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Blue Hills Bancorp, Inc. Reports Fourth Quarter and Annual Earnings

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NORWOOD, Mass., Jan. 29, 2018 (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 $1.3 million, or $0.05 per diluted share, for the fourth quarter of 2017 compared to net income of $3.8 million, or $0.16 per diluted share, for the third quarter of 2017 and net income of $4.0 million, or $0.17 per diluted share, for the fourth quarter of 2016. 

The fourth quarter of 2017 included an additional income tax expense of approximately $2.5 million, or $0.10 per diluted share, related to the Tax Cuts and Jobs Act (the "Tax Act") which was enacted on December 22, 2017. The Tax Act provides for a reduction in the corporate income tax rate from 35% to 21% effective January 1, 2018 and this reduction in the corporate tax rate resulted in a downward revaluation to the Company's net deferred tax asset (DTA). The fourth quarter of 2017 also included a pre-tax charge of $317,000 ($188,000 after tax, or $0.01 per share) related to pension settlements. The third quarter of 2017 included a pre-tax loss of $118,000 ($73,000 after tax, or less than a penny per diluted share) from the sale of a purchased home equity loan portfolio.  Excluding these items, net income was $4.0 million, or $0.16 per share, for the fourth quarter of 2017 on a non-GAAP basis and $3.9 million, or $0.16 per share for the third quarter of 2017 on a non-GAAP basis (see pages 15 and 16 for a reconciliation of GAAP to non-GAAP measures).

For the year ended December 31, 2017, net income was $16.5 million, or $0.67 per diluted share. Excluding nonrecurring items, net income for the year ended December 31, 2017 on a non-GAAP basis was $13.8 million or $0.56 per share. For the year ended December 31, 2016, net income was $8.7 million or $0.35 per diluted share.

2017 HIGHLIGHTS

  • Revenue growth and expense discipline allowed the Company to generate strong operating leverage in 2017 which, in turn, resulted in improvements to the efficiency ratio and return on assets compared to 2016 (see page 18).
  • Loans grew 14% to $2.2 billion at December 31, 2017 from the end of 2016. Over the past three years, loans have increased $1.1 billion, or 93%, as the Company continued to execute on its balance sheet diversification strategy through an expansion of the residential mortgage, commercial real estate and commercial business loan portfolios. Since the end of 2014, commercial real estate loans are up 116%, 1-4 family residential mortgages have increased 101% and commercial business loans have grown 67%.
  • Mortgage banking capabilities have been expanded over the past few years, including the opening of several new loan offices in Eastern Massachusetts. Current plans call for opening additional offices in Marblehead and Dorchester during the first quarter of 2018. Mortgage banking income grew to $3.7 million in 2017, up $1.2 million, or 48%, from 2016. Mortgage banking revenue was just $282,000 in 2015. Mortgage originations have been strong the past two years, totaling $495 million in 2017 and $539 million in 2016 compared to $269 million in 2015.
  • Commercial loan originations (real estate and non-real estate combined) were $412 million in 2017 compared to $359 million in 2016 and $331 million in 2015. The Company has continued to expand its asset-based lending and specialized lending businesses as well as its commercial deposit taking capabilities, including converting to a new cash management platform. The combination of commercial and small business deposits totaled $359 million at December 31, 2017, up 20% from the end of 2016 and up 65% from the end of 2015.
  • Over the past few years, new retail branches were opened in Milton (fourth quarter of 2014), Westwood (fourth quarter of 2015), and the Seaport District of Boston (fourth quarter of 2016). These three branches had combined total deposits of $266 million at December 31, 2017. Deposits, excluding brokered deposits, increased 13% during 2017.
  • The Government Banking division has added to the growth in deposits over the past two years, as municipal deposits were $137 million at the end of 2017, up 32% from the end of 2016 and up 188% from the end of 2015.
  • During 2017, the Company completed the process of restructuring its securities portfolio by selling its mutual fund and corporate bond portfolios. The remaining portfolio was moved in-house saving annual investment management fees of approximately $400,000.
  • Net interest margin has improved over the last several quarters as the Company has benefited from maintaining an asset sensitive interest rate risk position while the Federal Reserve has been raising interest rates.
  • Capital deployment efforts continued as the Company has reduced its tangible common equity to tangible assets ratio to 14.6% at December 31, 2017 from 23.7% at September 30, 2014 (the Company's first quarter as a public company). During 2017, the Company paid a $0.20 per share special dividend and raised its regular quarterly dividend twice. The quarterly dividend is now $0.15 per share compared to $0.03 at the end of 2016.
  • Credit quality was strong throughout 2017 and the Company had net loan recoveries of $29,000 during the year.
  • The Company and its foundations made donations in excess of $1 million in each of the last four years to various nonprofits reflecting the Company's active involvement in the communities it serves. Most of the donations were made through the Blue Hills Bank charitable foundations which support non-profits in the fields of education and the arts, health and human services, affordable housing, financial literacy, and community services.

Commenting on the Company's results, William Parent, President and Chief Executive Officer of Blue Hills Bancorp, said, "We are very proud of the progress we have made since becoming a public company in the third quarter of 2014. Our investment spending over the past few years has allowed us to build out our retail, mortgage and commercial banking platforms while adding experienced and dedicated employees who have led the effort in improving our financial performance and customer experience. These efforts have resulted in significant improvement in earnings growth, operating leverage, revenue, return on assets and operating efficiency; however, we recognize that our work is far from done and we look forward to another year of progress in 2018."

BALANCE SHEET
Compared to September 30, 2017, total assets grew $123 million, or 5%, to $2.7 billion at December 31, 2017. The increase was mainly driven by a $119 million, or 6%, increase in loans to $2.2 billion at December 31, 2017. By category, commercial real estate loans increased $83 million, residential mortgage loans were up $21 million and commercial business loans grew $12 million.

Compared to December 31, 2016, total assets increased $199 million, or 8%. Loans also drove the growth in total assets in this comparison, increasing $275 million, or 14%. By category, the increase from December 31, 2016 was due to commercial real estate loans, which were up $147 million, or 22%; residential mortgage loans, which were up $72 million, or 8%; and commercial business loans, which were up $47 million, or 23%. Residential mortgage loan originations were $112 million in the fourth quarter of 2017 compared to $176 million in the fourth quarter of 2016 while commercial loans (real estate and non-real estate combined) added to the balance sheet were $156 million in the fourth quarter of 2017 compared to $93 million in the fourth quarter of 2016. The growth in loans from December 31, 2016 was partially offset by a $92 million, or 23%, decline in the combination of securities available for sale and held to maturity, primarily due to the sales of the mutual fund investment portfolio and the remaining available-for-sale corporate debt securities portfolio in the first half of 2017.

Compared to September 30, 2017, deposits grew $54 million, or 3%, to $2.0 billion at December 31, 2017. The growth from the end of the third quarter was driven by a $66 million increase in brokered deposits and a $10 million increase in deposits at the Seaport branch, partially offset by a seasonal decline of $33 million in deposits at the Nantucket Bank. Borrowings increased to $205 million at December 31, 2017 from $130 million at September 30, 2017.

Compared to December 31, 2016, deposits grew $231 million, or 13%, and included growth in all customer segments (consumer, small business, commercial and municipal). By category, the most significant increases were seen in certificates of deposit, which were up $108 million, money market deposits, which were up $73 million, and NOW and demand deposits, which were up $50 million. The growth in CDs lengthened the duration of customer deposits. These increases were partially offset by a $42 million decline in regular savings deposits. Nantucket Bank deposits increased $24 million from the end of 2016. Total brokered deposits increased $42 million from the end of 2016 while borrowings declined $46 million. 

Stockholders' equity was $398 million at December 31, 2017 compared to $399 million at September 30, 2017 and $387 million at December 31, 2016. The increase from a year ago included net income during 2017, which added $16 million to stockholders' equity and the payment of $14 million in dividends, including a special dividend of $0.20 per common share in the second quarter of 2017. There were no share repurchases in 2017.

NET INTEREST AND DIVIDEND INCOME
Reported net interest and dividend income was $17.8 million in the fourth quarter of 2017, up $840,000, or 5%, from $17.0 million in the third quarter of 2017 and up $1.8 million, or 12%, from $16.0 million in the fourth quarter of 2016. Reported net interest margin was 2.80% in the fourth quarter of 2017, up from 2.77% in the third quarter of 2017 but down from 2.81% in the fourth 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 $17.9 million in the fourth quarter of 2017, up $846,000, or 5%, from $17.0 million in the third quarter of 2017, and up $1.8 million, or 11%, from $16.0 million in the fourth 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) was 2.81% in the fourth quarter of 2017 compared to 2.78% in the third quarter of 2017 and 2.82% in the fourth 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 focuses on changes in adjusted net interest and dividend income (FTE) and adjusted net interest margin (FTE).

           
(Unaudited, dollars in thousands) December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016
Net Interest and Dividend Income          
Reported net interest and dividend income $ 17,794   $ 16,954   $ 16,408   $ 15,881   $ 15,950  
FTE adjustment 64   58   60   66   78  
Reported net interest and dividend income (FTE) 17,858   17,012   16,468   15,947   16,028  
Mutual fund dividends (1)         (844 )
Purchase accounting accretion (1) (100 ) (103 ) (181 ) (107 ) (137 )
Adjusted net interest and dividend income (FTE) (2) $ 17,758   $ 16,909   $ 16,287   $ 15,840   $ 15,047  
           
Net Interest Margin          
Reported net interest margin 2.80 % 2.77 % 2.75 % 2.70 % 2.81 %
FTE adjustment 0.01   0.01   0.01   0.01   0.01  
Reported net interest margin (FTE) 2.81   2.78   2.76   2.71   2.82  
Mutual fund dividends (1)       0.03   (0.10 )
Purchase accounting accretion (1) (0.02 ) (0.02 ) (0.03 ) (0.02 ) (0.03 )
Adjusted net interest margin (FTE) (2) 2.79 % 2.76 % 2.73 % 2.72 % 2.69 %
           
(1) 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 the first quarter of 2017 when the mutual fund dividend income was zero, the removal of the average balance had a positive impact on the adjusted net interest margin. Management believes this adjusted net interest margin is useful to investors 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.
 
(2) 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%. Therefore, management believes, these measures provide useful information to investors by allowing them to make peer comparisons.
 

Adjusted net interest and dividend income (FTE) increased $849,000, or 5%, to $17.8 million in the fourth quarter of 2017 from $16.9 million in the third quarter of 2017 and was up $2.7 million, or 18%, from $15.0 million in the fourth quarter of 2016. Adjusted net interest margin (FTE) improved to 2.79% in the fourth quarter of 2017 from 2.76% in the third quarter of 2017 and 2.69% in the fourth quarter of 2016. Adjusted net interest and dividend income (FTE) and adjusted net interest margin (FTE) 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, December 2016 and, to a lesser extent, the rate hike that was announced in December 2017. The Company maintains an asset sensitive interest rate risk position. In addition, adjusted net interest and dividend income (FTE) was helped by loan growth, as average loans increased $82 million, or 4%, from the third quarter of this year and $355 million, or 19%, from the fourth quarter of last year. The increases in both comparisons were mainly driven by higher levels of commercial real estate loans, residential mortgages, and commercial business loans. Partially offsetting the improvement in adjusted net interest and dividend income (FTE) from the fourth quarter of 2016, was a $96 million, or 24%, decline in average securities reflecting the sales of the mutual fund and remaining available for sale corporate debt securities portfolios in the first half of 2017.

NONINTEREST INCOME
Noninterest income was $2.9 million in the fourth quarter of 2017, up $104,000, or 4%, from $2.8 million in the third quarter of 2017. The improvement reflects a $949,000 increase in loan level derivative income, which is related to a higher volume of new commercial loan customer back-to-back 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. This improvement was partially offset by a $594,000 drop in mortgage banking income due to seasonality and a $328,000 drop in miscellaneous income mainly reflecting lower income on CRA-qualified Small Business Investment Company investments.

Compared to the fourth quarter of 2016, noninterest income declined $877,000, or 23%. This was mainly due to a $1.2 million decline in miscellaneous income which reflects the absence of large positive valuation adjustments recorded in 2016 on the portfolio of commercial loan customer back-to-back interest rate swap contracts and the absence of $298,000 of securities gains recorded a year ago. These declines were partially offset by a $465,000 increase in loan level derivative income and smaller increases in mortgage banking income, deposit account fees and interchange and ATM fees.

NONINTEREST EXPENSE
Noninterest expense was $14.2 million in the fourth quarter of 2017, up $830,000, or 6%, from $13.4 million in the third quarter of 2017 and up $676,000, or 5%, from $13.5 million in the fourth quarter of 2016. The fourth quarter of 2017 includes a $317,000 charge related to pension settlements and excluding such item, noninterest expense was up $513,000, or 4%, from the third quarter of 2017 and up $359,000, or 3%, from the fourth quarter of 2016. In addition, and as a result of the Tax Act, the Company recorded an expense of $70,000 in the fourth quarter of 2017 related to awarding a $1,000 bonus to each employee with a functional title below the Assistant Vice President level. The Company also took action to raise the hourly pay rate to $15 for a small number of hourly employees not already at that pay level. The linked quarter comparison also reflects a $200,000 increase in occupancy and equipment expense due mainly to non-capitalized equipment purchases made in the fourth quarter.

The fourth quarter of 2017 also includes a charge related to a settlement agreement that was reached between the Company and a former employee from a previously disclosed complaint filed by the former employee on December 30, 2014. Both parties provided mutual releases of all claims and executed a confidentiality agreement.

INCOME TAXES
The Company's effective tax rate in the fourth quarter of 2017 was 78% and included a charge of approximately $2.5 million charge related to the Tax Act which was enacted on December 22, 2017. The Tax Act provides for a reduction in the corporate income tax rate from 35% to 21% effective January 1, 2018 and this reduction in the corporate tax rate resulted in a downward revaluation of the Company's net deferred tax asset which has an adjusted balance of $6.0 million at December 31, 2017. Excluding this charge, the Company's effective tax rate was 35% in the fourth quarter of 2017 compared to 38% in the third quarter of 2017. The decline in the effective tax rate in the fourth quarter was due to the tax effect associated with equity-based compensation transactions. As a result of the Tax Act, the Company expects its effective tax rate to be approximately 25% in 2018.

ASSET QUALITY
The provision for loan losses reflects management's assessment of risks inherent in the loan portfolio. The provision for loan losses was $681,000 in the fourth quarter of 2017 compared to $242,000 in the third quarter of 2017 and $927,000 in the fourth quarter of 2016.  Loan growth and loan mix impact the level of provision needed each quarter and the linked quarter increase in the provision reflects loan growth of 6% in the fourth quarter of 2017 compared to growth of 1% in the third quarter.

The allowance for loan losses as a percentage of total loans was 0.95% at December 31, 2017 compared to 0.97% at September 30, 2017 and December 31, 2016. The Company had net loan charge-offs of $52,000 in the fourth quarter of 2017 compared to net loan recoveries of $89,000 in the third quarter of 2017 and net loan recoveries of $93,000 in the fourth quarter of 2016. Net loan recoveries for the year ended December 31, 2017 were $29,000 compared to net charge-offs of $3.2 million in 2016, which included a $3.2 million net charge-off related to one commercial customer.

Nonperforming assets were $11.5 million at December 31, 2017 and September 30, 2017 compared to $9.0 million at December 31, 2016. The increase in nonperforming assets from the fourth quarter of last year was mainly due to loans secured by one income property that were placed back on nonaccrual in the first quarter of 2017. Nonperforming assets as a percentage of total assets were 0.43% at December 31, 2017 compared to 0.45% at September 30, 2017 and 0.36% at December 31, 2016.

ABOUT BLUE HILLS BANCORP
Blue Hills Bancorp, Inc., with corporate headquarters in Norwood, MA, had assets of $2.7 billion at December 31, 2017 and operates 11 retail 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 145 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.

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

         
Blue Hills Bancorp, Inc.
Consolidated Balance Sheets
         
(Unaudited; dollars in thousands)       % Change
  December 31, 2017 September 30, 2017 December 31, 2016 December 31, 2017
vs.
September 30, 2017
December 31, 2017
vs.
December 31, 2016
Assets          
Cash and due from banks $ 16,149   $ 16,171   $ 14,752         (0.1 )%          9.5  %
Short term investments 30,018   22,192   15,744   35.3  % 90.7  %
Total cash and cash equivalents 46,167   38,363   30,496   20.3  % 51.4  %
Securities available-for-sale, at fair value 9,720   9,943   204,836   (2.2 )% (95.3 )%
Securities held-to-maturity, at amortized cost 303,716   302,833   201,027   0.3  % 51.1  %
Federal Home Loan Bank stock, at cost 12,105   9,410   13,352   28.6  % (9.3 )%
Loans held for sale 8,992   12,268   2,761   (26.7 )% 225.7  %
Loans:              
1-4 family residential 926,117   905,585   854,478   2.3  % 8.4  %
Home equity 81,358   77,819   79,132   4.5  % 2.8  %
Commercial real estate 833,978   751,209   686,522   11.0  % 21.5  %
Construction 90,712   88,979   75,950   1.9  % 19.4  %
Total real estate loans 1,932,165   1,823,592   1,696,082   6.0  % 13.9  %
Commercial business 253,001   240,801   205,832   5.1  % 22.9  %
Consumer 21,858   23,142   29,707   (5.5 )% (26.4 )%
Total loans 2,207,024   2,087,535   1,931,621   5.7  % 14.3  %
Allowance for loan losses (20,877 ) (20,248 ) (18,750 ) 3.1  % 11.3  %
Loans, net 2,186,147   2,067,287   1,912,871   5.7  % 14.3  %
Premises and equipment, net 21,573   21,850   22,034   (1.3 )% (2.1 )%
Accrued interest receivable 6,438   5,802   6,057   11.0  % 6.3  %
Goodwill and core deposit intangible 9,717   9,892   10,560   (1.8 )% (8.0 )%
Net deferred tax asset 6,000   9,295   10,146   (35.4 )% (40.9 )%
Bank-owned life insurance 33,078   32,800   32,015   0.8  % 3.3  %
Other assets 24,867   25,673   23,537   (3.1 )% 5.7  %
Total assets $ 2,668,520   $ 2,545,416   $ 2,469,692   4.8  % 8.1  %
Liabilities and Stockholders' Equity              
Deposits:              
NOW and demand $ 381,316   $ 376,864   $ 331,508   1.2  % 15.0  %
Regular savings 221,004   244,662   262,984   (9.7 )% (16.0 )%
Money market 646,603   666,388   573,204   (3.0 )% 12.8  %
Certificates of deposit 448,382   420,765   340,114   6.6  % 31.8  %
Brokered money market 92,798   41,768   53,357   122.2  % 73.9  %
Brokered certificates of deposit 249,766   235,106   247,520   6.2  % 0.9  %
Total deposits 2,039,869   1,985,553   1,808,687   2.7  % 12.8  %
Short-term borrowings 100,000   20,000   146,000   NM   (31.5 )%
Long-term debt 105,000   110,000   105,000   (4.5 )%  %
Other liabilities 25,845   30,829   23,098   (16.2 )% 11.9  %
Total liabilities 2,270,714   2,146,382   2,082,785   5.8  % 9.0  %
Common stock 259   259   259    %  %
Additional paid-in capital 254,759   254,034   249,317   0.3  % 2.2  %
Unearned compensation- ESOP (19,737 ) (19,927 ) (20,496 ) (1.0 )% (3.7 )%
Retained earnings 163,978   166,282   161,896   (1.4 )% 1.3  %
Accumulated other comprehensive loss (1,453 ) (1,614 ) (4,069 ) (10.0 )% (64.3 )%
Total stockholders' equity 397,806   399,034   386,907   (0.3 )% 2.8  %
Total liabilities and stockholders' equity $ 2,668,520   $ 2,545,416   $ 2,469,692   4.8  % 8.1  %
                           


 
Blue Hills Bancorp, Inc.
Consolidated Balance Sheet Trend
 
           
(Unaudited; dollars in thousands) December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016
Assets          
Cash and due from banks $ 16,149   $ 16,171   $ 17,292   $ 15,594   $ 14,752  
Short term investments 30,018   22,192   33,819   19,555   15,744  
Total cash and cash equivalents 46,167   38,363   51,111   35,149   30,496  
Securities available-for-sale, at fair value 9,720   9,943   10,437   173,834   204,836  
Securities held-to-maturity, at amortized cost 303,716   302,833   283,672   201,684   201,027  
Federal Home Loan Bank stock, at cost 12,105   9,410   11,943   14,828   13,352  
Loans held for sale 8,992   12,268   6,789   1,675   2,761  
Loans:          
1-4 family residential 926,117   905,585   895,015   896,951   854,478  
Home equity 81,358   77,819   84,615   80,427   79,132  
Commercial real estate 833,978   751,209   756,093   701,463   686,522  
Construction 90,712   88,979   78,062   70,855   75,950  
Total real estate loans 1,932,165   1,823,592   1,813,785   1,749,696   1,696,082  
Commercial business 253,001   240,801   227,262   210,328   205,832  
Consumer 21,858   23,142   25,047   27,325   29,707  
Total loans 2,207,024   2,087,535   2,066,094   1,987,349   1,931,621  
Allowance for loan losses (20,877 ) (20,248 ) (19,917 ) (18,875 ) (18,750 )
Loans, net 2,186,147   2,067,287   2,046,177   1,968,474   1,912,871  
Premises and equipment, net 21,573   21,850   22,004   21,858   22,034  
Accrued interest receivable 6,438   5,802   5,362   5,994   6,057  
Goodwill and core deposit intangible 9,717   9,892   10,091   10,313   10,560  
Net deferred tax asset 6,000   9,295   8,184   8,751   10,146  
Bank-owned life insurance 33,078   32,800   32,533   32,271   32,015  
Other assets 24,867   25,673   25,606   21,779   23,537  
Total assets $ 2,668,520   $ 2,545,416   $ 2,513,909   $ 2,496,610   $ 2,469,692  
Liabilities and Stockholders' Equity          
Deposits:          
NOW and demand $ 381,316   $ 376,864   $ 359,877   $ 342,118   $ 331,508  
Regular savings 221,004   244,662   246,484   265,116   262,984  
Money market 646,603   666,388   674,593   622,852   573,204  
Certificates of deposit 448,382   420,765   362,261   348,042   340,114  
Brokered money market 92,798   41,768   44,728   50,129   53,357  
Brokered certificates of deposit 249,766   235,106   277,320   228,465   247,520  
Total deposits 2,039,869   1,985,553   1,965,263   1,856,722   1,808,687  
Short-term borrowings 100,000   20,000     118,000   146,000  
Long-term debt 105,000   110,000   130,000   105,000   105,000  
Other liabilities 25,845   30,829   21,328   19,944   23,098  
Total liabilities 2,270,714   2,146,382   2,116,591   2,099,666   2,082,785  
Common stock 259   259   259   259   259  
Additional paid-in capital 254,759   254,034   252,504   250,976   249,317  
Unearned compensation- ESOP (19,737 ) (19,927 ) (20,117 ) (20,306 ) (20,496 )
Retained earnings 163,978   166,282   166,033   168,160   161,896  
Accumulated other comprehensive loss (1,453 ) (1,614 ) (1,361 ) (2,145 ) (4,069 )
Total stockholders' equity 397,806   399,034   397,318   396,944   386,907  
         Total liabilities and stockholders' equity $ 2,668,520   $ 2,545,416   $ 2,513,909   $ 2,496,610   $ 2,469,692  
                               

 

 
Blue Hills Bancorp, Inc.
Consolidated Statements of Net Income - Quarters
     
(Unaudited; dollars in thousands, except share data) Quarters Ended % Change
  December 31, 2017 September 30, 2017 December 31, 2016 December 31, 2017
vs.
September 30, 2017
December 31, 2017
vs.
December 31, 2016
Interest and fees on loans $ 20,883   $ 19,721   $ 16,099   5.9  % 29.7  %
Interest on securities 1,763   1,565   2,325   12.7  % (24.2 )%
Dividends 189   194   990   (2.6 )% (80.9 )%
Other 40   65   20   (38.5 )% 100.0  %
Total interest and dividend income 22,875   21,545   19,434   6.2  % 17.7  %
Interest on deposits 4,349   4,089   2,980   6.4  % 45.9  %
Interest on borrowings 732   502   504   45.8  % 45.2  %
Total interest expense 5,081   4,591   3,484   10.7  % 45.8  %
Net interest and dividend income 17,794   16,954   15,950   5.0  % 11.6  %
Provision for loan losses 681   242   927   181.4  % (26.5 )%
Net interest and dividend income, after
provision for loan losses
17,113   16,712   15,023   2.4  % 13.9  %
Deposit account fees 372   385   356   (3.4 )% 4.5  %
Interchange and ATM fees 418   455   388   (8.1 )% 7.7  %
Mortgage banking 552   1,146   436   (51.8 )% 26.6  %
Loss on sale of purchased home equity portfolio
  (118 )   NM   NM  
Loan level derivative fee income 1,105   156   640   608.3  % 72.7  %
Realized securities gains, net     298   NM   NM  
Bank-owned life insurance income 277   268   272   3.4  % 1.8  %
Miscellaneous 206   534   1,417   (61.4 )% (85.5 )%
Total noninterest income 2,930   2,826   3,807   3.7  % (23.0 )%
Salaries and employee benefits 7,755   7,979   7,234   (2.8 )% 7.2  %
Pension settlement charges 317       NM   NM  
Occupancy and equipment 2,224   2,024   2,291   9.9  % (2.9 )%
Data processing 1,067   1,016   988   5.0  % 8.0  %
Professional fees 540   340   736   58.8  % (26.6 )%
Advertising 503   563   677   (10.7 )% (25.7 )%
FDIC deposit insurance 220   226   157   (2.7 )% 40.1  %
Directors' fees 382   382   377    % 1.3  %
Amortization of core deposit intangible 175   199   271   (12.1 )% (35.4 )%
Other general and administrative 1,002   626   778   60.1 % 28.8  %
Total noninterest expense 14,185   13,355   13,509   6.2  % 5.0  %
Income before income taxes 5,858   6,183   5,321   (5.3 )% 10.1  %
Provision for income taxes 4,565   2,342   1,323   94.9  % 245.0  %
Net income $ 1,293   $ 3,841   $ 3,998   (66.3 )% (67.7 )%
           
Earnings per common share:          
Basic $ 0.05   $ 0.16   $ 0.17      
Diluted $ 0.05   $ 0.16   $ 0.17      
Weighted average shares outstanding:          
Basic 24,104,329
  23,973,116
  23,919,483
     
Diluted 24,795,366
  24,510,092
  24,032,613
     
           
Regular dividends declared per share $ 0.15   $ 0.15   $ 0.03      
Special dividends declared per share $   $   $      
                       


 
Blue Hills Bancorp, Inc.
Consolidated Statements of Net Income-Year to Date
 
(Unaudited; dollars in thousands, except share data) Year to Date
  December 31, 2017 December 31, 2016 % Change
Interest and fees on loans $ 76,701   $ 58,953   30.1  %
Interest on securities 7,110   8,895   (20.1 )%
Dividends 733   1,596   (54.1 )%
Other 231   94   145.7  %
Total interest and dividend income 84,775   69,538   21.9  %
Interest on deposits 15,215   10,488   45.1  %
Interest on borrowings 2,523   2,088   20.8  %
Total interest expense 17,738   12,576   41.0  %
Net interest and dividend income 67,037   56,962   17.7  %
Provision for loan losses 2,098   4,885   (57.1 )%
Net interest and dividend income, after provision for loan losses 64,939   52,077   24.7  %
Deposit account fees 1,418   1,327   6.9  %
Interchange and ATM fees 1,609   1,546   4.1  %
Mortgage banking 3,657   2,473   47.9  %
Loss on sale of purchased home equity portfolio

(118 )   NM  
Loan level derivative fee income 2,792   2,371   17.8  %
Realized securities gains (losses), net (94 ) 1,280   (107.3 )%
Gain on exchange of investment in Northeast Retirement Services 5,947     NM  
Bank-owned life insurance income 1,063   1,048   1.4  %
Bank-owned life insurance death benefit gains   506   NM  
Miscellaneous 808   1,576   (48.7 )%
Total noninterest income 17,082   12,127   40.9  %
Salaries and employee benefits 30,961   28,853   7.3  %
Pension settlement charges 317     NM  
Occupancy and equipment 8,393   7,370   13.9  %
Data processing 4,149   3,460   19.9  %
Professional fees 2,275   2,638   (13.8 )%
Advertising 1,922   2,423   (20.7 )%
FDIC deposit insurance 881   1,125   (21.7 )%
Directors' fees 1,566   1,458   7.4  %
Amortization of core deposit intangible 843   1,225   (31.2 )%
Other general and administrative 2,999   3,194   (6.1 )%
Total noninterest expense 54,306   51,746   4.9  %
Income before income taxes 27,715   12,458   122.5  %
Provision for income taxes 11,226   3,805   195.0  %
Net income $ 16,489   $ 8,653   90.6  %
       
Earnings per common share:      
Basic $ 0.69   $ 0.35    
Diluted $ 0.67   $ 0.35    
Weighted average shares outstanding:      
Basic 23,985,822
  24,420,405
   
Diluted 24,482,414
  24,540,929
   
       
Regular dividends declared per share $ 0.40   $ 0.11    
Special dividends declared per share $ 0.20   $    
               


 
Blue Hills Bancorp Inc.
Consolidated Statements of Net Income - Trend
  Quarters Ended
(Unaudited; dollars in thousands, except share data) December 31, September 30, June 30, March 31, December 31,
  2017 2017 2017 2017 2016
Interest and fees on loans $ 20,883   $ 19,721   $ 18,715   $ 17,382   $ 16,099  
Interest on securities 1,763   1,565   1,572   2,210   2,325  
Dividends 189   194   193   157   990  
Other 40   65   94   32   20  
Total interest and dividend income 22,875   21,545   20,574   19,781   19,434  
Interest on deposits 4,349   4,089   3,523   3,254   2,980  
Interest on borrowings 732   502   643   646   504  
Total interest expense 5,081   4,591   4,166   3,900   3,484  
Net interest and dividend income 17,794   16,954   16,408   15,881   15,950  
Provision for loan losses 681   242   1,118   57   927  
Net interest and dividend income, after provision for
loan losses
17,113   16,712   15,290   15,824   15,023  
Deposit account fees 372   385   341   320   356  
Interchange and ATM fees 418   455   388   348   388  
Mortgage banking 552   1,146   1,219   740   436  
Loss on sale of purchased home equity portfolio

  (118 )      
Loan level derivative fee income 1,105   156   1,367   164   640  
Realized securities gains (losses), net     928   (1,022 ) 298  
Gain on exchange of investment in Northeast Retirement
Services
      5,947    
Bank-owned life insurance income 277   268   261   257   272  
Miscellaneous 206   534   6   62   1,417  
Total noninterest income 2,930   2,826   4,510   6,816   3,807  
Salaries and employee benefits 7,755   7,979   7,664   7,563   7,234  
Pension settlement charges 317          
Occupancy and equipment 2,224   2,024   2,030   2,115   2,291  
Data processing 1,067   1,016   1,022   1,044   988  
Professional fees 540   340   526   869   736  
Advertising 503   563   489   367   677  
FDIC deposit insurance 220   226   223   212   157  
Directors' fees 382   382   428   374   377  
Amortization of core deposit intangible 175   199   222   247   271  
Other general and administrative 1,002   626   762   609   778  
Total noninterest expense 14,185   13,355   13,366   13,400   13,509  
Income before income taxes 5,858   6,183   6,434   9,240   5,321  
Provision for income taxes 4,565   2,342   2,566   1,753   1,323  
Net income $ 1,293   $ 3,841   $ 3,868   $ 7,487   $ 3,998  
           
Earnings per common share:          
Basic $ 0.05   $ 0.16   $ 0.16   $ 0.31   $ 0.17  
Diluted $ 0.05   $ 0.16   $ 0.16   $ 0.31   $ 0.17  
Weighted average shares outstanding:          
Basic 24,104,329
  23,973,116
  23,952,443
  23,911,419
  23,919,483
 
Diluted 24,795,366
  24,510,092
  24,346,553
  24,275,665
  24,032,613
 
           
Regular dividends declared per share $ 0.15   $ 0.15   $ 0.05   $ 0.05   $ 0.03  
Special dividends declared per share $   $   $ 0.20   $   $  
                               


 
Blue Hills Bancorp Inc.
Average Balances/Yields
(Unaudited; dollars in thousands) Quarters Ended
  December 31, 2017   September 30, 2017   December 31, 2016
  Average
balance
Interest Yield/
Cost
  Average
balance
Interest Yield/
Cost
  Average
balance
Interest Yield/
Cost
Interest-earning assets                      
Total loans (1) $ 2,178,388   $ 20,947   3.81 %   $ 2,096,034   $ 19,779   3.74 %   $ 1,823,046   $ 16,161   3.53 %
Securities (1) 312,313   1,836   2.33     301,484   1,609   2.12     408,351   3,206   3.12  
Other interest earning assets and
FHLB stock
28,842   156   2.15     32,051   215   2.66     29,235   145   1.97  
Total interest-earning assets 2,519,543   22,939   3.61 %   2,429,569   21,603   3.53 %   2,260,632   19,512   3.43 %
Non-interest-earning assets 96,781         101,188         104,188      
Total assets $ 2,616,324         $ 2,530,757         $ 2,364,820      
                       
Interest-bearing liabilities                      
NOW $ 160,371   $ 17   0.04 %   $ 153,224   $ 17   0.04 %   $ 144,520   $ 18   0.05 %
Regular savings 235,864   183   0.31     243,680   191   0.31     265,589   225   0.34  
Money market 718,489   1,823   1.01     708,748   1,769   0.99     597,891   1,319   0.88  
Certificates of deposit 653,573   2,326   1.41     653,339   2,112   1.28     526,433   1,418   1.07  
Total interest-bearing deposits 1,768,297   4,349   0.98     1,758,991   4,089   0.92     1,534,433   2,980   0.77  
Borrowings 202,255   732   1.44     133,788   502   1.49     223,693   504   0.90  
Total interest-bearing liabilities 1,970,552   5,081   1.02 %   1,892,779   4,591   0.96 %   1,758,126   3,484   0.79 %
Non-interest-bearing deposits 220,167         213,459         188,797      
Other non-interest-bearing liabilities 23,602         23,603         29,861      
Total liabilities 2,214,321         2,129,841         1,976,784      
Stockholders' equity 402,003         400,916         388,036      
Total liabilities and stockholders'
equity
$ 2,616,324         $ 2,530,757         $ 2,364,820      
                       
Net interest and dividend income (FTE)   17,858         17,012         16,028    
Less: FTE adjustment   (64 )       (58 )       (78 )  
Net interest and dividend income (GAAP)   $ 17,794         $ 16,954         $ 15,950    
                       
Net interest rate spread (FTE)     2.59 %       2.57 %       2.64 %
Net interest margin (FTE)     2.81 %       2.78 %       2.82 %
Total deposit cost     0.87 %       0.82 %       0.69 %
                             

(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%.

 
Blue Hills Bancorp Inc.
Average Balances/Yields
(Unaudited; dollars in thousands) Year to Date
  December 31, 2017   December 31, 2016
  Average
balance
Interest Yield/
Cost
  Average
balance
Interest Yield/
Cost
Interest-earning assets              
Total loans (1) $ 2,070,513   $ 76,932   3.72 %   $ 1,688,878   $ 59,174   3.50 %
Securities (1) 329,369   7,306   2.22     415,220   10,068   2.42  
Other interest earning assets and FHLB stock 32,345   785   2.43     33,427   603   1.80  
Total interest-earning assets 2,432,227   85,023   3.50 %   2,137,525   69,845   3.27 %
Non-interest-earning assets 99,333         102,868      
Total assets $ 2,531,560         $ 2,240,393      
               
Interest-bearing liabilities              
NOW $ 152,469   $ 67   0.04 %   $ 139,829   $ 67   0.05 %
Regular savings 249,256   800   0.32     275,347   938   0.34  
Money market 692,474   6,780   0.98     517,474   4,321   0.84  
Certificates of deposit 612,486   7,568   1.24     472,985   5,162   1.09  
Total interest-bearing deposits 1,706,685   15,215   0.89     1,405,635   10,488   0.75  
Borrowings 199,004   2,523   1.27     249,226   2,088   0.84  
Total interest-bearing liabilities 1,905,689   17,738   0.93 %   1,654,861   12,576   0.76 %
Non-interest-bearing deposits 201,715         163,403      
Other non-interest-bearing liabilities 25,477         29,459      
Total liabilities 2,132,881         1,847,723      
Stockholders' equity 398,679         392,670      
Total liabilities and stockholders' equity $ 2,531,560         $ 2,240,393      
               
Net interest and dividend income (FTE)   67,285         57,269    
Less: FTE adjustment   (248 )       (307 )  
Net interest and dividend income (GAAP)   $ 67,037         $ 56,962    
               
Net interest rate spread (FTE)     2.57 %       2.51 %
Net interest margin (FTE)     2.77 %       2.68 %
Total deposit cost     0.80 %       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%.

 
Blue Hills Bancorp, Inc.
Average Balances - Trend
(Unaudited; dollars in thousands) Quarters Ended
  December 31, September 30, June 30, March 31, December 31,
  2017 2017 2017 2017 2016
Interest-earning assets          
Total loans $ 2,178,388   $ 2,096,034   $ 2,046,288   $ 1,958,647   $ 1,823,046  
Securities 312,313   301,484   309,909   398,201   408,351  
Other interest earning assets and FHLB stock 28,842   32,051   36,768   31,842   29,235  
Total interest-earning assets 2,519,543   2,429,569   2,392,965   2,388,690   2,260,632  
Non-interest-earning assets 96,781   101,188   102,750   93,397   104,188  
Total assets $ 2,616,324   $ 2,530,757   $ 2,495,715   $ 2,482,087   $ 2,364,820  
           
Interest-bearing liabilities          
NOW $ 160,371   $ 153,224   $ 150,711   $ 145,396   $ 144,520  
Regular savings 235,864   243,680   255,255   262,578   265,589  
Money market 718,489   708,748   688,600   653,165   597,891  
Certificates of deposit 653,573   653,339   573,997   567,642   526,433  
Total interest-bearing deposits 1,768,297   1,758,991   1,668,563   1,628,781   1,534,433  
Borrowings 202,255   133,788   204,786   256,500   223,693  
Total interest-bearing liabilities 1,970,552   1,892,779   1,873,349   1,885,281   1,758,126  
Non-interest-bearing deposits 220,167   213,459   189,180   183,520   188,797  
Other non-interest-bearing liabilities 23,602   23,603   33,664   21,035   29,861  
Total liabilities 2,214,321   2,129,841   2,096,193   2,089,836   1,976,784  
Stockholders' equity 402,003   400,916   399,522   392,251   388,036  
Total liabilities and stockholders' equity $ 2,616,324   $ 2,530,757   $ 2,495,715   $ 2,482,087   $ 2,364,820  
                               


 
Blue Hills Bancorp, Inc.
Yield Trend
(Unaudited; dollars in thousands) Quarters Ended
  December 31, September 30, June 30, March 31, December 31,
  2017 2017 2017 2017 2016
Interest-earning assets          
Total loans (1) 3.81 % 3.74 % 3.68 % 3.61 % 3.53 %
Securities (1) 2.33 % 2.12 % 2.10 % 2.28 % 3.12 %
Other interest earning assets and FHLB stock 2.15 % 2.66 % 2.65 % 2.18 % 1.97 %
Total interest-earning assets 3.61 % 3.53 % 3.46 % 3.37 % 3.43 %
           
Interest-bearing liabilities          
NOW 0.04 % 0.04 % 0.05 % 0.04 % 0.05 %
Regular savings 0.31 % 0.31 % 0.33 % 0.34 % 0.34 %
Money market 1.01 % 0.99 % 0.97 % 0.94 % 0.88 %
Certificates of deposit 1.41 % 1.28 % 1.14 % 1.07 % 1.07 %
Total interest-bearing deposits 0.98 % 0.92 % 0.85 % 0.81 % 0.77 %
Borrowings 1.44 % 1.49 % 1.26 % 1.02 % 0.90 %
Total interest-bearing liabilities 1.02 % 0.96 % 0.89 % 0.84 % 0.79 %
           
Net interest rate spread (FTE) (1) 2.59 % 2.57 % 2.57 % 2.53 % 2.64 %
Net interest margin (FTE) (1) 2.81 % 2.78 % 2.76 % 2.71 % 2.82 %
Total deposit cost 0.87 % 0.82 % 0.76 % 0.73 % 0.69 %
                     

(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%.

 
Blue Hills Bancorp Inc.
Reconciliation of GAAP to Non-GAAP Net Income
(Unaudited; dollars in thousands, except share data) Quarter Ended
  December 31, 2017
  Income Before
Income Taxes
  Provision for
Income Taxes
  Net Income   Earnings per
Common Share
(diluted)
GAAP basis $ 5,858     $ 4,565     $ 1,293     $ 0.05  
Add pension settlement charges 317     129     188     0.01  
Add impact of tax reform on DTA valuation     (2,500 )   2,500     0.10  
Non-GAAP basis $ 6,175     $ 2,194     $ 3,981     $ 0.16  
  Quarter Ended
  September 30, 2017
  Income Before
Income Taxes
  Provision for
Income Taxes
  Net Income   Earnings per
Common Share
(diluted)
GAAP basis $ 6,183     $ 2,342     $ 3,841     $ 0.16  
Add loss on sale of purchased home equity portfolio 118     45     73      
Non-GAAP basis $ 6,301     $ 2,387     $ 3,914     $ 0.16  
  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  realized 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  
Less reversal of state tax valuation allowance     1,697     (1,697 )   (0.07 )
Non-GAAP basis $ 4,347     $ 1,695     $ 2,652     $ 0.11  
               

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.
Reconciliation of GAAP to Non-GAAP Net Income
(Unaudited; dollars in thousands, except share data) Year to Date
  December 31, 2017
  Income Before
Income Taxes
  Provision for
Income Taxes
  Net Income   Earnings per
Common Share
(diluted)
GAAP basis $ 27,715     $ 11,226     $ 16,489     $ 0.67  
Less gain on exchange of investment in Northeast
Retirement Services
(5,947 )   (2,133 )   (3,814 )   (0.16 )
Less realized 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 loss on sale of purchased home equity portfolio 118     45     73      
Add pension settlement charges 317     129     188     0.01  
Less reversal of state tax valuation allowance     1,697     (1,697 )   (0.07 )
Add impact of tax reform on DTA valuation     (2,500 )   2,500     0.10  
Non-GAAP basis $ 22,329     $ 8,509     $ 13,820     $ 0.56  
               

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. There we no nonrecurring items in the year ended December 31, 2016.

 
Blue Hills Bancorp, Inc.
Selected Financial Highlights
(Unaudited; dollars in thousands, except share data) Quarters Ended
  December 31, September 30, June 30, March 31, December 31,
  2017 2017 2017 2017 2016
Performance Ratios (annualized)          
           
Diluted EPS          
GAAP $ 0.05   $ 0.16   $ 0.16   $ 0.31   $ 0.17  
Non-GAAP $ 0.16   $ 0.16   $ 0.14   $ 0.11   n/a
 
           
Return on average assets (ROAA)          
GAAP 0.20 % 0.60 % 0.62 % 1.22 % 0.67 %
Non-GAAP 0.60 % 0.61 % 0.53 % 0.43 % n/a
 
           
Return on average equity (ROAE)          
GAAP 1.28 % 3.80 % 3.88 % 7.74 % 4.10 %
Non-GAAP 3.93 % 3.87 % 3.29 % 2.74 % n/a
 
           
Return on average tangible common equity
(ROATCE) (1) (3)
         
GAAP 1.31 % 3.90 % 3.99 % 7.95 % 4.22 %
Non-GAAP 4.03 % 3.97 % 3.37 % 2.82 % n/a
 
           
Efficiency ratio (2) (3)          
GAAP 68 % 68 % 64 % 59 % 68 %
Non-GAAP 67 % 67 % 67 % 75 % 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
  December 31, 2017 December 31, 2016
Performance Ratios    
     
Diluted EPS    
GAAP $ 0.67   $ 0.35  
Non-GAAP 0.56   n/a
 
     
Return on average assets (ROAA)    
GAAP 0.65 % 0.39 %
Non-GAAP 0.55 % n/a
 
     
Return on average equity (ROAE)    
GAAP 4.14 % 2.20 %
Non-GAAP 3.47 % n/a
 
     
Return on average tangible common equity (ROATCE) (1) (3)    
GAAP 4.24 % 2.27 %
Non-GAAP 3.56 % n/a
 
     
Efficiency ratio (2) (3) 65 % 75 %
GAAP 69 % 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 16 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 Year Ended
  December 31, September 30, December 31,   December 31, December 31,
  2017 2017 2016   2017 2016
Asset Quality            
Non-performing Assets $ 11,523   $ 11,540   $ 8,983     $ 11,523   $ 8,983  
Non-performing Assets/ Total Assets 0.43 % 0.45  % 0.36  %   0.43 % 0.36 %
Allowance for Loan Losses/ Total Loans 0.95 % 0.97  % 0.97  %   0.95 % 0.97 %
Net Charge-offs (Recoveries) $ 52   $ (89 ) $ (93 )   $ (29 ) $ 3,237  
Annualized Net Charge-offs (Recoveries)/ Average Loans 0.01 % (0.02 )% (0.02 )%   % 0.19 %
Allowance for Loan Losses/ Nonperforming Loans 181 % 175  % 209  %   181 % 209 %
             
Capital/Other            
Common shares outstanding 26,827,660   26,869,088   26,759,953        
Book value per share $ 14.83   $ 14.85   $ 14.46        
Tangible book value per share $ 14.47   $ 14.48   $ 14.06        
Tangible Common Equity/Tangible Assets (1) (2) 14.60 % 15.35  % 15.30  %      
Full-time Equivalent Employees 237   232   228        

(1) Tangible common equity equals total equity less goodwill and core deposit intangibles, Tangible assets equals total assets less goodwill and core deposit 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.

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