Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported second quarter 2019 GAAP Net income attributable to the Company of $19.4 million, compared to $19.4 million for the first quarter of 2019 and $6.4 million for the second quarter of 2018. Second quarter 2019 GAAP Diluted earnings per share were $0.22, compared to $0.25 in the first quarter of 2019 and $0.03 in the second quarter of 2018.
Summary Financial Results - Reported | ||||||||||||
% Change | ||||||||||||
($ in millions, except for per share data) | 2Q19 | 1Q19 | 2Q18 | LQ | Y/Y | |||||||
Net income | $19.4 | $19.4 | $6.4 | — | % | nm | ||||||
Diluted earnings per share | $0.22 | $0.25 | $0.03 | (12 | )% | nm | ||||||
Non-GAAP Financial Measures: | ||||||||||||
Pre-tax, pre-provision income | $26.2 | $23.0 | $25.3 | 14 | % | 4 | % | |||||
Return on average common equity (“ROACE”) | 9.8% | 10.3% | 3.0% | |||||||||
Return on average tangible common equity (“ROATCE”) | 11.1% | 11.6% | 3.9% | |||||||||
nm = not meaningful | ||||||||||||
The Company's reported financial results increased year-over-year primarily as a result of a $12.7 million income tax expense related to the divestiture of Anchor Capital Advisors LLC in the second quarter of 2018.
In addition to presenting the Company’s results in conformity with GAAP, the Company uses certain non-GAAP financial measures to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. For additional information on non-GAAP financial measures, see page 7. A full reconciliation of GAAP to non-GAAP results can be found in the footnotes beginning on page 17.
Summary Financial Results - Operating Basis (non-GAAP) | ||||||||||||
% Change | ||||||||||||
($ in millions, except for per share data) | 2Q19 | 1Q191 | 2Q182 | LQ | Y/Y | |||||||
Net income | $19.4 | $20.7 | $19.5 | (7 | )% | (1 | )% | |||||
Diluted earnings per share | $0.22 | $0.27 | $0.21 | (17 | )% | 4 | % | |||||
Pre-tax, pre-provision income | $26.2 | $24.7 | $25.7 | 6 | % | 2 | % | |||||
Return on average common equity | 9.8% | 11.0% | 10.1% | |||||||||
Return on average tangible common equity | 11.1% | 12.4% | 12.2% | |||||||||
1 1Q19 results adjusted to exclude the net after-tax impact of $1.6 million restructuring expense
2 2Q18 results adjusted to exclude $12.7 million income tax expense related to the divestiture of Anchor and net after-tax impact of $0.4 million information services expense related to efficiency initiatives
"During the first half of 2019, we have been focused on beginning the process of implementing our strategic vision for growth," said Anthony DeChellis, CEO of Boston Private. "Our second quarter results reflect improvement in pre-tax, pre-provision profitability measures as we exercise expense discipline and realize the benefits from efficiency initiatives. Looking ahead, we will continue to improve our efficiency as we transition our company to achieve the growth objectives we discussed during our Investor Day."
Divested Affiliates
The Company completed the sale of Anchor Capital Advisors LLC ("Anchor") and Bingham, Osborn & Scarborough LLC ("BOS") (together, "the Divested Affiliates") during 2018. Financial results from the Divested Affiliates remain consolidated in the Company's financial results through the closing dates of the divestitures. The Anchor divestiture closing date was April 13, 2018, and the BOS divestiture closing date was December 3, 2018.
For presentation purposes, the Divested Affiliates' AUM are excluded from AUM amounts, but are included in the calculation of Core fees and income. The discussion below includes non-GAAP measures that exclude the contributions from these affiliates in order to enhance comparability of trends in the core business.
Net Interest Income and Margin | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 2Q19 | 1Q19 | 2Q18 | LQ | Y/Y | ||||||||||
Net interest income | $57.5 | $58.3 | $57.5 | (2 | )% | — | % | ||||||||
Less: Interest recovered on previous nonaccrual loans | — | 0.3 | — | nm | nm | ||||||||||
Core net interest income (non-GAAP) | $57.5 | $58.1 | $57.5 | (1 | )% | — | % | ||||||||
Net interest margin | 2.78 | % | 2.90 | % | 2.85 | % | |||||||||
Core net interest margin (non-GAAP) | 2.78 | % | 2.89 | % | 2.85 | % | |||||||||
Net interest income for the second quarter of 2019 was $57.5 million, a decrease of 2% linked quarter while remaining flat year-over-year. Core net interest income, which excludes interest recovered on previous nonaccrual loans, decreased 1% linked quarter and while remaining flat year-over-year. The linked quarter decrease was primarily driven by higher funding costs and higher borrowing volumes, partially offset by higher average interest-earning asset volumes.
The Company’s Core net interest margin, which excludes interest recovered on previous nonaccrual loans, decreased 11 basis points on a linked quarter basis to 2.78%, primarily driven by higher funding costs and higher borrowing volumes, while interest earning asset yields remained stable.
Noninterest Income | ||||||||||||
% Change | ||||||||||||
($ in millions) | 2Q19 | 1Q19 | 2Q18 | LQ | Y/Y | |||||||
Investment management fees | $2.5 | $2.7 | $4.2 | (7 | )% | (42 | )% | |||||
Wealth advisory fees | 8.1 | 8.2 | 13.7 | — % | (41 | )% | ||||||
Wealth management and trust fees | 10.8 | 10.9 | 11.2 | (1 | )% | (4 | )% | |||||
Private banking fees 3 | 2.9 | 2.6 | 2.8 | 14 | % | 4 | % | |||||
Total core fees and income | $24.3 | $24.3 | $31.9 | — % | (24 | )% | ||||||
Total other income | 0.1 | 1.0 | 0.2 | (91 | )% | (56 | )% | |||||
Total noninterest income | $24.4 | $25.2 | $32.1 | (3 | )% | (24 | )% | |||||
Memo: Excluding Divested Affiliates | ||||||||||||
Investment management fees (non-GAAP) 4 | 2.5 | 2.7 | 3.1 | (7 | )% | (20 | )% | |||||
Wealth advisory fees (non-GAAP) 5 | 8.1 | 8.2 | 8.0 | — % | 2 | % | ||||||
Wealth management and trust fees | 10.8 | 10.9 | 11.2 | (1 | )% | (4 | )% | |||||
Private banking fees3 | 2.9 | 2.6 | 2.8 | 14 | % | 4 | % | |||||
Total core fees and income (non-GAAP) 4 5 | $24.3 | $24.3 | $25.0 | — % | (3 | )% | ||||||
Total other income (non-GAAP) | 0.1 | 1.0 | 0.2 | (91 | )% | (48 | )% | |||||
Total noninterest income (non-GAAP) 4 5 | $24.4 | $25.2 | $25.2 | (3 | )% | (3 | )% | |||||
3 Private banking fees includes Other banking fee income and Gain/ (loss) on sale of loans, net
4 Excludes Anchor revenue of $1.2 million in 2Q18
5 Excludes BOS revenue of $5.8 million in 2Q18
Total core fees and income for the second quarter of 2019 was $24.3 million, flat linked quarter and a decline of 24% year-over-year. The year-over-year decline was primarily driven by the divestitures of Anchor and BOS.
Excluding Divested Affiliates, Total core fees and income decreased 3% year-over-year, primarily driven by lower Investment management fees and Wealth management and trust fees.
Assets Under Management / Advisory | ||||||||||||
% Change | ||||||||||||
($ in millions) | 2Q19 | 1Q19 | 2Q18 | LQ | Y/Y | |||||||
Wealth Management and Trust | $7,595 | $7,593 | $7,789 | — | % | (2 | )% | |||||
Affiliate Partners 6 | 8,604 | 8,529 | 9,072 | 1 | % | (5 | )% | |||||
Total assets under management / advisory 7 | $16,199 | $16,122 | $16,861 | — | % | (4 | )% | |||||
Total net flows 7 | $(269) | $(963) | $(97) | |||||||||
6 Segment includes Dalton, Greiner, Hartman, Maher & Co., LLC ("DGHM") and KLS Professional Advisors Group, LLC ("KLS")
7 Excludes Divested Affiliates
Total assets under management / advisory were $16.2 billion at the end of the second quarter of 2019, flat linked quarter and a decrease of 4% year-over-year. The linked quarter comparison was impacted by positive market action offset by negative net flows, while the year-over-year decrease was primarily driven by negative net flows in excess of positive market action.
Net flows during the second quarter of 2019 in the Wealth Management and Trust segment were negative $127 million, while net flows in the Affiliate Partners segment were negative $142 million.
Operating Expense | ||||||||||
% Change | ||||||||||
($ in millions) | 2Q19 | 1Q19 | 2Q18 | LQ | Y/Y | |||||
Salaries and employee benefits | $32.7 | $35.7 | $39.4 | (8)% | (17)% | |||||
Occupancy and equipment | 7.9 | 8.3 | 8.2 | (6)% | (5)% | |||||
Professional services | 3.3 | 3.6 | 2.9 | (7)% | 15% | |||||
Marketing and business development | 1.9 | 1.1 | 2.1 | 78% | (7)% | |||||
Information systems | 5.1 | 5.9 | 6.8 | (12)% | (24)% | |||||
Amortization of intangibles | 0.7 | 0.7 | 0.7 | —% | (10)% | |||||
FDIC insurance | 0.6 | 0.7 | 0.7 | (11)% | (17)% | |||||
Restructuring | — | 1.6 | — | nm | nm | |||||
Other | 3.5 | 3.0 | 3.6 | 15% | (3)% | |||||
Total operating expense | $55.7 | $60.6 | $64.4 | (8)% | (14)% | |||||
Memo: Excluding Notable Items8 and Divested Affiliates | ||||||||||
Information systems 9 | — | — | 0.4 | nm | nm | |||||
Restructuring | — | 1.6 | — | nm | nm | |||||
Divested Affiliates operating expense | — | — | 4.7 | nm | nm | |||||
Total operating expense (non-GAAP) | $55.7 | $59.0 | $59.2 | (6)% | (6)% | |||||
8 "Notable Items" include adjustments made to GAAP results in prior periods
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 8% linked quarter, primarily driven by lower salaries and employee benefits expense, restructuring expense, information systems expense, and occupancy and equipment expense, partially offset by higher marketing and business development expense. Salaries and employee benefits expense declined linked quarter primarily as a result of seasonal payroll tax expense incurred during the first quarter of 2019. Restructuring expense incurred during the first quarter of 2019 was related to executive departures. Information systems expense declined linked quarter primarily as a result of savings attributable to information technology infrastructure consolidation. The year-over-year decline in Total operating expense of 14% was primarily driven by expenses associated with Divested Affiliates that are included in the second quarter of 2018 results.
Excluding Notable Items and Divested Affiliates, Total operating expense for the second quarter of 2019 was $55.7 million, down 6% linked quarter and 6% year-over-year. The year-over-year decline was primarily attributable to efficiency initiatives primarily impacting compensation and technology.
Income Tax Expense
The Company's effective tax rate for the second quarter of 2019 was 21.6%.
Loans and Deposits - QTD Averages | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 2Q19 | 1Q19 | 2Q18 | LQ | Y/Y | ||||||||||
Commercial and industrial | $1,092 | $1,070 | $974 | 2 | % | 12 | % | ||||||||
Commercial real estate | 2,507 | 2,398 | 2,478 | 5 | % | 1 | % | ||||||||
Construction and land | 203 | 211 | 167 | (4 | )% | 22 | % | ||||||||
Residential | 3,009 | 2,973 | 2,775 | 1 | % | 8 | % | ||||||||
Home equity | 91 | 91 | 94 | 1 | % | (3 | )% | ||||||||
Other consumer | 125 | 134 | 180 | (7 | )% | (31 | )% | ||||||||
Total loans | $7,026 | $6,877 | $6,668 | 2 | % | 5 | % | ||||||||
Non-interest bearing deposits | 1,927 | 1,975 | 1,908 | (2 | )% | 1 | % | ||||||||
Interest bearing deposits | 4,664 | 4,792 | 4,441 | (3 | )% | 5 | % | ||||||||
Total deposits | $6,590 | $6,767 | $6,349 | (3 | )% | 4 | % | ||||||||
Non-interest bearing deposits as a % of Total deposits | 29 | % | 29 | % | 30 | % | |||||||||
Average total loans in the second quarter of 2019 increased 5% year-over-year, primarily driven by increases in Residential loans and Commercial and industrial loans.
Average total deposits increased 4% year-over-year, primarily driven by growth in money market accounts, certificates of deposits, and demand deposit accounts, partially offset by declines in savings and NOW accounts. Deposits declined 3% linked quarter
The cost of total deposits was 0.88%, an increase of 4 basis points linked quarter and 35 basis points year-over-year.
Provision and Asset Quality | |||||||||||||||
($ in millions) | 2Q19 | 1Q19 | 4Q18 | 3Q18 | 2Q18 | ||||||||||
Provision/ (credit) for loan loss | $1.4 | $(1.4) | $0.1 | $(0.9) | $0.5 | ||||||||||
Total criticized loans | 141.7 | 141.3 | 146.6 | 134.7 | 114.4 | ||||||||||
Total nonaccrual loans | 17.2 | 12.0 | 14.1 | 12.1 | 15.7 | ||||||||||
Total loans 30-89 days past due and accruing | 2.4 | 17.7 | 22.3 | 11.6 | 5.0 | ||||||||||
Total net loans (charged-off)/ recovered | (0.1) | (0.1) | 1.7 | 1.0 | 0.1 | ||||||||||
Ratios: | |||||||||||||||
Allowance for loan losses as a % of Total loans | 1.06 | % | 1.07 | % | 1.09 | % | 1.09 | % | 1.09 | % | |||||
Nonaccrual loans as a % of Total loans | 0.24 | % | 0.17 | % | 0.20 | % | 0.18 | % | 0.23 | % | |||||
The Company recorded a provision expense of $1.4 million for the second quarter of 2019, compared to a provision credit of $1.4 million for the first quarter of 2019 and an expense of $0.5 million in the second quarter of 2018. The provision expense in the second quarter of 2019 was primarily driven by loan growth.
Total criticized loans as of June 30, 2019 was $141.7 million, flat linked quarter and an increase of 24% year-over-year. Total nonaccrual loans as of June 30, 2019 was $17.2 million, or 24 basis points of total loans, compared to $12.0 million, or 17 basis points of total loans as of March 31, 2019, and $15.7 million, or 23 basis points of total loans as of June 30, 2018.
Capital | ||||||||||
($ in millions, except for per share data) | 2Q19 | 1Q19 | 4Q18 | 3Q18 | 2Q18 | |||||
Tangible common equity/ Tangible assets 10 | 8.4% | 8.3% | 8.1% | 7.8% | 7.5% | |||||
Tangible book value per share 10 | $8.71 | $8.47 | $8.18 | $7.67 | $7.62 | |||||
Regulatory Capital Ratios: 11 | ||||||||||
Tier 1 common equity | 11.2% | 11.4% | 11.4% | 11.1% | 10.9% | |||||
Total risk-based capital | 13.9% | 14.2% | 14.3% | 14.1% | 13.8% | |||||
Tier 1 risk-based capital | 12.7% | 13.0% | 13.0% | 12.8% | 12.6% | |||||
Tier 1 leverage capital | 9.6% | 9.7% | 9.5% | 9.2% | 9.2% | |||||
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 | — |
10 See footnote 6 for a GAAP to non-GAAP reconciliation.
11 Current quarter information is presented based on estimated data.
Tangible book value per share as of June 30, 2019 increased 3% linked quarter and 14% year-over-year to $8.71. The linked quarter increase in Tangible book value per share was primarily driven by increased retained earnings and higher Accumulated other comprehensive income related to unrealized securities gains, while the year-over-year increase was primarily driven by the divestiture of BOS, higher Accumulated other comprehensive income and increased retained earnings, partially offset by common share repurchases.
EPS Calculation
For calculation of income for EPS, second quarter 2019 Net income attributable to the common shareholders was negatively impacted by $0.8 million, or $0.01 per share, related to the changes in value of Redeemable noncontrolling interests (“RNCI”).
Dividend Payments
Concurrent with the release of second 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 August 9, 2019, and the payment date is August 23, 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 schedules.
Conference Call
Management will hold a conference call at 8:00 a.m. Eastern Time on Thursday, July 25, 2019, to discuss the financial results, business highlights and outlook. To access the call:
Dial In #: (888) 317-6003
Elite Entry Number: 5871776
Replay Information:
Available from July 25, 2019 at 12:00 p.m. Eastern Time until August 1, 2019
Dial In #: (877) 344-7529
Conference Number: 10132971
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.
June 30,
| March 31,
| December 31,
| September 30,
| June 30,
| |||||||||||||||
(In thousands, except share and per share data) | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 65,756 | $ | 96,211 | $ | 127,259 | $ | 92,634 | $ | 364,539 | |||||||||
Investment securities available-for-sale | 966,731 | 981,951 | 994,065 | 1,056,261 | 1,069,025 | ||||||||||||||
Investment securities held-to-maturity | 54,482 | 67,548 | 70,438 | 75,468 | 78,955 | ||||||||||||||
Equity securities at fair value | 19,092 | 7,491 | 14,228 | 7,079 | 7,942 | ||||||||||||||
Stock in Federal Home Loan Bank and Federal Reserve Bank | 64,453 | 47,053 | 49,263 | 48,727 | 70,127 | ||||||||||||||
Loans held for sale | 3,640 | 280 | 2,812 | 3,344 | 4,622 | ||||||||||||||
Total loans | 7,080,260 | 6,926,968 | 6,893,158 | 6,720,420 | 6,767,123 | ||||||||||||||
Less: Allowance for loan losses | 75,067 | 73,814 | 75,312 | 73,500 | 73,464 | ||||||||||||||
Net loans | 7,005,193 | 6,853,154 | 6,817,846 | 6,646,920 | 6,693,659 | ||||||||||||||
Other real estate owned (“OREO”) | — | — | 401 | 108 | 108 | ||||||||||||||
Premises and equipment, net | 40,244 | 42,938 | 45,412 | 47,399 | 46,421 | ||||||||||||||
Goodwill (1) | 57,607 | 57,607 | 57,607 | 75,598 | 75,598 | ||||||||||||||
Intangible assets, net | 10,884 | 11,555 | 12,227 | 13,834 | 14,584 | ||||||||||||||
Fees receivable | 3,611 | 3,982 | 5,101 | 10,445 | 10,405 | ||||||||||||||
Accrued interest receivable | 26,411 | 25,935 | 24,366 | 24,641 | 23,732 | ||||||||||||||
Deferred income taxes, net | 17,183 | 22,844 | 26,638 | 27,833 | 26,316 | ||||||||||||||
Right-of-use assets | 110,880 | 104,644 | — | — | — | ||||||||||||||
Other assets | 266,706 | 248,950 | 246,962 | 245,549 | 230,170 | ||||||||||||||
Total assets | $ | 8,712,873 | $ | 8,572,143 | $ | 8,494,625 | $ | 8,375,840 | $ | 8,716,203 | |||||||||
Liabilities: | |||||||||||||||||||
Deposits | $ | 6,437,963 | $ | 6,779,845 | $ | 6,781,170 | $ | 6,768,723 | $ | 6,620,179 | |||||||||
Securities sold under agreements to repurchase | 62,372 | 58,329 | 36,928 | 39,453 | 58,824 | ||||||||||||||
Federal funds purchased | 135,000 | — | 250,000 | 120,000 | — | ||||||||||||||
Federal Home Loan Bank borrowings | 920,068 | 615,070 | 420,144 | 441,836 | 1,056,938 | ||||||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 106,363 | 106,363 | ||||||||||||||
Lease liabilities | 126,740 | 120,162 | — | — | — | ||||||||||||||
Other liabilities | 124,370 | 112,893 | 143,540 | 149,770 | 129,175 | ||||||||||||||
Total liabilities | 7,912,876 | 7,792,662 | 7,738,145 | 7,626,145 | 7,971,479 | ||||||||||||||
Redeemable noncontrolling interests (“RNCI”) | 1,786 | 662 | 2,526 | 11,686 | 10,747 | ||||||||||||||
Shareholders’ equity: | |||||||||||||||||||
Common stock, $1.00 par value; authorized: 170,000,000 shares | 83,774 | 83,774 | 83,656 | 84,603 | 84,479 | ||||||||||||||
Additional paid-in capital | 603,869 | 604,288 | 600,196 | 614,157 | 613,918 | ||||||||||||||
Retained earnings | 106,443 | 97,155 | 87,821 | 64,618 | 56,912 | ||||||||||||||
Accumulated other comprehensive income/ (loss) | 4,125 | (6,398 | ) | (17,719 | ) | (27,578 | ) | (23,328 | ) | ||||||||||
Total Company’s shareholders’ equity | 798,211 | 778,819 | 753,954 | 735,800 | 731,981 | ||||||||||||||
Noncontrolling interests | — | — | — | 2,209 | 1,996 | ||||||||||||||
Total shareholders’ equity | 798,211 | 778,819 | 753,954 | 738,009 | 733,977 | ||||||||||||||
Total liabilities, RNCI and shareholders’ equity | $ | 8,712,873 | $ | 8,572,143 | $ | 8,494,625 | $ | 8,375,840 | $ | 8,716,203 | |||||||||
Three Months Ended | |||||||||||||||||||
June 30,
| March 31,
| December 31,
| September 30,
| June 30,
| |||||||||||||||
Interest and dividend income: | (In thousands, except share and per share data) | ||||||||||||||||||
Loans | $ | 71,943 | $ | 69,933 | $ | 69,294 | $ | 68,254 | $ | 64,048 | |||||||||
Investment securities | 5,728 | 5,983 | 6,242 | 6,230 | 6,302 | ||||||||||||||
Short-term investments and other | 1,057 | 908 | 1,356 | 1,617 | 1,205 | ||||||||||||||
Total interest and dividend income | 78,728 | 76,824 | 76,892 | 76,101 | 71,555 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 14,515 | 14,058 | 13,470 | 11,487 | 8,365 | ||||||||||||||
Borrowings | 6,753 | 4,428 | 3,425 | 4,973 | 5,645 | ||||||||||||||
Total interest expense | 21,268 | 18,486 | 16,895 | 16,460 | 14,010 | ||||||||||||||
Net interest income | 57,460 | 58,338 | 59,997 | 59,641 | 57,545 | ||||||||||||||
Provision/ (credit) for loan losses | 1,363 | (1,426 | ) | 93 | (949 | ) | 453 | ||||||||||||
Net interest income after provision/ (credit) for loan losses | 56,097 | 59,764 | 59,904 | 60,590 | 57,092 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Investment management fees | 2,455 | 2,650 | 2,831 | 3,245 | 4,227 | ||||||||||||||
Wealth advisory fees | 8,141 | 8,165 | 12,111 | 13,995 | 13,693 | ||||||||||||||
Wealth management and trust fees | 10,771 | 10,893 | 11,677 | 11,510 | 11,169 | ||||||||||||||
Other banking fee income | 2,867 | 2,499 | 2,033 | 2,775 | 2,745 | ||||||||||||||
Gain on sale of loans, net | 58 | 73 | 39 | 67 | 63 | ||||||||||||||
Total core fees and income | 24,292 | 24,280 | 28,691 | 31,592 | 31,897 | ||||||||||||||
Gain/ (loss) on sale of investments, net | — | — | (596 | ) | — | 7 | |||||||||||||
Gain/ (loss) on OREO, net | — | 91 | — | — | — | ||||||||||||||
Gain on sale of affiliate | — | — | 18,142 | — | — | ||||||||||||||
Other | 88 | 877 | (392 | ) | 722 | 191 | |||||||||||||
Total other income | 88 | 968 | 17,154 | 722 | 198 | ||||||||||||||
Total revenue (2) | 81,840 | 83,586 | 105,842 | 91,955 | 89,640 | ||||||||||||||
Operating expense: | |||||||||||||||||||
Salaries and employee benefits | 32,706 | 35,726 | 36,007 | 38,944 | 39,433 | ||||||||||||||
Occupancy and equipment | 7,852 | 8,348 | 7,975 | 8,164 | 8,229 | ||||||||||||||
Professional services | 3,313 | 3,560 | 4,229 | 2,877 | 2,872 | ||||||||||||||
Marketing and business development | 1,934 | 1,085 | 2,275 | 1,710 | 2,070 | ||||||||||||||
Information systems | 5,137 | 5,860 | 6,296 | 6,233 | 6,770 | ||||||||||||||
Amortization of intangibles | 672 | 672 | 680 | 750 | 749 | ||||||||||||||
FDIC insurance | 585 | 660 | 739 | 674 | 708 | ||||||||||||||
Restructuring | — | 1,646 | 2,065 | 5,763 | — | ||||||||||||||
Other | 3,460 | 2,996 | 3,291 | 3,442 | 3,553 | ||||||||||||||
Total operating expense | 55,659 | 60,553 | 63,557 | 68,557 | 64,384 | ||||||||||||||
Income before income taxes | 24,818 | 24,459 | 42,192 | 24,347 | 24,803 | ||||||||||||||
Income tax expense | 5,369 | 4,917 | 8,651 | 5,461 | 17,399 | ||||||||||||||
Net income from continuing operations | 19,449 | 19,542 | 33,541 | 18,886 | 7,404 | ||||||||||||||
Net income/ (loss) from discontinued operations (3) | — | — | 306 | — | (2 | ) | |||||||||||||
Net income before attribution to noncontrolling interests | 19,449 | 19,542 | 33,847 | 18,886 | 7,402 | ||||||||||||||
Less: Net income attributable to noncontrolling interests | 69 | 100 | 545 | 924 | 968 | ||||||||||||||
Net income attributable to the Company | $ | 19,380 | $ | 19,442 | $ | 33,302 | $ | 17,962 | $ | 6,434 | |||||||||
Adjustments, treasury stock method (4) | (816 | ) | 1,557 | 2,694 | (829 | ) | (3,524 | ) | |||||||||||
Net income attributable to common shareholders, treasury stock method | $ | 18,564 | $ | 20,999 | $ | 35,996 | $ | 17,133 | $ | 2,910 | |||||||||
Weighted average basic shares outstanding | 83,565,780 | 83,285,095 | 83,750,785 | 84,017,284 | 83,509,115 | ||||||||||||||
Weighted average diluted shares outstanding (5) | 84,048,972 | 84,010,450 | 84,863,779 | 85,498,568 | 85,413,575 | ||||||||||||||
Diluted total earnings per share | $ | 0.22 | $ | 0.25 | $ | 0.42 | $ | 0.20 | $ | 0.03 | |||||||||
Six Months Ended | |||||||
June 30,
| June 30,
| ||||||
Interest and dividend income: | (In thousands, except share and per share data) | ||||||
Loans | $ | 141,876 | $ | 124,977 | |||
Investment securities | 11,711 | 12,720 | |||||
Short-term investments and other | 1,965 | 2,214 | |||||
Total interest and dividend income | 155,552 | 139,911 | |||||
Interest expense: | |||||||
Deposits | 28,573 | 14,889 | |||||
Borrowings | 11,181 | 10,094 | |||||
Total interest expense | 39,754 | 24,983 | |||||
Net interest income | 115,798 | 114,928 | |||||
Provision/ (credit) for loan losses | (63 | ) | (1,342 | ) | |||
Net interest income after provision/ (credit) for loan losses | 115,861 | 116,270 | |||||
Fees and other income: | |||||||
Investment management fees | 5,105 | 15,652 | |||||
Wealth advisory fees | 16,306 | 27,205 | |||||
Wealth management and trust fees | 21,664 | 23,320 | |||||
Other banking fee income | 5,366 | 5,018 | |||||
Gain on sale of loans, net | 131 | 137 | |||||
Total core fees and income | 48,572 | 71,332 | |||||
Gain/ (loss) on sale of investments, net | — | (17 | ) | ||||
Gain/ (loss) on OREO, net | 91 | — | |||||
Other | 965 | 523 | |||||
Total other income | 1,056 | 506 | |||||
Total revenue (2) | 165,426 | 186,766 | |||||
Operating expense: | |||||||
Salaries and employee benefits | 68,432 | 86,517 | |||||
Occupancy and equipment | 16,200 | 15,977 | |||||
Professional services | 6,873 | 6,049 | |||||
Marketing and business development | 3,019 | 3,663 | |||||
Information systems | 10,997 | 12,656 | |||||
Amortization of intangibles | 1,344 | 1,499 | |||||
FDIC insurance | 1,245 | 1,452 | |||||
Restructuring | 1,646 | — | |||||
Other | 6,456 | 7,428 | |||||
Total operating expense | 116,212 | 135,241 | |||||
Income before income taxes | 49,277 | 52,867 | |||||
Income tax expense | 10,286 | 23,425 | |||||
Net income from continuing operations | 38,991 | 29,442 | |||||
Net income from discontinued operations (3) | — | 1,696 | |||||
Net income before attribution to noncontrolling interests | 38,991 | 31,138 | |||||
Less: Net income attributable to noncontrolling interests | 169 | 2,018 | |||||
Net income attributable to the Company | $ | 38,822 | $ | 29,120 | |||
Adjustments, treasury stock method (4) | 741 | (3,547 | ) | ||||
Net income attributable to common shareholders, treasury stock method | $ | 39,563 | $ | 25,573 | |||
Weighted average basic shares outstanding | 83,426,213 | 83,304,573 | |||||
Weighted average diluted shares outstanding (5) | 84,036,050 | 85,221,974 | |||||
Diluted total earnings per share | $ | 0.47 | $ | 0.30 | |||
(In thousands, except per share data) | June 30,
| March 31,
| December 31,
| September 30,
| June 30,
| ||||||||||||||
FINANCIAL DATA: | |||||||||||||||||||
Book value per common share | $ | 9.53 | $ | 9.30 | $ | 9.01 | $ | 8.72 | $ | 8.69 | |||||||||
Tangible book value per share (6) | $ | 8.71 | $ | 8.47 | $ | 8.18 | $ | 7.67 | $ | 7.62 | |||||||||
Market price per share | $ | 12.07 | $ | 10.96 | $ | 10.57 | $ | 13.65 | $ | 15.90 | |||||||||
ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"): | |||||||||||||||||||
Wealth Management and Trust | $ | 7,595,000 | $ | 7,593,000 | $ | 7,602,000 | $ | 8,335,000 | $ | 7,789,000 | |||||||||
Affiliate Partners, excluding BOS | 8,604,000 | 8,529,000 | 8,319,000 | 9,388,000 | 9,072,000 | ||||||||||||||
Total AUM, excluding BOS (7) | 16,199,000 | 16,122,000 | 15,921,000 | 17,723,000 | 16,861,000 | ||||||||||||||
AUM at BOS | — | — | — | 4,714,000 | 4,525,000 | ||||||||||||||
Less: Inter-company relationship | — | — | — | (7,000 | ) | (7,000 | ) | ||||||||||||
Total AUM | $ | 16,199,000 | $ | 16,122,000 | $ | 15,921,000 | $ | 22,430,000 | $ | 21,379,000 | |||||||||
FINANCIAL RATIOS: | |||||||||||||||||||
Total equity/ Total assets | 9.16 | % | 9.09 | % | 8.88 | % | 8.81 | % | 8.42 | % | |||||||||
Tangible common equity/ Tangible assets (6) | 8.44 | % | 8.35 | % | 8.12 | % | 7.83 | % | 7.46 | % | |||||||||
Tier 1 common equity/ Risk weighted assets (6) | 11.19 | % | 11.38 | % | 11.40 | % | 11.14 | % | 10.90 | % | |||||||||
Allowance for loan losses/ Total loans | 1.06 | % | 1.07 | % | 1.09 | % | 1.09 | % | 1.09 | % | |||||||||
Allowance for loan losses/ Nonaccrual loans | 438 | % | 614 | % | 536 | % | 608 | % | 469 | % | |||||||||
Return on average assets (annualized) | 0.90 | % | 0.93 | % | 1.56 | % | 0.84 | % | 0.31 | % | |||||||||
ROACE (annualized) (non-GAAP) (8) | 9.83 | % | 10.29 | % | 17.87 | % | 9.67 | % | 3.03 | % | |||||||||
ROATCE (annualized) (non-GAAP) (8) | 11.06 | % | 11.63 | % | 20.46 | % | 11.37 | % | 3.90 | % | |||||||||
Efficiency ratio (annualized) (non-GAAP) (9) | 67.19 | % | 69.67 | % | 57.14 | % | 67.04 | % | 70.29 | % | |||||||||
DEPOSIT DETAIL: | |||||||||||||||||||
Demand deposits (non-interest bearing) | $ | 1,854,091 | $ | 2,016,838 | $ | 1,951,274 | $ | 2,001,275 | $ | 2,089,373 | |||||||||
NOW | 563,130 | 605,852 | 626,685 | 568,148 | 635,841 | ||||||||||||||
Savings | 68,036 | 68,102 | 73,834 | 72,967 | 73,675 | ||||||||||||||
Money market | 3,228,608 | 3,302,244 | 3,338,892 | 3,363,062 | 3,128,211 | ||||||||||||||
Certificates of deposit | 724,098 | 786,809 | 790,485 | 763,271 | 693,079 | ||||||||||||||
Total deposits | $ | 6,437,963 | $ | 6,779,845 | $ | 6,781,170 | $ | 6,768,723 | $ | 6,620,179 | |||||||||
Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||||||||||
(In thousands) | Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||||
AVERAGE BALANCE SHEET: | 06/30/19 | 03/31/19 | 06/30/18 | 06/30/19 | 03/31/19 | 06/30/18 | 06/30/19 | 03/31/19 | 06/30/18 | |||||||||||||||||
AVERAGE ASSETS | ||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||
Cash and investments (10): | ||||||||||||||||||||||||||
Taxable investment securities | $ | 227,029 | $ | 244,230 | $ | 326,482 | $ | 1,121 | $ | 1,185 | $ | 1,501 | 1.98 | % | 1.94 | % | 1.84 | % | ||||||||
Non-taxable investment securities | 304,309 | 306,868 | 297,852 | 1,901 | 1,901 | 1,752 | 2.50 | % | 2.48 | % | 2.35 | % | ||||||||||||||
Mortgage-backed securities | 508,033 | 521,788 | 570,845 | 2,706 | 2,897 | 3,049 | 2.13 | % | 2.22 | % | 2.14 | % | ||||||||||||||
Short-term investments and other | 130,363 | 79,603 | 157,878 | 1,057 | 908 | 1,205 | 3.23 | % | 4.58 | % | 3.03 | % | ||||||||||||||
Total cash and investments | 1,169,734 | 1,152,489 | 1,353,057 | 6,785 | 6,891 | 7,507 | 2.32 | % | 2.39 | % | 2.22 | % | ||||||||||||||
Loans (10) (11): | ||||||||||||||||||||||||||
Commercial and industrial | 1,091,903 | 1,070,161 | 974,443 | 11,170 | 10,979 | 9,201 | 4.05 | % | 4.10 | % | 3.74 | % | ||||||||||||||
Commercial real estate | 2,506,637 | 2,398,413 | 2,477,634 | 29,953 | 28,151 | 27,387 | 4.73 | % | 4.69 | % | 4.37 | % | ||||||||||||||
Construction and land | 202,609 | 211,351 | 166,736 | 2,559 | 2,641 | 2,011 | 5.00 | % | 5.00 | % | 4.77 | % | ||||||||||||||
Residential | 3,008,753 | 2,972,945 | 2,775,239 | 25,735 | 25,545 | 22,590 | 3.42 | % | 3.44 | % | 3.26 | % | ||||||||||||||
Home equity | 91,384 | 90,646 | 94,445 | 1,146 | 1,121 | 1,041 | 5.03 | % | 5.02 | % | 4.42 | % | ||||||||||||||
Other consumer | 124,778 | 133,937 | 179,684 | 1,380 | 1,496 | 1,818 | 4.43 | % | 4.53 | % | 4.06 | % | ||||||||||||||
Total loans | 7,026,064 | 6,877,453 | 6,668,181 | 71,943 | 69,933 | 64,048 | 4.07 | % | 4.07 | % | 3.82 | % | ||||||||||||||
Total earning assets | 8,195,798 | 8,029,942 | 8,021,238 | 78,728 | 76,824 | 71,555 | 3.82 | % | 3.83 | % | 3.55 | % | ||||||||||||||
LESS: Allowance for loan losses | 73,856 | 75,537 | 72,998 | |||||||||||||||||||||||
Cash and due from banks (non-interest bearing) | 45,705 | 46,172 | 45,337 | |||||||||||||||||||||||
Other assets | 511,859 | 493,148 | 396,744 | |||||||||||||||||||||||
TOTAL AVERAGE ASSETS | $ | 8,679,506 | $ | 8,493,725 | $ | 8,390,321 | ||||||||||||||||||||
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||
Interest-bearing deposits (12): | ||||||||||||||||||||||||||
Savings and NOW | $ | 684,507 | $ | 674,872 | $ | 719,159 | $ | 276 | $ | 296 | $ | 304 | 0.16 | % | 0.18 | % | 0.17 | % | ||||||||
Money market | 3,226,569 | 3,341,397 | 3,033,306 | 10,476 | 10,072 | 5,543 | 1.30 | % | 1.22 | % | 0.73 | % | ||||||||||||||
Certificates of deposit | 752,500 | 775,817 | 688,567 | 3,763 | 3,690 | 2,518 | 2.01 | % | 1.93 | % | 1.47 | % | ||||||||||||||
Total interest-bearing deposits (12) | 4,663,576 | 4,792,086 | 4,441,032 | 14,515 | 14,058 | 8,365 | 1.25 | % | 1.19 | % | 0.76 | % | ||||||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 1,080 | 1,121 | 1,008 | 4.02 | % | 4.22 | % | 3.75 | % | ||||||||||||||
FHLB borrowings and other | 952,645 | 615,985 | 1,022,636 | 5,673 | 3,307 | 4,637 | 2.36 | % | 2.15 | % | 1.79 | % | ||||||||||||||
Total interest-bearing liabilities (12) | 5,722,584 | 5,514,434 | 5,570,031 | 21,268 | 18,486 | 14,010 | 1.48 | % | 1.36 | % | 1.00 | % | ||||||||||||||
Non-interest bearing demand deposits (12) | 1,926,591 | 1,974,526 | 1,908,037 | |||||||||||||||||||||||
Other liabilities | 238,544 | 236,426 | 122,175 | |||||||||||||||||||||||
Total average liabilities | 7,887,719 | 7,725,386 | 7,600,243 | |||||||||||||||||||||||
Redeemable noncontrolling interests | 943 | 2,056 | 14,129 | |||||||||||||||||||||||
Average shareholders’ equity | 790,844 | 766,283 | 775,949 | |||||||||||||||||||||||
TOTAL AVERAGE LIABILITIES, RNCI,
| $ | 8,679,506 | $ | 8,493,725 | $ | 8,390,321 | ||||||||||||||||||||
Net interest income | $ | 57,460 | $ | 58,338 | $ | 57,545 | ||||||||||||||||||||
Interest rate spread | 2.34 | % | 2.47 | % | 2.55 | % | ||||||||||||||||||||
Bank only net interest margin | 2.84 | % | 2.96 | % | 2.90 | % | ||||||||||||||||||||
Net interest margin | 2.78 | % | 2.90 | % | 2.85 | % | ||||||||||||||||||||
Average total deposits (12) | 6,590,167 | 6,766,612 | 6,349,069 | 0.88 | % | 0.84 | % | 0.53 | % | |||||||||||||||||
Average total deposits and borrowings (12) | 7,649,175 | 7,488,960 | 7,478,068 | 1.11 | % | 1.00 | % | 0.75 | % | |||||||||||||||||
Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||
(In thousands) | Six Months Ended | Six Months Ended | Six Months Ended | |||||||||||||||
AVERAGE BALANCE SHEET: | 06/30/19 | 06/30/18 | 06/30/19 | 06/30/18 | 06/30/19 | 06/30/18 | ||||||||||||
AVERAGE ASSETS | ||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||
Cash and investments: | ||||||||||||||||||
Taxable investment securities | $ | 235,218 | $ | 330,220 | $ | 2,306 | $ | 3,011 | 1.92 | % | 1.83 | % | ||||||
Non-taxable investment securities (10) | 305,581 | 297,407 | 3,802 | 3,482 | 2.49 | % | 2.34 | % | ||||||||||
Mortgage-backed securities | 514,872 | 579,604 | 5,603 | 6,227 | 2.18 | % | 2.15 | % | ||||||||||
Short-term investments and other | 105,610 | 158,853 | 1,965 | 2,214 | 3.61 | % | 2.78 | % | ||||||||||
Total cash and investments | 1,161,281 | 1,366,084 | 13,676 | 14,934 | 2.34 | % | 2.19 | % | ||||||||||
Loans (11): | ||||||||||||||||||
Commercial and industrial (10) | 1,081,092 | 953,940 | 22,150 | 17,661 | 4.08 | % | 3.68 | % | ||||||||||
Commercial real estate (10) | 2,452,824 | 2,459,525 | 58,104 | 53,538 | 4.71 | % | 4.33 | % | ||||||||||
Construction and land (10) | 206,956 | 168,052 | 5,200 | 3,948 | 5.00 | % | 4.67 | % | ||||||||||
Residential | 2,990,948 | 2,738,980 | 51,280 | 44,356 | 3.43 | % | 3.24 | % | ||||||||||
Home equity | 91,017 | 95,810 | 2,267 | 2,083 | 5.02 | % | 4.39 | % | ||||||||||
Other consumer | 129,332 | 182,623 | 2,875 | 3,391 | 4.48 | % | 3.74 | % | ||||||||||
Total loans | 6,952,169 | 6,598,930 | 141,876 | 124,977 | 4.07 | % | 3.78 | % | ||||||||||
Total earning assets | 8,113,450 | 7,965,014 | 155,552 | 139,911 | 3.82 | % | 3.50 | % | ||||||||||
LESS: Allowance for loan losses | 74,692 | 73,911 | ||||||||||||||||
Cash and due from banks (non-interest bearing) | 46,010 | 48,725 | ||||||||||||||||
Other assets | 502,068 | 408,810 | ||||||||||||||||
TOTAL AVERAGE ASSETS | $ | 8,586,836 | $ | 8,348,638 | ||||||||||||||
AVERAGE LIABILITIES, RNCI, AND
| ||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||
Interest-bearing deposits (12): | ||||||||||||||||||
Savings and NOW | $ | 679,716 | $ | 718,051 | $ | 572 | $ | 519 | 0.17 | % | 0.15 | % | ||||||
Money market | 3,283,891 | 3,086,710 | 20,549 | 9,857 | 1.26 | % | 0.64 | % | ||||||||||
Certificates of deposit | 764,094 | 672,736 | 7,452 | 4,513 | 1.97 | % | 1.35 | % | ||||||||||
Total interest-bearing deposits (12) | 4,727,701 | 4,477,497 | 28,573 | 14,889 | 1.22 | % | 0.67 | % | ||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 2,201 | 1,854 | 4.17 | % | 3.52 | % | ||||||||||
FHLB borrowings and other | 785,245 | 950,763 | 8,980 | 8,240 | 2.27 | % | 1.72 | % | ||||||||||
Total interest-bearing liabilities (12) | 5,619,309 | 5,534,623 | 39,754 | 24,983 | 1.42 | % | 0.91 | % | ||||||||||
Non-interest bearing demand deposits (12) | 1,950,088 | 1,890,184 | ||||||||||||||||
Payables and other liabilities | 236,894 | 126,601 | ||||||||||||||||
Total average liabilities | 7,806,291 | 7,551,408 | ||||||||||||||||
Redeemable noncontrolling interests | 1,619 | 17,644 | ||||||||||||||||
Average shareholders’ equity | 778,926 | 779,586 | ||||||||||||||||
TOTAL AVERAGE LIABILITIES, RNCI, AND
| $ | 8,586,836 | $ | 8,348,638 | ||||||||||||||
Net interest income | $ | 115,798 | $ | 114,928 | ||||||||||||||
Interest rate spread | 2.40 | % | 2.59 | % | ||||||||||||||
Bank only net interest margin | 2.89 | % | 2.92 | % | ||||||||||||||
Net interest margin | 2.84 | % | 2.87 | % | ||||||||||||||
Average total deposits (12) | 6,677,789 | 6,367,681 | 0.86 | % | 0.47 | % | ||||||||||||
Average total deposits and borrowings (12) | 7,569,397 | 7,424,807 | 1.06 | % | 0.68 | % | ||||||||||||
(In thousands) | June 30,
| March 31,
| December 31,
| September 30,
| June 30,
| ||||||||||||||
LOAN DATA (13): | |||||||||||||||||||
Other commercial and industrial loans: | |||||||||||||||||||
New England | $ | 524,319 | $ | 492,800 | $ | 503,201 | $ | 460,409 | $ | 481,081 | |||||||||
San Francisco Bay Area | 41,131 | 39,829 | 43,702 | 41,256 | 35,220 | ||||||||||||||
Southern California | 90,736 | 82,741 | 76,134 | 81,549 | 66,892 | ||||||||||||||
Total other commercial and industrial loans | $ | 656,186 | $ | 615,370 | $ | 623,037 | $ | 583,214 | $ | 583,193 | |||||||||
New England | $ | 343,359 | $ | 342,270 | $ | 344,079 | $ | 330,753 | $ | 332,572 | |||||||||
San Francisco Bay Area | 95,825 | 96,024 | 96,387 | 96,775 | 94,959 | ||||||||||||||
Southern California | 11,123 | 11,198 | 11,205 | 11,279 | 11,351 | ||||||||||||||
Total commercial tax-exempt loans | $ | 450,307 | $ | 449,492 | $ | 451,671 | $ | 438,807 | $ | 438,882 | |||||||||
Total commercial and industrial loans | $ | 1,106,493 | $ | 1,064,862 | $ | 1,074,708 | $ | 1,022,021 | $ | 1,022,075 | |||||||||
Commercial real estate loans: | |||||||||||||||||||
New England | $ | 1,071,073 | $ | 1,068,619 | $ | 1,022,061 | $ | 1,043,494 | $ | 1,069,942 | |||||||||
San Francisco Bay Area | 770,312 | 720,276 | 714,449 | 724,243 | 739,769 | ||||||||||||||
Southern California | 689,171 | 650,153 | 659,182 | 631,343 | 694,810 | ||||||||||||||
Total commercial real estate loans | $ | 2,530,556 | $ | 2,439,048 | $ | 2,395,692 | $ | 2,399,080 | $ | 2,504,521 | |||||||||
Construction and land loans: | |||||||||||||||||||
New England | $ | 144,986 | $ | 136,097 | $ | 153,929 | $ | 114,411 | $ | 88,068 | |||||||||
San Francisco Bay Area | 24,725 | 43,130 | 41,516 | 40,755 | 37,783 | ||||||||||||||
Southern California | 30,667 | 31,391 | 44,861 | 42,358 | 46,173 | ||||||||||||||
Total construction and land loans | $ | 200,378 | $ | 210,618 | $ | 240,306 | $ | 197,524 | $ | 172,024 | |||||||||
Residential loans: | |||||||||||||||||||
New England | $ | 1,708,501 | $ | 1,692,421 | $ | 1,689,318 | $ | 1,650,989 | $ | 1,643,039 | |||||||||
San Francisco Bay Area | 574,937 | 570,132 | 559,578 | 554,502 | 533,394 | ||||||||||||||
Southern California | 742,320 | 730,579 | 700,077 | 657,388 | 631,773 | ||||||||||||||
Total residential loans | $ | 3,025,758 | $ | 2,993,132 | $ | 2,948,973 | $ | 2,862,879 | $ | 2,808,206 | |||||||||
Home equity loans: | |||||||||||||||||||
New England | $ | 58,806 | $ | 59,074 | $ | 57,617 | $ | 61,291 | $ | 61,125 | |||||||||
San Francisco Bay Area | 19,232 | 18,279 | 19,722 | 19,769 | 17,366 | ||||||||||||||
Southern California | 11,892 | 11,267 | 13,082 | 12,330 | 13,310 | ||||||||||||||
Total home equity loans | $ | 89,930 | $ | 88,620 | $ | 90,421 | $ | 93,390 | $ | 91,801 | |||||||||
Other consumer loans: | |||||||||||||||||||
New England | $ | 106,177 | $ | 110,363 | $ | 120,402 | $ | 121,685 | $ | 145,726 | |||||||||
San Francisco Bay Area | 12,279 | 11,956 | 12,663 | 14,228 | 14,659 | ||||||||||||||
Southern California | 8,689 | 8,369 | 9,993 | 9,613 | 8,111 | ||||||||||||||
Total other consumer loans | $ | 127,145 | $ | 130,688 | $ | 143,058 | $ | 145,526 | $ | 168,496 | |||||||||
Total loans: | |||||||||||||||||||
New England | $ | 3,957,221 | $ | 3,901,644 | $ | 3,890,607 | $ | 3,783,032 | $ | 3,821,553 | |||||||||
San Francisco Bay Area | 1,538,441 | 1,499,626 | 1,488,017 | 1,491,528 | 1,473,150 | ||||||||||||||
Southern California | 1,584,598 | 1,525,698 | 1,514,534 | 1,445,860 | 1,472,420 | ||||||||||||||
Total loans | $ | 7,080,260 | $ | 6,926,968 | $ | 6,893,158 | $ | 6,720,420 | $ | 6,767,123 | |||||||||
(In thousands) | June 30,
| March 31,
| December 31,
| September 30,
| June 30,
| ||||||||||||||
CREDIT QUALITY (13): | |||||||||||||||||||
Special mention loans: | |||||||||||||||||||
New England | $ | 35,235 | $ | 34,675 | $ | 31,147 | $ | 20,382 | $ | 18,515 | |||||||||
San Francisco Bay Area | 10,360 | 23,486 | 18,585 | 18,359 | 19,255 | ||||||||||||||
Southern California | 25,082 | 28,626 | 28,796 | 28,665 | 15,678 | ||||||||||||||
Total special mention loans | $ | 70,677 | $ | 86,787 | $ | 78,528 | $ | 67,406 | $ | 53,448 | |||||||||
Accruing classified loans (14): | |||||||||||||||||||
New England | $ | 13,012 | $ | 15,830 | $ | 10,392 | $ | 10,083 | $ | 11,493 | |||||||||
San Francisco Bay Area | 25,957 | 20,801 | 24,584 | 24,252 | 12,766 | ||||||||||||||
Southern California | 14,914 | 5,890 | 19,119 | 21,045 | 21,194 | ||||||||||||||
Total accruing classified loans | $ | 53,883 | $ | 42,521 | $ | 54,095 | $ | 55,380 | $ | 45,453 | |||||||||
Nonaccruing loans: | |||||||||||||||||||
New England | $ | 8,837 | $ | 6,161 | $ | 6,728 | $ | 5,131 | $ | 7,282 | |||||||||
San Francisco Bay Area | 2,644 | 2,480 | 2,488 | 1,169 | 1,319 | ||||||||||||||
Southern California | 5,674 | 3,378 | 4,841 | 5,797 | 7,050 | ||||||||||||||
Total nonaccruing loans | $ | 17,155 | $ | 12,019 | $ | 14,057 | $ | 12,097 | $ | 15,651 | |||||||||
Loans 30-89 days past due and accruing (15): | |||||||||||||||||||
New England | $ | 1,747 | $ | 7,232 | $ | 15,961 | $ | 9,193 | $ | 4,653 | |||||||||
San Francisco Bay Area | 6 | 2,021 | 2,246 | 1,651 | — | ||||||||||||||
Southern California | 681 | 8,462 | 4,092 | 763 | 324 | ||||||||||||||
Total loans 30-89 days past due and accruing | $ | 2,434 | $ | 17,715 | $ | 22,299 | $ | 11,607 | $ | 4,977 | |||||||||
Loans (charged-off)/ recovered, net: | |||||||||||||||||||
New England | $ | 31 | $ | 222 | $ | (100 | ) | $ | 232 | $ | (73 | ) | |||||||
San Francisco Bay Area | 20 | 18 | 1,804 | 706 | 91 | ||||||||||||||
Southern California | (161 | ) | (312 | ) | 15 | 47 | 95 | ||||||||||||
Total net loans (charged-off)/ recovered | $ | (110 | ) | $ | (72 | ) | $ | 1,719 | $ | 985 | $ | 113 | |||||||
Loans (charged-off)/ recovered, net for the year ended: | |||||||||||||||||||
New England | $ | 253 | $ | (358 | ) | ||||||||||||||
San Francisco Bay Area | 38 | 158 | |||||||||||||||||
Southern California | (473 | ) | 264 | ||||||||||||||||
Total Net Loans (Charged-off)/ Recovered | $ | (182 | ) | $ | 64 | ||||||||||||||
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. 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 a 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 units, 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 Goodwill and intangible assets, net. | |
(In thousands, except share and per share data) | June 30,
| March 31,
| December 31,
| September 30,
| June 30,
| ||||||||||||||
Total balance sheet assets | $ | 8,712,873 | $ | 8,572,143 | $ | 8,494,625 | $ | 8,375,840 | $ | 8,716,203 | |||||||||
LESS: Goodwill and intangible assets, net | (68,491 | ) | (69,162 | ) | (69,834 | ) | (89,432 | ) | (90,182 | ) | |||||||||
Tangible assets (non-GAAP) | $ | 8,644,382 | $ | 8,502,981 | $ | 8,424,791 | $ | 8,286,408 | $ | 8,626,021 | |||||||||
Total shareholders’ equity | $ | 798,211 | $ | 778,819 | $ | 753,954 | $ | 738,009 | $ | 733,977 | |||||||||
LESS: Goodwill and intangible assets, net | (68,491 | ) | (69,162 | ) | (69,834 | ) | (89,432 | ) | (90,182 | ) | |||||||||
Tangible common equity (non-GAAP) | $ | 729,720 | $ | 709,657 | $ | 684,120 | $ | 648,577 | $ | 643,795 | |||||||||
Total equity/ Total assets | 9.16 | % | 9.09 | % | 8.88 | % | 8.81 | % | 8.42 | % | |||||||||
Tangible common equity/ Tangible assets (non-GAAP) | 8.44 | % | 8.35 | % | 8.12 | % | 7.83 | % | 7.46 | % | |||||||||
Total risk weighted assets * | $ | 6,494,049 | $ | 6,304,444 | $ | 6,161,677 | $ | 6,057,002 | $ | 6,104,586 | |||||||||
Tier 1 common equity * | $ | 726,872 | $ | 717,138 | $ | 702,728 | $ | 674,641 | $ | 665,628 | |||||||||
Tier 1 common equity/ Risk weighted assets * | 11.19 | % | 11.38 | % | 11.40 | % | 11.14 | % | 10.90 | % | |||||||||
End of period shares outstanding | 83,774,335 | 83,773,650 | 83,655,651 | 84,602,519 | 84,478,858 | ||||||||||||||
Book value per common share | $ | 9.53 | $ | 9.30 | $ | 9.01 | $ | 8.72 | $ | 8.69 | |||||||||
Tangible book value per share (non-GAAP) | $ | 8.71 | $ | 8.47 | $ | 8.18 | $ | 7.67 | $ | 7.62 | |||||||||
* Risk weighted assets and Tier 1 common equity for June 30, 2019 are presented based on estimated data. | |||||||||||||||||||
(7) | Assets under management and advisory have been reduced to exclude those assets managed or advised by BOS for periods when BOS was 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. |
Three Months Ended | |||||||||||||||||||
(In thousands) | June 30,
| March 31,
| December 31,
| September 30,
| June 30,
| ||||||||||||||
Total average shareholders’ equity | $ | 790,844 | $ | 766,283 | $ | 739,313 | $ | 737,188 | $ | 775,949 | |||||||||
LESS: Average Series D preferred stock | — | — | — | — | (39,881 | ) | |||||||||||||
Average common equity (non-GAAP) | 790,844 | 766,283 | 739,313 | 737,188 | 736,068 | ||||||||||||||
LESS: Average goodwill and intangible assets, net | (68,889 | ) | (69,498 | ) | (83,153 | ) | (89,830 | ) | (102,533 | ) | |||||||||
Average tangible common equity (non-GAAP) | $ | 721,955 | $ | 696,785 | $ | 656,160 | $ | 647,358 | $ | 633,535 | |||||||||
Net income attributable to the Company | $ | 19,380 | $ | 19,442 | $ | 33,302 | $ | 17,962 | $ | 6,434 | |||||||||
LESS: Dividends on Series D preferred stock | — | — | — | — | (869 | ) | |||||||||||||
Common net income (non-GAAP) | 19,380 | 19,442 | 33,302 | 17,962 | 5,565 | ||||||||||||||
ADD: Amortization of intangibles, net of tax | 531 | 531 | 537 | 593 | 592 | ||||||||||||||
Tangible common net income (non-GAAP) | $ | 19,911 | $ | 19,973 | $ | 33,839 | $ | 18,555 | $ | 6,157 | |||||||||
Return on average equity - (annualized) | 9.83 | % | 10.29 | % | 17.87 | % | 9.67 | % | 3.33 | % | |||||||||
ROACE - (annualized) (non-GAAP) | 9.83 | % | 10.29 | % | 17.87 | % | 9.67 | % | 3.03 | % | |||||||||
ROATCE - (annualized) (non-GAAP) | 11.06 | % | 11.63 | % | 20.46 | % | 11.37 | % | 3.90 | % | |||||||||
Six Months Ended | |||||||
(In thousands) | June 30,
| June 30,
| |||||
Total average shareholders’ equity | $ | 778,926 | $ | 779,586 | |||
LESS: Average Series D preferred stock (non-convertible) | — | (43,795 | ) | ||||
Average common equity (non-GAAP) | 778,926 | 735,791 | |||||
LESS: Average goodwill and intangible assets, net | (69,211 | ) | (117,839 | ) | |||
Average tangible common equity (non-GAAP) | $ | 709,715 | $ | 617,952 | |||
Net income attributable to the Company | $ | 38,822 | $ | 29,120 | |||
LESS: Dividends on Series D preferred stock | — | (1,738 | ) | ||||
Common net income (non-GAAP) | 38,822 | 27,382 | |||||
ADD: Amortization of intangibles, net of tax | 1,062 | 1,184 | |||||
Tangible common net income (non-GAAP) | $ | 39,884 | $ | 28,566 | |||
Return on average equity | 10.05 | % | 7.53 | % | |||
Return on average common equity (non-GAAP) | 10.05 | % | 7.50 | % | |||
Return on average tangible common equity (non-GAAP) | 11.33 | % | 9.32 | % | |||
(9) | The Company uses certain non-GAAP financial measures, such as Pre-tax, pre-provision income; Total operating expenses excluding amortization of intangibles 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 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: |
Three Months Ended | |||||||||||||||||||
(In thousands) | June 30,
| March 31,
| December 31,
| September 30,
| June 30,
| ||||||||||||||
Income before income taxes (GAAP) | $ | 24,818 | $ | 24,459 | $ | 42,192 | $ | 24,347 | $ | 24,803 | |||||||||
ADD BACK: Provision/ (credit) for loan losses | 1,363 | (1,426 | ) | 93 | (949 | ) | 453 | ||||||||||||
Pre-tax, pre-provision income (non-GAAP) | $ | 26,181 | $ | 23,033 | $ | 42,285 | $ | 23,398 | $ | 25,256 | |||||||||
Total operating expense (GAAP) | $ | 55,659 | $ | 60,553 | $ | 63,557 | $ | 68,557 | $ | 64,384 | |||||||||
Less: Amortization of intangibles | 672 | 672 | 680 | 750 | 749 | ||||||||||||||
Less: Restructuring | — | 1,646 | 2,065 | 5,763 | — | ||||||||||||||
Total operating expense (non-GAAP) | $ | 54,987 | $ | 58,235 | $ | 60,812 | $ | 62,044 | $ | 63,635 | |||||||||
Net interest income | $ | 57,460 | $ | 58,338 | $ | 59,997 | $ | 59,641 | $ | 57,545 | |||||||||
Total core fees and income | 24,292 | 24,280 | 28,691 | 31,592 | 31,897 | ||||||||||||||
Gain on sale of affiliate | — | — | 18,142 | — | — | ||||||||||||||
Total other income | 88 | 968 | (988 | ) | 722 | 198 | |||||||||||||
Total revenue (10) | $ | 81,840 | $ | 83,586 | $ | 105,842 | $ | 91,955 | $ | 89,640 | |||||||||
Efficiency ratio (GAAP) | 68.01 | % | 72.44 | % | 60.05 | % | 74.55 | % | 71.83 | % | |||||||||
Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) (10) | 67.19 | % | 69.67 | % | 57.14 | % | 67.04 | % | 70.29 | % | |||||||||
Six Months Ended | |||||||
(In thousands) | June 30,
| June 30,
| |||||
Income before income taxes (GAAP) | $ | 49,277 | $ | 52,867 | |||
ADD BACK: Provision/ (credit) for loan losses | (63 | ) | (1,342 | ) | |||
Pre-tax, pre-provision income (non-GAAP) | $ | 49,214 | $ | 51,525 | |||
Total operating expense (GAAP) | $ | 116,212 | $ | 135,241 | |||
Less: Amortization of intangibles | 1,344 | 1,499 | |||||
Less: Restructuring | 1,646 | — | |||||
Total operating expense (non-GAAP) | $ | 113,222 | $ | 133,742 | |||
Net interest income | $ | 115,798 | $ | 114,928 | |||
Total core fees and income | 48,572 | 71,332 | |||||
Total other income | 1,056 | 506 | |||||
Total revenue (10) | $ | 165,426 | $ | 186,766 | |||
Efficiency ratio (GAAP) | 70.25 | % | 72.41 | % | |||
Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) (10) | 68.44 | % | 70.90 | % | |||
(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. |
(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) | In addition to loans 30-89 days past due and accruing, at June 30, 2019, the Company had one loan totaling $0.9 million that was more than 90 days past due but still on accrual status. This loan originated in the New England region. The Company had no loans outstanding more than 90 days past due but still on accrual status in comparative periods. |
(16) | 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) | June 30,
| March 31,
| December 31,
| September 30,
| June 30,
| ||||||||||||||
Net interest income (GAAP basis) | $ | 57,460 | $ | 58,338 | $ | 59,997 | $ | 59,641 | $ | 57,545 | |||||||||
LESS: Interest recovered on previous nonaccrual loans | — | 258 | 986 | 986 | — | ||||||||||||||
Net interest income, excluding interest recovered while loans on nonaccrual status (non-GAAP) - also referred to as Core net interest income (non-GAAP) | 57,460 | 58,080 | 59,011 | 58,655 | 57,545 | ||||||||||||||
Net interest margin, excluding interest recovered while loans on nonaccrual status (non-GAAP) - also referred to as Core net interest margin (non-GAAP) | 2.78 | % | 2.89 | % | 2.90 | % | 2.85 | % | 2.85 | % | |||||||||
(17) | The Company uses certain non-GAAP financial measures, such as Net income attributable to the Company excluding notable items and Diluted earnings per share excluding notable items to provide information for investors to effectively analyze financial trends of ongoing business activities and to enhance comparability with peers across the financial sector. Reconciliations from the Company’s GAAP Net income attributable to the Company to non-GAAP Net income attributable to the Company excluding notable items and from GAAP Diluted earnings per share to non-GAAP Diluted earnings per share excluding notable items are presented below: |
Three Months Ended | |||||||||||||||||||
(In thousands, except share and per share data) | June 30,
| March 31,
| December 31,
| September 30,
| June 30,
| ||||||||||||||
Net income attributable to the Company (GAAP) | $ | 19,380 | $ | 19,442 | $ | 33,302 | $ | 17,962 | $ | 6,434 | |||||||||
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) | $ | 19,380 | $ | 20,742 | $ | 19,945 | $ | 22,515 | $ | 19,488 | |||||||||
Net income attributable to the common shareholders, treasury stock method (GAAP) | $ | 18,564 | $ | 20,999 | $ | 35,996 | $ | 17,133 | $ | 2,910 | |||||||||
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) | $ | 18,564 | $ | 22,299 | $ | 22,639 | $ | 21,686 | $ | 18,211 | |||||||||
Weighted average diluted shares outstanding | 84,048,972 | 84,010,450 | 84,863,779 | 85,498,568 | 85,413,575 | ||||||||||||||
Diluted total earnings per share (GAAP) | $ | 0.22 | $ | 0.25 | $ | 0.42 | $ | 0.20 | $ | 0.03 | |||||||||
Diluted total earnings per share, excluding notable items (non-GAAP) | $ | 0.22 | $ | 0.27 | $ | 0.27 | $ | 0.25 | $ | 0.21 | |||||||||
Average common equity (non-GAAP) | $ | 790,844 | $ | 766,283 | $ | 739,313 | $ | 737,188 | $ | 736,068 | |||||||||
Average tangible common equity (non-GAAP) | $ | 721,955 | $ | 696,785 | $ | 656,160 | $ | 647,358 | $ | 633,535 | |||||||||
Return on average common equity - (annualized), excluding notable items (non-GAAP) | 9.83 | % | 10.98 | % | 10.70 | % | 12.12 | % | 10.15 | % | |||||||||
Return on average tangible common equity - (annualized), excluding notable items (non-GAAP) | 11.06 | % | 12.38 | % | 12.38 | % | 14.16 | % | 12.16 | % | |||||||||
Pre-tax, pre-provision income (non-GAAP) | $ | 26,181 | $ | 23,033 | $ | 42,285 | $ | 23,398 | $ | 25,256 | |||||||||
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) | $ | 26,181 | $ | 24,679 | $ | 25,767 | $ | 29,161 | $ | 25,697 | |||||||||
* | In the fourth quarter of 2018, $0.4 million of Information services expense was reclassified to Restructuring expense in conjunction with the announcement of the Company's formal restructuring plan. |
** | 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/20190724005788/en/
Contacts:
(617) 912-4386
abromley@bostonprivate.com
