Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported third quarter 2020 Net income attributable to the Company of $22.7 million, compared to Net loss attributable to the Company of $(3.3) million for the second quarter of 2020 and Net income attributable to the Company of $20.0 million for the third quarter of 2019. Third quarter 2020 Diluted earnings per share were $0.28, compared to Diluted loss per share of $(0.04) in the second quarter of 2020 and Diluted earnings per share of $0.24 in the third quarter of 2019.
"We are proud of the dedication and commitment shown by the Boston Private employees guiding our clients through this challenging environment," said Anthony DeChellis, CEO of Boston Private. "This quarter's financial results include a provision credit and continued strong new business in our Wealth Management & Trust business. We strengthened our capital and liquidity position to provide flexibility as we navigate the uncertain environment. We remain committed to our strategic objectives and believe that we are well positioned for long-term success."
Summary Financial Results | ||||||||||||
% Change | ||||||||||||
($ in millions, except for per share data) | 3Q20 | 2Q20 | 3Q19 | LQ | Y/Y | |||||||
Net income/(loss) - GAAP | $22.7 | $(3.3) | $20.0 | nm | 14% | |||||||
Net income/(loss) - Operating | 22.0 | (3.3) | 20.0 | nm | 10% | |||||||
Diluted earnings/(loss) per share - GAAP | $0.28 | $(0.04) | $0.24 | nm | 17% | |||||||
Diluted earnings/(loss) per share - Operating | $0.27 | $(0.04) | $0.24 | nm | 13% | |||||||
Non-GAAP Financial Measures: | ||||||||||||
Pre-tax, pre-provision income | $19.9 | $20.1 | $25.7 | (1)% | (23)% | |||||||
Return on average common equity ("ROACE") | 10.7% | (1.6)% | 9.8 | % | ||||||||
Return on average tangible common equity ("ROATCE") | 11.9% | (1.4)% | 11.0 | % | ||||||||
nm = not meaningful | ||||||||||||
The Company's financial results improved linked quarter primarily driven by a lower loan loss provision, which changed from a $25.4 million provision expense during the second quarter of 2020 to a $2.8 million provision credit during the third quarter of 2020. The company’s operating results exclude the after-tax effect of a $0.9 million gain related to the revaluation of a receivable from the divestiture of BOS.
Net Interest Income and Margin | ||||||||||
% Change | ||||||||||
($ in millions) | 3Q20 | 2Q20 | 3Q19 | LQ | Y/Y | |||||
Net interest income | $57.8 | $58.9 | $56.2 | (2)% | 3% | |||||
Net interest margin | 2.61% | 2.75% | 2.72% | |||||||
Net interest income for the third quarter of 2020 was $57.8 million, a 2% decrease linked quarter and a 3% increase year-over-year. The linked quarter decrease was primarily driven by lower loan volumes, lower interest-earning asset yields, and prepayment penalties in the second quarter of 2020, partially offset by lower funding costs.
Net interest margin decreased 14 basis points on a linked quarter basis to 2.61%. The decline was primarily driven by lower asset yields, prepayment penalties in the second quarter of 2020 and excess cash balances, partially offset by lower funding costs.
Noninterest Income | ||||||||||||
% Change | ||||||||||||
($ in millions) | 3Q20 | 2Q20 | 3Q19 | LQ | Y/Y | |||||||
Wealth management and trust fees | $18.2 | $17.3 | $19.1 | 6 | % | (4) | % | |||||
Investment management fees | 1.4 | 1.8 | 2.5 | (21) | % | (44) | % | |||||
Private banking fees 1 | 2.3 | 2.6 | 3.6 | (11) | % | (35) | % | |||||
Total core fees and income | $22.0 | $21.6 | $25.2 | 2 | % | (13) | % | |||||
Total other income | 1.1 | 1.0 | — | 5 | % | nm | ||||||
Total noninterest income | $23.0 | $22.7 | $25.1 | 2 | % | (8) | % | |||||
nm = not meaningful | ||||||||||||
1 Private banking fees includes Other banking fee income and Gain/(loss) on sale of loans, net | ||||||||||||
Total core fees and income for the third quarter of 2020 was $22.0 million, a 2% increase linked quarter. The linked quarter increase was primarily driven by higher Wealth management and trust fees, partially offset by lower Investment management fees. Total other income for the third quarter of 2020 includes a $0.9 million gain related to the revaluation of a receivable from the divestiture of BOS.
Assets Under Management / Advisory | ||||||||||||
% Change | ||||||||||||
($ in millions) | 3Q20 | 2Q20 | 3Q19 | LQ | Y/Y | |||||||
Wealth Management and Trust | $15,581 | $14,889 | $14,695 | 5 | % | 6 | % | |||||
Other 3 | 672 | 1,067 | 1,533 | (37) | % | (56) | % | |||||
Total assets under management / advisory | $16,253 | $15,956 | $16,228 | 2 | % | — | % | |||||
Net flows | ||||||||||||
Wealth Management and Trust | $(12) | $60 | $(100) | |||||||||
Other 3 | (395) | (100) | (37) | |||||||||
Total net flows | $(407) | $(40) | $(137) | |||||||||
3 Includes results from DGHM | ||||||||||||
Total assets under management / advisory were $16.3 billion at the end of the third quarter of 2020, a 2% increase linked quarter. The linked quarter increase was primarily driven by the impact of favorable market action, partially offset by outflows at DGHM.
Total net flows were negative $407 million during the third quarter of 2020, driven by net outflows of $395 million at DGHM. The Wealth Management and Trust segment had net flows of negative $12 million during the third quarter of 2020. Negative flows in the Wealth Management and Trust segment were primarily the result of client assets that transferred from fixed income products into bank deposit products and tax payments made during the quarter. Overall client attrition was low, while new business at Wealth Management & Trust improved linked quarter to $299 million for the third quarter of 2020 compared to $251 million for the second quarter of 2020.
Noninterest Expense | ||||||||||||
% Change | ||||||||||||
($ in millions) | 3Q20 | 2Q20 | 3Q19 | LQ | Y/Y | |||||||
Salaries and employee benefits | $34.7 | $33.9 | $31.7 | 2 | % | 9 | % | |||||
Occupancy and equipment | 8.2 | 7.6 | 8.3 | 8 | % | (1) | % | |||||
Information systems | 7.1 | 7.1 | 5.2 | — | % | 37 | % | |||||
Professional services | 4.0 | 3.4 | 4.4 | 17 | % | (9) | % | |||||
Marketing and business development | 0.9 | 2.3 | 1.4 | (60) | % | (33) | % | |||||
Amortization of intangibles | 0.7 | 0.7 | 0.7 | 2 | % | 6 | % | |||||
FDIC insurance | 1.0 | 0.8 | 0.1 | nm | nm | |||||||
Other | 4.4 | 5.6 | 3.9 | (22) | % | 14 | % | |||||
Total noninterest expense | $60.9 | $61.5 | $55.5 | (1) | % | 10 | % | |||||
Memo: Excluding Off-Balance Sheet Provision | ||||||||||||
Reserve for unfunded loan commitments | $1.8 | $2.8 | — | (38) | % | nm | ||||||
Total noninterest expense (non-GAAP) | $59.2 | $58.6 | $55.5 | 1 | % | 7 | % | |||||
Total noninterest expense for the third quarter of 2020 was $60.9 million, which includes $1.8 million of reserve for unfunded loan commitments recognized in Other expense.
Excluding the reserve for unfunded loan commitments, total noninterest expense (non-GAAP) for the third quarter of 2020 was $59.2 million, an increase of 1% linked quarter and an increase of 7% year-over-year. The linked quarter increase was driven primarily by higher compensation expense, while the year-over-year increase was driven primarily by higher compensation expense and higher Information systems expense from technology initiatives placed in service.
Income Tax Expense |
The Company's effective tax rate for the third quarter of 2020 was 7.4% as a result of lower pre-tax income during 2020.
Loans - QTD Averages & Yields | |||||||||||||||
% Change | |||||||||||||||
($ in millions) | 3Q20 | 2Q20 | 3Q19 | LQ | Y/Y | ||||||||||
Commercial and industrial | $1,033 | $1,037 | $1,102 | — | % | (6) | % | ||||||||
Paycheck Protection Program ("PPP") | 373 | 284 | — | 32 | % | nm | |||||||||
Commercial real estate | 2,653 | 2,659 | 2,518 | — | % | 5 | % | ||||||||
Construction and land | 218 | 233 | 196 | (6) | % | 11 | % | ||||||||
Residential | 2,810 | 2,863 | 3,016 | (2) | % | (7) | % | ||||||||
Home equity | 84 | 88 | 89 | (5) | % | (5) | % | ||||||||
Other consumer | 112 | 124 | 128 | (10) | % | (13) | % | ||||||||
Total loans | $7,283 | $7,289 | $7,049 | — | % | 3 | % | ||||||||
Total loans, excluding PPP (non-GAAP) | $6,910 | $7,005 | $7,049 | (1) | % | (2) | % | ||||||||
Total loan yields | 3.23% | 3.42% | 3.98% | ||||||||||||
Average total loans, excluding PPP (non-GAAP) in the third quarter of 2020 decreased 1% linked quarter and year-over-year.
- Within Commercial and industrial loans, lower revolving line of credit usage was partially offset by Commercial tax-exempt loan growth of 3%
- Nearly all of the PPP loans remain outstanding
- The linked quarter decline in Residential loans was driven by the sale of $72 million of Residential loans
Deposits - QTD Averages & Costs | ||||||||||||
% Change | ||||||||||||
($ in millions) | 3Q20 | 2Q20 | 3Q19 | LQ | Y/Y | |||||||
Non-interest bearing deposits | 2,321 | 2,214 | 1,953 | 5 | % | 19 | % | |||||
Interest bearing deposits | 5,378 | 5,036 | 4,705 | 7 | % | 14 | % | |||||
Total deposits | $7,700 | $7,250 | $6,658 | 6 | % | 16 | % | |||||
Cost of total deposits | 0.33% | 0.41% | 0.92% | |||||||||
Cost of total interest-bearing deposits | 0.48% | 0.59% | 1.31% | |||||||||
Average total deposits in the third quarter of 2020 increased 6% linked quarter and 16% year-over-year to $7.7 billion. The linked quarter increase was driven by a combination of existing and new client balances, client asset flows from the Wealth Management & Trust segment into deposit products, and an increase in wealth sweep deposits.
Provision and Asset Quality | ||||||||||
($ in millions) | 3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | |||||
Provision and Allowance | ||||||||||
Provision/(credit) for loan losses | $(4.6) | $22.6 | $17.0 | $(3.7) | $0.2 | |||||
Reserve for unfunded loan commitments | 1.8 | 2.8 | 1.8 | — | — | |||||
Total Provision for credit losses | $(2.8) | $25.4 | $18.8 | $(3.7) | $0.2 | |||||
Allowance for loan losses as a % of Total loans | 1.17% | 1.22% | 0.97% | 1.03% | 1.07% | |||||
Asset Quality | ||||||||||
Total net loans (charged-off)/ recovered | (0.2) | (1.5) | (0.3) | 0.3 | 0.1 | |||||
Total nonaccrual loans | 41.3 | 25.6 | 24.3 | 16.1 | 17.6 | |||||
Nonaccrual loans as a % of Total loans | 0.57% | 0.35% | 0.35% | 0.23% | 0.25% | |||||
Special mention loans (criticized loans) | $199.5 | $191.9 | $92.6 | $52.0 | $58.1 | |||||
Classified loans | 123.1 | 114.2 | 112.3 | 74.0 | 80.8 | |||||
Total criticized and classified loans | $322.6 | $306.1 | $204.9 | $126.1 | $139.0 | |||||
The Company recorded a provision credit of $2.8 million during the third quarter of 2020. The provision release was primarily driven by an improved economic forecast related to the current expected credit losses methodology and resulted in lower reserves on residential mortgages and construction and land loans. The allowance for loan losses as a percentage of total loans, excluding PPP loans (non-GAAP), was 1.23% in the third quarter of 2020, compared to 1.28% in the second quarter of 2020.
Total nonaccrual loans as of September 30, 2020 was $41.3 million, an increase of $15.7 million, or 61%, linked quarter primarily driven by the downgrade of a commercial & industrial relationship in Northern California.
Total criticized and classified loans as of September 30, 2020 was $322.6 million, an increase of $16.5 million, or 5%, linked quarter primarily driven by the downgrade of $71 million of loans, partially offset by $54 million of payoffs, paydowns and upgrades. Of the $71 million in downgrades in the third quarter of 2020, $62 million were Commercial real estate loans across 16 relationships, primarily with hospitality and retail clients.
As of September 30, 2020:
- Residential loans on deferral totaled approximately $100 million, or 3.6% of total residential loans, compared to a peak of approximately $220 million in the second quarter of 2020
- Commercial & industrial loans on deferral totaled approximately $50 million, or 4.7% of total Commercial & industrial loans, compared to a peak of approximately $125 million in the second quarter of 2020
- The majority of Commercial real estate clients that qualified for and accepted the debt service reserve program remain in the program, representing a total loan balance of approximately $78 million
Capital | ||||||||||
3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | ||||||
Tangible common equity/ Tangible assets (non-GAAP) | 8.3% | 8.3% | 8.8% | 8.6% | 8.6% | |||||
Tangible book value per share (non-GAAP) | $9.48 | $9.25 | $9.31 | $9.02 | $8.90 | |||||
Regulatory Capital Ratios: 3 | ||||||||||
Tier 1 common equity | 11.3% | 11.1% | 11.2% | 11.4% | 11.2% | |||||
Tier 1 risk-based capital | 12.8% | 12.6% | 12.7% | 13.0% | 12.8% | |||||
Total risk-based capital | 14.1% | 13.9% | 13.8% | 14.1% | 13.9% | |||||
Tier 1 leverage capital | 9.2% | 9.2% | 9.7% | 9.8% | 9.7% | |||||
3 Current quarter information is presented based on estimated data. | ||||||||||
The Company's tangible book value per share increased to $9.48 in the third quarter of 2020, a 7% increase year-over-year. Risk-weighted regulatory capital ratios increased slightly linked quarter.
Dividend Payments |
Concurrent with the release of third quarter 2020 earnings, the Board of Directors of the Company declared a cash dividend payable to common shareholders of $0.06 per share. The record date for this dividend is November 6, 2020, and the payment date is November 20, 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; tangible common equity / tangible assets; the efficiency ratio excluding amortization of intangibles; net income/(loss) attributable to the Company excluding notable items; net income/(loss) attributable to the common shareholders, treasury stock method, excluding notable items; diluted earnings/(loss) per share excluding notable items; and average total loans, excluding PPP.
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 16 of the attached financial statements.
Conference Call |
Management will hold a conference call at 8:00 a.m. Eastern Time on Thursday, October 22, 2020, to discuss the financial results, business highlights and outlook. To access the call:
Dial In #: (888) 317-6003
Elite Entry Number: 0457772
Replay Information:
Available from October 22, 2020 at 12 noon Eastern Time until October 29, 2020
Dial In #: (877) 344-7529
Conference Number: 10149141
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.
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 in 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 employment levels, general business and economic conditions on a national basis and in the local markets in which the Company operates; changes in customer behavior; the possibility that future credits losses are higher than currently expected due to changes in economic assumptions, customer behavior or adverse economic developments; 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 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 statements are made.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | ||||||||||||||
Consolidated Balance Sheets | ||||||||||||||
Unaudited ($ in thousands, except share and per share data) | ||||||||||||||
3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | ||||||||||
ASSETS: | ||||||||||||||
Cash and cash equivalents | $ | 546,263 | $ | 179,027 | $ | 61,714 | $ | 292,479 | $ | 78,010 | ||||
Investment securities available-for-sale | 1,011,327 | 1,002,970 | 993,166 | 978,284 | 935,538 | |||||||||
Investment securities held-to-maturity | 38,600 | 42,495 | 45,395 | 48,212 | 51,379 | |||||||||
Equity securities at fair value | 32,818 | 24,492 | 23,080 | 18,810 | 21,780 | |||||||||
Stock in Federal Home Loan Bank and Federal Reserve Bank | 36,618 | 42,407 | 45,273 | 39,078 | 47,756 | |||||||||
Loans held for sale | 15,074 | 9,786 | 7,671 | 7,386 | 6,658 | |||||||||
Loans | 7,222,569 | 7,332,954 | 7,043,338 | 6,976,704 | 7,067,151 | |||||||||
Less: Allowance for loan losses | 84,551 | 89,324 | 68,211 | 71,982 | 75,359 | |||||||||
Loans, net of allowance for loan losses | 7,138,018 | 7,243,630 | 6,975,127 | 6,904,722 | 6,991,792 | |||||||||
Premises and equipment, net | 42,907 | 43,805 | 43,544 | 44,527 | 42,658 | |||||||||
Goodwill | 57,607 | 57,607 | 57,607 | 57,607 | 57,607 | |||||||||
Intangible assets, net | 8,898 | 8,935 | 9,637 | 10,352 | 10,622 | |||||||||
Accrued interest receivable | 25,935 | 24,918 | 24,054 | 24,175 | 24,851 | |||||||||
Deferred income taxes, net | 8,250 | 9,116 | 5,630 | 11,383 | 15,704 | |||||||||
Right-of-use assets | 94,879 | 94,143 | 98,896 | 102,075 | 107,045 | |||||||||
Other assets | 374,111 | 375,575 | 355,532 | 291,411 | 299,544 | |||||||||
TOTAL ASSETS | $ | 9,431,305 | $ | 9,158,906 | $ | 8,746,326 | $ | 8,830,501 | $ | 8,690,944 | ||||
LIABILITIES: | ||||||||||||||
Deposits | $ | 7,827,719 | $ | 7,427,397 | $ | 6,835,572 | $ | 7,241,476 | $ | 6,658,242 | ||||
Securities sold under agreements to repurchase | 42,544 | 46,623 | 45,319 | 53,398 | 48,860 | |||||||||
Federal funds purchased | — | — | 145,000 | — | 230,000 | |||||||||
Federal Home Loan Bank borrowings | 296,236 | 426,313 | 491,254 | 350,829 | 570,904 | |||||||||
Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 106,363 | 106,363 | |||||||||
Lease liabilities | 108,932 | 108,234 | 113,574 | 117,214 | 122,799 | |||||||||
Other liabilities | 203,342 | 218,771 | 180,452 | 140,820 | 143,607 | |||||||||
TOTAL LIABILITIES | 8,585,136 | 8,333,701 | 7,917,534 | 8,010,100 | 7,880,775 | |||||||||
REDEEMABLE NONCONTROLLING INTERESTS (“RNCI”) | — | — | — | 1,383 | 1,481 | |||||||||
SHAREHOLDERS' EQUITY: | ||||||||||||||
Common stock, $1.00 par value; authorized: 170,000,000 shares | 82,255 | 82,058 | 81,800 | 83,266 | 83,242 | |||||||||
Additional paid-in capital | 597,113 | 594,463 | 593,167 | 600,708 | 599,877 | |||||||||
Retained earnings | 136,394 | 118,647 | 131,761 | 127,469 | 116,210 | |||||||||
Accumulated other comprehensive income | 30,407 | 30,037 | 22,064 | 7,575 | 9,359 | |||||||||
TOTAL SHAREHOLDERS' EQUITY | 846,169 | 825,205 | 828,792 | 819,018 | 808,688 | |||||||||
TOTAL LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY | $ | 9,431,305 | $ | 9,158,906 | $ | 8,746,326 | $ | 8,830,501 | $ | 8,690,944 | ||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Consolidated Income Statements | |||||||||||||||||||
Unaudited ($ in thousands, except share and per share data) | |||||||||||||||||||
3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | |||||||||||||||
REVENUE: | |||||||||||||||||||
Interest income | $ | 65,453 | $ | 68,819 | $ | 73,082 | $ | 75,291 | $ | 77,604 | |||||||||
Interest expense | 7,629 | 9,881 | 15,825 | 19,166 | 21,451 | ||||||||||||||
Net interest income | 57,824 | 58,938 | 57,257 | 56,125 | 56,153 | ||||||||||||||
Provision/(credit) for loan losses 4 | (4,569 | ) | 22,604 | 16,962 | (3,668 | ) | 167 | ||||||||||||
Net interest income after provision/(credit) for loan losses | 62,393 | 36,334 | 40,295 | 59,793 | 55,986 | ||||||||||||||
Wealth management and trust fees 5 | 18,240 | 17,261 | 18,371 | 18,720 | 19,067 | ||||||||||||||
Investment management fees | 1,393 | 1,770 | 1,925 | 2,554 | 2,496 | ||||||||||||||
Private banking fee income | 1,320 | 2,395 | 2,490 | 2,924 | 2,658 | ||||||||||||||
Gain on sale of loans, net | 1,006 | 204 | 100 | 557 | 934 | ||||||||||||||
Total core fees and income | 21,959 | 21,630 | 22,886 | 24,755 | 25,155 | ||||||||||||||
Total other income | 1,086 | 1,032 | (1,365 | ) | 2,038 | (29 | ) | ||||||||||||
TOTAL REVENUE 6 | 80,869 | 81,600 | 78,778 | 82,918 | 81,279 | ||||||||||||||
NONINTEREST EXPENSE: | |||||||||||||||||||
Salaries and employee benefits | 34,671 | 33,937 | 35,096 | 34,186 | 31,684 | ||||||||||||||
Occupancy and equipment | 8,150 | 7,560 | 7,646 | 7,578 | 8,260 | ||||||||||||||
Information systems | 7,096 | 7,113 | 6,725 | 6,476 | 5,169 | ||||||||||||||
Professional services | 4,025 | 3,446 | 3,601 | 3,920 | 4,435 | ||||||||||||||
Marketing and business development | 935 | 2,313 | 1,890 | 2,017 | 1,403 | ||||||||||||||
Amortization of intangibles | 714 | 702 | 715 | 676 | 671 | ||||||||||||||
FDIC insurance | 960 | 767 | — | (19 | ) | 59 | |||||||||||||
Other 4 | 4,386 | 5,615 | 5,235 | 3,623 | 3,856 | ||||||||||||||
TOTAL NONINTEREST EXPENSE | 60,937 | 61,453 | 60,908 | 58,457 | 55,537 | ||||||||||||||
INCOME/(LOSS) BEFORE INCOME TAXES | 24,501 | (2,457 | ) | 908 | 28,129 | 25,575 | |||||||||||||
Income tax expense | 1,821 | 841 | 102 | 6,788 | 5,517 | ||||||||||||||
Net income/(loss) before attribution to noncontrolling interests | 22,680 | (3,298 | ) | 806 | 21,341 | 20,058 | |||||||||||||
Less: Net income attributable to noncontrolling interests | — | — | 6 | 97 | 96 | ||||||||||||||
NET INCOME/(LOSS) ATTRIBUTABLE TO THE COMPANY | $ | 22,680 | $ | (3,298 | ) | $ | 800 | $ | 21,244 | $ | 19,962 | ||||||||
Adjustments, treasury stock method 7 | — | — | 414 | 98 | 304 | ||||||||||||||
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 22,680 | $ | (3,298 | ) | $ | 1,214 | $ | 21,342 | $ | 20,266 | ||||||||
COMMON SHARE DATA: | |||||||||||||||||||
Weighted average basic shares outstanding | 82,221,705 | 81,929,752 | 83,005,064 | 83,238,982 | 83,631,403 | ||||||||||||||
Weighted average diluted shares outstanding 8 | 82,362,338 | 81,929,752 | 83,318,041 | 83,637,786 | 83,956,708 | ||||||||||||||
Diluted earnings/(loss) per share | $ | 0.28 | $ | (0.04 | ) | $ | 0.01 | $ | 0.26 | $ | 0.24 | ||||||||
4 Total Provision for credit losses includes the Provision/(credit) for loan losses and the Reserve for unfunded loan commitments within Other expense. 5 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. 6 Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. 7 Adjustments to Net income/(loss) attributable to the Company to arrive at Net income/(loss) attributable to common shareholders, treasury stock method, as presented in these tables, include decrease/(increase) in Noncontrolling interests redemption value. 8 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 Income Statements | ||||||||
Unaudited ($ in thousands, except share and per share data) | ||||||||
Nine months ended September 30, | ||||||||
2020 | 2019 | |||||||
REVENUE: | ||||||||
Interest income | $ | 207,354 | $ | 233,156 | ||||
Interest expense | 33,335 | 61,205 | ||||||
Net interest income | 174,019 | 171,951 | ||||||
Provision/(credit) for loan losses 4 | 34,997 | 104 | ||||||
Net interest income after provision/(credit) for loan losses | 139,022 | 171,847 | ||||||
Wealth management and trust fees 5 | 53,872 | 57,037 | ||||||
Investment management fees | 5,088 | 7,601 | ||||||
Private banking fee income | 6,205 | 8,024 | ||||||
Gain on sale of loans, net | 1,310 | 1,065 | ||||||
Total core fees and income | 66,475 | 73,727 | ||||||
Total other income | 753 | 1,027 | ||||||
TOTAL REVENUE 6 | 241,247 | 246,705 | ||||||
NONINTEREST EXPENSE: | ||||||||
Salaries and employee benefits | 103,704 | 100,116 | ||||||
Occupancy and equipment | 23,356 | 24,460 | ||||||
Information systems | 20,934 | 16,166 | ||||||
Professional services | 11,072 | 11,308 | ||||||
Marketing and business development | 5,138 | 4,422 | ||||||
Amortization of intangibles | 2,131 | 2,015 | ||||||
FDIC insurance | 1,727 | 1,304 | ||||||
Restructuring | — | 1,646 | ||||||
Other 4 | 15,236 | 10,312 | ||||||
TOTAL NONINTEREST EXPENSE | 183,298 | 171,749 | ||||||
INCOME BEFORE INCOME TAXES | 22,952 | 74,852 | ||||||
Income tax expense | 2,764 | 15,803 | ||||||
Net income before attribution to noncontrolling interests | 20,188 | 59,049 | ||||||
Less: Net income attributable to noncontrolling interests | 6 | 265 | ||||||
NET INCOME ATTRIBUTABLE TO THE COMPANY | $ | 20,182 | $ | 58,784 | ||||
Adjustments, treasury stock method 7 | 414 | 1,045 | ||||||
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 20,596 | $ | 59,829 | ||||
COMMON SHARE DATA | ||||||||
Weighted average basic shares outstanding | 82,382,050 | 83,495,361 | ||||||
Weighted average diluted shares outstanding 8 | 82,746,866 | 84,003,281 | ||||||
Diluted earnings per share | $ | 0.25 | $ | 0.71 | ||||
4 Total Provision for credit losses includes the Provision/(credit) for loan losses and the Reserve for unfunded loan commitments within Other expense. 5 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. 6 Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. 7 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. 8 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) | |||||||||||||||||||
3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | |||||||||||||||
KEY STATISTICS: | |||||||||||||||||||
Return on average assets (non-GAAP) 9 | 0.96 | % | (0.15 | )% | 0.04 | % | 0.96 | % | 0.91 | % | |||||||||
ROACE (non-GAAP) 9 | 10.68 | % | (1.58 | )% | 0.39 | % | 10.29 | % | 9.80 | % | |||||||||
ROATCE (non-GAAP) 9 | 11.88 | % | (1.43 | )% | 0.72 | % | 11.51 | % | 10.99 | % | |||||||||
Efficiency ratio (non-GAAP) 9 | 74.5 | % | 74.4 | % | 76.4 | % | 69.7 | % | 67.5 | % | |||||||||
Noninterest income to total revenue | 28.5 | % | 27.8 | % | 27.3 | % | 32.3 | % | 30.9 | % | |||||||||
Net interest margin | 2.61 | % | 2.75 | % | 2.76 | % | 2.70 | % | 2.72 | % | |||||||||
Average loan to average deposit ratio | 94.6 | % | 100.5 | % | 99.0 | % | 101.6 | % | 105.9 | % | |||||||||
Cost of total deposits | 0.33 | % | 0.41 | % | 0.72 | % | 0.86 | % | 0.92 | % | |||||||||
Cost of interest-bearing deposits | 0.48 | % | 0.59 | % | 1.02 | % | 1.20 | % | 1.31 | % | |||||||||
Cost of total funding | 0.37 | % | 0.50 | % | 0.83 | % | 0.99 | % | 1.12 | % | |||||||||
Allowance for loan losses / Total loans | 1.17 | % | 1.22 | % | 0.97 | % | 1.03 | % | 1.07 | % | |||||||||
Nonperforming loans / Total loans | 0.57 | % | 0.35 | % | 0.35 | % | 0.23 | % | 0.25 | % | |||||||||
Net (charge-offs)/recoveries / Total loans 9 | (0.01 | )% | (0.08 | )% | (0.02 | )% | 0.02 | % | 0.01 | % | |||||||||
CAPITAL HIGHLIGHTS: | |||||||||||||||||||
Tier 1 common equity 3 | $ | 752,492 | $ | 731,316 | $ | 742,044 | $ | 745,926 | $ | 732,980 | |||||||||
Tier 1 capital 3 | $ | 852,514 | $ | 831,338 | $ | 842,066 | $ | 846,337 | $ | 833,431 | |||||||||
Total capital 3 | $ | 935,824 | $ | 913,936 | $ | 914,572 | $ | 919,573 | $ | 910,076 | |||||||||
Risk-weighted assets ("RWA") 3 | $ | 6,654,690 | $ | 6,593,957 | $ | 6,627,339 | $ | 6,530,804 | $ | 6,533,884 | |||||||||
Average assets for leverage 3 | $ | 9,237,940 | $ | 9,009,565 | $ | 8,691,254 | $ | 8,659,944 | $ | 8,588,358 | |||||||||
Tier 1 common equity ratio 3 | 11.31 | % | 11.09 | % | 11.20 | % | 11.42 | % | 11.22 | % | |||||||||
Tier 1 risk-based capital ratio 3 | 12.81 | % | 12.61 | % | 12.71 | % | 12.96 | % | 12.76 | % | |||||||||
Total risk-based capital ratio 3 | 14.06 | % | 13.86 | % | 13.80 | % | 14.08 | % | 13.93 | % | |||||||||
Tier 1 leverage capital ratio 3 | 9.23 | % | 9.23 | % | 9.69 | % | 9.77 | % | 9.70 | % | |||||||||
Total equity / Total assets | 8.97 | % | 9.01 | % | 9.48 | % | 9.27 | % | 9.30 | % | |||||||||
Tangible common equity / Tangible assets (non-GAAP) | 8.33 | % | 8.34 | % | 8.77 | % | 8.57 | % | 8.59 | % | |||||||||
End of period market price per share | $ | 5.52 | $ | 6.88 | $ | 7.15 | $ | 12.03 | $ | 11.66 | |||||||||
End of period shares outstanding | 82,254,594 | 82,058,483 | 81,800,486 | 83,265,674 | 83,241,952 | ||||||||||||||
Book value per common share | $ | 10.29 | $ | 10.06 | $ | 10.13 | $ | 9.84 | $ | 9.71 | |||||||||
Tangible book value per share (non-GAAP) | $ | 9.48 | $ | 9.25 | $ | 9.31 | $ | 9.02 | $ | 8.90 | |||||||||
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 | |||||||||
3 Current quarter information is presented based on estimated data. 9 Annualized. | |||||||||||||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Consolidated AUM and Balance Sheet - End of Period Balances | |||||||||||||||||||
Unaudited ($ in thousands) | |||||||||||||||||||
3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | |||||||||||||||
ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"): | |||||||||||||||||||
Wealth Management and Trust | $ | 15,581,000 | $ | 14,889,000 | $ | 13,497,000 | $ | 15,224,000 | $ | 14,695,000 | |||||||||
Other 2 | 672,000 | 1,067,000 | 1,016,000 | 1,544,000 | 1,533,000 | ||||||||||||||
TOTAL AUM | $ | 16,253,000 | $ | 15,956,000 | $ | 14,513,000 | $ | 16,768,000 | $ | 16,228,000 | |||||||||
AUM Rollforward: | |||||||||||||||||||
Beginning balance | $ | 15,956,000 | $ | 14,513,000 | $ | 16,768,000 | $ | 16,228,000 | $ | 16,199,000 | |||||||||
Net flows | (407,000 | ) | (40,000 | ) | 150,000 | (209,000 | ) | (137,000 | ) | ||||||||||
Market returns | 704,000 | 1,483,000 | (2,405,000 | ) | 749,000 | 166,000 | |||||||||||||
Ending balance | $ | 16,253,000 | $ | 15,956,000 | $ | 14,513,000 | $ | 16,768,000 | $ | 16,228,000 | |||||||||
AUM Net Flows: | |||||||||||||||||||
Wealth Management and Trust | $ | (12,000 | ) | $ | 60,000 | $ | 176,000 | $ | (114,000 | ) | $ | (100,000 | ) | ||||||
Other 2 | (395,000 | ) | (100,000 | ) | (26,000 | ) | (95,000 | ) | (37,000 | ) | |||||||||
TOTAL NET FLOWS | $ | (407,000 | ) | $ | (40,000 | ) | $ | 150,000 | $ | (209,000 | ) | $ | (137,000 | ) | |||||
DEPOSITS: | |||||||||||||||||||
Demand deposits (non-interest bearing) | $ | 2,346,126 | $ | 2,293,864 | $ | 2,020,440 | $ | 1,971,013 | $ | 1,947,363 | |||||||||
Savings and NOW | 756,797 | 758,656 | 653,006 | 646,199 | 666,107 | ||||||||||||||
Money market | 4,187,657 | 3,753,228 | 3,468,701 | 3,969,330 | 3,366,623 | ||||||||||||||
Certificates of deposit | 537,139 | 621,649 | 693,425 | 654,934 | 678,149 | ||||||||||||||
TOTAL DEPOSITS | $ | 7,827,719 | $ | 7,427,397 | $ | 6,835,572 | $ | 7,241,476 | $ | 6,658,242 | |||||||||
LOANS: | |||||||||||||||||||
Commercial and industrial | $ | 583,145 | $ | 565,748 | $ | 670,744 | $ | 694,034 | $ | 695,029 | |||||||||
Paycheck Protection Program | 371,496 | 370,034 | — | — | — | ||||||||||||||
Commercial tax-exempt | 472,342 | 419,264 | 445,319 | 447,927 | 448,488 | ||||||||||||||
Commercial real estate | 2,659,890 | 2,676,708 | 2,626,299 | 2,551,274 | 2,533,346 | ||||||||||||||
Construction and land | 211,697 | 240,211 | 238,293 | 225,983 | 209,741 | ||||||||||||||
Residential | 2,729,164 | 2,859,627 | 2,841,926 | 2,839,155 | 2,964,042 | ||||||||||||||
Home equity | 81,797 | 84,588 | 89,350 | 83,657 | 84,432 | ||||||||||||||
Consumer | 113,038 | 116,774 | 131,407 | 134,674 | 132,073 | ||||||||||||||
TOTAL LOANS | $ | 7,222,569 | $ | 7,332,954 | $ | 7,043,338 | $ | 6,976,704 | $ | 7,067,151 | |||||||||
2 Includes results from Dalton, Greiner, Hartman, Maher & Co, LLC ("DGHM") | |||||||||||||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Provision and Asset Quality | |||||||||||||||||||
Unaudited ($ in thousands) | |||||||||||||||||||
3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | |||||||||||||||
PROVISION: | |||||||||||||||||||
Provision/(credit) for loan losses | $ | (4,569 | ) | $ | 22,604 | $ | 16,962 | $ | (3,668 | ) | $ | 167 | |||||||
Reserve for unfunded loan commitments 4 | 1,750 | 2,829 | 1,827 | (23 | ) | (23 | ) | ||||||||||||
Total Provision/(credit) for credit losses | $ | (2,819 | ) | $ | 25,433 | $ | 18,789 | $ | (3,691 | ) | $ | 144 | |||||||
CHARGE-OFFS: | |||||||||||||||||||
Loan charge-offs | $ | (245 | ) | $ | (1,546 | ) | $ | (528 | ) | $ | (285 | ) | $ | (185 | ) | ||||
Loan recoveries | 41 | 55 | 180 | 576 | 310 | ||||||||||||||
NET (CHARGE-OFFS)/RECOVERIES | $ | (204 | ) | $ | (1,491 | ) | $ | (348 | ) | $ | 291 | $ | 125 | ||||||
Net charge-offs to average loans (annualized) | (0.01 | )% | (0.08 | )% | (0.02 | )% | 0.02 | % | 0.01 | % | |||||||||
Net (Charge-offs)/Recoveries by Loan Type: | |||||||||||||||||||
Commercial and industrial | $ | (136 | ) | $ | (337 | ) | $ | (473 | ) | $ | 118 | $ | 95 | ||||||
Commercial real estate | — | — | — | 183 | 27 | ||||||||||||||
Home equity | — | (1,157 | ) | 132 | 4 | 6 | |||||||||||||
Consumer | (68 | ) | 3 | (7 | ) | (14 | ) | (3 | ) | ||||||||||
NET (CHARGE-OFFS)/RECOVERIES | $ | (204 | ) | $ | (1,491 | ) | $ | (348 | ) | $ | 291 | $ | 125 | ||||||
LOAN QUALITY DATA: | |||||||||||||||||||
Special mention loans | $ | 199,509 | $ | 191,882 | $ | 92,623 | $ | 52,026 | $ | 58,133 | |||||||||
Accruing classified loans 10 | 81,827 | 88,586 | 87,948 | 57,922 | 63,278 | ||||||||||||||
Nonaccrual loans | 41,263 | 25,604 | 24,314 | 16,103 | 17,565 | ||||||||||||||
Total classified | 123,090 | 114,190 | 112,262 | 74,025 | 80,843 | ||||||||||||||
Criticized and classified loans | $ | 322,599 | $ | 306,072 | $ | 204,885 | $ | 126,051 | $ | 138,976 | |||||||||
Loans 30-89 days past due and accruing 11 | $ | 5,635 | $ | 5,535 | $ | 14,852 | $ | 25,945 | $ | 4,179 | |||||||||
4 Total Provision for credit losses includes the Provision/(credit) for loan losses and the Reserve for unfunded loan commitments within Other expense. 10 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. 11 At June 30, 2020, the Company had one loan totaling less than $0.1 million that was more than 90 days past due but still on accrual status. This loan originated in the New England region. The Company had no other loans outstanding more than 90 days past due but still on accrual status in comparative periods. | |||||||||||||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | ||||||||||||||||||||||||||
Average Balances, Yields, and Rates | ||||||||||||||||||||||||||
Unaudited ($ in thousands) | ||||||||||||||||||||||||||
Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||||||||||
3Q20 | 2Q20 | 3Q19 | 3Q20 | 2Q20 | 3Q19 | 3Q20 | 2Q20 | 3Q19 | ||||||||||||||||||
INTEREST-EARNING ASSETS | ||||||||||||||||||||||||||
Cash and investments: | ||||||||||||||||||||||||||
Taxable investment securities | $ | 201,515 | $ | 198,337 | $ | 198,655 | $ | 853 | $ | 859 | $ | 938 | 1.69 | % | 1.73 | % | 1.95 | % | ||||||||
Non-taxable investment securities | 313,130 | 316,513 | 305,108 | 1,974 | 2,005 | 1,924 | 2.52 | % | 2.53 | % | 2.52 | % | ||||||||||||||
Mortgage-backed securities | 515,813 | 505,669 | 492,514 | 2,354 | 2,566 | 2,622 | 1.83 | % | 2.03 | % | 2.13 | % | ||||||||||||||
Short-term investments and other | 432,117 | 186,895 | 101,958 | 654 | 582 | 1,084 | 0.59 | % | 1.23 | % | 4.06 | % | ||||||||||||||
Total cash and investments | 1,462,575 | 1,207,414 | 1,098,235 | 5,835 | 6,012 | 6,568 | 1.59 | % | 1.99 | % | 2.39 | % | ||||||||||||||
Loans: 12 | ||||||||||||||||||||||||||
Commercial and industrial | 1,032,816 | 1,037,285 | 1,101,672 | 8,314 | 9,708 | 11,523 | 3.15 | % | 3.70 | % | 4.09 | % | ||||||||||||||
Paycheck Protection Program | 373,047 | 283,619 | — | 2,390 | 1,573 | — | 2.51 | % | 2.19 | % | — | % | ||||||||||||||
Commercial real estate | 2,652,770 | 2,659,074 | 2,518,048 | 23,546 | 24,602 | 29,118 | 3.47 | % | 3.66 | % | 4.52 | % | ||||||||||||||
Construction and land | 218,211 | 233,305 | 195,843 | 2,109 | 2,251 | 2,410 | 3.78 | % | 3.82 | % | 4.82 | % | ||||||||||||||
Residential | 2,809,871 | 2,862,708 | 3,016,265 | 22,089 | 23,079 | 25,567 | 3.14 | % | 3.22 | % | 3.39 | % | ||||||||||||||
Home equity | 84,226 | 88,307 | 89,068 | 623 | 650 | 1,121 | 2.94 | % | 2.96 | % | 4.99 | % | ||||||||||||||
Other consumer | 111,657 | 124,346 | 127,987 | 547 | 944 | 1,297 | 1.95 | % | 3.05 | % | 4.02 | % | ||||||||||||||
Total loans | 7,282,598 | 7,288,644 | 7,048,883 | 59,618 | 62,807 | 71,036 | 3.23 | % | 3.42 | % | 3.98 | % | ||||||||||||||
Total earning assets | 8,745,173 | 8,496,058 | 8,147,118 | 65,453 | 68,819 | 77,604 | 2.96 | % | 3.22 | % | 3.76 | % | ||||||||||||||
LESS: Allowance for loan losses | 89,370 | 68,473 | 75,199 | |||||||||||||||||||||||
Cash and due from banks | 34,761 | 39,959 | 49,065 | |||||||||||||||||||||||
Other assets | 655,999 | 641,657 | 544,368 | |||||||||||||||||||||||
TOTAL AVERAGE ASSETS | $ | 9,346,563 | $ | 9,109,201 | $ | 8,665,352 | ||||||||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||||
Interest-bearing deposits: 13 | ||||||||||||||||||||||||||
Savings and NOW | $ | 722,742 | $ | 680,758 | $ | 615,730 | $ | 197 | $ | 187 | $ | 275 | 0.11 | % | 0.11 | % | 0.18 | % | ||||||||
Money market | 4,070,026 | 3,684,147 | 3,378,006 | 4,790 | 4,848 | 11,523 | 0.47 | % | 0.53 | % | 1.35 | % | ||||||||||||||
Certificates of deposit | 585,729 | 671,470 | 711,299 | 1,447 | 2,300 | 3,689 | 0.98 | % | 1.38 | % | 2.06 | % | ||||||||||||||
Total interest-bearing deposits 13 | 5,378,497 | 5,036,375 | 4,705,035 | 6,434 | 7,335 | 15,487 | 0.48 | % | 0.59 | % | 1.31 | % | ||||||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 508 | 764 | 1,022 | 1.87 | % | 2.84 | % | 3.76 | % | ||||||||||||||
FHLB borrowings and other | 388,412 | 610,856 | 833,535 | 687 | 1,782 | 4,942 | 0.69 | % | 1.15 | % | 2.32 | % | ||||||||||||||
Total interest-bearing liabilities 13 | 5,873,272 | 5,753,594 | 5,644,933 | 7,629 | 9,881 | 21,451 | 0.52 | % | 0.69 | % | 1.50 | % | ||||||||||||||
Non-interest bearing demand deposits 13 | 2,321,223 | 2,213,829 | 1,953,214 | |||||||||||||||||||||||
Payables and other liabilities | 309,462 | 306,896 | 258,371 | |||||||||||||||||||||||
Total average liabilities | 8,503,957 | 8,274,319 | 7,856,518 | |||||||||||||||||||||||
Redeemable noncontrolling interests | — | — | 944 | |||||||||||||||||||||||
Average shareholders’ equity | 842,606 | 834,882 | 807,890 | |||||||||||||||||||||||
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | $ | 9,346,563 | $ | 9,109,201 | $ | 8,665,352 | ||||||||||||||||||||
Net interest income | $ | 57,824 | $ | 58,938 | $ | 56,153 | ||||||||||||||||||||
Interest rate spread | 2.44 | % | 2.53 | % | 2.26 | % | ||||||||||||||||||||
Net interest margin | 2.61 | % | 2.75 | % | 2.72 | % | ||||||||||||||||||||
Average total deposits 13 | $ | 7,699,720 | $ | 7,250,204 | $ | 6,658,249 | 0.33 | % | 0.41 | % | 0.92 | % | ||||||||||||||
Average total deposits and borrowings 13 | $ | 8,194,495 | $ | 7,967,423 | $ | 7,598,147 | 0.37 | % | 0.50 | % | 1.12 | % | ||||||||||||||
12 Average loans includes Loans held for sale and Nonaccrual loans 13 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. | ||||||||||||||||||
Average Balances, Yields, and Rates | ||||||||||||||||||
Unaudited ($ in thousands) | ||||||||||||||||||
Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||
Nine Months Ended | Nine Months Ended | Nine Months Ended | ||||||||||||||||
INTEREST-EARNING ASSETS | 9/30/20 | 9/30/19 | 9/30/20 | 9/30/19 | 9/30/20 | 9/30/19 | ||||||||||||
Cash and investments: | ||||||||||||||||||
Taxable investment securities | $ | 200,346 | $ | 223,072 | $ | 2,580 | $ | 3,244 | 1.72 | % | 1.94 | % | ||||||
Non-taxable investment securities | 315,101 | 305,422 | 5,977 | 5,726 | 2.53 | % | 2.50 | % | ||||||||||
Mortgage-backed securities | 514,043 | 507,338 | 7,707 | 8,225 | 2.00 | % | 2.16 | % | ||||||||||
Short-term investments and other | 256,143 | 104,225 | 2,307 | 3,049 | 1.19 | % | 3.78 | % | ||||||||||
Total cash and investments | 1,285,633 | 1,140,057 | 18,571 | 20,244 | 1.92 | % | 2.36 | % | ||||||||||
Loans: 12 | ||||||||||||||||||
Commercial and industrial | 1,074,159 | 1,088,027 | 28,746 | 33,673 | 3.51 | % | 4.08 | % | ||||||||||
Paycheck Protection Program | 218,175 | — | 3,963 | — | 2.41 | % | — | % | ||||||||||
Commercial real estate | 2,631,461 | 2,474,804 | 75,630 | 87,222 | 3.78 | % | 4.65 | % | ||||||||||
Construction and land | 228,243 | 203,211 | 6,932 | 7,610 | 3.99 | % | 4.94 | % | ||||||||||
Residential | 2,841,023 | 2,999,480 | 68,636 | 76,847 | 3.22 | % | 3.42 | % | ||||||||||
Home equity | 86,186 | 90,361 | 2,225 | 3,388 | 3.44 | % | 5.01 | % | ||||||||||
Other consumer | 122,706 | 128,879 | 2,651 | 4,172 | 2.88 | % | 4.33 | % | ||||||||||
Total loans | 7,201,953 | 6,984,762 | 188,783 | 212,912 | 3.46 | % | 4.04 | % | ||||||||||
Total earning assets | 8,487,586 | 8,124,819 | 207,354 | 233,156 | 3.23 | % | 3.80 | % | ||||||||||
LESS: Allowance for loan losses | 69,929 | 74,863 | ||||||||||||||||
Cash and due from banks | 41,461 | 46,906 | ||||||||||||||||
Other assets | 620,313 | 516,642 | ||||||||||||||||
TOTAL AVERAGE ASSETS | $ | 9,079,431 | $ | 8,613,504 | ||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||
Interest-bearing deposits: 13 | ||||||||||||||||||
Savings and NOW | $ | 680,962 | $ | 658,154 | $ | 616 | $ | 847 | 0.12 | % | 0.17 | % | ||||||
Money market | 3,835,219 | 3,317,117 | 19,295 | 32,072 | 0.67 | % | 1.29 | % | ||||||||||
Certificates of deposit | 641,800 | 746,453 | 6,654 | 11,141 | 1.38 | % | 2.00 | % | ||||||||||
Total interest-bearing deposits 13 | 5,157,981 | 4,721,724 | 26,565 | 44,060 | 0.69 | % | 1.25 | % | ||||||||||
Junior subordinated debentures | 106,363 | 106,363 | 2,189 | 3,223 | 2.74 | % | 4.05 | % | ||||||||||
FHLB borrowings and other | 484,674 | 801,519 | 4,581 | 13,922 | 1.24 | % | 2.29 | % | ||||||||||
Total interest-bearing liabilities 13 | 5,749,018 | 5,629,606 | 33,335 | 61,205 | 0.77 | % | 1.45 | % | ||||||||||
Non-interest bearing demand deposits 13 | 2,194,237 | 1,949,948 | ||||||||||||||||
Payables and other liabilities | 295,327 | 243,370 | ||||||||||||||||
Total average liabilities | 8,238,582 | 7,822,924 | ||||||||||||||||
Redeemable noncontrolling interests | 400 | 1,642 | ||||||||||||||||
Average shareholders’ equity | 840,449 | 788,938 | ||||||||||||||||
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | $ | 9,079,431 | $ | 8,613,504 | ||||||||||||||
Net interest income | $ | 174,019 | $ | 171,951 | ||||||||||||||
Interest rate spread | 2.46 | % | 2.35 | % | ||||||||||||||
Net interest margin | 2.71 | % | 2.80 | % | ||||||||||||||
Average total deposits 13 | $ | 7,352,218 | $ | 6,671,672 | 0.48 | % | 0.88 | % | ||||||||||
Average total deposits and borrowings 13 | $ | 7,943,255 | $ | 7,579,554 | 0.56 | % | 1.08 | % | ||||||||||
12 Average loans includes Loans held for sale and Nonaccrual loans 13 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) | |||||||||||||||||||
3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | |||||||||||||||
New England | $ | 3,669,746 | $ | 3,781,603 | $ | 3,724,959 | $ | 3,776,747 | $ | 3,868,690 | |||||||||
Northern California | 1,763,556 | 1,741,255 | 1,618,668 | 1,532,786 | 1,559,569 | ||||||||||||||
Southern California | 1,789,267 | 1,810,096 | 1,699,711 | 1,667,171 | 1,638,892 | ||||||||||||||
Total loans | $ | 7,222,569 | $ | 7,332,954 | $ | 7,043,338 | $ | 6,976,704 | $ | 7,067,151 | |||||||||
Loans (charged-off)/recovered, net: | |||||||||||||||||||
New England | $ | (111 | ) | $ | 7 | $ | 15 | $ | 414 | $ | 275 | ||||||||
Northern California | — | 3 | 122 | (10 | ) | 6 | |||||||||||||
Southern California | (93 | ) | (1,501 | ) | (485 | ) | (113 | ) | (156 | ) | |||||||||
Total net loans (charged-off)/recovered | $ | (204 | ) | $ | (1,491 | ) | $ | (348 | ) | $ | 291 | $ | 125 | ||||||
Special mention loans: | |||||||||||||||||||
New England | $ | 103,060 | $ | 83,026 | $ | 61,741 | $ | 21,691 | $ | 19,828 | |||||||||
Northern California | 63,192 | 75,609 | 5,947 | 5,227 | 4,821 | ||||||||||||||
Southern California | 33,257 | 33,247 | 24,935 | 25,108 | 33,484 | ||||||||||||||
Total special mention loans | $ | 199,509 | $ | 191,882 | $ | 92,623 | $ | 52,026 | $ | 58,133 | |||||||||
Accruing classified loans: | |||||||||||||||||||
New England | $ | 74,682 | $ | 53,124 | $ | 50,483 | $ | 20,428 | $ | 21,830 | |||||||||
Northern California | 4,589 | 21,712 | 24,843 | 24,946 | 23,938 | ||||||||||||||
Southern California | 2,556 | 13,750 | 12,622 | 12,548 | 17,510 | ||||||||||||||
Total accruing classified loans | $ | 81,827 | $ | 88,586 | $ | 87,948 | $ | 57,922 | $ | 63,278 | |||||||||
Nonaccruing loans: | |||||||||||||||||||
New England | $ | 11,807 | $ | 11,630 | $ | 11,965 | $ | 9,764 | $ | 8,999 | |||||||||
Northern California | 25,133 | 9,459 | 6,575 | 319 | 2,395 | ||||||||||||||
Southern California | 4,323 | 4,515 | 5,774 | 6,020 | 6,171 | ||||||||||||||
Total nonaccruing loans | $ | 41,263 | $ | 25,604 | $ | 24,314 | $ | 16,103 | $ | 17,565 | |||||||||
14 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, except share and per share data) | |||||||||||||||||||
3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | |||||||||||||||
ROACE AND ROATCE: | |||||||||||||||||||
Net income/(loss) attributable to the Company (GAAP) (A) | $ | 22,680 | $ | (3,298 | ) | $ | 800 | $ | 21,244 | $ | 19,962 | ||||||||
ADD: Amortization of intangibles, net of tax | 564 | 555 | 565 | 534 | 530 | ||||||||||||||
Tangible common net income/(loss) (non-GAAP) (B) | $ | 23,244 | $ | (2,743 | ) | $ | 1,365 | $ | 21,778 | $ | 20,492 | ||||||||
Total average shareholders’ equity (C) | $ | 842,606 | $ | 834,882 | $ | 838,935 | $ | 818,816 | $ | 807,890 | |||||||||
LESS: Average goodwill and intangibles, net | (66,246 | ) | (66,877 | ) | (67,586 | ) | (68,031 | ) | (68,359 | ) | |||||||||
Average tangible common equity (non-GAAP) (D) | $ | 776,360 | $ | 768,005 | $ | 771,349 | $ | 750,785 | $ | 739,531 | |||||||||
ROACE (annualized) (A/C) | 10.68 | % | (1.58 | )% | 0.39 | % | 10.29 | % | 9.80 | % | |||||||||
ROATCE (annualized) (B/D) | 11.88 | % | (1.43 | )% | 0.72 | % | 11.51 | % | 10.99 | % | |||||||||
PRE-TAX, PRE-PROVISION INCOME: | |||||||||||||||||||
Income/(loss) before income taxes (GAAP) | $ | 24,501 | $ | (2,457 | ) | $ | 908 | $ | 28,129 | $ | 25,575 | ||||||||
ADD BACK: Provision/(credit) for loan losses | (4,569 | ) | 22,604 | 16,962 | (3,668 | ) | 167 | ||||||||||||
Pre-tax, pre-provision income (non-GAAP) | $ | 19,932 | $ | 20,147 | $ | 17,870 | $ | 24,461 | $ | 25,742 | |||||||||
TANGIBLE COMMON EQUITY: | |||||||||||||||||||
Total shareholders’ equity (GAAP) | $ | 846,169 | $ | 825,205 | $ | 828,792 | $ | 819,018 | $ | 808,688 | |||||||||
LESS: Goodwill and intangibles, net | (66,505 | ) | (66,542 | ) | (67,244 | ) | (67,959 | ) | (68,229 | ) | |||||||||
Tangible common equity (non-GAAP) (A) | $ | 779,664 | $ | 758,663 | $ | 761,548 | $ | 751,059 | $ | 740,459 | |||||||||
Total assets (GAAP) | $ | 9,431,305 | $ | 9,158,906 | $ | 8,746,326 | $ | 8,830,501 | $ | 8,690,944 | |||||||||
LESS: Goodwill and intangibles, net | (66,505 | ) | (66,542 | ) | (67,244 | ) | (67,959 | ) | (68,229 | ) | |||||||||
Tangible assets (non-GAAP) (B) | $ | 9,364,800 | $ | 9,092,364 | $ | 8,679,082 | $ | 8,762,542 | $ | 8,622,715 | |||||||||
End of period shares outstanding (C) | 82,254,594 | 82,058,483 | 81,800,486 | 83,265,674 | 83,241,952 | ||||||||||||||
Tangible common equity/ Tangible assets (non-GAAP) (A/B) | 8.33 | % | 8.34 | % | 8.77 | % | 8.57 | % | 8.59 | % | |||||||||
Tangible book value per share (non-GAAP) (A/C) | $ | 9.48 | $ | 9.25 | $ | 9.31 | $ | 9.02 | $ | 8.90 | |||||||||
AVERAGE LOANS: | |||||||||||||||||||
Total loans | $ | 7,282,598 | $ | 7,288,644 | $ | 7,033,733 | $ | 7,072,710 | $ | 7,048,883 | |||||||||
LESS: PPP | 373,047 | 283,619 | — | — | — | ||||||||||||||
Total loans, excluding PPP (non-GAAP) | $ | 6,909,551 | $ | 7,005,025 | $ | 7,033,733 | $ | 7,072,710 | $ | 7,048,883 | |||||||||
Total loan yields, excluding PPP (non-GAAP) | 3.27 | % | 3.47 | % | 3.75 | % | 3.83 | % | 3.98 | % | |||||||||
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. | |||||||||||||||||||
Reconciliations of Non-GAAP Financial Measures | |||||||||||||||||||
Unaudited ($ in thousands, except share and per share data) | |||||||||||||||||||
3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | |||||||||||||||
RETURN ON AVERAGE ASSETS: | |||||||||||||||||||
Net income/(loss) (GAAP) (A) | $ | 22,680 | $ | (3,298 | ) | $ | 800 | $ | 21,244 | $ | 19,962 | ||||||||
Average assets (non-GAAP) (B) | 9,346,563 | 9,109,201 | 8,779,391 | 8,738,750 | 8,665,352 | ||||||||||||||
Return on average assets (annualized) (non-GAAP) (A/B) | 0.96 | % | (0.15 | )% | 0.04 | % | 0.96 | % | 0.91 | % | |||||||||
EFFICIENCY RATIO: | |||||||||||||||||||
Total noninterest expense (GAAP) (A) | $ | 60,937 | $ | 61,453 | $ | 60,908 | $ | 58,457 | $ | 55,537 | |||||||||
LESS: Amortization of intangibles | 714 | 702 | 715 | 676 | 671 | ||||||||||||||
Total noninterest expense (non-GAAP) (B) | $ | 60,223 | $ | 60,751 | $ | 60,193 | $ | 57,781 | $ | 54,866 | |||||||||
Net interest income (GAAP) | $ | 57,824 | $ | 58,938 | $ | 57,257 | $ | 56,125 | $ | 56,153 | |||||||||
Total core fees and income (GAAP) | 21,959 | 21,630 | 22,886 | 24,755 | 25,155 | ||||||||||||||
Total other income (GAAP) | 1,086 | 1,032 | (1,365 | ) | 2,038 | (29 | ) | ||||||||||||
Total revenue (GAAP) (C) | $ | 80,869 | $ | 81,600 | $ | 78,778 | $ | 82,918 | $ | 81,279 | |||||||||
Efficiency ratio (GAAP) (A/C) | 75.4 | % | 75.3 | % | 77.3 | % | 70.5 | % | 68.3 | % | |||||||||
Efficiency ratio, excluding amortization of intangibles (non-GAAP) (B/C) | 74.5 | % | 74.4 | % | 76.4 | % | 69.7 | % | 67.5 | % | |||||||||
NET INCOME/(LOSS) ATTRIBUTABLE TO THE COMPANY: | |||||||||||||||||||
Net income/(loss) attributable to the Company (GAAP) | $ | 22,680 | $ | (3,298 | ) | $ | 800 | $ | 21,244 | $ | 19,962 | ||||||||
LESS: Gain on fair value of contingent considerations receivable 15 | 891 | — | — | 1,109 | — | ||||||||||||||
Tax effect at statutory rate | 258 | — | — | 322 | — | ||||||||||||||
Net income/(loss) attributable to the Company (non-GAAP) | $ | 22,047 | $ | (3,298 | ) | $ | 800 | $ | 20,457 | $ | 19,962 | ||||||||
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS: | |||||||||||||||||||
Net income/(loss) attributable to common shareholders (GAAP) | $ | 22,680 | $ | (3,298 | ) | $ | 1,214 | $ | 21,342 | $ | 20,266 | ||||||||
LESS: Gain on fair value of contingent considerations receivable 15 | 891 | — | — | 1,109 | — | ||||||||||||||
Tax effect at statutory rate | 258 | — | — | 322 | — | ||||||||||||||
Net income/(loss) attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP) | $ | 22,047 | $ | (3,298 | ) | $ | 1,214 | $ | 20,555 | $ | 20,266 | ||||||||
Weighted average diluted shares outstanding | 82,362,338 | 81,929,752 | 83,318,041 | 83,637,786 | 83,956,708 | ||||||||||||||
Diluted earnings/(loss) per share (GAAP) | $ | 0.28 | $ | (0.04 | ) | $ | 0.01 | $ | 0.26 | $ | 0.24 | ||||||||
Diluted earnings/(loss) per share, excluding notable items (non-GAAP) | $ | 0.27 | $ | (0.04 | ) | $ | 0.01 | $ | 0.25 | $ | 0.24 | ||||||||
Average common equity (non-GAAP) | $ | 842,606 | $ | 834,882 | $ | 838,935 | $ | 818,816 | $ | 807,890 | |||||||||
Average tangible common equity (non-GAAP) | $ | 776,360 | $ | 768,005 | $ | 771,349 | $ | 750,785 | $ | 739,531 | |||||||||
ROACE, excluding notable items (non-GAAP) | 10.38 | % | (1.58 | )% | 0.39 | % | 9.91 | % | 9.80 | % | |||||||||
ROATCE, excluding notable items (non-GAAP) | 11.55 | % | (1.43 | )% | 0.72 | % | 11.09 | % | 10.99 | % | |||||||||
Pre-tax, pre-provision income (non-GAAP) | $ | 19,932 | $ | 20,147 | $ | 17,870 | $ | 24,461 | $ | 25,742 | |||||||||
LESS: Gain on fair value of contingent considerations receivable 15 | 891 | — | — | 1,109 | — | ||||||||||||||
Pre-tax, pre-provision income, excluding notable items (non-GAAP) | $ | 19,041 | $ | 20,147 | $ | 17,870 | $ | 23,352 | $ | 25,742 | |||||||||
15 In the third quarter of 2020 and fourth quarter of 2019, there was a gain of $0.9 million and $1.1 million, respectively, related to the revaluation of a receivable from the divestiture of former affiliate, Bingham, Osborn & Scarborough, LLC ("BOS"). | |||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20201021005941/en/
Contacts:
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abromley@bostonprivate.com
