 1,873,349   4,166   0.89 %   1,885,281   3,900   0.84 %   1,624,685   3,040   0.75 %
Non-interest-bearing deposits 189,180         183,520         145,171      
Other non-interest-bearing liabilities 33,664         21,035         27,513      
Total liabilities 2,096,193         2,089,836         1,797,369      
Stockholders' equity 399,522         392,251         394,260      
Total liabilities and stockholders' equity $ 2,495,715         $ 2,482,087         $ 2,191,629      
                       
Net interest and dividend income (FTE)   16,468         15,947         13,393    
Less: FTE adjustment   (60 )       (66 )       (77 )  
Net interest and dividend income (GAAP)   $ 16,408         $ 15,881         $ 13,316    
                       
Net interest rate spread (FTE)     2.57 %       2.53 %       2.41 %
Net interest margin (FTE)     2.76 %       2.71 %       2.58 %
Total deposit cost     0.76 %       0.73 %       0.67 %
 
(1) Interest income on tax-exempt securities and loans was adjusted to a fully taxable-equivalent (FTE) basis using a federal statutory tax rate of 35%. A statutory tax rate of 34% was used prior to the fourth quarter of 2016.


 
Blue Hills Bancorp Inc.
Average Balances/Yields
(Unaudited, dollars in thousands) Year to Date
  June 30, 2017   June 30, 2016
  Average
balance
Interest Yield/
Cost
  Average
balance
Interest Yield/
Cost
Interest-earning assets              
Total loans (1) $ 2,002,710   $ 36,206   3.65 %   $ 1,602,248   $ 27,847   3.50 %
Securities (1) 352,212   3,861   2.21     424,850   4,448   2.11  
Other interest earning assets and FHLB stock 34,318   414   2.43     36,654   288   1.58  
Total interest-earning assets 2,389,240   40,481   3.42 %   2,063,752   32,583   3.17 %
Non-interest-earning assets 99,698         100,319      
Total assets $ 2,488,938         $ 2,164,071      
               
Interest-bearing liabilities              
NOW $ 148,068   $ 33   0.04 %   $ 137,234   $ 32   0.05 %
Regular savings 258,896   426   0.33     281,492   484   0.35  
Money market 670,980   3,188   0.96     455,276   1,829   0.81  
Certificates of deposit 570,837   3,130   1.11     446,951   2,431   1.09  
Total interest-bearing deposits 1,648,781   6,777   0.83     1,320,953   4,776   0.73  
Borrowings 230,500   1,289   1.13     274,549   1,126   0.82  
Total interest-bearing liabilities 1,879,281   8,066   0.87 %   1,595,502   5,902   0.74 %
Non-interest-bearing deposits 186,366         146,566      
Other non-interest-bearing liabilities 27,385         26,993      
Total liabilities 2,093,032         1,769,061      
Stockholders' equity 395,906         395,010      
Total liabilities and stockholders' equity $ 2,488,938         $ 2,164,071      
               
Net interest and dividend income (FTE)   32,415         26,681    
Less: FTE adjustment   (126 )       (164 )  
Net interest and dividend income (GAAP)   $ 32,289         $ 26,517    
               
Net interest rate spread (FTE)     2.55 %       2.43 %
Net interest margin (FTE)     2.74 %       2.60 %
Total deposit cost     0.74 %       0.65 %
 
(1) Interest income on tax-exempt securities and loans was adjusted to a fully taxable-equivalent (FTE) basis using a federal statutory tax rate of 35%. A statutory tax rate of 34% was used for 2016.


 
Blue Hills Bancorp, Inc.
Average Balances - Trend
(Unaudited, dollars in thousands) Quarters Ended
  June 30, March 31,   December 31,     September 30,   June 30,
  2017 2017 2016 2016 2016
Interest-earning assets          
Total loans $ 2,046,288   $ 1,958,647   $ 1,823,046   $ 1,726,088   $ 1,635,256  
Securities 309,909   398,201   408,351   403,038   419,685  
Other interest earning assets and FHLB stock 36,768   31,842   29,235   31,236   36,584  
Total interest-earning assets 2,392,965   2,388,690   2,260,632   2,160,362   2,091,525  
Non-interest-earning assets 102,750   93,397   104,188   106,589   100,104  
Total assets $ 2,495,715   $ 2,482,087   $ 2,364,820   $ 2,266,951   $ 2,191,629  
           
Interest-bearing liabilities          
NOW $ 150,711   $ 145,396   $ 144,520   $ 140,273   $ 139,100  
Regular savings 255,255   262,578   265,589   272,950   276,451  
Money market 688,600   653,165   597,891   560,098   479,564  
Certificates of deposit 573,997   567,642   526,433   471,040   458,328  
Total interest-bearing deposits 1,668,563   1,628,781   1,534,433   1,444,361   1,353,443  
Borrowings 204,786   256,500   223,693   224,660   271,242  
Total interest-bearing liabilities 1,873,349   1,885,281   1,758,126   1,669,021   1,624,685  
Non-interest-bearing deposits 189,180   183,520   188,797   171,317   145,171  
Other non-interest-bearing liabilities 33,664   21,035   29,861   33,936   27,513  
Total liabilities 2,096,193   2,089,836   1,976,784   1,874,274   1,797,369  
Stockholders' equity 399,522   392,251   388,036   392,677   394,260  
Total liabilities and stockholders' equity $ 2,495,715   $ 2,482,087   $ 2,364,820   $ 2,266,951   $ 2,191,629  


 
Blue Hills Bancorp, Inc.
Yield Trend
(Unaudited, dollars in thousands) Quarters Ended
  June 30, March 31, December 31, September 30, June 30,
  2017  2017  2016  2016  2016 
Interest-earning assets          
Total loans (1) 3.68 % 3.61 % 3.53 % 3.50 % 3.49 %
Securities (1) 2.10 % 2.28 % 3.12 % 2.38 % 1.99 %
Other interest earning assets and FHLB stock 2.65 % 2.18 % 1.97 % 2.17 % 1.78 %
Total interest-earning assets 3.46 % 3.37 % 3.43 % 3.27 % 3.16 %
           
Interest-bearing liabilities          
NOW 0.05 % 0.04 % 0.05 % 0.05 % 0.05 %
Regular savings 0.33 % 0.34 % 0.34 % 0.33 % 0.34 %
Money market 0.97 % 0.94 % 0.88 % 0.83 % 0.82 %
Certificates of deposit 1.14 % 1.07 % 1.07 % 1.11 % 1.10 %
Total interest-bearing deposits 0.85 % 0.81 % 0.77 % 0.75 % 0.74 %
Borrowings 1.26 % 1.02 % 0.90 % 0.81 % 0.82 %
  Total interest-bearing liabilities 0.89 % 0.84 % 0.79 % 0.76 % 0.75 %
           
Net interest rate spread (FTE) (1) 2.57 % 2.53 % 2.64 % 2.51 % 2.41 %
Net interest margin (FTE) (1) 2.76 % 2.71 % 2.82 % 2.68 % 2.58 %
Total deposit cost 0.76 % 0.73 % 0.69 % 0.67 % 0.67 %
 
(1) Interest income on tax-exempt securities and loans was adjusted to a fully taxable-equivalent (FTE) basis using a federal statutory tax rate of 35%. A statutory tax rate of 34% was used prior to the fourth quarter of 2016.


 
Blue Hills Bancorp Inc.
Reconciliation of GAAP to Non-GAAP Net Income
(Unaudited, dollars in thousands, except share data) Quarter Ended
  June 30, 2017
  Income Before
Income Taxes
  Provision for
Income Taxes
  Net Income   Earnings per
Common Share
(diluted)
GAAP basis $ 6,434     $ 2,566     $ 3,868     $ 0.16  
Less gain on sale of remaining available-for-sale debt securities portfolio (928 )   (333 )   (595 )   (0.02 )
Non-GAAP basis $ 5,506     $ 2,233     $ 3,273     $ 0.14  
               
  Quarter Ended
  March 31, 2017
  Income Before
Income Taxes
  Provision for
Income Taxes
  Net Income   Earnings per
Common Share
(diluted)
GAAP basis $ 9,240     $ 1,753     $ 7,487     $ 0.31  
Less gain on exchange of investment in Northeast Retirement Services (5,947 )   (2,133 )   (3,814 )   (0.16 )
Add realized loss on sale of mutual funds 1,054     378     676     0.03  
Add reversal of state tax valuation allowance     1,697     (1,697 )   (0.07 )
Non-GAAP basis $ 4,347     $ 1,695     $ 2,652     $ 0.11  
               
               
  Year to Date
  June 30, 2017
  Income Before
Income Taxes
  Provision for
Income Taxes
  Net Income   Earnings per
Common Share
(diluted)
GAAP basis $ 15,674     $ 4,319     $ 11,355     $ 0.47  
Less gain on exchange of investment in Northeast Retirement Services (5,947 )   (2,133 )   (3,814 )   (0.16 )
Less gain on sale of remaining available-for-sale debt securities portfolio (928 )   (333 )   (595 )   (0.02 )
Add realized loss on sale of mutual funds 1,054     378     676     0.03  
Add reversal of state tax valuation allowance     1,697     (1,697 )   (0.07 )
Non-GAAP basis $ 9,853     $ 3,928     $ 5,925     $ 0.25  
               
The Company's management believes that the presentation of net income on a non-GAAP basis, excluding nonrecurring items, provides useful information for evaluating the Company's operating results and any related trends that may be affecting the Company's business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP.


 
Blue Hills Bancorp, Inc.
Selected Financial Highlights
(Unaudited, dollars in thousands, except share data) Quarters Ended
    June 30,     March 31,     December 31,     September 30,     June 30,  
  2017 2017 2016 2016 2016
Performance Ratios (annualized)          
           
Diluted EPS          
GAAP $ 0.16   $ 0.31   $ 0.17   $ 0.07   $ 0.06  
Non-GAAP   0.14     0.11     n/a     n/a     n/a  
                               
Return on average assets (ROAA)                              
GAAP   0.62 %   1.22 %          0.67 %             0.29 %      0.25 %
Non-GAAP      0.53 %      0.43 %   n/a     n/a     n/a  
                               
Return on average equity (ROAE)                              
GAAP   3.88 %   7.74 %   4.10 %   1.65 %   1.39 %
Non-GAAP   3.29 %   2.74 %   n/a     n/a     n/a  
                               
Return on average tangible common equity (ROATCE) (1) (3)                              
GAAP   3.99 %   7.95 %   4.22 %   1.70 %   1.43 %
Non-GAAP   3.37 %   2.82 %   n/a     n/a     n/a  
                               
Efficiency ratio (2) (3)                              
GAAP   64 %   59 %   68 %   71 %   80 %
Non-GAAP   67 %   75 %   n/a     n/a     n/a  


(1) Average tangible common equity equals average total equity less goodwill and intangibles.
 
(2)Efficiency ratio equals noninterest expense divided by net interest and dividend income and noninterest income
 
(3) ROATCE and the efficiency ratio are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies. Management believes that these non-GAAP measures are meaningful because it is standard practice for companies in the banking industry to disclose these measures. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons.
 
See page 15 for Non-GAAP financial measures.


 
Blue Hills Bancorp, Inc.
Selected Financial Highlights
(Unaudited, dollars in thousands, except share data) Year to Date
    June 30, 2017     June 30, 2016  
Performance Ratios (annualized)    
     
Diluted EPS    
GAAP $ 0.47   $ 0.12  
Non-GAAP   0.25     n/a  
             
Return on average assets (ROAA)            
GAAP   0.92 %          0.39 %
Non-GAAP         0.48 %   n/a  
             
Return on average equity (ROAE)            
GAAP   5.78 %   2.20 %
Non-GAAP   3.02 %   n/a  
             
Return on average tangible common equity (ROATCE) (1) (3)            
GAAP   5.94 %   2.27 %
Non-GAAP   3.10 %   n/a  
             
Efficiency ratio (2) (3)   61 %   75 %
GAAP   71 %   n/a  
Non-GAAP    


(1) Average tangible common equity equals average total equity less goodwill and intangibles.
 
(2)Efficiency ratio equals noninterest expense divided by net interest and dividend income and noninterest income.
 
(3) ROATCE and the efficiency ratio are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies. Management believes that these non-GAAP measures are meaningful because it is standard practice for companies in the banking industry to disclose these measures. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons.
 
See page 15 for Non-GAAP financial measures.


 
Blue Hills Bancorp, Inc.
Selected Financial Highlights
(Unaudited, dollars in thousands, except share data)  At or for the Quarters Ended   At or for the Six Months Ended
  June 30, March 31, June 30,   June 30, June 30,
  2017 2017 2016   2017 2016
Asset Quality            
Non-performing Assets $ 12,779   $ 13,109   $ 14,983     $ 12,779   $ 14,983  
Non-performing Assets/ Total Assets 0.51 % 0.53 % 0.67 %   0.51 % 0.67 %
Allowance for Loan Losses/ Total Loans 0.97 % 0.95 % 1.07 %   0.97 % 1.07 %
Net Charge-offs (Recoveries) $ 76   $ (68 ) $ 19     $ 8   $ 109  
Annualized Net Charge-offs (Recoveries)/ Average Loans 0.01 % (0.01 )% %   % 0.01 %
Allowance for Loan Losses/ Nonperforming Loans 156 % 144 % 121 %   156 % 121 %
             
Capital/Other            
Common shares outstanding 26,860,988   26,858,328   27,397,842        
Book value per share $ 14.79   $ 14.78   $ 14.31        
Tangible book value per share $ 14.42   $ 14.40   $ 13.90        
Tangible Common Equity/Tangible Assets (1) (2) 15.47 % 15.55 % 17.08 %      
Full-time Equivalent Employees 230   227   231        
 
(1) Tangible common equity equals total equity less goodwill and intangibles, Tangible assets equals total assets less goodwill and intangibles.
 
(2)Tangible common equity/tangible assets is a non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies. Management believes that this non-GAAP measure is meaningful because it is standard practice for companies in the banking industry to disclose this measure. Therefore, management believes this measure provides useful information to investors by allowing them to make peer comparisons.


Media and Investor Contact:
William Parent, 617-360-6520

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