Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported first quarter 2019 GAAP Net income attributable to the Company of $19.4 million, compared to $33.3 million for the fourth quarter of 2018 and $22.7 million for the first quarter of 2018. First quarter 2019 GAAP Diluted earnings per share were $0.25, compared to $0.42 in the fourth quarter of 2018 and $0.27 in the first quarter of 2018.
| Summary Financial Results - Reported | |||||||||||||||
| % Change | |||||||||||||||
| ($ in millions, except for per share data) | 1Q19 | 4Q18 | 1Q18 | LQ | Y/Y | ||||||||||
| Net income | $19.4 | $33.3 | $22.7 | (42 | )% | (14 | )% | ||||||||
| Diluted earnings per share | $0.25 | $0.42 | $0.27 | (40 | )% | (7 | )% | ||||||||
Non-GAAP Financial Measures: | |||||||||||||||
| Pre-tax, pre-provision income | $23.0 | $42.3 | $26.3 | (46 | )% | (12 | )% | ||||||||
| Return on average common equity ("ROACE") | 10.3 | % | 17.9 | % | 12.0 | % | |||||||||
| Return on average tangible common equity ("ROATCE") | 11.6 | % | 20.5 | % | 15.2 | % | |||||||||
| nm = not meaningful | |||||||||||||||
The Company's reported financial results decreased linked quarter primarily as a result of the gain on sale related to the divestiture of Bingham, Osborn & Scarborough ("BOS") in the fourth quarter of 2018.
In addition to presenting the Company’s results in conformity with GAAP, the Company uses certain non-GAAP financial measures to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. For additional information on non-GAAP financial measures, see page 7. A full reconciliation of GAAP to non-GAAP results can be found in the footnotes beginning on page 15.
| Summary Financial Results - Operating Basis (non-GAAP) | |||||||||||||||
| % Change | |||||||||||||||
| ($ in millions, except for per share data) | 1Q191 | 4Q182 | 1Q18 | LQ | Y/Y | ||||||||||
| Net income | $20.7 | $19.9 | $22.7 | 4 | % | (9 | )% | ||||||||
| Diluted earnings per share | $0.27 | $0.27 | $0.27 | — | % | — | % | ||||||||
| Pre-tax, pre-provision income | $24.7 | $25.8 | $26.3 | (4 | )% | (6 | )% | ||||||||
| Return on average common equity | 11.0 | % | 10.7 | % | 12.0 | % | |||||||||
| Return on average tangible common equity | 12.4 | % | 12.4 | % | 15.2 | % | |||||||||
1 1Q19 results adjusted to exclude the net after-tax impact
of $1.6 million restructuring expense
2 4Q18 results
adjusted to exclude the net after-tax impact of $18.1 million gain on
sale and $3.5 million tax expense related to the divestiture of Bingham,
Osborn, & Scarborough, LLC and $1.6 million restructuring expense
"First quarter GAAP results include a restructuring charge related to executive departures during the quarter," said Anthony DeChellis, CEO of Boston Private. "This charge occurred as we assemble our management team and position for growth.
"I am pleased with our Company's performance in the core business, which excludes contributions from affiliates we divested in 2018 and Notable Items. During the first quarter, we generated positive operating leverage through disciplined management of expenses, which declined 2% year-over-year. The Commercial and Private Banking business maintained strong asset quality metrics, which contributed to a provision credit during the quarter, driving an overall increase to operating basis net income. At the same time, our AUM decreased 4% year-over-year driven by negative net flows, partially offset by positive market action."
Divested Affiliates
The Company completed the sale of Anchor Capital Advisors, LLC ("Anchor") and BOS (together, "the Divested Affiliates") during 2018. Financial results from the Divested Affiliates remain consolidated in the Company's financial results through the closing dates of the divestitures. The Anchor divestiture closing date was April 13, 2018, and the BOS divestiture closing date was December 3, 2018.
For presentation purposes, the Divested Affiliates' AUM are excluded from AUM amounts, but are included in the calculation of Core fees and income. The discussion below includes non-GAAP measures that exclude the contributions from these affiliates in order to enhance comparability of trends in the core business.
| Net Interest Income and Margin | |||||||||||||||
| % Change | |||||||||||||||
| ($ in millions) | 1Q19 | 4Q18 | 1Q18 | LQ | Y/Y | ||||||||||
| Net interest income | $58.3 | $60.0 | $57.4 | (3 | )% | 2 | % | ||||||||
| Less: Interest recovered on previous nonaccrual loans | 0.3 | 1.0 | 0.1 | (74 | )% | nm | |||||||||
| Core net interest income (non-GAAP) | 58.1 | 59.0 | 57.3 | (2 | )% | 1 | % | ||||||||
| Net interest margin | 2.90 | % | 2.94 | % | 2.90 | % | |||||||||
| Core net interest margin (non-GAAP) | 2.89 | % | 2.90 | % | 2.90 | % | |||||||||
Net interest income for the first quarter of 2019 was $58.3 million, a decrease of 3% linked quarter and an increase of 2% year-over-year. Core net interest income, which excludes interest recovered on previous nonaccrual loans, decreased 2% linked quarter and increased 1% year-over-year. The linked quarter decrease was primarily driven by higher funding costs and lower average interest-earning asset volumes. The year-over-year increase was primarily driven by higher yields on interest-earning assets and higher asset volumes, partially offset by higher funding costs.
The Company’s Core net interest margin, which excludes interest recovered on previous nonaccrual loans, decreased 1 basis point on a linked quarter basis to 2.89%, primarily driven by higher funding costs, partially offset by higher yields on interest-earning assets.
The current difference between Net interest margin ("NIM") and NIM on a fully taxable equivalent ("FTE") basis is immaterial, therefore the Company will only present NIM on a GAAP basis. The decline in the Federal tax rate in 2018 and the recent increases in interest expense have reduced the difference between NIM on a GAAP basis and NIM on a FTE basis.
| Noninterest Income | |||||||||||||||
| % Change | |||||||||||||||
| ($ in millions) | 1Q19 | 4Q18 | 1Q18 | LQ | Y/Y | ||||||||||
| Investment management fees | $2.7 | $2.8 | $11.4 | (6 | )% | (77 | )% | ||||||||
| Wealth advisory fees | 8.2 | 12.1 | 13.5 | (33 | )% | (40 | )% | ||||||||
| Wealth management and trust fees | 10.9 | 11.7 | 12.2 | (7 | )% | (10 | )% | ||||||||
| Private banking fees 3 | 2.6 | 2.1 | 2.3 | 24 | % | 13 | % | ||||||||
| Total core fees and income | $24.3 | $28.7 | $39.4 | (15 | )% | (38 | )% | ||||||||
| Total other income | 1.0 | 17.2 | 0.3 | (94 | )% | nm | |||||||||
| Total noninterest income | $25.2 | $45.8 | $39.7 | (45 | )% | (36 | )% | ||||||||
| Memo: Excluding Divested Affiliates and the gain on sale related to the divestiture of BOS | |||||||||||||||
| Investment management fees (non-GAAP) 4 | 2.7 | 2.8 | 3.0 | (6 | )% | (11 | )% | ||||||||
| Wealth advisory fees (non-GAAP) 6 | 8.2 | 8.3 | 7.8 | (1 | )% | 5 | % | ||||||||
| Total core fees and income (non-GAAP) 4 5 | $24.3 | $24.9 | $25.3 | (2 | )% | (4 | )% | ||||||||
| Total other income (non-GAAP) 6 | 1.0 | (1.0) | 0.3 | nm | nm | ||||||||||
| Total noninterest income (non-GAAP) 4 5 | $25.2 | $23.9 | $25.6 | 5 | % | (2 | )% | ||||||||
3 Private banking fees includes Other banking fee income and
Gain/ (loss) on sale of loans, net
4 Excludes Anchor
revenue of $8.4 million in 1Q18
5 Excludes BOS revenue
of $3.9 million in 4Q18 and $5.7 million in 1Q18
6
Excludes $18.1 million gain on sale in 4Q18
Total core fees and income for the first quarter of 2019 was $24.3 million, a decline of 15% linked quarter primarily driven by the divestiture of BOS and 38% year-over-year primarily driven by the divestitures of Anchor and BOS. Total other income declined 94% linked quarter due to an $18.1 million gain on sale related to BOS during the fourth quarter of 2018.
Excluding Divested Affiliates and the gain on sale related to the divestiture of BOS, Total core fees and income decreased 4% year-over-year primarily driven by lower AUM in the Wealth Management and Trust segment, partially offset by higher Wealth advisory fees.
| Assets Under Management / Advisory | ||||||||||||
| % Change | ||||||||||||
| ($ in millions) | 1Q19 | 4Q18 | 1Q18 | LQ | Y/Y | |||||||
| Wealth Management and Trust | $7,593 | $7,602 | $7,831 | — | % | (3 | )% | |||||
| Affiliate Partners 7 | 8,529 | 8,319 | 8,878 | 3 | % | (4 | )% | |||||
| Total assets under management / advisory 8 | $16,122 | $15,921 | $16,709 | 1 | % | (4 | )% | |||||
| Total net flows 8 | $(963) | $(143) | $122 | |||||||||
7 Segment includes Dalton, Greiner, Hartman, Maher
& Co., LLC ("DGHM") and KLS Professional Advisors Group, LLC ("KLS")
8
Excludes Anchor and BOS
Total assets under management / advisory, were $16.1 billion at the end of the first quarter of 2019, an increase of 1% linked quarter and a decrease of 4% year-over-year. The linked quarter increase was primarily driven by positive market action exceeding negative net flows, while the year-over-year decrease was primarily driven by negative net flows exceeding positive market action.
Net flows in the Wealth Management and Trust segment during the first quarter of 2019 were negative $508 million driven by elevated current client outflows, partially offset by $172 million of new business. Net flows in the Affiliate Partners segment were negative $455 million driven by lost clients.
| Operating Expense | |||||||||||||||
| % Change | |||||||||||||||
| ($ in millions) | 1Q19 | 4Q18 | 1Q18 | LQ | Y/Y | ||||||||||
| Salaries and employee benefits | $35.7 | $36.0 | $47.1 | (1 | )% | (24 | )% | ||||||||
| Occupancy and equipment | 8.3 | 8.0 | 7.7 | 5 | % | 8 | % | ||||||||
| Professional services | 3.6 | 4.2 | 3.2 | (16 | )% | 12 | % | ||||||||
| Marketing and business development | 1.1 | 2.3 | 1.6 | (52 | )% | (32 | )% | ||||||||
| Information systems | 5.9 | 6.3 | 5.9 | (7 | )% | — | % | ||||||||
| Amortization of intangibles | 0.7 | 0.7 | 0.8 | (1 | )% | (10 | )% | ||||||||
| FDIC insurance | 0.7 | 0.7 | 0.7 | (11 | )% | (11 | )% | ||||||||
| Restructuring | 1.6 | 2.1 | — | (20 | )% | nm | |||||||||
| Other | 3.0 | 3.3 | 3.9 | (9 | )% | (23 | )% | ||||||||
| Total operating expense | $60.6 | $63.6 | $70.9 | (5 | )% | (15 | )% | ||||||||
| Memo: Excluding Notable Items and Divested Affiliates | |||||||||||||||
| Information systems 9 | — | (0.4 | ) | — | nm | nm | |||||||||
| Restructuring | 1.6 | 2.1 | — | (20 | )% | nm | |||||||||
| Divested Affiliates operating expense | — | 2.8 | 10.6 | nm | nm | ||||||||||
| Total operating expense (non-GAAP) | $58.9 | $59.1 | $60.3 | — | % | (2 | )% | ||||||||
9 $0.4 million of Information services expense was reclassified to Restructuring expense in conjunction with the Company's formal restructuring plan announced in 4Q18
Total operating expense decreased 5% linked quarter and 15% year-over-year, primarily driven by expenses associated with Divested Affiliates that are included in prior period results.
Excluding Notable Items and Divested Affiliates, Total operating expense for the first quarter of 2019 was $58.9 million, flat linked quarter and down 2% year-over-year. Expenses remained flat linked quarter as lower marketing expense and professional fees offset higher compensation expense associated seasonal payroll taxes during the first quarter. Year-over-year, compensation declined as a result of efficiency initiatives, partially offset by higher occupancy expense and information technology investments.
Income Tax Expense
The Company's effective tax rate, excluding Notable Items, for the first quarter of 2019 was 20.1%. The tax rate was lower than prior quarters as a result of lower disallowed executive compensation related to the recent departures of certain executives.
| Loans and Deposits - QTD Averages | |||||||||||||||
| % Change | |||||||||||||||
| ($ in millions) | 1Q19 | 4Q18 | 1Q18 | LQ | Y/Y | ||||||||||
| Commercial and industrial | $1,070 | $1,027 | $933 | 4 | % | 15 | % | ||||||||
| Commercial real estate | 2,398 | 2,402 | 2,441 | — | % | (2 | )% | ||||||||
| Construction and land | 211 | 209 | 169 | 1 | % | 25 | % | ||||||||
| Residential | 2,973 | 2,907 | 2,702 | 2 | % | 10 | % | ||||||||
| Home equity | 91 | 94 | 97 | (3 | )% | (7 | )% | ||||||||
| Other consumer | 134 | 141 | 186 | (5 | )% | (28 | )% | ||||||||
| Total loans | $6,877 | $6,781 | $6,529 | 1 | % | 5 | % | ||||||||
| Non-interest bearing deposits | 1,975 | 2,092 | 1,872 | (6 | )% | 5 | % | ||||||||
| Interest bearing deposits | 4,792 | 4,826 | 4,516 | (1 | )% | 6 | % | ||||||||
| Total deposits | $6,767 | $6,918 | $6,388 | (2 | )% | 6 | % | ||||||||
| Non-interest bearing deposits as a % of Total deposits | 29 | % | 30 | % | 29 | % | |||||||||
Average total loans in the first quarter of 2019 increased 5% year-over-year, primarily driven by increases in Residential loans and C&I loans.
Average total deposits increased 6% year-over-year, primarily driven by growth in money market accounts, demand deposit accounts and certificates of deposits, partially offset by declines in savings and NOW accounts. The cost of total deposits, including DDA, was 0.84%, an increase of 7 basis points linked quarter and 43 basis points year-over-year.
| Provision and Asset Quality | |||||||||||||||
| ($ in millions) | 1Q19 | 4Q18 | 3Q18 | 2Q18 | 1Q18 | ||||||||||
| Provision/ (credit) for loan loss | $(1.4) | $0.1 | $(0.9) | $0.5 | $(1.8) | ||||||||||
| Total criticized loans | 141.3 | 146.6 | 134.7 | 114.4 | 124.1 | ||||||||||
| Total nonaccrual loans | 12.0 | 14.1 | 12.1 | 15.7 | 16.4 | ||||||||||
| Total loans 30-89 days past due and accruing | 17.7 | 22.3 | 11.6 | 5.0 | 20.4 | ||||||||||
| Total net loans (charged-off)/ recovered | (0.1) | 1.7 | 1.0 | 0.1 | — | ||||||||||
Ratios: | |||||||||||||||
| Allowance for loan losses as a % of Total loans | 1.07 | % | 1.09 | % | 1.09 | % | 1.09 | % | 1.10 | % | |||||
| Nonaccrual loans as a % of Total loans | 0.17 | % | 0.20 | % | 0.18 | % | 0.23 | % | 0.25 | % | |||||
The Company recorded a provision credit of $1.4 million for the first quarter of 2019, compared to an expense of $0.1 million for the fourth quarter of 2018 and a credit of $1.8 million in the first quarter of 2018. The provision credit in the first quarter of 2019 was primarily driven by a decline in criticized loans, partially offset by net changes to loss factors.
Total criticized loans as of March 31, 2019 was $141.3 million, a decrease of 4% linked quarter and an increase of 14% year-over-year. Total nonaccrual loans as of March 31, 2019 was $12.0 million, or 17 basis points of total loans, compared to $14.1 million, or 20 basis points of total loans as of December 31, 2018, and $16.4 million, or 25 basis points of total loans as of March 31, 2018.
| Capital | |||||||||||||
| ($ in millions, except for per share data) | 1Q19 | 4Q18 | 3Q18 | 2Q18 | 1Q18 | ||||||||
| Tangible common equity/ Tangible assets 12 | 8.3 | % | 8.1% | 7.8% | 7.5 | % | 7.4 | % | |||||
| Tangible book value per share 12 | $8.47 | $8.18 | $7.67 | $7.62 | $7.17 | ||||||||
Regulatory Capital Ratios: 13 | |||||||||||||
| Tier 1 common equity | 11.4 | % | 11.4% | 11.1% | 10.9 | % | 10.4 | % | |||||
| Total risk-based capital | 14.2 | % | 14.3% | 14.1% | 13.8 | % | 14.2 | % | |||||
| Tier 1 risk-based capital | 13.0 | % | 13.0% | 12.8% | 12.6 | % | 12.9 | % | |||||
| Tier 1 leverage capital | 9.7 | % | 9.5% | 9.2% | 9.2 | % | 9.4 | % | |||||
Common Equity Repurchase Program: | |||||||||||||
| Total shares of common stock repurchased | — | 1,505,521 | 137,144 | — | — | ||||||||
| Average price paid per share of common stock | — | $12.02 | $13.89 | — | — | ||||||||
| Aggregate repurchases of common equity ($ in millions) | — | $18.1 | $1.9 | — | — | ||||||||
12 See footnote 6 for a GAAP to non-GAAP reconciliation.
13
Current quarter information is presented based on estimated data.
Tangible book value per share as of March 31, 2019 increased 4% linked quarter and 18% year-over-year to $8.47. The increase in Tangible book value per share from March 31, 2018 to March 31, 2019 was primarily driven by the divestitures of Anchor and BOS and increased retained earnings, partially offset by common share repurchases and lower Accumulated other comprehensive income.
EPS Calculation
For calculation of income for EPS, first quarter 2019 Net income attributable to the common shareholders benefited by $1.6 million, or $0.02 per share, related to the changes in value of Redeemable noncontrolling interests ("RNCI").
Dividend Payments
Concurrent with the
release of first quarter 2019 earnings, the Board of Directors of the
Company declared a cash dividend payable to common shareholders of $0.12
per share. The record date for this dividend is May 3, 2019, and the
payment date is May 17, 2019.
Non-GAAP Financial Measures
The
Company uses certain non-GAAP financial measures to provide information
for investors to effectively analyze financial trends of ongoing
business activities, and to enhance comparability with peers across the
financial sector.
These non-GAAP financial measures include tangible book value per share; the TCE/TA ratio; return on average common equity; return on average tangible common equity; pre-tax, pre-provision income; total operating expense excluding intangibles, and restructuring, if any; the efficiency ratio; the efficiency ratio excluding amortization of intangibles, and restructuring, if any; net interest income and net interest margin excluding interest recovered on previous nonaccrual loans, also referred to as core net interest income, and core net interest margin, respectively; net income attributable to the Company excluding notable items; net income attributable to the common shareholders, treasury stock method, excluding notable items; diluted earnings per share excluding notable items; operating basis total revenue; operating basis total operating expenses.
A detailed reconciliation table of the Company’s GAAP to non-GAAP measures is included in the footnotes of the attached financial statements.
Conference Call
Management will hold a
conference call at 8:00 a.m. Eastern Time on Thursday, April 18, 2019,
to discuss the financial results, business highlights and outlook. To
access the call:
Dial In #: (888) 317-6003
Elite Entry Number: 1277765
Replay Information:
Available from April 18, 2019 at 12:00 p.m
Eastern Time until April 25, 2019
Dial In #: (877) 344-7529
Conference
Number: 10130183
The call will be simultaneously webcast and may be accessed on www.bostonprivate.com.
Boston Private Financial Holdings, Inc.
Boston
Private Financial Holdings, Inc. is a national financial services
organization that owns Wealth Management, Trust, and Commercial and
Private Banking affiliates with offices in Boston, New York, Los
Angeles, San Francisco, San Jose, and Florida. The Company has total
assets of greater than $8 billion, and manages over $16 billion of
client assets.
The Company’s affiliates serve the high net worth marketplace with high quality products and services of unique appeal to private clients. The Company also provides strategic oversight and access to resources, both financial and intellectual, to support affiliate management, marketing, compliance and legal activities. (NASDAQ: BPFH)
For more information about BPFH, visit the Company’s website at www.bostonprivate.com.
Forward-Looking Statements
Certain
statements in this press release that are not historical facts may
constitute forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and are intended to be
covered by the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve risks
and uncertainties. These statements include, among others, statements
regarding our strategy, evaluations of future interest rate trends and
liquidity, prospects for growth in assets, and prospects for overall
results over the long term. You should not place undue reliance on our
forward-looking statements. You should exercise caution in interpreting
and relying on forward-looking statements because they are subject to
significant risks, uncertainties and other factors which are, in some
cases, beyond the Company’s control. Forward-looking statements are
based on the current assumptions and beliefs of management and are only
expectations of future results. The Company’s actual results could
differ materially from those projected in the forward-looking statements
as a result of, among other factors, adverse conditions in the capital
and debt markets and the impact of such conditions on the Company’s
commercial and private banking, investment management, wealth advisory,
and trust activities; changes in interest rates; competitive pressures
from other financial institutions; the effects of weakness in general
economic conditions on a national basis or in the local markets in which
the Company operates; changes in loan defaults and charge-off rates;
changes in the value of securities and other assets, adequacy of loan
loss reserves, or decreases in deposit levels necessitating increased
borrowing to fund loans and investments; operational risks including,
but not limited to, cybersecurity, fraud and natural disasters; changes
in government regulation; the risk that goodwill and intangibles
recorded in the Company’s financial statements will become impaired; the
risk that the Company’s deferred tax asset may not be realized; risks
related to the identification and implementation of acquisitions,
dispositions and restructurings; changes in assumptions used in making
such forward-looking statements; and the other risks and uncertainties
detailed in the Company’s Annual Report on Form 10-K and updated by the
Company’s Quarterly Reports on Form 10-Q and other filings submitted to
the Securities and Exchange Commission. Forward-looking statements speak
only as of the date on which they are made. The Company does not
undertake any obligation to update any forward-looking statement to
reflect circumstances or events that occur after the date the
forward-looking statement is made.
Note to Editors:
Boston Private
Financial Holdings, Inc. is not to be confused with Boston Private Bank
& Trust Company. Boston Private Bank & Trust Company is a wholly-owned
subsidiary of BPFH. The information reported in this press release is
related to the performance and results of BPFH.
Boston Private Financial Holdings, Inc. | ||||||||||||||||||||
| March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | ||||||||||||||||
| (In thousands, except share and per share data) | ||||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 96,211 | $ | 127,259 | $ | 92,634 | $ | 364,539 | $ | 77,085 | ||||||||||
| Investment securities available-for-sale | 981,951 | 994,065 | 1,056,261 | 1,069,025 | 1,101,588 | |||||||||||||||
| Investment securities held-to-maturity | 67,548 | 70,438 | 75,468 | 78,955 | 70,809 | |||||||||||||||
| Equity securities at fair value | 7,491 | 14,228 | 7,079 | 7,942 | 16,909 | |||||||||||||||
| Stock in Federal Home Loan Bank and Federal Reserve Bank | 47,053 | 49,263 | 48,727 | 70,127 | 54,455 | |||||||||||||||
| Loans held for sale | 280 | 2,812 | 3,344 | 4,622 | 3,918 | |||||||||||||||
| Total loans | 6,926,968 | 6,893,158 | 6,720,420 | 6,767,123 | 6,602,327 | |||||||||||||||
| Less: Allowance for loan losses | 73,814 | 75,312 | 73,500 | 73,464 | 72,898 | |||||||||||||||
| Net loans | 6,853,154 | 6,817,846 | 6,646,920 | 6,693,659 | 6,529,429 | |||||||||||||||
| Other real estate owned (“OREO”) | — | 401 | 108 | 108 | — | |||||||||||||||
| Premises and equipment, net | 42,938 | 45,412 | 47,399 | 46,421 | 43,627 | |||||||||||||||
| Goodwill (1) | 57,607 | 57,607 | 75,598 | 75,598 | 75,598 | |||||||||||||||
| Intangible assets, net (1) | 11,555 | 12,227 | 13,834 | 14,584 | 15,334 | |||||||||||||||
| Fees receivable | 3,982 | 5,101 | 10,445 | 10,405 | 10,640 | |||||||||||||||
| Accrued interest receivable | 25,935 | 24,366 | 24,641 | 23,732 | 22,614 | |||||||||||||||
| Deferred income taxes, net | 22,844 | 26,638 | 27,833 | 26,316 | 32,058 | |||||||||||||||
| Right of use assets | 104,644 | — | — | — | — | |||||||||||||||
| Other assets (1) | 248,950 | 246,962 | 245,549 | 230,170 | 264,295 | |||||||||||||||
| Total assets | $ | 8,572,143 | $ | 8,494,625 | $ | 8,375,840 | $ | 8,716,203 | $ | 8,318,359 | ||||||||||
| Liabilities: | ||||||||||||||||||||
| Deposits | $ | 6,779,845 | $ | 6,781,170 | $ | 6,768,723 | $ | 6,620,179 | $ | 6,584,322 | ||||||||||
| Securities sold under agreements to repurchase | 58,329 | 36,928 | 39,453 | 58,824 | 85,257 | |||||||||||||||
| Federal funds purchased | — | 250,000 | 120,000 | — | — | |||||||||||||||
| Federal Home Loan Bank borrowings | 615,070 | 420,144 | 441,836 | 1,056,938 | 611,588 | |||||||||||||||
| Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 106,363 | 106,363 | |||||||||||||||
| Lease liabilities | 120,162 | — | — | — | — | |||||||||||||||
| Other liabilities (1) | 112,893 | 143,540 | 149,770 | 129,175 | 125,004 | |||||||||||||||
| Total liabilities | 7,792,662 | 7,738,145 | 7,626,145 | 7,971,479 | 7,512,534 | |||||||||||||||
| Redeemable noncontrolling interests (“RNCI”) | 662 | 2,526 | 11,686 | 10,747 | 16,322 | |||||||||||||||
| Shareholders’ equity: | ||||||||||||||||||||
| Preferred stock, $1.00 par value; authorized: 2,000,000 shares | — | — | — | — | 47,753 | |||||||||||||||
| Common stock, $1.00 par value; authorized: 170,000,000 shares | 83,774 | 83,656 | 84,603 | 84,479 | 84,194 | |||||||||||||||
| Additional paid-in capital | 604,288 | 600,196 | 614,157 | 613,918 | 612,526 | |||||||||||||||
| Retained earnings | 97,155 | 87,821 | 64,618 | 56,912 | 61,518 | |||||||||||||||
| Accumulated other comprehensive income/ (loss) | (6,398 | ) | (17,719 | ) | (27,578 | ) | (23,328 | ) | (21,313 | ) | ||||||||||
| Total Company’s shareholders’ equity | 778,819 | 753,954 | 735,800 | 731,981 | 784,678 | |||||||||||||||
| Noncontrolling interests | — | — | 2,209 | 1,996 | 4,825 | |||||||||||||||
| Total shareholders’ equity | 778,819 | 753,954 | 738,009 | 733,977 | 789,503 | |||||||||||||||
| Total liabilities, RNCI and shareholders’ equity | $ | 8,572,143 | $ | 8,494,625 | $ | 8,375,840 | $ | 8,716,203 | $ | 8,318,359 | ||||||||||
Boston Private Financial Holdings, Inc. | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | ||||||||||||||||
| Interest and dividend income: | (In thousands, except share and per share data) | |||||||||||||||||||
| Loans | $ | 69,933 | $ | 69,294 | $ | 68,254 | $ | 64,048 | $ | 60,929 | ||||||||||
| Investment securities | 5,983 | 6,242 | 6,230 | 6,302 | 6,418 | |||||||||||||||
| Short-term investments and other | 908 | 1,356 | 1,617 | 1,205 | 1,009 | |||||||||||||||
| Total interest and dividend income | 76,824 | 76,892 | 76,101 | 71,555 | 68,356 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 14,058 | 13,470 | 11,487 | 8,365 | 6,524 | |||||||||||||||
| Borrowings | 4,428 | 3,425 | 4,973 | 5,645 | 4,449 | |||||||||||||||
| Total interest expense | 18,486 | 16,895 | 16,460 | 14,010 | 10,973 | |||||||||||||||
| Net interest income | 58,338 | 59,997 | 59,641 | 57,545 | 57,383 | |||||||||||||||
| Provision/ (credit) for loan losses | (1,426 | ) | 93 | (949 | ) | 453 | (1,795 | ) | ||||||||||||
| Net interest income after provision/ (credit) for loan losses | 59,764 | 59,904 | 60,590 | 57,092 | 59,178 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Investment management fees | 2,650 | 2,831 | 3,245 | 4,227 | 11,425 | |||||||||||||||
| Wealth advisory fees | 8,165 | 12,111 | 13,995 | 13,693 | 13,512 | |||||||||||||||
| Wealth management and trust fees | 10,893 | 11,677 | 11,510 | 11,169 | 12,151 | |||||||||||||||
| Other banking fee income | 2,499 | 2,033 | 2,775 | 2,745 | 2,273 | |||||||||||||||
| Gain on sale of loans, net | 73 | 39 | 67 | 63 | 74 | |||||||||||||||
| Total core fees and income | 24,280 | 28,691 | 31,592 | 31,897 | 39,435 | |||||||||||||||
| Gain/ (loss) on sale of investments, net | — | (596 | ) | — | 7 | (24 | ) | |||||||||||||
| Gain/ (loss) on OREO, net | 91 | — | — | — | — | |||||||||||||||
| Gain on sale of affiliate | — | 18,142 | — | — | — | |||||||||||||||
| Other | 877 | (392 | ) | 722 | 191 | 332 | ||||||||||||||
| Total other income | 968 | 17,154 | 722 | 198 | 308 | |||||||||||||||
| Total revenue (2) | 83,586 | 105,842 | 91,955 | 89,640 | 97,126 | |||||||||||||||
| Operating expense: | ||||||||||||||||||||
| Salaries and employee benefits | 35,726 | 36,007 | 38,944 | 39,433 | 47,084 | |||||||||||||||
| Occupancy and equipment | 8,348 | 7,975 | 8,164 | 8,229 | 7,748 | |||||||||||||||
| Professional services | 3,560 | 4,229 | 2,877 | 2,872 | 3,177 | |||||||||||||||
| Marketing and business development | 1,085 | 2,275 | 1,710 | 2,070 | 1,593 | |||||||||||||||
| Information systems | 5,860 | 6,296 | 6,233 | 6,770 | 5,886 | |||||||||||||||
| Amortization of intangibles | 672 | 680 | 750 | 749 | 750 | |||||||||||||||
| FDIC insurance | 660 | 739 | 674 | 708 | 744 | |||||||||||||||
| Restructuring | 1,646 | 2,065 | 5,763 | — | — | |||||||||||||||
| Other | 2,996 | 3,291 | 3,442 | 3,553 | 3,875 | |||||||||||||||
| Total operating expense | 60,553 | 63,557 | 68,557 | 64,384 | 70,857 | |||||||||||||||
| Income before income taxes | 24,459 | 42,192 | 24,347 | 24,803 | 28,064 | |||||||||||||||
| Income tax expense | 4,917 | 8,651 | 5,461 | 17,399 | 6,026 | |||||||||||||||
| Net income from continuing operations | 19,542 | 33,541 | 18,886 | 7,404 | 22,038 | |||||||||||||||
| Net income/ (loss) from discontinued operations (3) | — | 306 | — | (2 | ) | 1,698 | ||||||||||||||
| Net income before attribution to noncontrolling interests | 19,542 | 33,847 | 18,886 | 7,402 | 23,736 | |||||||||||||||
| Less: Net income attributable to noncontrolling interests | 100 | 545 | 924 | 968 | 1,050 | |||||||||||||||
| Net income attributable to the Company | $ | 19,442 | $ | 33,302 | $ | 17,962 | $ | 6,434 | $ | 22,686 | ||||||||||
| Adjustments, treasury stock method (4) | 1,557 | 2,694 | (829 | ) | (3,524 | ) | (23 | ) | ||||||||||||
| Net income attributable to common shareholders, treasury stock method | $ | 20,999 | $ | 35,996 | $ | 17,133 | $ | 2,910 | $ | 22,663 | ||||||||||
| Weighted average basic shares outstanding | 83,285,095 | 83,750,785 | 84,017,284 | 83,509,115 | 83,097,758 | |||||||||||||||
| Weighted average diluted shares outstanding (5) | 84,010,450 | 84,863,779 | 85,498,568 | 85,413,575 | 85,271,650 | |||||||||||||||
| Diluted total earnings per share | $ | 0.25 | $ | 0.42 | $ | 0.20 | $ | 0.03 | $ | 0.27 | ||||||||||
Boston Private Financial Holdings, Inc. | ||||||||||||||||||||
| (In thousands, except per share data) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||||||||
| FINANCIAL DATA: | ||||||||||||||||||||
| Book value per common share | $ | 9.30 | $ | 9.01 | $ | 8.72 | $ | 8.69 | $ | 8.81 | ||||||||||
| Tangible book value per share (6) | $ | 8.47 | $ | 8.18 | $ | 7.67 | $ | 7.62 | $ | 7.17 | ||||||||||
| Market price per share | $ | 10.96 | $ | 10.57 | $ | 13.65 | $ | 15.90 | $ | 15.05 | ||||||||||
| ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"): | ||||||||||||||||||||
| Wealth Management and Trust | $ | 7,593,000 | $ | 7,602,000 | $ | 8,335,000 | $ | 7,789,000 | $ | 7,831,000 | ||||||||||
| Affiliate Partners, excluding Anchor and BOS | 8,529,000 | 8,319,000 | 9,388,000 | 9,072,000 | 8,878,000 | |||||||||||||||
| Total AUM, excluding Anchor and BOS (7) | 16,122,000 | 15,921,000 | 17,723,000 | 16,861,000 | 16,709,000 | |||||||||||||||
| AUM at Anchor and BOS | — | — | 4,714,000 | 4,525,000 | 13,530,000 | |||||||||||||||
| Less: Inter-company relationship | — | — | (7,000 | ) | (7,000 | ) | (11,000 | ) | ||||||||||||
| Total AUM | $ | 16,122,000 | $ | 15,921,000 | $ | 22,430,000 | $ | 21,379,000 | $ | 30,228,000 | ||||||||||
| FINANCIAL RATIOS: | ||||||||||||||||||||
| Total equity/ Total assets | 9.09 | % | 8.88 | % | 8.81 | % | 8.42 | % | 9.49 | % | ||||||||||
| Tangible common equity/ Tangible assets (6) | 8.35 | % | 8.12 | % | 7.83 | % | 7.46 | % | 7.38 | % | ||||||||||
| Tier 1 common equity/ Risk weighted assets (6) | 11.38 | % | 11.40 | % | 11.14 | % | 10.90 | % | 10.39 | % | ||||||||||
| Allowance for loan losses/ Total loans | 1.07 | % | 1.09 | % | 1.09 | % | 1.09 | % | 1.10 | % | ||||||||||
| Allowance for loan losses/ Nonaccrual loans | 614 | % | 536 | % | 608 | % | 469 | % | 445 | % | ||||||||||
| Return on average assets (annualized) | 0.93 | % | 1.56 | % | 0.84 | % | 0.31 | % | 1.11 | % | ||||||||||
| ROACE (annualized) (non-GAAP) (8) | 10.29 | % | 17.87 | % | 9.67 | % | 3.03 | % | 12.02 | % | ||||||||||
| ROATCE (annualized) (non-GAAP) (8) | 11.63 | % | 20.46 | % | 11.37 | % | 3.90 | % | 15.20 | % | ||||||||||
| Efficiency ratio (annualized) (non-GAAP) (9) | 69.67 | % | 57.14 | % | 67.04 | % | 70.29 | % | 71.46 | % | ||||||||||
| DEPOSIT DETAIL: | ||||||||||||||||||||
| Demand deposits (non-interest bearing) | $ | 2,016,838 | $ | 1,951,274 | $ | 2,001,275 | $ | 2,089,373 | $ | 1,932,732 | ||||||||||
| NOW | 605,852 | 626,685 | 568,148 | 635,841 | 689,526 | |||||||||||||||
| Savings | 68,102 | 73,834 | 72,967 | 73,675 | 73,580 | |||||||||||||||
| Money market | 3,302,244 | 3,338,892 | 3,363,062 | 3,128,211 | 3,177,692 | |||||||||||||||
| Certificates of deposit | 786,809 | 790,485 | 763,271 | 693,079 | 710,792 | |||||||||||||||
| Total deposits | $ | 6,779,845 | $ | 6,781,170 | $ | 6,768,723 | $ | 6,620,179 | $ | 6,584,322 | ||||||||||
Boston Private Financial Holdings, Inc. | |||||||||||||||||||||||||||||||||
| Average Balance | Interest Income/Expense | Average Yield/Rate | |||||||||||||||||||||||||||||||
| (In thousands) | Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
| AVERAGE BALANCE SHEET: | 03/31/19 | 12/31/18 | 03/31/18 | 03/31/19 | 12/31/18 | 03/31/18 | 03/31/19 | 12/31/18 | 03/31/18 | ||||||||||||||||||||||||
| AVERAGE ASSETS | |||||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||
| Cash and investments (10): | |||||||||||||||||||||||||||||||||
| Taxable investment securities | $ | 244,230 | $ | 317,230 | $ | 333,253 | $ | 1,185 | $ | 1,486 | $ | 1,510 | 1.94 | % | 1.87 | % | 1.81 | % | |||||||||||||||
| Non-taxable investment securities | 306,868 | 301,242 | 296,958 | 1,901 | 1,833 | 1,730 | 2.48 | % | 2.43 | % | 2.33 | % | |||||||||||||||||||||
| Mortgage-backed securities | 521,788 | 536,264 | 588,461 | 2,897 | 2,923 | 3,178 | 2.22 | % | 2.18 | % | 2.16 | % | |||||||||||||||||||||
| Short-term investments and other | 79,603 | 134,182 | 161,573 | 908 | 1,356 | 1,009 | 4.58 | % | 3.98 | % | 2.51 | % | |||||||||||||||||||||
| Total cash and investments | 1,152,489 | 1,288,918 | 1,380,245 | 6,891 | 7,598 | 7,427 | 2.39 | % | 2.35 | % | 2.15 | % | |||||||||||||||||||||
| Loans (10) (11): | |||||||||||||||||||||||||||||||||
| Commercial and industrial | 1,070,161 | 1,027,128 | 933,209 | 10,979 | 10,431 | 8,460 | 4.10 | % | 3.97 | % | 3.63 | % | |||||||||||||||||||||
| Commercial real estate | 2,398,413 | 2,402,304 | 2,441,215 | 28,151 | 29,016 | 26,151 | 4.69 | % | 4.73 | % | 4.28 | % | |||||||||||||||||||||
| Construction and land | 211,351 | 209,475 | 169,384 | 2,641 | 2,588 | 1,937 | 5.00 | % | 4.83 | % | 4.57 | % | |||||||||||||||||||||
| Residential | 2,972,945 | 2,907,446 | 2,702,317 | 25,545 | 24,630 | 21,766 | 3.44 | % | 3.39 | % | 3.22 | % | |||||||||||||||||||||
| Home equity | 90,646 | 93,656 | 97,191 | 1,121 | 1,148 | 1,042 | 5.02 | % | 4.86 | % | 4.35 | % | |||||||||||||||||||||
| Other consumer | 133,937 | 140,591 | 185,596 | 1,496 | 1,481 | 1,573 | 4.53 | % | 4.18 | % | 3.44 | % | |||||||||||||||||||||
| Total loans | 6,877,453 | 6,780,600 | 6,528,912 | 69,933 | 69,294 | 60,929 | 4.07 | % | 4.03 | % | 3.74 | % | |||||||||||||||||||||
| Total earning assets | 8,029,942 | 8,069,518 | 7,909,157 | 76,824 | 76,892 | 68,356 | 3.83 | % | 3.76 | % | 3.46 | % | |||||||||||||||||||||
| LESS: Allowance for loan losses | 75,537 | 75,006 | 74,834 | ||||||||||||||||||||||||||||||
| Cash and due from banks (non-interest bearing) | 46,172 | 53,633 | 51,944 | ||||||||||||||||||||||||||||||
| Other assets | 493,148 | 397,153 | 425,617 | ||||||||||||||||||||||||||||||
| TOTAL AVERAGE ASSETS | $ | 8,493,725 | $ | 8,445,298 | $ | 8,311,884 | |||||||||||||||||||||||||||
| AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
| Interest-bearing deposits (12): | |||||||||||||||||||||||||||||||||
| Savings and NOW | $ | 674,872 | $ | 649,937 | $ | 716,930 | $ | 296 | $ | 377 | $ | 215 | 0.18 | % | 0.23 | % | 0.12 | % | |||||||||||||||
| Money market | 3,341,397 | 3,392,039 | 3,141,564 | 10,072 | 9,502 | 4,314 | 1.22 | % | 1.11 | % | 0.56 | % | |||||||||||||||||||||
| Certificates of deposit | 775,817 | 784,184 | 657,109 | 3,690 | 3,591 | 1,995 | 1.93 | % | 1.82 | % | 1.23 | % | |||||||||||||||||||||
| Total interest-bearing deposits (12) | 4,792,086 | 4,826,160 | 4,515,603 | 14,058 | 13,470 | 6,524 | 1.19 | % | 1.11 | % | 0.59 | % | |||||||||||||||||||||
| Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 1,121 | 1,043 | 846 | 4.22 | % | 3.84 | % | 3.18 | % | |||||||||||||||||||||
| FHLB borrowings and other | 615,985 | 515,734 | 878,093 | 3,307 | 2,382 | 3,603 | 2.15 | % | 1.81 | % | 1.64 | % | |||||||||||||||||||||
| Total interest-bearing liabilities (12) | 5,514,434 | 5,448,257 | 5,500,059 | 18,486 | 16,895 | 10,973 | 1.36 | % | 1.23 | % | 0.80 | % | |||||||||||||||||||||
| Non-interest bearing demand deposits (12) | 1,974,526 | 2,092,070 | 1,872,472 | ||||||||||||||||||||||||||||||
| Other liabilities | 236,426 | 154,612 | 133,243 | ||||||||||||||||||||||||||||||
| Total average liabilities | 7,725,386 | 7,694,939 | 7,505,774 | ||||||||||||||||||||||||||||||
| Redeemable noncontrolling interests | 2,056 | 11,046 | 22,085 | ||||||||||||||||||||||||||||||
| Average shareholders’ equity | 766,283 | 739,313 | 784,025 | ||||||||||||||||||||||||||||||
| TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | $ | 8,493,725 | $ | 8,445,298 | $ | 8,311,884 | |||||||||||||||||||||||||||
| Net interest income | $ | 58,338 | $ | 59,997 | $ | 57,383 | |||||||||||||||||||||||||||
| Interest rate spread | 2.47 | % | 2.53 | % | 2.66 | % | |||||||||||||||||||||||||||
| Bank only net interest margin | 2.96 | % | 3.02 | % | 3.00 | % | |||||||||||||||||||||||||||
| Net interest margin | 2.90 | % | 2.96 | % | 2.95 | % | |||||||||||||||||||||||||||
| Average total deposits (12) | 6,766,612 | 6,918,230 | 6,388,075 | 0.84 | % | 0.77 | % | 0.41 | % | ||||||||||||||||||||||||
| Average total deposits and borrowings (12) | 7,488,960 | 7,540,327 | 7,372,531 | 1.00 | % | 0.89 | % | 0.60 | % | ||||||||||||||||||||||||
Boston Private Financial Holdings, Inc. | |||||||||||||||||||
| (In thousands) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | ||||||||||||||
| LOAN DATA (13): | |||||||||||||||||||
| Other commercial and industrial loans: | |||||||||||||||||||
| New England | $ | 492,800 | $ | 503,201 | $ | 460,409 | $ | 481,081 | $ | 444,419 | |||||||||
| San Francisco Bay Area | 39,829 | 43,702 | 41,256 | 35,220 | 23,491 | ||||||||||||||
| Southern California | 82,741 | 76,134 | 81,549 | 66,892 | 63,183 | ||||||||||||||
| Total other commercial and industrial loans | $ | 615,370 | $ | 623,037 | $ | 583,214 | $ | 583,193 | $ | 531,093 | |||||||||
| New England | $ | 342,270 | $ | 344,079 | $ | 330,753 | $ | 332,572 | $ | 313,955 | |||||||||
| San Francisco Bay Area | 96,024 | 96,387 | 96,775 | 94,959 | 95,380 | ||||||||||||||
| Southern California | 11,198 | 11,205 | 11,279 | 11,351 | 11,422 | ||||||||||||||
| Total commercial tax-exempt loans | $ | 449,492 | $ | 451,671 | $ | 438,807 | $ | 438,882 | $ | 420,757 | |||||||||
| Total commercial and industrial loans | $ | 1,064,862 | $ | 1,074,708 | $ | 1,022,021 | $ | 1,022,075 | $ | 951,850 | |||||||||
| Commercial real estate loans: | |||||||||||||||||||
| New England | $ | 1,068,619 | $ | 1,022,061 | $ | 1,043,494 | $ | 1,069,942 | $ | 1,046,178 | |||||||||
| San Francisco Bay Area | 720,276 | 714,449 | 724,243 | 739,769 | 721,871 | ||||||||||||||
| Southern California | 650,153 | 659,182 | 631,343 | 694,810 | 696,954 | ||||||||||||||
| Total commercial real estate loans | $ | 2,439,048 | $ | 2,395,692 | $ | 2,399,080 | $ | 2,504,521 | $ | 2,465,003 | |||||||||
| Construction and land loans: | |||||||||||||||||||
| New England | $ | 136,097 | $ | 153,929 | $ | 114,411 | $ | 88,068 | $ | 79,563 | |||||||||
| San Francisco Bay Area | 43,130 | 41,516 | 40,755 | 37,783 | 34,050 | ||||||||||||||
| Southern California | 31,391 | 44,861 | 42,358 | 46,173 | 51,627 | ||||||||||||||
| Total construction and land loans | $ | 210,618 | $ | 240,306 | $ | 197,524 | $ | 172,024 | $ | 165,240 | |||||||||
| Residential loans: | |||||||||||||||||||
| New England | $ | 1,692,421 | $ | 1,689,318 | $ | 1,650,989 | $ | 1,643,039 | $ | 1,619,856 | |||||||||
| San Francisco Bay Area | 570,132 | 559,578 | 554,502 | 533,394 | 511,903 | ||||||||||||||
| Southern California | 730,579 | 700,077 | 657,388 | 631,773 | 605,610 | ||||||||||||||
| Total residential loans | $ | 2,993,132 | $ | 2,948,973 | $ | 2,862,879 | $ | 2,808,206 | $ | 2,737,369 | |||||||||
| Home equity loans: | |||||||||||||||||||
| New England | $ | 59,074 | $ | 57,617 | $ | 61,291 | $ | 61,125 | $ | 65,434 | |||||||||
| San Francisco Bay Area | 18,279 | 19,722 | 19,769 | 17,366 | 19,314 | ||||||||||||||
| Southern California | 11,267 | 13,082 | 12,330 | 13,310 | 9,583 | ||||||||||||||
| Total home equity loans | $ | 88,620 | $ | 90,421 | $ | 93,390 | $ | 91,801 | $ | 94,331 | |||||||||
| Other consumer loans: | |||||||||||||||||||
| New England | $ | 110,363 | $ | 120,402 | $ | 121,685 | $ | 145,726 | $ | 166,413 | |||||||||
| San Francisco Bay Area | 11,956 | 12,663 | 14,228 | 14,659 | 13,569 | ||||||||||||||
| Southern California | 8,369 | 9,993 | 9,613 | 8,111 | 8,552 | ||||||||||||||
| Total other consumer loans | $ | 130,688 | $ | 143,058 | $ | 145,526 | $ | 168,496 | $ | 188,534 | |||||||||
| Total loans: | |||||||||||||||||||
| New England | $ | 3,901,644 | $ | 3,890,607 | $ | 3,783,032 | $ | 3,821,553 | $ | 3,735,818 | |||||||||
| San Francisco Bay Area | 1,499,626 | 1,488,017 | 1,491,528 | 1,473,150 | 1,419,578 | ||||||||||||||
| Southern California | 1,525,698 | 1,514,534 | 1,445,860 | 1,472,420 | 1,446,931 | ||||||||||||||
| Total loans | $ | 6,926,968 | $ | 6,893,158 | $ | 6,720,420 | $ | 6,767,123 | $ | 6,602,327 | |||||||||
Boston Private Financial Holdings, Inc. | ||||||||||||||||||||
| (In thousands) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||||||||
| CREDIT QUALITY (13): | ||||||||||||||||||||
| Special mention loans: | ||||||||||||||||||||
| New England | $ | 34,675 | $ | 31,147 | $ | 20,382 | $ | 18,515 | $ | 33,282 | ||||||||||
| San Francisco Bay Area | 23,486 | 18,585 | 18,359 | 19,255 | 14,117 | |||||||||||||||
| Southern California | 28,626 | 28,796 | 28,665 | 15,678 | 15,689 | |||||||||||||||
| Total special mention loans | $ | 86,787 | $ | 78,528 | $ | 67,406 | $ | 53,448 | $ | 63,088 | ||||||||||
| Accruing classified loans (14): | ||||||||||||||||||||
| New England | $ | 15,830 | $ | 10,392 | $ | 10,083 | $ | 11,493 | $ | 8,767 | ||||||||||
| San Francisco Bay Area | 20,801 | 24,584 | 24,252 | 12,766 | 14,970 | |||||||||||||||
| Southern California | 5,890 | 19,119 | 21,045 | 21,194 | 21,436 | |||||||||||||||
| Total accruing classified loans | $ | 42,521 | $ | 54,095 | $ | 55,380 | $ | 45,453 | $ | 45,173 | ||||||||||
| Nonaccruing loans: | ||||||||||||||||||||
| New England | $ | 6,161 | $ | 6,728 | $ | 5,131 | $ | 7,282 | $ | 8,056 | ||||||||||
| San Francisco Bay Area | 2,480 | 2,488 | 1,169 | 1,319 | 1,442 | |||||||||||||||
| Southern California | 3,378 | 4,841 | 5,797 | 7,050 | 6,882 | |||||||||||||||
| Total nonaccruing loans | $ | 12,019 | $ | 14,057 | $ | 12,097 | $ | 15,651 | $ | 16,380 | ||||||||||
| Loans 30-89 days past due and accruing: | ||||||||||||||||||||
| New England | $ | 7,232 | $ | 15,961 | $ | 9,193 | $ | 4,653 | $ | 10,571 | ||||||||||
| San Francisco Bay Area | 2,021 | 2,246 | 1,651 | — | 2,251 | |||||||||||||||
| Southern California | 8,462 | 4,092 | 763 | 324 | 7,554 | |||||||||||||||
| Total loans 30-89 days past due and accruing | $ | 17,715 | $ | 22,299 | $ | 11,607 | $ | 4,977 | $ | 20,376 | ||||||||||
| Loans (charged-off)/ recovered, net: | ||||||||||||||||||||
| New England | $ | 222 | $ | (100 | ) | $ | 232 | $ | (73 | ) | $ | (285 | ) | |||||||
| San Francisco Bay Area | 18 | 1,804 | 706 | 91 | 67 | |||||||||||||||
| Southern California | (312 | ) | 15 | 47 | 95 | 169 | ||||||||||||||
| Total net loans (charged-off)/ recovered | $ | (72 | ) | $ | 1,719 | $ | 985 | $ | 113 | $ | (49 | ) | ||||||||
Boston Private Financial Holdings, Inc. | ||
FOOTNOTES: | ||
| (1) | On April 13, 2018, the Company completed the sale of its ownership interest in Anchor to the management team of Anchor for an upfront cash payment and future payments. Anchor’s results remain consolidated in the Company’s results through the closing date. For presentation purposes, Anchor’s AUM is excluded from prior period AUM amounts, whereas it is included in the calculation of Core fees and income through the closing date. The Company classified the assets and liabilities of Anchor as held for sale at March 31, 2018, which are included with Other assets and Other liabilities, respectively, on the Company’s consolidated balance sheet. For regulatory purposes, the goodwill and intangible assets of Anchor are included in consolidated calculations through the closing date. | |
| On December 3, 2018, the Company completed the sale of its ownership interest in BOS to the management team of BOS for an upfront cash payment and an eight-year revenue sharing agreement with BOS. For presentation purposes, BOS' AUM is excluded from prior period AUM amounts, whereas it is included in the calculation of Core fees and income through the closing date. For regulatory purposes, the goodwill and intangible assets of BOS are included in consolidated calculations through the closing date. | ||
| See footnotes 6 and 8, below. | ||
| (2) | Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. | |
| (3) | Net income from discontinued operations consists of contingent payments, net of expenses, related to our divested affiliate, Westfield Capital Management Company, LLC. The Company received its final contingent payment in the first quarter of 2018 related to this affiliate and a tax benefit related to deferred taxes in the fourth quarter of 2018 when annual tax returns were filed. | |
| (4) | Adjustments to Net income attributable to the Company to arrive at Net income attributable to the common shareholders, treasury stock method, as presented in these tables, include decrease/ (increase) in Noncontrolling interests redemption value and dividends paid on preferred stock, if any, including deemed dividends on redemption of the 6.95% Non-Cumulative Perpetual Preferred Stock, Series D (“the Series D preferred stock”), if any. On June 15, 2018, the Company redeemed all $50 million of the outstanding Series D preferred stock. | |
| (5) | When the Company has positive Net income from continuing operations attributable to the common shareholders, the Company adds additional shares to basic Weighted average shares outstanding to arrive at Weighted average diluted shares outstanding for the Diluted earnings per share calculation. These additional shares reflect the assumed exercise, conversion, or contingent issuance of dilutive securities. If the additional shares would result in anti-dilution they would be excluded from the Diluted earnings per share calculation. The potential dilutive shares relate to: unexercised stock options, unvested restricted stock and unexercised stock warrants, if any. See Part II. Item 8. “Financial Statements and Supplementary Data - Note 16: Earnings Per Share” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for additional information. | |
| (6) | The Company uses certain non-GAAP financial measures, such as: Tangible book value per share and the Tangible common equity (“TCE”) to Tangible assets (“TA”) ratio to provide information for investors to effectively analyze financial trends of ongoing business activities and to enhance comparability with peers across the financial sector. | |
| Reconciliations from the Company’s GAAP Total equity to Total assets ratio to the non-GAAP TCE to TA ratio, and from GAAP Book value to non-GAAP Tangible book value are presented below: | ||
| The Company calculates TA by adjusting Total assets to exclude Goodwill and intangible assets. | ||
| The Company calculates TCE by adjusting Total equity to exclude non-convertible Series D preferred stock, if any, and exclude Goodwill and intangible assets, net. On June 15, 2018, the Company redeemed all $50 million of the outstanding Series D preferred stock. | ||
Boston Private Financial Holdings, Inc. | ||||||||||||||||||||
| (In thousands, except share and per share data) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||||||||
| Total balance sheet assets | $ | 8,572,143 | $ | 8,494,625 | $ | 8,375,840 | $ | 8,716,203 | $ | 8,318,359 | ||||||||||
| LESS: Goodwill and intangible assets, net * | (69,162 | ) | (69,834 | ) | (89,432 | ) | (90,182 | ) | (138,026 | ) | ||||||||||
| Tangible assets (non-GAAP) | $ | 8,502,981 | $ | 8,424,791 | $ | 8,286,408 | $ | 8,626,021 | $ | 8,180,333 | ||||||||||
| Total shareholders’ equity | $ | 778,819 | $ | 753,954 | $ | 738,009 | $ | 733,977 | $ | 789,503 | ||||||||||
| LESS: Series D preferred stock (non-convertible) | — | — | — | — | (47,753 | ) | ||||||||||||||
| LESS: Goodwill and intangible assets, net * | (69,162 | ) | (69,834 | ) | (89,432 | ) | (90,182 | ) | (138,026 | ) | ||||||||||
| Total adjusting items | (69,162 | ) | (69,834 | ) | (89,432 | ) | (90,182 | ) | (185,779 | ) | ||||||||||
| Tangible common equity (non-GAAP) | $ | 709,657 | $ | 684,120 | $ | 648,577 | $ | 643,795 | $ | 603,724 | ||||||||||
| Total equity/ Total assets | 9.09 | % | 8.88 | % | 8.81 | % | 8.42 | % | 9.49 | % | ||||||||||
| Tangible common equity/ Tangible assets (non-GAAP) | 8.35 | % | 8.12 | % | 7.83 | % | 7.46 | % | 7.38 | % | ||||||||||
| Total risk weighted assets ** | $ | 6,301,912 | $ | 6,161,677 | $ | 6,057,002 | $ | 6,104,586 | $ | 5,974,866 | ||||||||||
| Tier 1 common equity ** | $ | 717,138 | $ | 702,728 | $ | 674,641 | $ | 665,628 | $ | 621,084 | ||||||||||
| Tier 1 common equity/ Risk weighted assets ** | 11.38 | % | 11.40 | % | 11.14 | % | 10.90 | % | 10.39 | % | ||||||||||
| End of period shares outstanding | 83,773,650 | 83,655,651 | 84,602,519 | 84,478,858 | 84,194,267 | |||||||||||||||
| Book value per common share | $ | 9.30 | $ | 9.01 | $ | 8.72 | $ | 8.69 | $ | 8.81 | ||||||||||
| Tangible book value per share (non-GAAP) | $ | 8.47 | $ | 8.18 | $ | 7.67 | $ | 7.62 | $ | 7.17 | ||||||||||
| * Includes goodwill and intangible assets at an affiliate held for sale at March 31, 2018. | ||
| ** Risk weighted assets and Tier 1 common equity for March 31, 2019 are presented based on estimated data. | ||
| (7) | Assets under management and advisory have been reduced to exclude those assets managed or advised by Anchor and BOS for periods when Anchor and BOS were owned by the Company. | |
| (8) | The Company uses certain non-GAAP financial measures, such as: ROACE and ROATCE to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. | |
| Reconciliations from the Company’s GAAP Return on average equity ratio to the non-GAAP ROACE and the non-GAAP ROATCE ratios are presented below: | ||
| The Company annualizes income data based on the number of days in the period presented and a 365 day year. The Company calculates Average common equity by adjusting Average equity to exclude Average preferred equity, if any. The Company calculates Average tangible common equity by adjusting Average equity to exclude Average goodwill and intangible assets, net and Average preferred equity, if any. |
Boston Private Financial Holdings, Inc. | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| (In thousands) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||||||||
| Total average shareholders’ equity | $ | 766,283 | $ | 739,313 | $ | 737,188 | $ | 775,949 | $ | 784,025 | ||||||||||
| LESS: Average Series D preferred stock | — | — | — | (39,881 | ) | (47,753 | ) | |||||||||||||
| Average common equity (non-GAAP) | 766,283 | 739,313 | 737,188 | 736,068 | 736,272 | |||||||||||||||
| LESS: Average goodwill and intangible assets, net * | (69,498 | ) | (83,153 | ) | (89,830 | ) | (102,533 | ) | (138,451 | ) | ||||||||||
| Average tangible common equity (non-GAAP) | $ | 696,785 | $ | 656,160 | $ | 647,358 | $ | 633,535 | $ | 597,821 | ||||||||||
| Net income attributable to the Company | $ | 19,442 | $ | 33,302 | $ | 17,962 | $ | 6,434 | $ | 22,686 | ||||||||||
| LESS: Dividends on Series D preferred stock | — | — | — | (869 | ) | (869 | ) | |||||||||||||
| Common net income (non-GAAP) | 19,442 | 33,302 | 17,962 | 5,565 | 21,817 | |||||||||||||||
| ADD: Amortization of intangibles, net of tax | 531 | 537 | 593 | 592 | 593 | |||||||||||||||
| Tangible common net income (non-GAAP) | $ | 19,973 | $ | 33,839 | $ | 18,555 | $ | 6,157 | $ | 22,410 | ||||||||||
| Return on average equity - (annualized) | 10.29 | % | 17.87 | % | 9.67 | % | 3.33 | % | 11.73 | % | ||||||||||
| ROACE - (annualized) (non-GAAP) | 10.29 | % | 17.87 | % | 9.67 | % | 3.03 | % | 12.02 | % | ||||||||||
| ROATCE - (annualized) (non-GAAP) | 11.63 | % | 20.46 | % | 11.37 | % | 3.90 | % | 15.20 | % | ||||||||||
| * Includes goodwill and intangible assets at an affiliate held for sale at March 31, 2018. | |
| (9) | The Company uses certain non-GAAP financial measures, such as: Pre-tax, pre-provision income; Total operating expenses excluding amortization of intangibles, goodwill impairment, and restructuring expense, if any; and the Efficiency ratio to provide information for investors to effectively analyze financial trends of ongoing business activities and to enhance comparability with peers across the financial sector. |
| Reconciliations from the Company’s GAAP Income from continuing operations before income taxes to non-GAAP Pre-tax, pre-provision income; from GAAP Total operating expense to non-GAAP Total operating expense excluding amortization of intangibles, impairment of goodwill, and restructuring, if any; and from GAAP Efficiency ratio to non-GAAP Efficiency ratio, excluding amortization of intangibles, impairment of goodwill, and restructuring, if any, are presented below: |
Boston Private Financial Holdings, Inc. | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| (In thousands) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||||||||
| Income before income taxes (GAAP) | $ | 24,459 | $ | 42,192 | $ | 24,347 | $ | 24,803 | $ | 28,064 | ||||||||||
| ADD BACK: Provision/ (credit) for loan losses | (1,426 | ) | 93 | (949 | ) | 453 | (1,795 | ) | ||||||||||||
| Pre-tax, pre-provision income (non-GAAP) | $ | 23,033 | $ | 42,285 | $ | 23,398 | $ | 25,256 | $ | 26,269 | ||||||||||
| Total operating expense (GAAP) | $ | 60,553 | $ | 63,557 | $ | 68,557 | $ | 64,384 | $ | 70,857 | ||||||||||
| Less: Amortization of intangibles | 672 | 680 | 750 | 749 | 750 | |||||||||||||||
| Less: Restructuring | 1,646 | 2,065 | 5,763 | — | — | |||||||||||||||
| Total operating expense (non-GAAP) | $ | 58,235 | $ | 60,812 | $ | 62,044 | $ | 63,635 | $ | 70,107 | ||||||||||
| Net interest income | $ | 58,338 | $ | 59,997 | $ | 59,641 | $ | 57,545 | $ | 57,383 | ||||||||||
| Total core fees and income | 24,280 | 28,691 | 31,592 | 31,897 | 39,435 | |||||||||||||||
| Gain on sale of affiliate | — | 18,142 | — | — | — | |||||||||||||||
| Total other income | 968 | (988 | ) | 722 | 198 | 308 | ||||||||||||||
| Total revenue | $ | 83,586 | $ | 105,842 | $ | 91,955 | $ | 89,640 | $ | 97,126 | ||||||||||
| Efficiency ratio (GAAP) | 72.44 | % | 60.05 | % | 74.55 | % | 71.83 | % | 72.95 | % | ||||||||||
| Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) | 69.67 | % | 57.14 | % | 67.04 | % | 70.29 | % | 71.46 | % | ||||||||||
| (10) | Currently, the FTE adjustment for interest income on Non-taxable investments and loans is immaterial and therefore has not been applied. For comparison purposes, GAAP amounts are shown for all periods presented. | |
| (11) | Average loans includes Loans held for sale and Nonaccrual loans. |
Boston Private Financial Holdings, Inc. | ||
| (12) | Average total deposits is the sum of Average total interest-bearing deposits and Average non-interest bearing demand deposits. Average total deposits and borrowings is the sum of Average total interest-bearing liabilities and Average non-interest bearing demand deposits. | |
| (13) | The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lenders' regional offices. | |
| (14) | Accruing classified loans include loans that are classified as substandard but are still accruing interest income. Boston Private Bank & Trust Company may classify a loan as substandard where known information about possible credit problems of the related borrowers causes management to have doubts as to the ability of such borrowers to comply with the present repayment terms and which may result in disclosure of such loans as nonaccrual at some time in the future. | |
| (15) | The Company uses certain non-GAAP financial measures, such as: Net interest income excluding interest recovered on previous nonaccrual loans and Net interest margin excluding interest recovered on previous nonaccrual loans, also referred to as Core net interest margin, to provide information for investors to effectively analyze financial trends of ongoing business activities and to enhance comparability with peers across the financial sector. | |
| Reconciliations from the Company’s GAAP Net interest income to non-GAAP Net interest income excluding interest recovered on previous nonaccrual loans and from GAAP Net interest margin to non-GAAP Net interest margin excluding interest recovered on previous nonaccrual loans are presented below: | ||
| Three Months Ended | ||||||||||||||||||||
| (In thousands) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||||||||
| Net interest income (GAAP basis) | $ | 58,338 | $ | 59,997 | $ | 59,641 | $ | 57,545 | $ | 57,383 | ||||||||||
| LESS: Interest recovered on previous nonaccrual loans | 258 | 986 | 986 | — | 80 | |||||||||||||||
| Net interest income, excluding interest recovered while loans on nonaccrual status (non-GAAP) - also referred to as Core net interest income (non-GAAP) | 58,080 | 59,011 | 58,064 | 56,649 | 57,303 | |||||||||||||||
| Net interest margin, excluding interest recovered while loans on nonaccrual status (non-GAAP) - also referred to as Core net interest margin (non-GAAP) | 2.89 | % | 2.90 | % | 2.85 | % | 2.85 | % | 2.90 | % | ||||||||||
Boston Private Financial Holdings, Inc. | ||
| (16) | The Company uses certain non-GAAP financial measures, such as Net income attributable to the Company excluding notable items and Diluted earnings per share excluding notable items to provide information for investors to effectively analyze financial trends of ongoing business activities and to enhance comparability with peers across the financial sector. | |
| Reconciliations from the Company’s GAAP Net income attributable to the Company to non-GAAP Net income attributable to the Company excluding notable items and from GAAP Diluted earnings per share to non-GAAP Diluted earnings per share excluding notable items are presented below: | ||
| Three Months Ended | ||||||||||||||||||||
| (In thousands, except share and per share data) | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | |||||||||||||||
| Net income attributable to the Company (GAAP) | $ | 19,442 | $ | 33,302 | $ | 17,962 | $ | 6,434 | $ | 22,686 | ||||||||||
| LESS: Gain on sale of affiliate | — | 18,142 | — | — | — | |||||||||||||||
| ADD BACK: Information services * | — | (441 | ) | — | 441 | — | ||||||||||||||
| ADD BACK: Restructuring | 1,646 | 2,065 | 5,763 | — | — | |||||||||||||||
| ADD BACK: Tax adjustments ** | — | 3,502 | — | 12,706 | — | |||||||||||||||
| Tax effect at statutory rate | (346 | ) | (341 | ) | (1,210 | ) | (93 | ) | — | |||||||||||
|
Net income attributable to the Company
excluding notable items (non-GAAP) | $ | 20,742 | $ | 19,945 | $ | 22,515 | $ | 19,488 | $ | 22,686 | ||||||||||
| Net income attributable to the common shareholders, treasury stock method (GAAP) | $ | 20,999 | $ | 35,996 | $ | 17,133 | $ | 2,910 | $ | 22,663 | ||||||||||
| ADD BACK: Deemed dividend due to redemption of Series D preferred stock | — | — | — | 2,247 | — | |||||||||||||||
| LESS: Gain on sale of affiliate | — | 18,142 | — | — | — | |||||||||||||||
| ADD BACK: Information services * | — | (441 | ) | — | 441 | — | ||||||||||||||
| ADD BACK: Restructuring | 1,646 | 2,065 | 5,763 | — | — | |||||||||||||||
| ADD BACK: Tax adjustments ** | — | 3,502 | — | 12,706 | — | |||||||||||||||
| Tax effect at statutory rate | (346 | ) | (341 | ) | (1,210 | ) | (93 | ) | — | |||||||||||
| Net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP) | $ | 22,299 | $ | 22,639 | $ | 21,686 | $ | 18,211 | $ | 22,663 | ||||||||||
| Weighted average diluted shares outstanding | 84,010,450 | 84,863,779 | 85,498,568 | 85,413,575 | 85,271,650 | |||||||||||||||
| Diluted total earnings per share (GAAP) | $ | 0.25 | $ | 0.42 | $ | 0.20 | $ | 0.03 | $ | 0.27 | ||||||||||
| Diluted total earnings per share, excluding notable items (non-GAAP) | $ | 0.27 | $ | 0.27 | $ | 0.25 | $ | 0.21 | $ | 0.27 | ||||||||||
| Average common equity (non-GAAP) | $ | 766,283 | $ | 739,313 | $ | 737,188 | $ | 736,068 | $ | 736,272 | ||||||||||
| Average tangible common equity (non-GAAP) | $ | 696,785 | $ | 656,160 | $ | 647,358 | $ | 633,535 | $ | 597,821 | ||||||||||
| Return on average common equity - (annualized), excluding notable items (non-GAAP) | 10.98 | % | 10.70 | % | 12.12 | % | 10.15 | % | 12.02 | % | ||||||||||
| Return on average tangible common equity - (annualized), excluding notable items (non-GAAP) | 12.38 | % | 12.38 | % | 14.16 | % | 12.16 | % | 15.20 | % | ||||||||||
| Pre-tax, pre-provision income (non-GAAP) | $ | 23,033 | $ | 42,285 | $ | 23,398 | $ | 25,256 | $ | 26,269 | ||||||||||
| LESS: Gain on sale of affiliate | — | 18,142 | — | — | — | |||||||||||||||
| ADD BACK: Information services * | — | (441 | ) | — | 441 | — | ||||||||||||||
| ADD BACK: Restructuring | 1,646 | 2,065 | 5,763 | — | — | |||||||||||||||
| Pre-tax, pre-provision income, excluding notable items (non-GAAP) | $ | 24,679 | $ | 25,767 | $ | 29,161 | $ | 25,697 | $ | 26,269 | ||||||||||
| * | In the fourth quarter of 2018, $0.4 million of Information services expense was reclassified to Restructuring expense in conjunction with the Company's formal restructuring plan announced in the fourth quarter of 2018. | |
| ** | Additional tax expense in the second quarter of 2018 relates to the tax impact of the April 2018 completion of the sale of Anchor and additional expense in the fourth quarter of 2018 relates to the completion of the sale of BOS. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190417005907/en/
Contacts:
(617) 912-4386
abromley@bostonprivate.com
