Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported first quarter 2020 Net income attributable to the Company of $0.8 million, compared to $21.2 million for the fourth quarter of 2019 and $19.4 million for the first quarter of 2019. First quarter 2020 Diluted earnings per share were $0.01, compared to $0.26 in the fourth quarter of 2019 and $0.25 in the first quarter of 2019.
“I am extremely proud of the commitment and dedication shown by the Boston Private employees throughout the COVID-19 pandemic,” said Anthony DeChellis, CEO of Boston Private. “Many of our employees have worked around the clock in difficult circumstances to deliver much needed capital and advice to our clients as we navigate this crisis together.
“This quarter’s results reflect the implementation of CECL and a reserve build related to the uncertain outlook of the pandemic’s impact on our economy. Before the reserve build, our Company demonstrated net interest income growth and expense discipline, while generating positive net flows in our Wealth Management & Trust business.”
Summary Financial Results - Reported | |||||||||||||||
% Change | |||||||||||||||
($ in millions, except for per share data) | 1Q20 | 4Q19 | 1Q19 | LQ | Y/Y | ||||||||||
Net income | $0.8 | $21.2 | $19.4 | (96) | % | (96) | % | ||||||||
Diluted earnings per share | $0.01 | $0.26 | $0.25 | (96) | % | (96) | % | ||||||||
Non-GAAP Financial Measures: | |||||||||||||||
Pre-tax, pre-provision income | $17.9 | $24.5 | $23.0 | (27) | % | (22) | % | ||||||||
Return on average common equity ("ROACE") | 0.4 | % | 10.3 | % | 10.3 | % | |||||||||
Return on average tangible common equity ("ROATCE") | 0.7 | % | 11.5 | % | 11.6 | % | |||||||||
The Company's reported financial results decreased linked quarter and year-over-year primarily as a result of the total provision for credit losses of $18.8 million in the first quarter of 2020. $1.8 million of the provision for credit loss expense related to unfunded commitments was recognized as noninterest expense, which negatively impacted first quarter 2020 Pre-tax, pre-provision income.
In addition to presenting the Company’s results in conformity with GAAP, the Company uses certain non-GAAP financial measures to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. For additional information on non-GAAP measures, see page 5. A reconciliation of GAAP to non-GAAP results can be found beginning on page 15.
Summary Financial Results - Operating Basis (non-GAAP) | ||||||||||||||||||
% Change | ||||||||||||||||||
($ in millions, except for per share data) | 1Q20 | 4Q191 | 1Q192 | LQ | Y/Y | |||||||||||||
Net income | $ | 0.8 | $ | 20.5 | $ | 20.7 | (96 | )% | (96 | )% | ||||||||
Diluted earnings per share | $ | 0.01 | $ | 0.25 | $ | 0.27 | (96 | )% | (96 | )% | ||||||||
Pre-tax, pre-provision income | $ | 17.9 | $ | 23.4 | $ | 24.7 | (23 | )% | (28 | )% | ||||||||
Return on average common equity | 0.4 | % | 9.9 | % | 11.0 | % | ||||||||||||
Return on average tangible common equity | 0.7 | % | 11.1 | % | 12.4 | % | ||||||||||||
14Q19 results adjusted to exclude the net after-tax impact of $1.1 million gain related to the revaluation of a receivable from the divestiture of Bingham, Osborn & Scarborough, LLC ("BOS") 21Q19 results adjusted to exclude the net after-tax impact of $1.6 million restructuring expense | ||||||||||||||||||
Net Interest Income and Margin | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 1Q20 | 4Q19 | 1Q19 | LQ | Y/Y | ||||||||||
Net interest income | $57.3 | $56.1 | $58.3 | 2 | % | (2 | )% | ||||||||
Less: Interest recovered on previous nonaccrual loans | — | — | 0.3 | (71 | )% | (97 | )% | ||||||||
Core net interest income (non-GAAP) | $57.3 | $56.1 | $58.1 | 2 | % | (1 | )% | ||||||||
Net interest margin | 2.76 | % | 2.70 | % | 2.90 | % | |||||||||
Core net interest margin (non-GAAP) | 2.76 | % | 2.70 | % | 2.89 | % | |||||||||
Net interest income for the first quarter of 2020 was $57.3 million, a 2% increase linked quarter and a 2% decrease year-over-year. The linked quarter increase was driven by lower funding costs, partially offset by lower interest on earning assets.
The Company’s Net interest margin increased 6 basis points on a linked quarter basis to 2.76% driven by higher net interest income while interest-earning assets remained generally flat. The Company's total cost of funds declined 16 basis points from 0.99% to 0.83% as a result of lower deposit costs and higher average deposit balances that replaced higher cost borrowings.
Noninterest Income | ||||||||||||||||
% Change | ||||||||||||||||
($ in millions) | 1Q20 | 4Q19 | 1Q19 | LQ | Y/Y | |||||||||||
Wealth management and trust fees | $ | 18.4 | $ | 18.7 | $ | 19.1 | (2 | )% | (4 | )% | ||||||
Investment management fees | 1.9 | 2.6 | 2.7 | (25 | )% | (27 | )% | |||||||||
Private banking fees 3 | 2.6 | 3.5 | 2.6 | (26 | )% | 1 | % | |||||||||
Total core fees and income | $ | 22.9 | $ | 24.8 | $ | 24.3 | (8 | )% | (6 | )% | ||||||
Total other income | (1.4 | ) | 2.0 | 1.0 | nm | nm | ||||||||||
Total noninterest income | $ | 21.5 | $ | 26.8 | $ | 25.2 | (20 | )% | (15 | )% | ||||||
Memo: Excluding Notable Items | ||||||||||||||||
Wealth management and trust fees | $ | 18.4 | $ | 18.7 | $ | 19.1 | (2 | )% | (4 | )% | ||||||
Investment management fees | 1.9 | 2.6 | 2.7 | (25 | )% | (27 | )% | |||||||||
Private banking fees 3 | 2.6 | 3.5 | 2.6 | (26 | )% | 1 | % | |||||||||
Total core fees and income | $ | 22.9 | $ | 24.8 | $ | 24.3 | (8 | )% | (6 | )% | ||||||
Total other income (non-GAAP) 4 | (1.4 | ) | 0.9 | 1.0 | nm | nm | ||||||||||
Total noninterest income (non-GAAP) 4 | $ | 21.5 | $ | 25.7 | $ | 25.2 | (16 | )% | (15 | )% | ||||||
nm = not meaningful | ||||||||||||||||
3 Private banking fees includes Other banking fee income and Gain/(loss) on sale of loans, net 4 Excludes $1.1 million gain related to revaluation of a receivable from the divestiture of BOS in 4Q19 | ||||||||||||||||
Total core fees and income for the first quarter of 2020 was $22.9 million, an 8% decrease linked quarter. The linked quarter decrease was primarily driven by lower Investment management fees and lower revenue associated with the gain on sale of loans, which was elevated during the fourth quarter of 2019 as a result of a residential loan sale.
Total other income of $(1.4) million during the first quarter of 2020 was negative as a result of market-related valuation adjustments on derivatives and securities related to the Company's Deferred Compensation Plan.
Assets Under Management / Advisory | ||||||||||||||||||||
% Change | ||||||||||||||||||||
($ in millions) | 1Q20 | 4Q19 | 1Q19 | LQ | Y/Y | |||||||||||||||
Wealth Management and Trust | $ | 13,497 | $ | 15,224 | $ | 14,564 | (11 | ) | % | (7 | ) | % | ||||||||
Other 6 | 1,016 | 1,544 | 1,558 | (34 | ) | % | (35 | ) | % | |||||||||||
Total assets under management / advisory | $ | 14,513 | $ | 16,768 | $ | 16,122 | (13 | ) | % | (10 | ) | % | ||||||||
6 Includes results from Dalton, Greiner, Hartman, Maher & Co, LLC ("DGHM") | ||||||||||||||||||||
Total assets under management / advisory were $14.5 billion at the end of the first quarter of 2020, a 13% decrease linked quarter and 10% decrease year-over-year. The linked quarter and year-over-year decreases were primarily driven by lower equity market values.
Total net flows were $150.0 million during the first quarter of 2020, $176.0 million of which was attributable to the Wealth Management and Trust segment.
Noninterest Expense | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 1Q20 | 4Q19 | 1Q19 | LQ | Y/Y | ||||||||||
Salaries and employee benefits | $ | 35.1 | $ | 34.2 | $ | 35.7 | 3 | % | (2 | )% | |||||
Occupancy and equipment | 7.6 | 7.6 | 8.3 | 1 | % | (8 | )% | ||||||||
Information systems | 6.7 | 6.5 | 5.9 | 4 | % | 15 | % | ||||||||
Professional services | 3.6 | 3.9 | 3.6 | (8 | )% | 1 | % | ||||||||
Marketing and business development | 1.9 | 2.0 | 1.1 | (6 | )% | 74 | % | ||||||||
Amortization of intangibles | 0.7 | 0.7 | 0.7 | 6 | % | 6 | % | ||||||||
FDIC insurance | — | — | 0.7 | (100 | )% | (100 | )% | ||||||||
Restructuring | — | — | 1.6 | — | % | (100 | )% | ||||||||
Other | 5.2 | 3.6 | 3.0 | 44 | % | 75 | % | ||||||||
Total noninterest expense | $ | 60.9 | $ | 58.5 | $ | 60.6 | 4 | % | 1 | % | |||||
Memo: Excluding Notable Items | |||||||||||||||
Restructuring2 | — | — | 1.6 | nm | (100 | )% | |||||||||
Total noninterest expense (non-GAAP) | $ | 60.9 | $ | 58.5 | $ | 58.9 | 4 | % | 3 | % | |||||
21Q19 results adjusted to exclude the net after-tax impact of $1.6 million restructuring expense | |||||||||||||||
Total noninterest expense for the first quarter of 2020 was $60.9 million, which includes $1.8 million of provision expense related to unfunded loan commitments recognized in Other expense. Total noninterest expense increased 4% linked quarter primarily driven by the $1.8 million provision expense and seasonal compensation expense.
Total noninterest expense (non-GAAP) increased 3% year-over-year primarily driven by the $1.8 million provision expense and higher Information systems expense from new initiatives.
Income Tax Expense
The Company's effective tax rate for the first quarter of 2020 was 11.2%. This rate is lower than prior quarters of 2019 primarily because net tax benefits had a more significant impact on the effective tax rate as a result of lower levels of pre-tax income in 2020 as compared to 2019.
Loans and Deposits - QTD Averages | ||||||||||||||||||
% Change | ||||||||||||||||||
($ in millions) | 1Q20 | 4Q19 | 1Q19 | LQ | Y/Y | |||||||||||||
Commercial and industrial | $ | 1,149 | $ | 1,142 | $ | 1,070 | 1 | % | 7 | % | ||||||||
Commercial real estate | 2,582 | 2,562 | 2,398 | 1 | % | 8 | % | |||||||||||
Construction and land | 233 | 217 | 211 | 8 | % | 10 | % | |||||||||||
Residential | 2,851 | 2,935 | 2,973 | (3 | )% | (4 | )% | |||||||||||
Home equity | 86 | 85 | 91 | 2 | % | (5 | )% | |||||||||||
Other consumer | 132 | 132 | 134 | — | % | (1 | )% | |||||||||||
Total loans | $ | 7,034 | $ | 7,073 | $ | 6,877 | (1 | )% | 2 | % | ||||||||
Non-interest bearing deposits | 2,046 | 2,002 | 1,975 | 2 | % | 4 | % | |||||||||||
Interest bearing deposits | 5,061 | 4,957 | 4,792 | 2 | % | 6 | % | |||||||||||
Total deposits | $ | 7,107 | $ | 6,959 | $ | 6,767 | 2 | % | 5 | % | ||||||||
Non-interest bearing deposits as a % of Total deposits | 29 | % | 29 | % | 29 | % | ||||||||||||
The average loan to average deposit ratio declined linked quarter from 101.6% to 99.0% as a result of first quarter 2020 deposit inflows and a linked quarter decline in loans, primarily driven by a residential loan sale late in the fourth quarter of 2019.
Average total loans in the first quarter of 2020 increased 2% year-over-year, primarily driven by growth in commercial real estate and commercial and industrial loans, partially offset by a decline in residential loans.
Average total deposits in the first quarter of 2020 increased 5% year-over-year, primarily driven by an increase in money market accounts and non-interest bearing deposits, partially offset by a decline in brokered certificates of deposits.
The cost of total deposits was 0.72%, a decrease of 14 basis points linked quarter and 12 basis points year-over-year.
Provision and Asset Quality | |||||||||||||||||||||
($ in millions) | 1Q20 | 4Q19 | 3Q19 | 2Q19 | 1Q19 | ||||||||||||||||
Provision/(credit) for loan losses | $ | 17.0 | $ | (3.7 | ) | $ | 0.2 | $ | 1.4 | $ | (1.4 | ) | |||||||||
Total net loans (charged-off)/ recovered | (0.3 | ) | 0.3 | 0.1 | (0.1 | ) | (0.1 | ) | |||||||||||||
Total nonaccrual loans | 24.3 | 16.1 | 17.6 | 17.2 | 12.0 | ||||||||||||||||
Total criticized and classified loans | 204.9 | 126.0 | 139.0 | 141.7 | 141.3 | ||||||||||||||||
Total loans 30-89 days past due and accruing | 14.9 | 25.9 | 4.2 | 2.4 | 17.7 | ||||||||||||||||
Ratios: | |||||||||||||||||||||
Allowance for loan losses as a % of Total loans | 0.97 | % | 1.03 | % | 1.07 | % | 1.06 | % | 1.07 | % | |||||||||||
Nonaccrual loans as a % of Total loans | 0.35 | % | 0.23 | % | 0.25 | % | 0.24 | % | 0.17 | % | |||||||||||
On January 1, 2020, the Company adopted the Current Expected Credit Loss accounting standard ("CECL"). Under this standard, the allowance for credit losses reflects expected credit losses over the life of loans and incorporates macroeconomic forecasts as well as historical loss rates. The adoption of CECL resulted in a net decrease in reserves of $19.0 million.
During the first quarter of 2020, the Company recognized a total provision for credit losses and unfunded loan commitments expense of $18.8 million, which includes a provision for loan loss expense of $17.0 million and $1.8 million for unfunded loan commitments, which is recognized as Other expense within Noninterest expense. The provision expense calculated under the CECL methodology was driven by the changes in economic projections late in the first quarter of 2020 to reflect the impact of the COVID-19 pandemic. This quarter's Provision for loan loss expense of $17.0 million compares to a provision credit of $3.7 million in the fourth quarter of 2019 and $1.4 million in the first quarter of 2019, both from the prior accounting basis.
Total net loans charged-off for the quarter was $0.3 million, compared to net loans recovered of $0.3 million in the fourth quarter of 2019 and net loans charged-off of $0.1 million in the first quarter of 2019.
Total nonaccrual loans as of March 31, 2020 was $24.3 million, or 35 basis points of Total loans, compared to $16.1 million, or 23 basis points of Total loans, as of December 31, 2019, and $12.0 million, or 17 basis points of Total loans, as of March 31, 2019.
Total criticized and classified loans as of March 31, 2020 was $204.9 million, an increase of $78.8 million, or 63%, linked quarter and $63.6 million, or 45%, year-over-year.
Capital | ||||||||||||||||||||
($ in millions, except for share and per share data) | 1Q20 | 4Q19 | 3Q19 | 2Q19 | 1Q19 | |||||||||||||||
Tangible common equity/ Tangible assets (non-GAAP) | 8.8 | % | 8.6 | % | 8.6 | % | 8.4 | % | 8.3 | % | ||||||||||
Tangible book value per share (non-GAAP) | $ | 9.31 | $ | 9.02 | $ | 8.90 | $ | 8.71 | $ | 8.47 | ||||||||||
Regulatory Capital Ratios: 7 | ||||||||||||||||||||
Tier 1 common equity | 11.2 | % | 11.4 | % | 11.2 | % | 11.2 | % | 11.4 | % | ||||||||||
Total risk-based capital | 13.8 | % | 14.1 | % | 13.9 | % | 13.9 | % | 14.2 | % | ||||||||||
Tier 1 risk-based capital | 12.7 | % | 13.0 | % | 12.8 | % | 12.7 | % | 13.0 | % | ||||||||||
Tier 1 leverage capital | 9.7 | % | 9.8 | % | 9.7 | % | 9.6 | % | 9.7 | % | ||||||||||
Common Equity Repurchase Program: | ||||||||||||||||||||
Total shares of common stock repurchased | 1,565,060 | — | 678,165 | — | — | |||||||||||||||
Average price paid per share of common stock | $ | 8.18 | — | $ | 10.61 | — | — | |||||||||||||
Aggregate repurchases of common stock | $ | 12.8 | — | $ | 7.2 | — | — | |||||||||||||
7 Current quarter information is presented based on estimated data. | ||||||||||||||||||||
During the first quarter of 2020, the Company completed the remainder of the $20.0 million share repurchase program by repurchasing $12.8 million of common stock. The Company repurchased 1,565,060 shares of common stock at an average cost of $8.18 per share during the quarter.
Tangible book value per share (non-GAAP) as of March 31, 2020 increased 3% linked quarter and 10% year-over-year to $9.31. The linked quarter and year-over year increases in Tangible book value per share were primarily driven by increased Accumulated other comprehensive income, increased Retained earnings, and the impact of the share repurchase program on total shares outstanding.
Dividend Payments
Concurrent with the release of first quarter 2020 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 8, 2020, and the payment date is May 22, 2020.
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: return on average common equity; return on average tangible common equity; pre-tax, pre-provision income; 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; tangible common equity / tangible assets, total noninterest expense excluding intangibles and restructuring, if any; the efficiency ratio excluding amortization and intangibles, and restructuring, if any; 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.
A detailed reconciliation table of the Company’s GAAP to non-GAAP measures is included in the tables of this release and beginning on page 15 of the attached financial statements.
Conference Call
Management will hold a conference call at 8:00 a.m. Eastern Time on Thursday, April 30, 2020, to discuss the financial results, business highlights and outlook. To access the call:
Dial In #: (888) 317-6003
Elite Entry Number: 6465914
Replay Information:
Available from April 30, 2020 at 12:00 p.m Eastern Time until May 7, 2020
Dial In #: (877) 344-7529
Conference Number: 10142181
The call will be simultaneously webcast and may be accessed on www.bostonprivate.com.
About Boston Private
Boston Private is a leading provider of integrated wealth management, trust and banking services to individuals, families, businesses and nonprofits.
For more than 30 years, Boston Private has delivered comprehensive advice coupled with deep technical expertise to help clients simplify their lives and achieve their goals. The firm offers the capabilities of a large institution with the superior service of a boutique firm to clients across the United States. The Company has total assets of greater than $8 billion, and manages over $14 billion of client assets.
Boston Private is the corporate brand of Boston Private Financial Holdings, Inc. (NASDAQ: BPFH).
For more information, visit 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 interest rate trends and future liquidity; expectations as to changes and assets, deposits and results of operations; the impact of the COVID-19 pandemic; future operations; market position and financial position; and prospects, plans and objectives of management. 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, the negative impacts and disruptions of the COVID-19 pandemic and measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; the length and extent of the economic contraction as a result of the COVID-19 pandemic; continued deterioration in general business and economic conditions on a national basis and in the local markets in which the Company operates; changes in customer behavior due to changing business and economic conditions or legislative or regulatory initiatives; continued turbulence in the capital and debt markets; changes in interest rates; increases in loan defaults and charge-off rates; decreases in the value of securities and other assets; changes in loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; competitive pressures from other financial institutions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; changes in regulation; reputational risk relating to the Company’s participation in the Paycheck Protection Program and other pandemic-related legislative and regulatory initiatives and programs; risks 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 in 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 statements are made.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||||||||
Consolidated Balance Sheets | |||||||||||||||||||||||||
Unaudited ($ in thousands, except share and per share data) | |||||||||||||||||||||||||
1Q20 | 4Q19 | 3Q19 | 2Q19 | 1Q19 | |||||||||||||||||||||
ASSETS: | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 61,714 | $ | 292,479 | $ | 78,010 | $ | 65,756 | $ | 96,211 | |||||||||||||||
Investment securities available-for-sale | 993,166 | 978,284 | 935,538 | 966,731 | 981,951 | ||||||||||||||||||||
Investment securities held-to-maturity | 45,395 | 48,212 | 51,379 | 54,482 | 67,548 | ||||||||||||||||||||
Equity securities at fair value | 23,080 | 18,810 | 21,780 | 19,092 | 7,491 | ||||||||||||||||||||
Stock in Federal Home Loan Bank and Federal Reserve Bank | 45,273 | 39,078 | 47,756 | 64,453 | 47,053 | ||||||||||||||||||||
Loans held for sale | 7,671 | 7,386 | 6,658 | 3,640 | 280 | ||||||||||||||||||||
Loans | 7,043,338 | 6,976,704 | 7,067,151 | 7,080,260 | 6,926,968 | ||||||||||||||||||||
Less: Allowance for loan losses | 68,211 | 71,982 | 75,359 | 75,067 | 73,814 | ||||||||||||||||||||
Loans, net of allowance for loan losses | 6,975,127 | 6,904,722 | 6,991,792 | 7,005,193 | 6,853,154 | ||||||||||||||||||||
Premises and equipment, net | 43,544 | 44,527 | 42,658 | 40,244 | 42,938 | ||||||||||||||||||||
Goodwill | 57,607 | 57,607 | 57,607 | 57,607 | 57,607 | ||||||||||||||||||||
Intangible assets, net | 9,637 | 10,352 | 10,622 | 10,884 | 11,555 | ||||||||||||||||||||
Accrued interest receivable | 24,054 | 24,175 | 24,851 | 26,411 | 25,935 | ||||||||||||||||||||
Deferred income taxes, net | 5,630 | 11,383 | 15,704 | 17,183 | 22,844 | ||||||||||||||||||||
Right-of-use assets | 98,896 | 102,075 | 107,045 | 110,880 | 104,644 | ||||||||||||||||||||
Other assets | 355,532 | 291,411 | 299,544 | 270,317 | 252,932 | ||||||||||||||||||||
TOTAL ASSETS | $ | 8,746,326 | $ | 8,830,501 | $ | 8,690,944 | $ | 8,712,873 | $ | 8,572,143 | |||||||||||||||
LIABILITIES: | |||||||||||||||||||||||||
Deposits | $ | 6,835,572 | $ | 7,241,476 | $ | 6,658,242 | $ | 6,437,963 | $ | 6,779,845 | |||||||||||||||
Securities sold under agreements to repurchase | 45,319 | 53,398 | 48,860 | 62,372 | 58,329 | ||||||||||||||||||||
Federal funds purchased | 145,000 | — | 230,000 | 135,000 | — | ||||||||||||||||||||
Federal Home Loan Bank borrowings | 491,254 | 350,829 | 570,904 | 920,068 | 615,070 | ||||||||||||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 106,363 | 106,363 | ||||||||||||||||||||
Lease liabilities | 113,574 | 117,214 | 122,799 | 126,740 | 120,162 | ||||||||||||||||||||
Other liabilities | 180,452 | 140,820 | 143,607 | 124,370 | 112,893 | ||||||||||||||||||||
TOTAL LIABILITIES | 7,917,534 | 8,010,100 | 7,880,775 | 7,912,876 | 7,792,662 | ||||||||||||||||||||
REDEEMABLE NONCONTROLLING INTERESTS (“RNCI”) | — | 1,383 | 1,481 | 1,786 | 662 | ||||||||||||||||||||
SHAREHOLDERS' EQUITY: | |||||||||||||||||||||||||
Common stock, $1.00 par value; authorized: 170,000,000 shares | 81,800 | 83,266 | 83,242 | 83,774 | 83,774 | ||||||||||||||||||||
Additional paid-in capital | 593,167 | 600,708 | 599,877 | 603,869 | 604,288 | ||||||||||||||||||||
Retained earnings | 131,761 | 127,469 | 116,210 | 106,443 | 97,155 | ||||||||||||||||||||
Accumulated other comprehensive income/(loss) | 22,064 | 7,575 | 9,359 | 4,125 | (6,398 | ) | |||||||||||||||||||
TOTAL SHAREHOLDERS' EQUITY | 828,792 | 819,018 | 808,688 | 798,211 | 778,819 | ||||||||||||||||||||
TOTAL LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY | $ | 8,746,326 | $ | 8,830,501 | $ | 8,690,944 | $ | 8,712,873 | $ | 8,572,143 | |||||||||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Consolidated Income Statements | |||||||||||||||||||
Unaudited ($ in thousands, except share and per share data) | |||||||||||||||||||
1Q20 | 4Q19 | 3Q19 | 2Q19 | 1Q19 | |||||||||||||||
REVENUE: | |||||||||||||||||||
Interest income | $ | 73,082 | $ | 75,291 | $ | 77,604 | $ | 78,728 | $ | 76,824 | |||||||||
Interest expense | 15,825 | 19,166 | 21,451 | 21,268 | 18,486 | ||||||||||||||
Net interest income | 57,257 | 56,125 | 56,153 | 57,460 | 58,338 | ||||||||||||||
Provision/(credit) for loan losses 8 | 16,962 | (3,668 | ) | 167 | 1,363 | (1,426 | ) | ||||||||||||
Net interest income after provision/(credit) for loan losses | 40,295 | 59,793 | 55,986 | 56,097 | 59,764 | ||||||||||||||
Wealth management and trust fees 9 | 18,371 | 18,720 | 19,067 | 18,912 | 19,058 | ||||||||||||||
Investment management fees | 1,925 | 2,554 | 2,496 | 2,455 | 2,650 | ||||||||||||||
Private banking fee income | 2,490 | 2,924 | 2,658 | 2,867 | 2,499 | ||||||||||||||
Gain on sale of loans, net | 100 | 557 | 934 | 58 | 73 | ||||||||||||||
Total core fees and income | 22,886 | 24,755 | 25,155 | 24,292 | 24,280 | ||||||||||||||
Total other income | (1,365 | ) | 2,038 | (29 | ) | 88 | 968 | ||||||||||||
TOTAL REVENUE 10 | 78,778 | 82,918 | 81,279 | 81,840 | 83,586 | ||||||||||||||
NONINTEREST EXPENSE: | |||||||||||||||||||
Salaries and employee benefits | 35,096 | 34,186 | 31,684 | 32,706 | 35,726 | ||||||||||||||
Occupancy and equipment | 7,646 | 7,578 | 8,260 | 7,852 | 8,348 | ||||||||||||||
Information systems | 6,725 | 6,476 | 5,169 | 5,137 | 5,860 | ||||||||||||||
Professional services | 3,601 | 3,920 | 4,435 | 3,313 | 3,560 | ||||||||||||||
Marketing and business development | 1,890 | 2,017 | 1,403 | 1,934 | 1,085 | ||||||||||||||
Amortization of intangibles | 715 | 676 | 671 | 672 | 672 | ||||||||||||||
FDIC insurance | — | (19 | ) | 59 | 585 | 660 | |||||||||||||
Restructuring | — | — | — | — | 1,646 | ||||||||||||||
Other 8 | 5,235 | 3,623 | 3,856 | 3,460 | 2,996 | ||||||||||||||
TOTAL NONINTEREST EXPENSE | 60,908 | 58,457 | 55,537 | 55,659 | 60,553 | ||||||||||||||
INCOME BEFORE INCOME TAXES | 908 | 28,129 | 25,575 | 24,818 | 24,459 | ||||||||||||||
Provision for income taxes | 102 | 6,788 | 5,517 | 5,369 | 4,917 | ||||||||||||||
Net income before attribution to noncontrolling interests | 806 | 21,341 | 20,058 | 19,449 | 19,542 | ||||||||||||||
Less: Net income attributable to noncontrolling interests | 6 | 97 | 96 | 69 | 100 | ||||||||||||||
NET INCOME ATTRIBUTABLE TO THE COMPANY | $ | 800 | $ | 21,244 | $ | 19,962 | $ | 19,380 | $ | 19,442 | |||||||||
Adjustments, treasury stock method 11 | 414 | 98 | 304 | (816 | ) | 1,557 | |||||||||||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 1,214 | $ | 21,342 | $ | 20,266 | $ | 18,564 | $ | 20,999 | |||||||||
COMMON SHARE DATA: | |||||||||||||||||||
Weighted average basic shares outstanding | 83,005,064 | 83,238,982 | 83,631,403 | 83,565,780 | 83,285,095 | ||||||||||||||
Weighted average diluted shares outstanding 12 | 83,318,041 | 83,637,786 | 83,956,708 | 84,048,972 | 84,010,450 | ||||||||||||||
Diluted earnings per share | $ | 0.01 | $ | 0.26 | $ | 0.24 | $ | 0.22 | $ | 0.25 | |||||||||
8 In the first quarter of 2020, there was a $17.0 million provision expense for loan losses. Additionally, there was a $1.8 million provision expense related to the off-balance sheet commitments included in Other expenses. 9 Wealth management and trust fees consists of revenue from Boston Private Wealth LLC ("BPW"), KLS Professional Advisors Group, LLC ("KLS") through the effective date of its merger with BPW, and the trust operations of Boston Private Bank & Trust Company. 10 Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. 11 Adjustments to Net income attributable to the Company to arrive at Net income attributable to common shareholders, treasury stock method, as presented in these tables, include decrease/(increase) in Noncontrolling interests redemption value. 12 For a description of the Company's policies regarding Diluted earnings per share, please refer to Part II. Item 8. “Financial Statements and Supplementary Data - Note 16: Earnings Per Share” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. | |||||||||||||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Consolidated Financial Highlights | |||||||||||||||||||
Unaudited ($ in thousands, except share and per share data) | |||||||||||||||||||
1Q20 | 4Q19 | 3Q19 | 2Q19 | 1Q19 | |||||||||||||||
KEY STATISTICS: | |||||||||||||||||||
Return on average assets (non-GAAP) 12 | 0.04 | % | 0.96 | % | 0.91 | % | 0.90 | % | 0.93 | % | |||||||||
ROACE (non-GAAP) 12 | 0.39 | % | 10.29 | % | 9.80 | % | 9.83 | % | 10.29 | % | |||||||||
ROATCE (non-GAAP) 12 | 0.72 | % | 11.51 | % | 10.99 | % | 11.06 | % | 11.63 | % | |||||||||
Efficiency ratio (non-GAAP) 12 | 76.4 | % | 69.7 | % | 67.5 | % | 67.2 | % | 69.7 | % | |||||||||
Noninterest income to total revenue | 27.3 | % | 32.3 | % | 30.9 | % | 29.8 | % | 30.2 | % | |||||||||
Net interest margin | 2.76 | % | 2.70 | % | 2.72 | % | 2.78 | % | 2.90 | % | |||||||||
Average loan to average deposit ratio | 99.0 | % | 101.6 | % | 105.9 | % | 106.6 | % | 101.6 | % | |||||||||
Cost of total deposits | 0.72 | % | 0.86 | % | 0.92 | % | 0.88 | % | 0.84 | % | |||||||||
Cost of interest-bearing deposits | 1.02 | % | 1.20 | % | 1.31 | % | 1.25 | % | 1.19 | % | |||||||||
Cost of total funding | 0.83 | % | 0.99 | % | 1.12 | % | 1.11 | % | 1.00 | % | |||||||||
Allowance for loan loss / Total loans | 0.97 | % | 1.03 | % | 1.07 | % | 1.06 | % | 1.07 | % | |||||||||
Nonperforming loans / Total loans | 0.35 | % | 0.23 | % | 0.25 | % | 0.24 | % | 0.17 | % | |||||||||
Net (charge-offs)/recoveries / Total loans 12 | (0.02 | )% | 0.02 | % | 0.01 | % | (0.01 | )% | — | % | |||||||||
CAPITAL HIGHLIGHTS: | |||||||||||||||||||
Tier 1 common equity 7 | $ | 742,044 | $ | 745,926 | $ | 732,980 | $ | 726,872 | $ | 717,138 | |||||||||
Tier 1 capital 7 | $ | 842,066 | $ | 846,337 | $ | 833,431 | $ | 827,299 | $ | 817,600 | |||||||||
Total capital 7 | $ | 914,572 | $ | 919,573 | $ | 910,076 | $ | 903,675 | $ | 892,764 | |||||||||
Risk-weighted assets ("RWA") 7 | $ | 6,627,338 | $ | 6,530,804 | $ | 6,533,884 | $ | 6,491,184 | $ | 6,304,444 | |||||||||
Average assets for leverage 7 | $ | 8,691,254 | $ | 8,659,944 | $ | 8,588,358 | $ | 8,617,803 | $ | 8,447,143 | |||||||||
Tier 1 common equity ratio 7 | 11.20 | % | 11.42 | % | 11.22 | % | 11.20 | % | 11.38 | % | |||||||||
Tier 1 risk-based capital ratio 7 | 12.71 | % | 12.96 | % | 12.76 | % | 12.74 | % | 12.97 | % | |||||||||
Total risk-based capital ratio 7 | 13.80 | % | 14.08 | % | 13.93 | % | 13.92 | % | 14.16 | % | |||||||||
Tier 1 leverage capital ratio 7 | 9.69 | % | 9.77 | % | 9.70 | % | 9.60 | % | 9.68 | % | |||||||||
Total equity / Total assets | 9.48 | % | 9.27 | % | 9.30 | % | 9.16 | % | 9.09 | % | |||||||||
Tangible common equity / Tangible assets (non-GAAP) | 8.77 | % | 8.57 | % | 8.59 | % | 8.44 | % | 8.35 | % | |||||||||
End of period market price per share | $ | 7.15 | $ | 12.03 | $ | 11.66 | $ | 12.07 | $ | 10.96 | |||||||||
End of period shares outstanding | 81,800,486 | 83,265,674 | 83,241,952 | 83,774,335 | 83,773,650 | ||||||||||||||
Book value per common share | $ | 10.13 | $ | 9.84 | $ | 9.71 | $ | 9.53 | $ | 9.30 | |||||||||
Tangible book value per share (non-GAAP) | $ | 9.31 | $ | 9.02 | $ | 8.90 | $ | 8.71 | $ | 8.47 | |||||||||
Common Equity Repurchase Program: | |||||||||||||||||||
Total shares of common stock repurchased | 1,565,060 | — | 678,165 | — | — | ||||||||||||||
Average price paid per share of common stock | $ | 8.18 | $ | — | $10.61 | $ | — | $ | — | ||||||||||
Aggregate repurchases of common stock ($ in millions) | $ | 12.8 | $ | — | $7.2 | $ | — | $ | — | ||||||||||
7 Current quarter capital highlights are presented based on estimated data. 12 Annualized. | |||||||||||||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | ||||||||||||||||||||||||
Consolidated AUM and Balance Sheet - End of Period Balances | ||||||||||||||||||||||||
Unaudited ($ in thousands) | ||||||||||||||||||||||||
1Q20 | 4Q19 | 3Q19 | 2Q19 | 1Q19 | ||||||||||||||||||||
ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"): | ||||||||||||||||||||||||
Wealth Management and Trust | $ | 13,497,000 | $ | 15,224,000 | $ | 14,695,000 | $ | 14,649,000 | $ | 14,564,000 | ||||||||||||||
Other | 1,016,000 | 1,544,000 | 1,533,000 | 1,550,000 | 1,558,000 | |||||||||||||||||||
TOTAL AUM | $ | 14,513,000 | $ | 16,768,000 | $ | 16,228,000 | $ | 16,199,000 | $ | 16,122,000 | ||||||||||||||
AUM Rollforward: | ||||||||||||||||||||||||
Beginning balance | $ | 16,768,000 | $ | 16,228,000 | $ | 16,199,000 | $ | 16,122,000 | $ | 15,921,000 | ||||||||||||||
Net flows | 150,000 | (209,000 | ) | (137,000 | ) | (269,000 | ) | (963,000 | ) | |||||||||||||||
Market | (2,405,000 | ) | 749,000 | 166,000 | 346,000 | 1,164,000 | ||||||||||||||||||
Ending balance | $ | 14,513,000 | $ | 16,768,000 | $ | 16,228,000 | $ | 16,199,000 | $ | 16,122,000 | ||||||||||||||
AUM Net Flows: | ||||||||||||||||||||||||
Wealth Management and Trust | $ | 176,000 | $ | (114,000 | ) | $ | (100,000 | ) | $ | (233,000 | ) | $ | (580,000 | ) | ||||||||||
Other | (26,000 | ) | (95,000 | ) | (37,000 | ) | (36,000 | ) | (383,000 | ) | ||||||||||||||
TOTAL NET FLOWS | $ | 150,000 | $ | (209,000 | ) | $ | (137,000 | ) | $ | (269,000 | ) | $ | (963,000 | ) | ||||||||||
DEPOSITS: | ||||||||||||||||||||||||
Demand deposits (non-interest bearing) | $ | 2,020,440 | $ | 1,971,013 | $ | 1,947,363 | $ | 1,854,091 | $ | 2,016,838 | ||||||||||||||
Savings and NOW | 653,006 | 646,199 | 666,107 | 631,166 | 673,954 | |||||||||||||||||||
Money market | 3,468,701 | 3,969,330 | 3,366,623 | 3,228,608 | 3,302,244 | |||||||||||||||||||
Certificates of deposit | 693,425 | 654,934 | 678,149 | 724,098 | 786,809 | |||||||||||||||||||
TOTAL DEPOSITS | $ | 6,835,572 | $ | 7,241,476 | $ | 6,658,242 | $ | 6,437,963 | $ | 6,779,845 | ||||||||||||||
LOANS: | ||||||||||||||||||||||||
Commercial and industrial | $ | 670,744 | $ | 694,034 | $ | 695,029 | $ | 656,186 | $ | 615,370 | ||||||||||||||
Commercial tax exempt | 445,319 | 447,927 | 448,488 | 450,307 | 449,492 | |||||||||||||||||||
Commercial real estate | 2,626,299 | 2,551,274 | 2,533,346 | 2,530,556 | 2,439,048 | |||||||||||||||||||
Construction and land | 238,293 | 225,983 | 209,741 | 200,378 | 210,618 | |||||||||||||||||||
Residential | 2,841,926 | 2,839,155 | 2,964,042 | 3,025,758 | 2,993,132 | |||||||||||||||||||
Home equity | 89,350 | 83,657 | 84,432 | 89,930 | 88,620 | |||||||||||||||||||
Consumer | 131,407 | 134,674 | 132,073 | 127,145 | 130,688 | |||||||||||||||||||
TOTAL LOANS | $ | 7,043,338 | $ | 6,976,704 | $ | 7,067,151 | $ | 7,080,260 | $ | 6,926,968 | ||||||||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | ||||||||||||||||||||||||
Asset Quality | ||||||||||||||||||||||||
Unaudited ($ in thousands) | ||||||||||||||||||||||||
1Q20 | 4Q19 | 3Q19 | 2Q19 | 1Q19 | ||||||||||||||||||||
CHARGE-OFFS: | ||||||||||||||||||||||||
Loan charge-offs | $ | (528 | ) | $ | (285 | ) | $ | (185 | ) | $ | (195 | ) | $ | (564 | ) | |||||||||
Loan recoveries | 180 | 576 | 310 | 85 | 492 | |||||||||||||||||||
NET (CHARGE-OFFS)/RECOVERIES | $ | (348 | ) | $ | 291 | $ | 125 | $ | (110 | ) | $ | (72 | ) | |||||||||||
Net charge-offs to average loans (annualized) | (0.02 | )% | 0.02 | % | 0.01 | % | (0.01 | )% | — | % | ||||||||||||||
Net (Charge-offs)/Recoveries by Loan Type: | ||||||||||||||||||||||||
Commercial and industrial | $ | (473 | ) | $ | 118 | $ | 95 | $ | (155 | ) | $ | 188 | ||||||||||||
Commercial tax exempt | — | — | — | — | — | |||||||||||||||||||
Commercial real estate | — | 183 | 27 | 30 | 189 | |||||||||||||||||||
Construction and land | — | — | — | — | — | |||||||||||||||||||
Residential | — | — | — | — | 100 | |||||||||||||||||||
Home equity | 132 | 4 | 6 | — | (562 | ) | ||||||||||||||||||
Consumer | (7 | ) | (14 | ) | (3 | ) | 15 | 13 | ||||||||||||||||
NET (CHARGE-OFFS)/RECOVERIES | $ | (348 | ) | $ | 291 | $ | 125 | $ | (110 | ) | $ | (72 | ) | |||||||||||
LOAN QUALITY DATA: | ||||||||||||||||||||||||
Special mention loans | $ | 92,623 | $ | 52,026 | $ | 58,133 | $ | 70,677 | $ | 86,787 | ||||||||||||||
Accruing classified loans 13 | 87,948 | 57,922 | 63,278 | 53,883 | 42,521 | |||||||||||||||||||
Nonaccrual loans | 24,314 | 16,103 | 17,565 | 17,155 | 12,019 | |||||||||||||||||||
Total classified | 112,262 | 74,025 | 80,843 | 71,038 | 54,540 | |||||||||||||||||||
Criticized and classified loans | $ | 204,885 | $ | 126,051 | $ | 138,976 | $ | 141,715 | $ | 141,327 | ||||||||||||||
Loans 30-89 days past due and accruing 14 | $ | 14,852 | $ | 25,945 | $ | 4,179 | $ | 2,434 | $ | 17,715 | ||||||||||||||
13 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. 14 At June 30, 2019, the Company had one loan totaling $0.9 million that was more than 90 days past due but still on accrual status. This loan originated in the New England region. The Company had no other loans outstanding more than 90 days past due but still on accrual status in comparative periods. | ||||||||||||||||||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | ||||||||||||||||||||||||||||||||
Average Balances, Yields, and Rates | ||||||||||||||||||||||||||||||||
Unaudited ($ in thousands) | ||||||||||||||||||||||||||||||||
Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||||||||||||||||
1Q20 | 4Q19 | 1Q19 | 1Q20 | 4Q19 | 1Q19 | 1Q20 | 4Q19 | 1Q19 | ||||||||||||||||||||||||
INTEREST-EARNING ASSETS | ||||||||||||||||||||||||||||||||
Cash and investments: | ||||||||||||||||||||||||||||||||
Taxable investment securities | $ | 201,174 | $ | 201,535 | $ | 244,230 | $ | 868 | $ | 869 | $ | 1,185 | 1.73 | % | 1.72 | % | 1.94 | % | ||||||||||||||
Non-taxable investment securities | 315,681 | 311,705 | 306,868 | 1,998 | 1,976 | 1,901 | 2.53 | % | 2.54 | % | 2.48 | % | ||||||||||||||||||||
Mortgage-backed securities | 520,629 | 489,927 | 521,788 | 2,787 | 2,568 | 2,897 | 2.14 | % | 2.10 | % | 2.22 | % | ||||||||||||||||||||
Short-term investments and other | 147,482 | 130,519 | 79,603 | 1,071 | 1,210 | 908 | 2.89 | % | 3.65 | % | 4.58 | % | ||||||||||||||||||||
Total cash and investments | 1,184,966 | 1,133,686 | 1,152,489 | 6,724 | 6,623 | 6,891 | 2.27 | % | 2.33 | % | 2.39 | % | ||||||||||||||||||||
Loans: 15 | ||||||||||||||||||||||||||||||||
Commercial and industrial | 1,148,986 | 1,142,015 | 1,070,161 | 10,724 | 11,276 | 10,979 | 3.69 | % | 3.86 | % | 4.10 | % | ||||||||||||||||||||
Commercial real estate | 2,582,305 | 2,562,380 | 2,398,413 | 27,482 | 28,285 | 28,151 | 4.21 | % | 4.32 | % | 4.69 | % | ||||||||||||||||||||
Construction and land | 233,324 | 216,754 | 211,351 | 2,572 | 2,588 | 2,641 | 4.36 | % | 4.67 | % | 5.00 | % | ||||||||||||||||||||
Residential | 2,850,833 | 2,934,786 | 2,972,945 | 23,468 | 24,275 | 25,545 | 3.29 | % | 3.31 | % | 3.44 | % | ||||||||||||||||||||
Home equity | 86,048 | 84,632 | 90,646 | 952 | 965 | 1,121 | 4.45 | % | 4.53 | % | 5.02 | % | ||||||||||||||||||||
Other consumer | 132,237 | 132,143 | 133,937 | 1,160 | 1,279 | 1,496 | 3.53 | % | 3.84 | % | 4.53 | % | ||||||||||||||||||||
Total loans | 7,033,733 | 7,072,710 | 6,877,453 | 66,358 | 68,668 | 69,933 | 3.75 | % | 3.83 | % | 4.07 | % | ||||||||||||||||||||
Total earning assets | 8,218,699 | 8,206,396 | 8,029,942 | 73,082 | 75,291 | 76,824 | 3.54 | % | 3.62 | % | 3.83 | % | ||||||||||||||||||||
LESS: Allowance for loan losses | 51,730 | 75,283 | 75,537 | |||||||||||||||||||||||||||||
Cash and due from banks | 49,571 | 48,287 | 46,172 | |||||||||||||||||||||||||||||
Other assets | 562,851 | 559,350 | 493,148 | |||||||||||||||||||||||||||||
TOTAL AVERAGE ASSETS | $ | 8,779,391 | $ | 8,738,750 | $ | 8,493,725 | ||||||||||||||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||||||||||
Interest-bearing deposits: 16 | ||||||||||||||||||||||||||||||||
Savings and NOW | $ | 638,926 | $ | 644,502 | $ | 674,872 | $ | 232 | $ | 252 | $ | 296 | 0.15 | % | 0.16 | % | 0.18 | % | ||||||||||||||
Money market | 3,753,045 | 3,632,258 | 3,341,397 | 9,657 | 11,449 | 10,072 | 1.03 | % | 1.25 | % | 1.22 | % | ||||||||||||||||||||
Certificates of deposit | 668,818 | 680,466 | 775,817 | 2,907 | 3,322 | 3,690 | 1.75 | % | 1.94 | % | 1.93 | % | ||||||||||||||||||||
Total interest-bearing deposits 16 | 5,060,789 | 4,957,226 | 4,792,086 | 12,796 | 15,023 | 14,058 | 1.02 | % | 1.20 | % | 1.19 | % | ||||||||||||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 917 | 966 | 1,121 | 3.41 | % | 3.56 | % | 4.22 | % | ||||||||||||||||||||
FHLB borrowings and other | 455,813 | 591,682 | 615,985 | 2,112 | 3,177 | 3,307 | 1.83 | % | 2.10 | % | 2.15 | % | ||||||||||||||||||||
Total interest-bearing liabilities 16 | 5,622,965 | 5,655,271 | 5,514,434 | 15,825 | 19,166 | 18,486 | 1.13 | % | 1.34 | % | 1.36 | % | ||||||||||||||||||||
Non-interest bearing demand deposits 16 | 2,046,102 | 2,001,714 | 1,974,526 | |||||||||||||||||||||||||||||
Payables and other liabilities | 270,371 | 261,503 | 236,426 | |||||||||||||||||||||||||||||
Total average liabilities | 7,939,438 | 7,918,488 | 7,725,386 | |||||||||||||||||||||||||||||
Redeemable noncontrolling interests | 1,018 | 1,446 | 2,056 | |||||||||||||||||||||||||||||
Average shareholders’ equity | 838,935 | 818,816 | 766,283 | |||||||||||||||||||||||||||||
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | $ | 8,779,391 | $ | 8,738,750 | $ | 8,493,725 | ||||||||||||||||||||||||||
Net interest income | $ | 57,257 | $ | 56,125 | $ | 58,338 | ||||||||||||||||||||||||||
Interest rate spread | 2.41 | % | 2.28 | % | 2.47 | % | ||||||||||||||||||||||||||
Net interest margin | 2.76 | % | 2.70 | % | 2.90 | % | ||||||||||||||||||||||||||
Average total deposits 16 | $ | 7,106,891 | $ | 6,958,940 | $ | 6,766,612 | 0.72 | % | 0.86 | % | 0.84 | % | ||||||||||||||||||||
Average total deposits and borrowings 16 | $ | 7,669,067 | $ | 7,656,985 | $ | 7,488,960 | 0.83 | % | 0.99 | % | 1.00 | % | ||||||||||||||||||||
15 Average loans includes Loans held for sale and Nonaccrual loans 16 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. | ||||||||||||||||||||||||||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||||||||||||
Regional Loan Data | |||||||||||||||||||||||||||||
Unaudited ($ in thousands) | |||||||||||||||||||||||||||||
1Q20 | 4Q19 | 3Q19 | 2Q19 | 1Q19 | |||||||||||||||||||||||||
New England | $ | 3,724,959 | $ | 3,776,747 | $ | 3,868,690 | $ | 3,957,221 | $ | 3,901,644 | |||||||||||||||||||
Northern California | 1,618,668 | 1,532,786 | 1,559,569 | 1,538,441 | 1,499,626 | ||||||||||||||||||||||||
Southern California | 1,699,711 | 1,667,171 | 1,638,892 | 1,584,598 | 1,525,698 | ||||||||||||||||||||||||
Total loans | $ | 7,043,338 | $ | 6,976,704 | $ | 7,067,151 | $ | 7,080,260 | $ | 6,926,968 | |||||||||||||||||||
Loans (charged-off)/recovered, net: | |||||||||||||||||||||||||||||
New England | $ | 15 | $ | 414 | $ | 275 | $ | 31 | $ | 222 | |||||||||||||||||||
Northern California | 122 | (10 | ) | 6 | 20 | 18 | |||||||||||||||||||||||
Southern California | (485 | ) | (113 | ) | (156 | ) | (161 | ) | (312 | ) | |||||||||||||||||||
Total net loans (charged-off)/recovered | $ | (348 | ) | $ | 291 | $ | 125 | $ | (110 | ) | $ | (72 | ) | ||||||||||||||||
Special mention loans: | |||||||||||||||||||||||||||||
New England | $ | 61,741 | $ | 21,691 | $ | 19,828 | $ | 35,235 | $ | 34,675 | |||||||||||||||||||
Northern California | 5,947 | 5,227 | 4,821 | 10,360 | 23,486 | ||||||||||||||||||||||||
Southern California | 24,935 | 25,108 | 33,484 | 25,082 | 28,626 | ||||||||||||||||||||||||
Total special mention loans | $ | 92,623 | $ | 52,026 | $ | 58,133 | $ | 70,677 | $ | 86,787 | |||||||||||||||||||
Accruing classified loans: | |||||||||||||||||||||||||||||
New England | $ | 50,483 | $ | 20,428 | $ | 21,830 | $ | 13,012 | $ | 15,830 | |||||||||||||||||||
Northern California | 24,843 | 24,946 | 23,938 | 25,957 | 20,801 | ||||||||||||||||||||||||
Southern California | 12,622 | 12,548 | 17,510 | 14,914 | 5,890 | ||||||||||||||||||||||||
Total accruing classified loans | $ | 87,948 | $ | 57,922 | $ | 63,278 | $ | 53,883 | $ | 42,521 | |||||||||||||||||||
Nonaccruing loans: | |||||||||||||||||||||||||||||
New England | $ | 11,965 | $ | 9,764 | $ | 8,999 | $ | 8,837 | $ | 6,161 | |||||||||||||||||||
Northern California | 6,575 | 319 | 2,395 | 2,644 | 2,480 | ||||||||||||||||||||||||
Southern California | 5,774 | 6,020 | 6,171 | 5,674 | 3,378 | ||||||||||||||||||||||||
Total nonaccruing loans | $ | 24,314 | $ | 16,103 | $ | 17,565 | $ | 17,155 | $ | 12,019 | |||||||||||||||||||
17 The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lenders' regional offices. | |||||||||||||||||||||||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||||||||||||||||||||
Reconciliations of Non-GAAP Financial Measures | |||||||||||||||||||||||||||||||||||||
Unaudited ($ in thousands) | |||||||||||||||||||||||||||||||||||||
1Q20 | 4Q19 | 3Q19 | 2Q19 | 1Q19 | |||||||||||||||||||||||||||||||||
ROACE AND ROATCE: | |||||||||||||||||||||||||||||||||||||
Net income attributable to the Company (GAAP) (A) | $ | 800 | $ | 21,244 | $ | 19,962 | $ | 19,380 | $ | 19,442 | |||||||||||||||||||||||||||
ADD: Amortization of intangibles, net of tax | 565 | 534 | 530 | 531 | 531 | ||||||||||||||||||||||||||||||||
Tangible common net income (non-GAAP) (B) | $ | 1,365 | $ | 21,778 | $ | 20,492 | $ | 19,911 | $ | 19,973 | |||||||||||||||||||||||||||
Total average shareholders’ equity (C) | $ | 838,935 | $ | 818,816 | $ | 807,890 | $ | 790,844 | $ | 766,283 | |||||||||||||||||||||||||||
LESS: Average goodwill and intangibles, net | (67,586 | ) | (68,031 | ) | (68,359 | ) | (68,889 | ) | (69,498 | ) | |||||||||||||||||||||||||||
Average tangible common equity (non-GAAP) (D) | $ | 771,349 | $ | 750,785 | $ | 739,531 | $ | 721,955 | $ | 696,785 | |||||||||||||||||||||||||||
ROACE (annualized) (A/C) | 0.39 | % | 10.29 | % | 9.80 | % | 9.83 | % | 10.29 | % | |||||||||||||||||||||||||||
ROATCE (annualized) (B/D) | 0.72 | % | 11.51 | % | 10.99 | % | 11.06 | % | 11.63 | % | |||||||||||||||||||||||||||
PRE-TAX, PRE-PROVISION INCOME: | |||||||||||||||||||||||||||||||||||||
Income before income taxes (GAAP) | $ | 908 | $ | 28,129 | $ | 25,575 | $ | 24,818 | $ | 24,459 | |||||||||||||||||||||||||||
ADD BACK: Provision/ (credit) for loan losses | 16,962 | (3,668 | ) | 167 | 1,363 | (1,426 | ) | ||||||||||||||||||||||||||||||
Pre-tax, pre-provision income (non-GAAP) | $ | 17,870 | $ | 24,461 | $ | 25,742 | $ | 26,181 | $ | 23,033 | |||||||||||||||||||||||||||
CORE NET INTEREST INCOME AND MARGIN: | |||||||||||||||||||||||||||||||||||||
Net interest income (GAAP) | $ | 57,257 | $ | 56,125 | $ | 56,153 | $ | 57,460 | $ | 58,338 | |||||||||||||||||||||||||||
LESS: Interest recovered on previous nonaccrual loans | 7 | 24 | 180 | — | 258 | ||||||||||||||||||||||||||||||||
Net interest income, excluding interest recovered while loans on nonaccrual status ("Core net interest income") (non-GAAP) | $ | 57,250 | $ | 56,101 | $ | 55,973 | $ | 57,460 | $ | 58,080 | |||||||||||||||||||||||||||
Net interest margin, excluding interest recovered while loans on nonaccrual status ("Core net interest margin") (non-GAAP) | 2.76 | % | 2.70 | % | 2.71 | % | 2.78 | % | 2.89 | % | |||||||||||||||||||||||||||
TANGIBLE COMMON EQUITY: | |||||||||||||||||||||||||||||||||||||
Total shareholders’ equity (GAAP) | $ | 828,792 | $ | 819,018 | $ | 808,688 | $ | 798,211 | $ | 778,819 | |||||||||||||||||||||||||||
LESS: Goodwill and intangibles, net | (67,244 | ) | (67,959 | ) | (68,229 | ) | (68,491 | ) | (69,162 | ) | |||||||||||||||||||||||||||
Tangible common equity (non-GAAP) (A) | $ | 761,548 | $ | 751,059 | $ | 740,459 | $ | 729,720 | $ | 709,657 | |||||||||||||||||||||||||||
Total assets (GAAP) | $ | 8,746,326 | $ | 8,830,501 | $ | 8,690,944 | $ | 8,712,873 | $ | 8,572,143 | |||||||||||||||||||||||||||
LESS: Goodwill and intangibles, net | (67,244 | ) | (67,959 | ) | (68,229 | ) | (68,491 | ) | (69,162 | ) | |||||||||||||||||||||||||||
Tangible assets (non-GAAP) (B) | $ | 8,679,082 | $ | 8,762,542 | $ | 8,622,715 | $ | 8,644,382 | $ | 8,502,981 | |||||||||||||||||||||||||||
End of period shares outstanding (C) | 81,800,486 | 83,265,674 | 83,241,952 | 83,774,335 | 83,773,650 | ||||||||||||||||||||||||||||||||
Tangible common equity/ Tangible assets (non-GAAP) (A/B) | 8.77 | % | 8.57 | % | 8.59 | % | 8.44 | % | 8.35 | % | |||||||||||||||||||||||||||
Tangible book value per share (non-GAAP) (A/C) | $ | 9.31 | $ | 9.02 | $ | 8.90 | $ | 8.71 | $ | 8.47 | |||||||||||||||||||||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | ||||||||||||||||||||||||||
Reconciliations of Non-GAAP Financial Measures | ||||||||||||||||||||||||||
Unaudited ($ in thousands) | ||||||||||||||||||||||||||
1Q20 | 4Q19 | 3Q19 | 2Q19 | 1Q19 | ||||||||||||||||||||||
RETURN ON AVERAGE ASSETS: | ||||||||||||||||||||||||||
Net income (GAAP) (A) | $ | 800 | $ | 21,244 | $ | 19,962 | $ | 19,380 | $ | 19,442 | ||||||||||||||||
Average assets (non-GAAP) (B) | 8,779,391 | 8,738,750 | 8,665,352 | 8,679,506 | 8,493,725 | |||||||||||||||||||||
Return on average assets (annualized) (non-GAAP) (A/B) | 0.04 | % | 0.96 | % | 0.91 | % | 0.90 | % | 0.93 | % | ||||||||||||||||
EFFICIENCY RATIO: | ||||||||||||||||||||||||||
Total noninterest expense (GAAP) (A) | $ | 60,908 | $ | 58,457 | $ | 55,537 | $ | 55,659 | $ | 60,553 | ||||||||||||||||
LESS: Amortization of intangibles | 715 | 676 | 671 | 672 | 672 | |||||||||||||||||||||
LESS: Restructuring | — | — | — | — | 1,646 | |||||||||||||||||||||
Total noninterest expense (non-GAAP) (B) | $ | 60,193 | $ | 57,781 | $ | 54,866 | $ | 54,987 | $ | 58,235 | ||||||||||||||||
Net interest income (GAAP) | $ | 57,257 | $ | 56,125 | $ | 56,153 | $ | 57,460 | $ | 58,338 | ||||||||||||||||
Total core fees and income (GAAP) | 22,886 | 24,755 | 25,155 | 24,292 | 24,280 | |||||||||||||||||||||
Total other income (GAAP) | (1,365 | ) | 2,038 | (29 | ) | 88 | 968 | |||||||||||||||||||
Total revenue (GAAP) (C) | $ | 78,778 | $ | 82,918 | $ | 81,279 | $ | 81,840 | $ | 83,586 | ||||||||||||||||
Efficiency ratio (GAAP) (A/C) | 77.3 | % | 70.5 | % | 68.3 | % | 68.0 | % | 72.4 | % | ||||||||||||||||
Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) (B/C) | 76.4 | % | 69.7 | % | 67.5 | % | 67.2 | % | 69.7 | % | ||||||||||||||||
OTHER INCOME/(LOSS): (GAAP) | ||||||||||||||||||||||||||
Gain/(loss) on OREO, net | — | — | — | — | 91 | |||||||||||||||||||||
Other | (1,365 | ) | 2,038 | (29 | ) | 88 | 877 | |||||||||||||||||||
Total other income/(loss) (GAAP) | $ | (1,365 | ) | $ | 2,038 | $ | (29 | ) | $ | 88 | $ | 968 | ||||||||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||||||||
Reconciliations of Non-GAAP measures: Operating Adjustments | |||||||||||||||||||||||||
Unaudited ($ in thousands, except share and per share data) | |||||||||||||||||||||||||
1Q20 | 4Q19 | 3Q19 | 2Q19 | 1Q19 | |||||||||||||||||||||
NET INCOME ATTRIBUTABLE TO THE COMPANY: | |||||||||||||||||||||||||
Net income attributable to the Company (GAAP) | $ | 800 | $ | 21,244 | $ | 19,962 | $ | 19,380 | $ | 19,442 | |||||||||||||||
LESS: Gain on fair value of contingent considerations receivable 18 | — | 1,109 | — | — | — | ||||||||||||||||||||
ADD: Restructuring | — | — | — | — | 1,646 | ||||||||||||||||||||
Tax effect at statutory rate | — | 322 | — | — | (346 | ) | |||||||||||||||||||
Net income attributable to the Company (non-GAAP) | $ | 800 | $ | 20,457 | $ | 19,962 | $ | 19,380 | $ | 20,742 | |||||||||||||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS: | |||||||||||||||||||||||||
Net Income Attributable to Common Shareholders (GAAP) | $ | 1,214 | $ | 21,342 | $ | 20,266 | $ | 18,564 | $ | 20,999 | |||||||||||||||
LESS: Gain on fair value of contingent considerations receivable 18 | — | 1,109 | — | — | — | ||||||||||||||||||||
ADD: Restructuring | — | — | — | — | 1,646 | ||||||||||||||||||||
Tax effect at statutory rate | — | 322 | — | — | (346 | ) | |||||||||||||||||||
Net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP) | $ | 1,214 | $ | 20,555 | $ | 20,266 | $ | 18,564 | $ | 22,299 | |||||||||||||||
Weighted average diluted shares outstanding | 83,318,041 | 83,637,786 | 83,956,708 | 84,048,972 | 84,010,450 | ||||||||||||||||||||
Diluted earnings per share (GAAP) | $ | 0.01 | $ | 0.26 | $ | 0.24 | $ | 0.22 | $ | 0.25 | |||||||||||||||
Diluted earnings per share, excluding notable items (non-GAAP) | $ | 0.01 | $ | 0.25 | $ | 0.24 | $ | 0.22 | $ | 0.27 | |||||||||||||||
Average common equity (non-GAAP) | $ | 838,935 | $ | 818,816 | $ | 807,890 | $ | 790,844 | $ | 766,283 | |||||||||||||||
Average tangible common equity (non-GAAP) | $ | 771,349 | $ | 750,785 | $ | 739,531 | $ | 721,955 | $ | 696,785 | |||||||||||||||
ROACE, excluding notable items (non-GAAP) | 0.39 | % | 9.91 | % | 9.80 | % | 9.83 | % | 10.98 | % | |||||||||||||||
ROATCE, excluding notable items (non-GAAP) | 0.72 | % | 11.09 | % | 10.99 | % | 11.06 | % | 12.38 | % | |||||||||||||||
Pre-tax, pre-provision income (non-GAAP) | $ | 17,870 | $ | 24,461 | $ | 25,742 | $ | 26,181 | $ | 23,033 | |||||||||||||||
LESS: Gain on fair value of contingent considerations receivable 18 | — | 1,109 | — | — | — | ||||||||||||||||||||
ADD: Restructuring | — | — | — | — | 1,646 | ||||||||||||||||||||
Pre-tax, pre-provision income, excluding notable items (non-GAAP) | $ | 17,870 | $ | 23,352 | $ | 25,742 | $ | 26,181 | $ | 24,679 | |||||||||||||||
18 In the fourth quarter of 2019, there was a $1.1 million gain related to the revaluation of the fair value of the estimated future cash flows related to the BOS contingent consideration receivable. | |||||||||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20200429005852/en/
Contacts:
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abromley@bostonprivate.com
