Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported third quarter 2018 GAAP Net income attributable to the Company of $18.0 million, compared to $6.4 million for the second quarter of 2018 and $19.8 million for the third quarter of 2017. Third quarter 2018 Diluted earnings per share were $0.20, compared to $0.03 in the second quarter of 2018 and $0.22 in the third quarter of 2017.
| Summary Financial Results - Reported | ||||||||||
| % Change | ||||||||||
| ($ in millions, except for per share data) | 3Q18 | 2Q18 | 3Q17 | Linked | Year over | |||||
| Net income attributable to the Company | $18.0 | $6.4 | $19.8 | nm | (9)% | |||||
| Diluted earnings per share | $0.20 | $0.03 | $0.22 | nm | (9)% | |||||
Non-GAAP Financial Measures: | ||||||||||
| Pre-tax, pre-provision income | $23.4 | $25.3 | $27.5 | (7)% | (15)% | |||||
| Return on average common equity ("ROACE") | 9.7% | 3.0% | 9.9% | |||||||
| Return on average tangible common equity ("ROATCE") | 11.4% | 3.9% | 13.2% | |||||||
| nm = not meaningful | ||||||||||
Net income attributable to the Company, Diluted earnings per share, ROACE, and ROATCE for the third quarter of 2018 improved primarily due to a $12.7 million income tax expense during second quarter results associated with the divestiture of Anchor Capital Advisors, LLC ("Anchor"), partially offset by a $5.8 million restructuring expense during third quarter results.
In addition to presenting the Company’s results in conformity with GAAP, the Company uses certain non-GAAP financial measures to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. For additional information on non-GAAP financial measures, see page 7. A full reconciliation of GAAP to non-GAAP results can be found in the footnotes beginning on page 18.
| Summary Financial Results - Operating Basis (non-GAAP) | ||||||||||
| % Change | ||||||||||
| ($ in millions, except for per share data) | 3Q181 | 2Q182 | 3Q17 | Linked Quarter | Year over Year | |||||
| Net income attributable to the Company | $22.5 | $19.1 | $19.8 | 18% | 14% | |||||
| Diluted earnings per share | $0.25 | $0.21 | $0.22 | 21% | 15% | |||||
| Pre-tax, pre-provision income | $29.2 | $25.3 | $27.5 | 15% | 6% | |||||
| Return on average common equity | 12.1% | 10.0% | 9.9% | |||||||
| Return on average tangible common equity | 14.2% | 11.9% | 13.2% | |||||||
1 3Q18 results adjusted to exclude the impact of $5.8
million restructuring expense less a $1.2 million tax benefit,
resulting in a net $4.6 million benefit to overall results See footnote 16 for a GAAP to non-GAAP reconciliation | ||||||||||
"Our third quarter results demonstrate improved financial performance across our core businesses. Operating basis pre-tax, pre-provision income increased 15% linked quarter and 6% year-over-year," said Clayton G. Deutsch, CEO. "The Bank demonstrated linked quarter average deposit growth of 6%, and Boston Private Wealth continues to demonstrate strong new business generation across regions and distribution channels."
"Our third quarter results include a restructuring charge of $5.8 million, which is the result of an efficiency initiative guided by a focus of delivering expense reduction and an improved return profile. We expect restructuring benefits to include approximately $11 million of expense savings in 2019."
Divestiture
On April 13, 2018, the Company completed the
sale of its ownership interest in Anchor. Anchor’s results through the
closing date remain consolidated in the Company’s results through April
13, 2018 and prior periods. For presentation purposes, Anchor’s AUM are
excluded from AUM amounts, but are included in the calculation of Core
fees and income.
| Net Interest Income and Margin (non-GAAP, except for Net Interest Income) | |||||||||||||
| % Change | |||||||||||||
| ($ in millions) | 3Q18 | 2Q18 | 3Q17 | Linked Quarter | Year over Year | ||||||||
| Net interest income | $59.6 | $57.5 | $56.6 | 4% | 5% | ||||||||
| Less: Interest recovered on previous nonaccrual loans | 1.0 | — | 0.1 | nm | nm | ||||||||
| Core net interest income, non-FTE basis | 58.7 | 57.5 | 56.5 | 2% | 4% | ||||||||
| Add: FTE adjustment | 0.6 | 0.9 | 2.9 | (34)% | (80)% | ||||||||
| Core net interest income, FTE basis | 59.2 | 58.4 | 59.4 | 1% | —% | ||||||||
| Net interest margin (FTE basis) | 2.93 | % | 2.89 | % | 3.02 | % | |||||||
| Core net interest margin (FTE basis) | 2.88 | % | 2.89 | % | 3.02 | % | |||||||
| Core net interest margin (non-FTE basis) | 2.85 | % | 2.85 | % | 2.87 | % | |||||||
| FTE = Fully Taxable Equivalent | |||||||||||||
Net interest income for the third quarter of 2018 was $59.6 million, an increase of 4% linked quarter and 5% year-over-year. The year-over-year increase was primarily driven by interest recovered on previous nonaccrual loans, higher yields on interest-earning assets, and higher asset volumes, partially offset by higher funding costs. Core net interest income, non-FTE basis, which excludes interest recovered on previous nonaccrual loans, increased 4% year-over-year and 2% linked quarter.
The Company’s Core net interest margin (FTE basis) decreased 1 basis point on a linked quarter basis to 2.88%, primarily driven by a lower FTE adjustment. Linked quarter, the net interest margin benefited from deposit inflows that funded repayment of short-term borrowings. The year-over-year decline was primarily driven by a lower tax benefit on tax-exempt income.
| Noninterest Income | ||||||||||
| % Change | ||||||||||
| ($ in millions) | 3Q18 | 2Q18 | 3Q17 | Linked Quarter | Year over Year | |||||
| Investment management fees | $3.2 | $4.2 | $11.3 | (23)% | (71)% | |||||
| Wealth advisory fees | 14.0 | 13.7 | 13.3 | 2% | 5% | |||||
| Wealth management and trust fees | 11.5 | 11.2 | 11.6 | 3% | (1)% | |||||
| Private banking fees3 | 2.8 | 2.8 | 2.9 | 1% | (2)% | |||||
| Total core fees and income | $31.6 | $31.9 | $39.1 | (1)% | (19)% | |||||
| Total other income | 0.7 | 0.2 | 1.2 | nm | (40)% | |||||
| Total noninterest income | $32.3 | $32.1 | $40.3 | 1% | (20)% | |||||
| Memo: Noninterest income lines excluding Anchor | ||||||||||
| Less: Anchor revenue | — | 1.1 | 8.4 | nm | nm | |||||
| Investment management fees (non-GAAP) | 3.2 | 3.1 | 2.9 | 5% | 12% | |||||
| Total core fees and income (non-GAAP) | $31.6 | $30.7 | $30.7 | 3% | 3% | |||||
| Total noninterest income (non-GAAP) | $32.3 | $30.9 | $31.9 | 4% | 1% | |||||
| 3 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 2018 was $31.6 million, a 1% decrease linked quarter and a 19% decrease year-over-year, primarily driven by the divestiture of Anchor. Excluding Anchor, Total core fees and income increased 3% year-over-year primarily driven by higher levels of assets under management in the Wealth Advisory and Investment Management segments. Wealth Management & Trust revenues increased 3% linked quarter driven by higher levels of AUM.
| Assets Under Management / Advisory | ||||||||||
| % Change | ||||||||||
| ($ in millions) | 3Q18 | 2Q18 | 3Q17 | Linked Quarter | Year over Year | |||||
| Wealth Management and Trust | $8,335 | $7,789 | $7,703 | 7% | 8% | |||||
| Investment Management 4 | 2,125 | 2,031 | 1,902 | 5% | 12% | |||||
| Wealth Advisory | 11,977 | 11,566 | 10,992 | 4% | 9% | |||||
| Total assets under management / advisory 4 5 | $22,430 | $21,379 | $20,586 | 5% | 9% | |||||
| Net flows | 3Q18 | 2Q18 | 3Q17 | |||||||
| Wealth Management and Trust | $315 | $(77) | $114 | |||||||
| Investment Management 4 | 45 | 27 | (5) | |||||||
| Wealth Advisory | (18) | (30) | (71) | |||||||
| Total net flows 4 | $342 | $(76) | $38 | |||||||
4 Information excludes Anchor | ||||||||||
Total assets under management / advisory, were $22.4 billion at the end of the third quarter of 2018, an increase of 5% linked quarter and 9% year-over-year. The year-over-year increase was driven primarily by positive market action and positive net flows in all three segments. Positive net flows in the Wealth Management & Trust segment during the third quarter of 2018 were driven by $394 million of new business and low client attrition.
| Operating Expense | ||||||||||
| % Change | ||||||||||
| ($ in millions) | 3Q18 | 2Q18 | 3Q17 | Linked Quarter | Year over Year | |||||
| Salaries and employee benefits | $38.9 | $39.4 | $44.9 | (1)% | (13)% | |||||
| Occupancy and equipment | 8.2 | 8.2 | 7.9 | (1)% | 3% | |||||
| Professional services | 2.9 | 2.9 | 3.3 | —% | (13)% | |||||
| Marketing and business development | 1.7 | 2.1 | 2.2 | (17)% | (23)% | |||||
| Information systems | 6.2 | 6.8 | 5.3 | (8)% | 18% | |||||
| Amortization of intangibles | 0.8 | 0.7 | 1.4 | —% | (47)% | |||||
| FDIC insurance | 0.7 | 0.7 | 0.6 | (5)% | 4% | |||||
| Restructuring | 5.8 | — | — | nm | nm | |||||
| Other | 3.4 | 3.6 | 3.6 | (3)% | (5)% | |||||
| Total operating expense | $68.6 | $64.4 | $69.3 | 6% | (1)% | |||||
| Memo: Excluding Anchor and Restructuring | ||||||||||
| Restructuring | 5.8 | — | — | nm | nm | |||||
| Anchor operating expense | — | 0.9 | 6.4 | nm | nm | |||||
| Total operating expense (non-GAAP) 6 | $62.8 | $63.4 | $62.9 | (1)% | —% | |||||
| 6 For information on non-GAAP financial measures, see
page 6
nm= not meaningful | ||||||||||
Total operating expense increased 6% linked quarter primarily driven by restructuring expense, while decreasing 1% year-over-year, primarily driven by the divestiture of Anchor. The restructuring expense is related to a company-wide efficiency initiative and consists primarily of severance and other compensation related expenses.
Excluding Anchor and restructuring expense, Total operating expense for the third quarter of 2018 was $62.8 million, down 1% linked quarter, primarily driven by lower information systems expense and compensation.
Income Tax Expense
The Company's effective tax rate for continuing operations for the third quarter of 2018 was 22.4%, compared to 29.6% in the prior year with the decline primarily driven by the enactment of the Tax Cuts and Jobs Act of 2017.
| Loans and Deposits - QTD Averages | ||||||||||
| % Change | ||||||||||
| ($ in millions) | 3Q18 | 2Q18 | 3Q17 | Linked Quarter | Year over Year | |||||
| Commercial and industrial | $999 | $974 | $994 | 3% | —% | |||||
| Commercial real estate | 2,475 | 2,478 | 2,382 | —% | 4% | |||||
| Construction and land | 179 | 167 | 114 | 8% | 58% | |||||
| Residential | 2,837 | 2,775 | 2,567 | 2% | 11% | |||||
| Home equity | 94 | 94 | 107 | —% | (12)% | |||||
| Other consumer | 163 | 180 | 187 | (9)% | (13)% | |||||
| Total loans | $6,747 | $6,668 | $6,351 | 1% | 6% | |||||
| Non-interest bearing deposits | 2,064 | 1,908 | 1,966 | 8% | 5% | |||||
| Interest bearing deposits | 4,668 | 4,441 | 4,439 | 5% | 5% | |||||
| Total deposits | $6,732 | $6,349 | $6,406 | 6% | 5% | |||||
| Non-interest bearing deposits as a % of Total deposits | 31% | 30% | 31% | |||||||
Average total loans in the third quarter of 2018 increased 6% year-over-year primarily driven by increases in Residential loans in all geographic markets. End of period Commercial real estate loans increased 2% from September 30, 2017 to September 30, 2018 with New England increasing 6%, Northern California increasing 4%, and Southern California decreasing 7%.
Average total deposits increased 5% year-over-year, primarily driven by growth in money market accounts, demand deposit accounts and certificates of deposits, partially offset by net declines in savings and NOW accounts. Average non-interest bearing deposits comprised 31% of Average total deposits in the third quarter of 2018 and the third quarter of 2017. The cost of total deposits, including DDA, was 0.68%, an increase of 15 basis points linked quarter and 35 basis points year-over-year. The increase was primarily driven by increasing cost of interest bearing deposits.
| Provision and Asset Quality | ||||||||||
| ($ in millions) | 3Q18 | 2Q18 | 1Q18 | 4Q17 | 3Q17 | |||||
| Provision/ (credit) for loan loss | $(0.9) | $0.5 | $(1.8) | $(0.9) | $(0.4) | |||||
| Total criticized loans | 134.7 | 114.4 | 124.1 | 154.8 | 146.0 | |||||
| Total nonaccrual loans | 12.1 | 15.7 | 16.4 | 14.3 | 13.6 | |||||
| Total loans 30-89 days past due and accruing | 11.6 | 5.0 | 20.4 | 25.0 | 5.3 | |||||
| Total net loans (charged-off)/ recovered | 1.0 | 0.1 | — | 0.8 | 0.3 | |||||
Ratios: | ||||||||||
| Allowance for loan losses as a % of Total loans | 1.09% | 1.09% | 1.10% | 1.15% | 1.17% | |||||
| Nonaccrual loans as a % of Total loans | 0.18% | 0.23% | 0.25% | 0.22% | 0.21% | |||||
The Company recorded a provision credit of $0.9 million for the third quarter of 2018, compared to an expense of $0.5 million for the second quarter of 2018 and a credit of $0.4 million for the third quarter of 2017. The provision credit in the third quarter of 2018 was primarily driven by loan recoveries and loan balance declines, partially offset by an increase in criticized and classified loans.
Total criticized loans as of September 30, 2018 was $134.7 million, an increase of 18% linked quarter and a decrease of 8% year-over-year. The linked quarter increase was driven by an increase in Southern California special mention loans and San Francisco Bay Area accruing substandard loans. Total nonaccrual loans (“Nonaccruals”) as of September 30, 2018 was $12.1 million, a decrease of 23% linked quarter and 11% year-over-year. As a percentage of Total loans, Nonaccruals were 18 basis points as of September 30, 2018, down 5 basis points from June 30, 2018, and down 3 basis points from September 30, 2017.
Capital | ||||||||||
| 3Q18 | 2Q18 | 1Q18 | 4Q17 | 3Q17 | ||||||
| Tangible common equity/ Total assets 7 | 7.8% | 7.5% | 7.4% | 7.3% | 7.4% | |||||
| Tangible book value per share 7 | $7.67 | $7.62 | $7.17 | $7.12 | $7.16 | |||||
| Regulatory Capital Ratios: 8 | ||||||||||
| Tier 1 common equity | 11.1% | 10.9% | 10.4% | 10.3% | 10.4% | |||||
| Total risk-based capital | 14.1% | 13.8% | 14.2% | 14.1% | 14.3% | |||||
| Tier 1 risk-based capital | 12.8% | 12.6% | 12.9% | 12.9% | 13.0% | |||||
| Tier 1 leverage capital | 9.2% | 9.2% | 9.4% | 9.3% | 9.4% | |||||
7 See footnote 6 for a GAAP to non-GAAP reconciliation. | ||||||||||
Tangible book value per share as of September 30, 2018 increased 7% year-over-year to $7.67.
Dividend Payments
Concurrent with the
release of third quarter 2018 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 November 2, 2018, and
the payment date is November 16, 2018.
Non-GAAP Financial Measures
The
Company uses certain non-GAAP financial measures to provide information
for investors to effectively analyze financial trends of ongoing
business activities, and to enhance comparability with peers across the
financial sector.
These non-GAAP financial measures include tangible book value per share; the TCE/TA ratio; return on average common equity; return on average tangible common equity; pre-tax, pre-provision income; total operating expense excluding intangibles, goodwill impairment, and restructuring, if any; the efficiency ratio (FTE basis); the efficiency ratio (FTE basis) excluding amortization of intangibles, goodwill impairment, and restructuring, if any; net interest income and net interest margin excluding interest recovered on previous nonaccrual loans, also referred to as core net interest margin; net income attributable to the Company excluding notable items; net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP); diluted earnings per share excluding notable items; operating basis total revenue; operating basis total operating expenses; operating basis pre-tax, pre-provision income; operating basis income before income taxes; operating basis income tax expense; operating basis net income/ (loss) attributable to the Company; operating basis net income/ (loss) attributable to the Common Shareholders; operating basis weighted average diluted shares outstanding; operating basis diluted total earnings/ (loss) per share; operating basis return on average common equity; operating basis return on average tangible common equity; and operating basis effective tax rate.
A detailed reconciliation table of the Company’s GAAP to non-GAAP measures is included in the footnotes of the attached financial statements.
Conference Call
Management will hold a conference call at 8 a.m. Eastern Time on Thursday, October 18, 2018, to discuss the financial results, business highlights and outlook. To access the call:
Dial In #: (888) 317-6003
Elite Entry Number: 3938300
Replay Information:
Available from October 18, 2018 at 12 noon ET
until October 25, 2018
Dial In #: (877) 344-7529
Conference
Number: 10124992
The call will be simultaneously webcast and may be accessed on www.bostonprivate.com.
Boston Private Financial Holdings, Inc.
Boston
Private Financial Holdings, Inc. is a national financial services
organization that owns Wealth Management, Trust, and Private Banking
affiliates with offices in Boston, New York, Los Angeles, San Francisco,
San Jose, Florida, and Wisconsin. The Company has total assets of
greater than $8 billion, and manages over $22 billion of client assets.
The Company’s affiliates serve the high net worth marketplace with high quality products and services of unique appeal to private clients. The Company also provides strategic oversight and access to resources, both financial and intellectual, to support affiliate management, marketing, compliance and legal activities. (NASDAQ: BPFH)
For more information about BPFH, visit the Company’s website at www.bostonprivate.com.
Forward-Looking Statements
Certain
statements in this press release that are not historical facts may
constitute forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and are intended to be
covered by the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve risks
and uncertainties. These statements include, among others, statements
regarding our strategy, evaluations of future interest rate trends and
liquidity, prospects for growth in assets, and prospects for overall
results over the long term. You should not place undue reliance on our
forward-looking statements. You should exercise caution in interpreting
and relying on forward-looking statements because they are subject to
significant risks, uncertainties and other factors which are, in some
cases, beyond the Company’s control. Forward-looking statements are
based on the current assumptions and beliefs of management and are only
expectations of future results. The Company’s actual results could
differ materially from those projected in the forward-looking statements
as a result of, among other factors, adverse conditions in the capital
and debt markets and the impact of such conditions on the Company’s
private banking, investment management, wealth advisory, and trust
activities; changes in interest rates; competitive pressures from other
financial institutions; the effects of weakness in general economic
conditions on a national basis or in the local markets in which the
Company operates; changes in loan defaults and charge-off rates; changes
in the value of securities and other assets, adequacy of loan loss
reserves, or decreases in deposit levels necessitating increased
borrowing to fund loans and investments; operational risks including,
but not limited to, cybersecurity, fraud and natural disasters; changes
in government regulation; the risk that goodwill and intangibles
recorded in the Company’s financial statements will become impaired; the
risk that the Company’s deferred tax asset may not be realized; risks
related to the identification and implementation of acquisitions,
dispositions and restructurings; changes in assumptions used in making
such forward-looking statements; and the other risks and uncertainties
detailed in the Company’s Annual Report on Form 10-K and updated by the
Company’s Quarterly Reports on Form 10-Q and other filings submitted to
the Securities and Exchange Commission. Forward-looking statements speak
only as of the date on which they are made. The Company does not
undertake any obligation to update any forward-looking statement to
reflect circumstances or events that occur after the date the
forward-looking statement is made.
Note to Editors:
Boston Private
Financial Holdings, Inc. is not to be confused with Boston Private Bank
& Trust Company. Boston Private Bank & Trust Company is a wholly-owned
subsidiary of BPFH. The information reported in this press release is
related to the performance and results of BPFH.
Boston Private Financial Holdings, Inc. | ||||||||||||||||||||
| September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | ||||||||||||||||
| (In thousands, except share and per share data) | ||||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 92,634 | $ | 364,539 | $ | 77,085 | $ | 120,541 | $ | 110,440 | ||||||||||
| Investment securities available-for-sale | 1,063,340 | 1,076,967 | 1,118,497 | 1,170,328 | 1,189,827 | |||||||||||||||
| Investment securities held-to-maturity | 75,468 | 78,955 | 70,809 | 74,576 | 84,090 | |||||||||||||||
| Stock in Federal Home Loan Bank and Federal Reserve Bank | 48,727 | 70,127 | 54,455 | 59,973 | 61,714 | |||||||||||||||
| Loans held for sale | 3,344 | 4,622 | 3,918 | 4,697 | 1,957 | |||||||||||||||
| Total loans | 6,720,420 | 6,767,123 | 6,602,327 | 6,505,028 | 6,413,201 | |||||||||||||||
| Less: Allowance for loan losses | 73,500 | 73,464 | 72,898 | 74,742 | 74,873 | |||||||||||||||
Net loans | 6,646,920 | 6,693,659 | 6,529,429 | 6,430,286 | 6,338,328 | |||||||||||||||
| Other real estate owned (“OREO”) | 108 | 108 | — | — | — | |||||||||||||||
| Premises and equipment, net | 47,399 | 46,421 | 43,627 | 37,640 | 36,546 | |||||||||||||||
| Goodwill (1) | 75,598 | 75,598 | 75,598 | 75,598 | 142,554 | |||||||||||||||
| Intangible assets, net (1) | 13,834 | 14,584 | 15,334 | 16,083 | 22,447 | |||||||||||||||
| Fees receivable | 10,445 | 10,405 | 10,640 | 11,154 | 12,560 | |||||||||||||||
| Accrued interest receivable | 24,641 | 23,732 | 22,614 | 22,322 | 21,823 | |||||||||||||||
| Deferred income taxes, net | 27,833 | 26,316 | 32,058 | 29,031 | 46,088 | |||||||||||||||
| Other assets (1) | 245,549 | 230,170 | 264,295 | 259,515 | 201,024 | |||||||||||||||
| Total assets | $ | 8,375,840 | $ | 8,716,203 | $ | 8,318,359 | $ | 8,311,744 | $ | 8,269,398 | ||||||||||
| Liabilities: | ||||||||||||||||||||
| Deposits | $ | 6,768,723 | $ | 6,620,179 | $ | 6,584,322 | $ | 6,510,246 | $ | 6,262,347 | ||||||||||
| Securities sold under agreements to repurchase | 39,453 | 58,824 | 85,257 | 32,169 | 59,903 | |||||||||||||||
| Federal funds purchased | 120,000 | — | — | 30,000 | 70,000 | |||||||||||||||
| Federal Home Loan Bank borrowings | 441,836 | 1,056,938 | 611,588 | 693,681 | 812,773 | |||||||||||||||
| Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 106,363 | 106,363 | |||||||||||||||
| Other liabilities (1) | 149,770 | 129,175 | 125,004 | 135,880 | 127,069 | |||||||||||||||
| Total liabilities | 7,626,145 | 7,971,479 | 7,512,534 | 7,508,339 | 7,438,455 | |||||||||||||||
| Redeemable noncontrolling interests (“RNCI”) | 11,686 | 10,747 | 16,322 | 17,461 | 15,882 | |||||||||||||||
| Shareholders’ equity: | ||||||||||||||||||||
| Preferred stock, $1.00 par value; authorized: 2,000,000 shares | — | — | 47,753 | 47,753 | 47,753 | |||||||||||||||
| Common stock, $1.00 par value; authorized: 170,000,000 shares | 84,603 | 84,479 | 84,194 | 84,208 | 84,082 | |||||||||||||||
| Additional paid-in capital | 614,157 | 613,918 | 612,526 | 607,929 | 606,802 | |||||||||||||||
| Retained earnings | 64,618 | 56,912 | 61,518 | 49,526 | 76,455 | |||||||||||||||
| Accumulated other comprehensive income/ (loss) | (27,578 | ) | (23,328 | ) | (21,313 | ) | (8,658 | ) | (4,823 | ) | ||||||||||
| Total Company’s shareholders’ equity | 735,800 | 731,981 | 784,678 | 780,758 | 810,269 | |||||||||||||||
| Noncontrolling interests | 2,209 | 1,996 | 4,825 | 5,186 | 4,792 | |||||||||||||||
| Total shareholders’ equity | 738,009 | 733,977 | 789,503 | 785,944 | 815,061 | |||||||||||||||
| Total liabilities, redeemable noncontrolling interests and shareholders’ equity | $ | 8,375,840 | $ | 8,716,203 | $ | 8,318,359 | $ | 8,311,744 | $ | 8,269,398 | ||||||||||
Boston Private Financial Holdings, Inc. | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | ||||||||||||||||
| Interest and dividend income: | (In thousands, except share and per share data) | |||||||||||||||||||
| Loans | $ | 68,254 | $ | 64,048 | $ | 60,929 | $ | 59,496 | $ | 58,096 | ||||||||||
| Taxable investment securities | 1,510 | 1,501 | 1,510 | 1,562 | 1,569 | |||||||||||||||
| Non-taxable investment securities | 1,779 | 1,752 | 1,730 | 1,697 | 1,664 | |||||||||||||||
| Mortgage-backed securities | 2,941 | 3,049 | 3,178 | 3,125 | 3,267 | |||||||||||||||
| Short-term investments and other | 1,617 | 1,205 | 1,009 | 978 | 916 | |||||||||||||||
| Total interest and dividend income | 76,101 | 71,555 | 68,356 | 66,858 | 65,512 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 11,487 | 8,365 | 6,524 | 6,048 | 5,356 | |||||||||||||||
| Federal Home Loan Bank borrowings | 3,877 | 4,447 | 3,344 | 2,626 | 2,657 | |||||||||||||||
| Junior subordinated debentures | 1,028 | 1,008 | 846 | 771 | 761 | |||||||||||||||
| Repurchase agreements and other short-term borrowings | 68 | 190 | 259 | 141 | 111 | |||||||||||||||
| Total interest expense | 16,460 | 14,010 | 10,973 | 9,586 | 8,885 | |||||||||||||||
| Net interest income | 59,641 | 57,545 | 57,383 | 57,272 | 56,627 | |||||||||||||||
| Provision/ (credit) for loan losses | (949 | ) | 453 | (1,795 | ) | (942 | ) | (432 | ) | |||||||||||
| Net interest income after provision/ (credit) for loan losses | 60,590 | 57,092 | 59,178 | 58,214 | 57,059 | |||||||||||||||
| Fees and other income: | ||||||||||||||||||||
| Investment management fees | 3,245 | 4,227 | 11,425 | 12,321 | 11,274 | |||||||||||||||
| Wealth advisory fees | 13,995 | 13,693 | 13,512 | 13,496 | 13,279 | |||||||||||||||
| Wealth management and trust fees | 11,510 | 11,169 | 12,151 | 11,756 | 11,619 | |||||||||||||||
| Other banking fee income | 2,775 | 2,745 | 2,273 | 2,531 | 2,726 | |||||||||||||||
| Gain on sale of loans, net | 67 | 63 | 74 | 85 | 169 | |||||||||||||||
| Total core fees and income | 31,592 | 31,897 | 39,435 | 40,189 | 39,067 | |||||||||||||||
| Gain/ (loss) on sale of investments, net | — | 7 | (24 | ) | (110 | ) | 230 | |||||||||||||
| Gain/ (loss) on sale of affiliates or offices | — | — | — | (1,264 | ) | — | ||||||||||||||
| Other | 722 | 191 | 332 | 360 | 970 | |||||||||||||||
| Total other income | 722 | 198 | 308 | (1,014 | ) | 1,200 | ||||||||||||||
| Total revenue (2) | 91,955 | 89,640 | 97,126 | 96,447 | 96,894 | |||||||||||||||
| Operating expense: | ||||||||||||||||||||
| Salaries and employee benefits | 38,944 | 39,433 | 47,084 | 44,612 | 44,912 | |||||||||||||||
| Occupancy and equipment | 8,164 | 8,229 | 7,748 | 7,753 | 7,944 | |||||||||||||||
| Professional services | 2,877 | 2,872 | 3,177 | 4,035 | 3,308 | |||||||||||||||
| Marketing and business development | 1,710 | 2,070 | 1,593 | 1,919 | 2,216 | |||||||||||||||
| Information systems | 6,233 | 6,770 | 5,886 | 5,635 | 5,282 | |||||||||||||||
| Amortization of intangibles | 750 | 749 | 750 | 1,323 | 1,426 | |||||||||||||||
| Impairment of goodwill | — | — | — | 24,901 | — | |||||||||||||||
| FDIC insurance | 674 | 708 | 744 | 677 | 647 | |||||||||||||||
| Restructuring | 5,763 | — | — | — | — | |||||||||||||||
| Other | 3,442 | 3,553 | 3,875 | 3,134 | 3,611 | |||||||||||||||
| Total operating expense | 68,557 | 64,384 | 70,857 | 93,989 | 69,346 | |||||||||||||||
| Income before income taxes | 24,347 | 24,803 | 28,064 | 3,400 | 27,980 | |||||||||||||||
| Income tax expense | 5,461 | 17,399 | 6,026 | 21,391 | 8,289 | |||||||||||||||
| Net income/ (loss) from continuing operations | 18,886 | 7,404 | 22,038 | (17,991 | ) | 19,691 | ||||||||||||||
| Net income from discontinued operations (3) | — | (2 | ) | 1,698 | 989 | 1,186 | ||||||||||||||
| Net income/ (loss) before attribution to noncontrolling interests | 18,886 | 7,402 | 23,736 | (17,002 | ) | 20,877 | ||||||||||||||
| Less: Net income attributable to noncontrolling interests | 924 | 968 | 1,050 | 1,278 | 1,074 | |||||||||||||||
| Net income/ (loss) attributable to the Company | $ | 17,962 | $ | 6,434 | $ | 22,686 | $ | (18,280 | ) | $ | 19,803 | |||||||||
Boston Private Financial Holdings, Inc. | ||||||||
| Nine Months Ended | ||||||||
| September 30, 2018 | September 30, 2017 | |||||||
| Interest and dividend income: | (In thousands, except share and per share data) | |||||||
| Loans | $ | 193,231 | $ | 169,468 | ||||
| Taxable investment securities | 4,521 | 4,831 | ||||||
| Non-taxable investment securities | 5,261 | 4,925 | ||||||
| Mortgage-backed securities | 9,168 | 10,266 | ||||||
| Short-term investments and other | 3,831 | 2,347 | ||||||
| Total interest and dividend income | 216,012 | 191,837 | ||||||
| Interest expense: | ||||||||
| Deposits | 26,376 | 14,836 | ||||||
| Federal Home Loan Bank borrowings | 11,668 | 7,257 | ||||||
| Junior subordinated debentures | 2,882 | 2,148 | ||||||
| Repurchase agreements and other short-term borrowings | 517 | 182 | ||||||
| Total interest expense | 41,443 | 24,423 | ||||||
| Net interest income | 174,569 | 167,414 | ||||||
| Provision/ (credit) for loan losses | (2,291 | ) | (6,727 | ) | ||||
| Net interest income after provision/ (credit) for loan losses | 176,860 | 174,141 | ||||||
| Fees and other income: | ||||||||
| Investment management fees | 18,897 | 33,194 | ||||||
| Wealth advisory fees | 41,200 | 39,063 | ||||||
| Wealth management and trust fees | 34,830 | 33,606 | ||||||
| Other banking fee income | 7,793 | 6,384 | ||||||
| Gain on sale of loans, net | 204 | 366 | ||||||
| Total core fees and income | 102,924 | 112,613 | ||||||
| Gain/ (loss) on sale of investments, net | (17 | ) | 486 | |||||
| Gain/ (loss) on OREO, net | — | (46 | ) | |||||
| Other | 1,245 | 1,738 | ||||||
| Total other income | 1,228 | 2,178 | ||||||
| Total revenue (2) | 278,721 | 282,205 | ||||||
| Operating expense: | ||||||||
| Salaries and employee benefits | 125,461 | 133,889 | ||||||
| Occupancy and equipment | 24,141 | 22,412 | ||||||
| Professional services | 8,926 | 9,728 | ||||||
| Marketing and business development | 5,373 | 5,847 | ||||||
| Information systems | 18,889 | 16,161 | ||||||
| Amortization of intangibles | 2,249 | 4,278 | ||||||
| FDIC insurance | 2,126 | 2,292 | ||||||
| Restructuring | 5,763 | — | ||||||
| Other | 10,870 | 11,340 | ||||||
| Total operating expense | 203,798 | 205,947 | ||||||
| Income before income taxes | 77,214 | 82,985 | ||||||
| Income tax expense | 28,886 | 24,805 | ||||||
| Net income from continuing operations | 48,328 | 58,180 | ||||||
| Net income from discontinued operations (3) | 1,696 | 3,881 | ||||||
| Net income before attribution to noncontrolling interests | 50,024 | 62,061 | ||||||
| Less: Net income attributable to noncontrolling interests | 2,942 | 3,190 | ||||||
| Net income attributable to the Company | $ | 47,082 | $ | 58,871 | ||||
Boston Private Financial Holdings, Inc. | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| PER SHARE DATA: | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | |||||||||||||||
| (In thousands, except share and per share data) | ||||||||||||||||||||
| Calculation of income for EPS: | ||||||||||||||||||||
| Net income/ (loss) attributable to the Company | $ | 17,962 | $ | 6,434 | $ | 22,686 | $ | (18,280 | ) | $ | 19,803 | |||||||||
| Adjustments to Net income/ (loss) attributable to the Company to arrive at Net income/ (loss) attributable to common shareholders, treasury stock method (4) | (829 | ) | (3,524 | ) | (23 | ) | (1,998 | ) | (1,146 | ) | ||||||||||
| Net income/ (loss) attributable to the common shareholders, treasury stock method | $ | 17,133 | $ | 2,910 | $ | 22,663 | $ | (20,278 | ) | $ | 18,657 | |||||||||
| End of period common shares outstanding | 84,602,519 | 84,478,858 | 84,194,267 | 84,208,538 | 84,082,250 | |||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Weighted average basic shares outstanding | 84,017,284 | 83,509,115 | 83,097,758 | 82,904,776 | 82,556,225 | |||||||||||||||
| Weighted average diluted shares outstanding (5) | 85,498,568 | 85,413,575 | 85,271,650 | 82,904,776 | 84,888,311 | |||||||||||||||
| Diluted total earnings/ (loss) per share | $ | 0.20 | $ | 0.03 | $ | 0.27 | $ | (0.24 | ) | $ | 0.22 | |||||||||
| Nine Months Ended | ||||||||
| PER SHARE DATA: | September 30, 2018 | September 30, 2017 | ||||||
(In thousands, except share | ||||||||
| Calculation of income for EPS: | ||||||||
| Net income attributable to the Company | $ | 47,082 | $ | 58,871 | ||||
| Adjustments to Net income attributable to the Company to arrive at Net income attributable to common shareholders, treasury stock method (4) | (4,376 | ) | (2,889 | ) | ||||
| Net income attributable to the common shareholders, treasury stock method | $ | 42,706 | $ | 55,982 | ||||
| Weighted average shares outstanding: | ||||||||
| Weighted average basic shares outstanding | 83,544,754 | 82,270,849 | ||||||
| Weighted average diluted shares outstanding (5) | 85,254,295 | 84,741,172 | ||||||
| Diluted total earnings per share | $ | 0.50 | $ | 0.66 | ||||
Boston Private Financial Holdings, Inc. | ||||||||||||||||||||
| (In thousands, except per share data) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | |||||||||||||||
| FINANCIAL DATA: | ||||||||||||||||||||
| Book value per common share | $ | 8.72 | $ | 8.69 | $ | 8.81 | $ | 8.77 | $ | 9.13 | ||||||||||
| Tangible book value per share (6) | $ | 7.67 | $ | 7.62 | $ | 7.17 | $ | 7.12 | $ | 7.16 | ||||||||||
| Market price per share | $ | 13.65 | $ | 15.90 | $ | 15.05 | $ | 15.45 | $ | 16.55 | ||||||||||
| ASSETS UNDER MANAGEMENT AND ADVISORY: | ||||||||||||||||||||
| Wealth Management and Trust | $ | 8,335,000 | $ | 7,789,000 | $ | 7,831,000 | $ | 7,865,000 | $ | 7,703,000 | ||||||||||
| Investment Management (7) | 2,125,000 | 2,031,000 | 1,920,000 | 2,004,000 | 1,902,000 | |||||||||||||||
| Wealth Advisory | 11,977,000 | 11,566,000 | 11,446,000 | 11,350,000 | 10,992,000 | |||||||||||||||
| Less: Inter-company relationship | (7,000 | ) | (7,000 | ) | (11,000 | ) | (11,000 | ) | (11,000 | ) | ||||||||||
| Total assets under management and advisory, excluding Anchor (7) | $ | 22,430,000 | $ | 21,379,000 | $ | 21,186,000 | $ | 21,208,000 | $ | 20,586,000 | ||||||||||
| Assets under management and advisory at Anchor through March 31, 2018 | — | — | 9,042,000 | 9,277,000 | 9,181,000 | |||||||||||||||
| Total assets under management and advisory, including Anchor through March 31, 2018 | $ | 22,430,000 | $ | 21,379,000 | $ | 30,228,000 | $ | 30,485,000 | $ | 29,767,000 | ||||||||||
| FINANCIAL RATIOS: | ||||||||||||||||||||
| Total equity/ Total assets | 8.81 | % | 8.42 | % | 9.49 | % | 9.46 | % | 9.86 | % | ||||||||||
| Tangible common equity/ Tangible assets (6) | 7.83 | % | 7.46 | % | 7.38 | % | 7.33 | % | 7.43 | % | ||||||||||
| Tier 1 common equity/ Risk weighted assets (6) | 11.14 | % | 10.90 | % | 10.39 | % | 10.32 | % | 10.42 | % | ||||||||||
| Allowance for loan losses/ Total loans | 1.09 | % | 1.09 | % | 1.10 | % | 1.15 | % | 1.17 | % | ||||||||||
| Allowance for loan losses/ Nonaccrual loans | 608 | % | 469 | % | 445 | % | 523 | % | 550 | % | ||||||||||
| Return on average assets - three months ended (annualized) | 0.84 | % | 0.31 | % | 1.11 | % | (0.88 | )% | 0.96 | % | ||||||||||
| Return on average common equity - three months ended (annualized) (8) | 9.67 | % | 3.03 | % | 12.02 | % | (9.92 | )% | 9.87 | % | ||||||||||
| Return on average tangible common equity - three months ended (annualized) (8) | 11.37 | % | 3.90 | % | 15.20 | % | (11.94 | )% | 13.24 | % | ||||||||||
| Efficiency ratio - three months ended (9) | 67.04 | % | 70.29 | % | 71.46 | % | 68.23 | % | 68.06 | % | ||||||||||
| DEPOSIT DETAIL: | ||||||||||||||||||||
| Demand deposits (noninterest-bearing) | $ | 2,001,275 | $ | 2,089,373 | $ | 1,932,732 | $ | 2,025,690 | $ | 1,850,833 | ||||||||||
| NOW | 568,148 | 635,841 | 689,526 | 645,361 | 636,013 | |||||||||||||||
| Savings | 72,967 | 73,675 | 73,580 | 70,935 | 74,333 | |||||||||||||||
| Money market | 3,363,062 | 3,128,211 | 3,177,692 | 3,121,811 | 3,009,779 | |||||||||||||||
| Certificates of deposit | 763,271 | 693,079 | 710,792 | 646,449 | 691,389 | |||||||||||||||
| Total deposits | $ | 6,768,723 | $ | 6,620,179 | $ | 6,584,322 | $ | 6,510,246 | $ | 6,262,347 | ||||||||||
Boston Private Financial Holdings, Inc. | |||||||||||||||||||||||||||||||||
| Average Balance | Interest Income/Expense | Average Yield/Rate | |||||||||||||||||||||||||||||||
| (In thousands) | Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
| AVERAGE BALANCE SHEET: | 09/30/18 | 06/30/18 | 09/30/17 | 09/30/18 | 06/30/18 | 09/30/17 | 09/30/18 | 06/30/18 | 09/30/17 | ||||||||||||||||||||||||
| AVERAGE ASSETS | |||||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||
| Cash and investments: | |||||||||||||||||||||||||||||||||
| Taxable investment securities | $ | 324,583 | $ | 326,482 | $ | 353,374 | $ | 1,510 | $ | 1,501 | $ | 1,569 | 1.86 | % | 1.84 | % | 1.77 | % | |||||||||||||||
| Non-taxable investment securities (10) | 297,710 | 297,852 | 295,727 | 2,256 | 2,217 | 2,559 | 3.03 | % | 2.98 | % | 3.46 | % | |||||||||||||||||||||
| Mortgage-backed securities | 552,820 | 570,845 | 631,052 | 2,941 | 3,049 | 3,267 | 2.13 | % | 2.14 | % | 2.07 | % | |||||||||||||||||||||
| Short-term investments and other | 204,814 | 157,878 | 146,285 | 1,617 | 1,205 | 916 | 3.11 | % | 3.03 | % | 2.47 | % | |||||||||||||||||||||
| Total cash and investments | 1,379,927 | 1,353,057 | 1,426,438 | 8,324 | 7,972 | 8,311 | 2.41 | % | 2.35 | % | 2.33 | % | |||||||||||||||||||||
| Loans (11): | |||||||||||||||||||||||||||||||||
| Commercial and industrial (10) | 998,817 | 974,443 | 994,388 | 9,940 | 9,439 | 10,001 | 3.89 | % | 3.83 | % | 3.94 | % | |||||||||||||||||||||
| Commercial real estate (10) | 2,475,143 | 2,477,634 | 2,381,583 | 29,547 | 27,550 | 25,579 | 4.67 | % | 4.40 | % | 4.20 | % | |||||||||||||||||||||
| Construction and land (10) | 179,248 | 166,736 | 113,562 | 2,196 | 2,040 | 1,415 | 4.80 | % | 4.84 | % | 4.88 | % | |||||||||||||||||||||
| Residential | 2,836,593 | 2,775,239 | 2,567,044 | 23,907 | 22,590 | 20,423 | 3.37 | % | 3.26 | % | 3.18 | % | |||||||||||||||||||||
| Home equity | 94,050 | 94,445 | 106,744 | 1,089 | 1,041 | 1,128 | 4.59 | % | 4.42 | % | 4.19 | % | |||||||||||||||||||||
| Other consumer | 163,224 | 179,684 | 187,184 | 1,689 | 1,818 | 1,554 | 4.11 | % | 4.06 | % | 3.29 | % | |||||||||||||||||||||
| Total loans | 6,747,075 | 6,668,181 | 6,350,505 | 68,368 | 64,478 | 60,100 | 4.00 | % | 3.84 | % | 3.73 | % | |||||||||||||||||||||
| Total earning assets | 8,127,002 | 8,021,238 | 7,776,943 | 76,692 | 72,450 | 68,411 | 3.73 | % | 3.59 | % | 3.48 | % | |||||||||||||||||||||
| LESS: Allowance for loan losses | 73,861 | 72,998 | 75,166 | ||||||||||||||||||||||||||||||
| Cash and due from banks (non-interest bearing) | 46,056 | 45,337 | 42,031 | ||||||||||||||||||||||||||||||
| Other assets | 392,757 | 396,744 | 455,820 | ||||||||||||||||||||||||||||||
| TOTAL AVERAGE ASSETS | $ | 8,491,954 | $ | 8,390,321 | $ | 8,199,628 | |||||||||||||||||||||||||||
| AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
| Interest-bearing deposits (12): | |||||||||||||||||||||||||||||||||
| Savings and NOW | $ | 693,419 | $ | 719,159 | $ | 702,182 | $ | 301 | $ | 304 | $ | 205 | 0.17 | % | 0.17 | % | 0.12 | % | |||||||||||||||
| Money market | 3,244,628 | 3,033,306 | 3,065,059 | 8,110 | 5,543 | 3,436 | 0.99 | % | 0.73 | % | 0.44 | % | |||||||||||||||||||||
| Certificates of deposit | 730,117 | 688,567 | 671,992 | 3,076 | 2,518 | 1,715 | 1.67 | % | 1.47 | % | 1.01 | % | |||||||||||||||||||||
| Total interest-bearing deposits (12) | 4,668,164 | 4,441,032 | 4,439,233 | 11,487 | 8,365 | 5,356 | 0.98 | % | 0.76 | % | 0.48 | % | |||||||||||||||||||||
| Junior subordinated debentures | 106,363 | 106,363 | 106,363 | 1,028 | 1,008 | 761 | 3.78 | % | 3.75 | % | 2.80 | % | |||||||||||||||||||||
| FHLB borrowings and other | 768,015 | 1,022,636 | 736,035 | 3,945 | 4,637 | 2,768 | 2.01 | % | 1.79 | % | 1.47 | % | |||||||||||||||||||||
| Total interest-bearing liabilities (12) | 5,542,542 | 5,570,031 | 5,281,631 | 16,460 | 14,010 | 8,885 | 1.17 | % | 1.00 | % | 0.66 | % | |||||||||||||||||||||
|
Non-interest bearing demand
deposits (12) | 2,063,642 | 1,908,037 | 1,966,479 | ||||||||||||||||||||||||||||||
| Payables and other liabilities | 135,508 | 122,175 | 121,288 | ||||||||||||||||||||||||||||||
| Total average liabilities | 7,741,692 | 7,600,243 | 7,369,398 | ||||||||||||||||||||||||||||||
| Redeemable noncontrolling interests | 13,074 | 14,129 | 21,634 | ||||||||||||||||||||||||||||||
| Average shareholders’ equity | 737,188 | 775,949 | 808,596 | ||||||||||||||||||||||||||||||
| TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | $ | 8,491,954 | $ | 8,390,321 | $ | 8,199,628 | |||||||||||||||||||||||||||
| Net interest income - on a fully taxable equivalent basis (FTE) | $ | 60,232 | $ | 58,440 | $ | 59,526 | |||||||||||||||||||||||||||
| LESS: FTE adjustment (10) | 591 | 895 | 2,899 | ||||||||||||||||||||||||||||||
| Net interest income (GAAP basis) | $ | 59,641 | $ | 57,545 | $ | 56,627 | |||||||||||||||||||||||||||
| Interest rate spread | 2.56 | % | 2.59 | % | 2.82 | % | |||||||||||||||||||||||||||
| Bank only net interest margin | 2.98 | % | 2.95 | % | 3.07 | % | |||||||||||||||||||||||||||
| Net interest margin | 2.93 | % | 2.89 | % | 3.02 | % | |||||||||||||||||||||||||||
| Average total deposits (12) | 6,731,806 | 6,349,069 | 6,405,712 | 0.68 | % | 0.53 | % | 0.33 | % | ||||||||||||||||||||||||
| Average total deposits and borrowings (12) | 7,606,184 | 7,478,068 | 7,248,110 | 0.86 | % | 0.75 | % | 0.48 | % | ||||||||||||||||||||||||
Boston Private Financial Holdings, Inc. | ||||||||||||||||||||||
| Average Balance | Interest Income/Expense | Average Yield/Rate | ||||||||||||||||||||
| (In thousands) | Nine Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||||||||
| AVERAGE BALANCE SHEET: | 09/30/18 | 09/30/17 | 09/30/18 | 09/30/17 | 09/30/18 | 09/30/17 | ||||||||||||||||
| AVERAGE ASSETS | ||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||
| Cash and investments: | ||||||||||||||||||||||
| Taxable investment securities | $ | 328,054 | $ | 369,929 | $ | 4,521 | $ | 4,831 | 1.84 | % | 1.74 | % | ||||||||||
| Non-taxable investment securities (10) | 297,509 | 295,195 | 6,663 | 7,576 | 2.99 | % | 3.42 | % | ||||||||||||||
| Mortgage-backed securities | 570,578 | 652,159 | 9,168 | 10,266 | 2.14 | % | 2.10 | % | ||||||||||||||
| Short-term investments and other | 174,736 | 169,114 | 3,831 | 2,347 | 2.91 | % | 1.55 | % | ||||||||||||||
| Total cash and investments | 1,370,877 | 1,486,397 | 24,183 | 25,020 | 2.35 | % | 2.21 | % | ||||||||||||||
| Loans (11): | ||||||||||||||||||||||
| Commercial and industrial (10) | 969,063 | 988,449 | 28,135 | 29,077 | 3.83 | % | 3.88 | % | ||||||||||||||
| Commercial real estate (10) | 2,464,788 | 2,354,996 | 83,438 | 75,556 | 4.46 | % | 4.23 | % | ||||||||||||||
| Construction and land (10) | 171,825 | 115,629 | 6,201 | 4,036 | 4.76 | % | 4.60 | % | ||||||||||||||
| Residential | 2,771,875 | 2,494,151 | 68,263 | 58,988 | 3.28 | % | 3.15 | % | ||||||||||||||
| Home equity | 95,217 | 111,423 | 3,172 | 3,302 | 4.45 | % | 3.96 | % | ||||||||||||||
| Other consumer | 176,086 | 191,550 | 5,080 | 4,500 | 3.86 | % | 3.14 | % | ||||||||||||||
| Total loans | 6,648,854 | 6,256,198 | 194,289 | 175,459 | 3.87 | % | 3.71 | % | ||||||||||||||
| Total earning assets | 8,019,731 | 7,742,595 | 218,472 | 200,479 | 3.61 | % | 3.43 | % | ||||||||||||||
| LESS: Allowance for loan losses | 73,894 | 77,957 | ||||||||||||||||||||
| Cash and due from banks (non-interest bearing) | 47,859 | 42,006 | ||||||||||||||||||||
| Other assets | 404,375 | 436,373 | ||||||||||||||||||||
| TOTAL AVERAGE ASSETS | $ | 8,398,071 | $ | 8,143,017 | ||||||||||||||||||
| AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||
| Interest-bearing deposits (12): | ||||||||||||||||||||||
| Savings and NOW | $ | 709,751 | $ | 688,885 | $ | 820 | $ | 521 | 0.15 | % | 0.10 | % | ||||||||||
| Money market | 3,139,107 | 3,149,545 | 17,967 | 9,801 | 0.77 | % | 0.42 | % | ||||||||||||||
| Certificates of deposit | 691,670 | 642,820 | 7,589 | 4,514 | 1.47 | % | 0.94 | % | ||||||||||||||
| Total interest-bearing deposits (12) | 4,540,528 | 4,481,250 | 26,376 | 14,836 | 0.78 | % | 0.44 | % | ||||||||||||||
| Junior subordinated debentures | 106,363 | 106,363 | 2,882 | 2,148 | 3.62 | % | 2.66 | % | ||||||||||||||
| FHLB borrowings and other | 889,178 | 722,087 | 12,185 | 7,439 | 1.81 | % | 1.36 | % | ||||||||||||||
| Total interest-bearing liabilities (12) | 5,536,069 | 5,309,700 | 41,443 | 24,423 | 1.00 | % | 0.61 | % | ||||||||||||||
|
Non-interest bearing demand deposits (12) | 1,948,573 | 1,903,709 | ||||||||||||||||||||
| Payables and other liabilities | 130,410 | 115,622 | ||||||||||||||||||||
| Total average liabilities | 7,615,052 | 7,329,031 | ||||||||||||||||||||
| Redeemable noncontrolling interests | 16,294 | 21,341 | ||||||||||||||||||||
| Average shareholders’ equity | 766,725 | 792,645 | ||||||||||||||||||||
| TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY | $ | 8,398,071 | $ | 8,143,017 | ||||||||||||||||||
| Net interest income - on a fully taxable equivalent basis (FTE) | $ | 177,029 | $ | 176,056 | ||||||||||||||||||
| LESS: FTE adjustment (10) | 2,460 | 8,642 | ||||||||||||||||||||
| Net interest income (GAAP basis) | $ | 174,569 | $ | 167,414 | ||||||||||||||||||
| Interest rate spread | 2.61 | % | 2.82 | % | ||||||||||||||||||
| Bank only net interest margin | 2.97 | % | 3.06 | % | ||||||||||||||||||
| Net interest margin | 2.92 | % | 3.01 | % | ||||||||||||||||||
| Average total deposits (12) | 6,489,101 | 6,384,959 | 0.54 | % | 0.31 | % | ||||||||||||||||
| Average total deposits and borrowings (12) | 7,484,642 | 7,213,409 | 0.74 | % | 0.45 | % | ||||||||||||||||
Boston Private Financial Holdings, Inc. | |||||||||||||||
| (In thousands) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | ||||||||||
| LOAN DATA (13): | |||||||||||||||
| Other commercial and industrial loans: | |||||||||||||||
| New England | $ | 460,409 | $ | 481,081 | $ | 444,419 | $ | 438,322 | $ | 503,322 | |||||
| San Francisco Bay Area | 41,256 | 35,220 | 23,491 | 23,311 | 50,686 | ||||||||||
| Southern California | 81,549 | 66,892 | 63,183 | 59,359 | 64,248 | ||||||||||
| Total other commercial and industrial loans | $ | 583,214 | $ | 583,193 | $ | 531,093 | $ | 520,992 | $ | 618,256 | |||||
| Commercial tax-exempt loans: | |||||||||||||||
| New England | $ | 330,753 | $ | 332,572 | $ | 313,955 | $ | 305,792 | $ | 320,172 | |||||
| San Francisco Bay Area | 96,775 | 94,959 | 95,380 | 101,340 | 99,540 | ||||||||||
| Southern California | 11,279 | 11,351 | 11,422 | 11,566 | 11,638 | ||||||||||
| Total commercial tax-exempt loans | $ | 438,807 | $ | 438,882 | $ | 420,757 | $ | 418,698 | $ | 431,350 | |||||
| Total commercial and industrial loans | $ | 1,022,021 | $ | 1,022,075 | $ | 951,850 | $ | 939,690 | $ | 1,049,606 | |||||
| Commercial real estate loans: | |||||||||||||||
| New England | $ | 1,043,494 | $ | 1,069,942 | $ | 1,046,178 | $ | 1,002,092 | $ | 988,788 | |||||
| San Francisco Bay Area | 724,243 | 739,769 | 721,871 | 725,454 | 698,148 | ||||||||||
| Southern California | 631,343 | 694,810 | 696,954 | 712,674 | 676,223 | ||||||||||
| Total commercial real estate loans | $ | 2,399,080 | $ | 2,504,521 | $ | 2,465,003 | $ | 2,440,220 | $ | 2,363,159 | |||||
| Construction and land loans: | |||||||||||||||
| New England | $ | 114,411 | $ | 88,068 | $ | 79,563 | $ | 86,874 | $ | 61,635 | |||||
| San Francisco Bay Area | 40,755 | 37,783 | 34,050 | 27,891 | 20,893 | ||||||||||
| Southern California | 42,358 | 46,173 | 51,627 | 50,225 | 35,763 | ||||||||||
| Total construction and land loans | $ | 197,524 | $ | 172,024 | $ | 165,240 | $ | 164,990 | $ | 118,291 | |||||
| Residential loans: | |||||||||||||||
| New England | $ | 1,650,989 | $ | 1,643,039 | $ | 1,619,856 | $ | 1,598,072 | $ | 1,558,587 | |||||
| San Francisco Bay Area | 554,502 | 533,394 | 511,903 | 512,189 | 510,956 | ||||||||||
| Southern California | 657,388 | 631,773 | 605,610 | 572,272 | 531,245 | ||||||||||
| Total residential loans | $ | 2,862,879 | $ | 2,808,206 | $ | 2,737,369 | $ | 2,682,533 | $ | 2,600,788 | |||||
| Home equity loans: | |||||||||||||||
| New England | $ | 61,291 | $ | 61,125 | $ | 65,434 | $ | 67,435 | $ | 72,149 | |||||
| San Francisco Bay Area | 19,769 | 17,366 | 19,314 | 22,462 | 26,052 | ||||||||||
| Southern California | 12,330 | 13,310 | 9,583 | 10,061 | 9,026 | ||||||||||
| Total home equity loans | $ | 93,390 | $ | 91,801 | $ | 94,331 | $ | 99,958 | $ | 107,227 | |||||
| Other consumer loans: | |||||||||||||||
| New England | $ | 121,685 | $ | 145,726 | $ | 166,413 | $ | 149,022 | $ | 150,309 | |||||
| San Francisco Bay Area | 14,228 | 14,659 | 13,569 | 14,707 | 15,302 | ||||||||||
| Southern California | 9,613 | 8,111 | 8,552 | 13,908 | 8,519 | ||||||||||
| Total other consumer loans | $ | 145,526 | $ | 168,496 | $ | 188,534 | $ | 177,637 | $ | 174,130 | |||||
| Total loans: | |||||||||||||||
| New England | $ | 3,783,032 | $ | 3,821,553 | $ | 3,735,818 | $ | 3,647,609 | $ | 3,654,962 | |||||
| San Francisco Bay Area | 1,491,528 | 1,473,150 | 1,419,578 | 1,427,354 | 1,421,577 | ||||||||||
| Southern California | 1,445,860 | 1,472,420 | 1,446,931 | 1,430,065 | 1,336,662 | ||||||||||
| Total loans | $ | 6,720,420 | $ | 6,767,123 | $ | 6,602,327 | $ | 6,505,028 | $ | 6,413,201 | |||||
Boston Private Financial Holdings, Inc. | ||||||||||||||||||||
| (In thousands) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | |||||||||||||||
| CREDIT QUALITY (13): | ||||||||||||||||||||
| Special mention loans: | ||||||||||||||||||||
| New England | $ | 20,382 | $ | 18,515 | $ | 33,282 | $ | 45,640 | $ | 37,569 | ||||||||||
| San Francisco Bay Area | 18,359 | 19,255 | 14,117 | 23,400 | 23,898 | |||||||||||||||
| Southern California | 28,665 | 15,678 | 15,689 | 18,134 | 17,207 | |||||||||||||||
| Total special mention loans | $ | 67,406 | $ | 53,448 | $ | 63,088 | $ | 87,174 | $ | 78,674 | ||||||||||
| Accruing substandard loans (14): | ||||||||||||||||||||
| New England | $ | 10,083 | $ | 11,493 | $ | 8,767 | $ | 10,911 | $ | 8,196 | ||||||||||
| San Francisco Bay Area | 24,252 | 12,766 | 14,970 | 11,615 | 11,622 | |||||||||||||||
| Southern California | 21,045 | 21,194 | 21,436 | 30,826 | 33,923 | |||||||||||||||
| Total accruing substandard loans | $ | 55,380 | $ | 45,453 | $ | 45,173 | $ | 53,352 | $ | 53,741 | ||||||||||
| Nonaccruing loans: | ||||||||||||||||||||
| New England | $ | 5,131 | $ | 7,282 | $ | 8,056 | $ | 6,061 | $ | 7,380 | ||||||||||
| San Francisco Bay Area | 1,169 | 1,319 | 1,442 | 1,473 | 1,494 | |||||||||||||||
| Southern California | 5,797 | 7,050 | 6,882 | 6,761 | 4,749 | |||||||||||||||
| Total nonaccruing loans | $ | 12,097 | $ | 15,651 | $ | 16,380 | $ | 14,295 | $ | 13,623 | ||||||||||
| Loans 30-89 days past due and accruing: | ||||||||||||||||||||
| New England | $ | 9,193 | $ | 4,653 | $ | 10,571 | $ | 19,725 | $ | 4,664 | ||||||||||
| San Francisco Bay Area | 1,651 | — | 2,251 | 1,911 | 430 | |||||||||||||||
| Southern California | 763 | 324 | 7,554 | 3,412 | 198 | |||||||||||||||
| Total loans 30-89 days past due and accruing | $ | 11,607 | $ | 4,977 | $ | 20,376 | $ | 25,048 | $ | 5,292 | ||||||||||
| Loans (charged-off)/ recovered, net for the three months ended: | ||||||||||||||||||||
| New England | $ | 232 | $ | (73 | ) | $ | (285 | ) | $ | 1,020 | $ | 73 | ||||||||
| San Francisco Bay Area | 706 | 91 | 67 | 64 | 206 | |||||||||||||||
| Southern California | 47 | 95 | 169 | (273 | ) | 17 | ||||||||||||||
| Total net loans (charged-off)/ recovered | $ | 985 | $ | 113 | $ | (49 | ) | $ | 811 | $ | 296 | |||||||||
| Loans (charged-off)/ recovered, net for the nine months ended: | ||||||||||||||||||||
| New England | $ | (126 | ) | $ | 819 | |||||||||||||||
| San Francisco Bay Area | 864 | 3,097 | ||||||||||||||||||
| Southern California | 311 | (393 | ) | |||||||||||||||||
| Total Net Loans (Charged-off)/ Recovered | $ | 1,049 | $ | 3,523 | ||||||||||||||||
Boston Private Financial Holdings, Inc. | ||
Selected Financial Data | ||
(Unaudited) | ||
FOOTNOTES: | ||
| (1) | On December 20, 2017, Boston Private Financial Holdings, Inc. (the “Company”) announced an agreement, effective December 19, 2017, to sell all of its current equity interest in Anchor Capital Advisors LLC, an indirect, majority-owned subsidiary of the Company (“Anchor”), to the management team of Anchor for an upfront cash payment and a non-voting, revenue share participation interest in Anchor. On April 13, 2018, the Company completed the sale of its ownership interest in Anchor. Anchor’s results remain consolidated in the Company’s results during current and prior periods through the closing date. For presentation purposes, Anchor’s AUM are excluded from current and prior period AUM amounts, but are included in the calculation of Core Fees and Income. The Company classified the assets and liabilities of Anchor as held for sale at March 31, 2018 and December 31, 2017, which are included with Other assets and Other liabilities, respectively, on the Company’s consolidated balance sheet. For regulatory purposes, the goodwill and intangible assets of Anchor will be included in consolidated calculations. See footnotes 6 and 8, below. | |
| (2) | Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. | |
| (3) | Net income from discontinued operations consists of contingent payments net of expenses related to our divested affiliate, Westfield Capital Management Company, LLC. The Company received its final contingent payment in the first quarter of 2018 related to this affiliate. | |
| (4) | Adjustments to Net income attributable to the Company to arrive at Net income attributable to the common shareholders, as presented in these tables, include decrease/ (increase) in Noncontrolling interests redemption value and dividends paid on preferred stock, including deemed dividends on redemption of the 6.95% Non-Cumulative Perpetual Preferred Stock, Series D (“the Series D preferred stock”). On June 15, 2018, the Company redeemed all $50 million of the outstanding Series D preferred stock. | |
| (5) | When the Company has positive Net income from continuing operations attributable to the common shareholders, the Company adds additional shares to basic Weighted average shares outstanding to arrive at Weighted average diluted shares outstanding for the Diluted earnings/ (loss) per share calculation. These additional shares reflect the assumed exercise, conversion, or contingent issuance of dilutive securities. If the additional shares would result in anti-dilution they would be excluded from the diluted earnings per share calculation. The potential dilutive shares relate to: unexercised stock options, unvested restricted stock, and unexercised stock warrants. See Part II. Item 8. “Financial Statements and Supplementary Data - Note 16: Earnings Per Share” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 for additional information. | |
| (6) | The Company uses certain non-GAAP financial measures, such as: Tangible book value per share and the Tangible common equity (“TCE”) to Tangible assets (“TA”) ratio to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. | |
| Reconciliations from the Company’s GAAP Total equity to Total assets ratio to the Non-GAAP TCE to TA ratio, and from GAAP Book value to Non-GAAP Tangible book value are presented below: | ||
| The Company calculates Tangible assets by adjusting Total assets to exclude Goodwill and intangible assets. | ||
| The Company calculates Tangible common equity by adjusting Total equity to exclude non-convertible Series D preferred stock and exclude Goodwill and intangible assets, net. On June 15, 2018, the Company redeemed all $50 million of the outstanding Series D preferred stock | ||
| (In thousands, except share and per share data) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | |||||||||||||||
| Total balance sheet assets | $ | 8,375,840 | $ | 8,716,203 | $ | 8,318,359 | $ | 8,311,744 | $ | 8,269,398 | ||||||||||
| LESS: Goodwill and intangible assets, net * | (89,432 | ) | (90,182 | ) | (138,026 | ) | (138,775 | ) | (165,001 | ) | ||||||||||
| Tangible assets (non-GAAP) | $ | 8,286,408 | $ | 8,626,021 | $ | 8,180,333 | $ | 8,172,969 | $ | 8,104,397 | ||||||||||
| Total shareholders’ equity | $ | 738,009 | $ | 733,977 | $ | 789,503 | $ | 785,944 | $ | 815,061 | ||||||||||
| LESS: Series D preferred stock (non-convertible) | — | — | (47,753 | ) | (47,753 | ) | (47,753 | ) | ||||||||||||
| LESS: Goodwill and intangible assets, net * | (89,432 | ) | (90,182 | ) | (138,026 | ) | (138,775 | ) | (165,001 | ) | ||||||||||
| Total adjusting items | (89,432 | ) | (90,182 | ) | (185,779 | ) | (186,528 | ) | (212,754 | ) | ||||||||||
| Tangible common equity (non-GAAP) | $ | 648,577 | $ | 643,795 | $ | 603,724 | $ | 599,416 | $ | 602,307 | ||||||||||
| Total equity/ Total assets | 8.81 | % | 8.42 | % | 9.49 | % | 9.46 | % | 9.86 | % | ||||||||||
| Tangible common equity/ Tangible assets (non-GAAP) | 7.83 | % | 7.46 | % | 7.38 | % | 7.33 | % | 7.43 | % | ||||||||||
| Total risk weighted assets ** | $ | 6,057,099 | $ | 6,104,586 | $ | 5,974,866 | $ | 5,892,286 | $ | 5,831,558 | ||||||||||
| Tier 1 common equity ** | $ | 674,641 | $ | 665,628 | $ | 621,084 | $ | 607,800 | $ | 607,822 | ||||||||||
| Tier 1 common equity/ Risk weighted assets ** | 11.14 | % | 10.90 | % | 10.39 | % | 10.32 | % | 10.42 | % | ||||||||||
| End of period shares outstanding | 84,602,519 | 84,478,858 | 84,194,267 | 84,208,538 | 84,082,250 | |||||||||||||||
| Book value per common share | $ | 8.72 | $ | 8.69 | $ | 8.81 | $ | 8.77 | $ | 9.13 | ||||||||||
| Tangible book value per share (non-GAAP) | $ | 7.67 | $ | 7.62 | $ | 7.17 | $ | 7.12 | $ | 7.16 | ||||||||||
* Includes goodwill and intangible assets at affiliates held for
sale at March 31, 2018 and December 31, 2017. | ||||||||||||||||||||
Boston Private Financial Holdings, Inc. | ||
Selected Financial Data | ||
(Unaudited) | ||
| (7) | Assets under management and advisory have been reduced to exclude those assets managed or advised by Anchor for periods when Anchor was owned by the Company. | |
| (8) | The Company uses certain non-GAAP financial measures, such as: Return on average common equity and Return on average tangible common equity to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. | |
| Reconciliations from the Company’s GAAP Return on average equity ratio to the non-GAAP Return on average common equity ratio, and the non-GAAP Return on average tangible common equity ratio are presented below: | ||
| The Company annualizes income data based on the number of days in the period presented and a 365 day year. The Company calculates Average common equity by adjusting Average equity to exclude Average preferred equity. The Company calculates Average tangible common equity by adjusting Average equity to exclude Average goodwill and intangible assets, net and Average preferred equity. | ||
| Three Months Ended | ||||||||||||||||||||
| (In thousands) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | |||||||||||||||
| Total average shareholders’ equity | $ | 737,188 | $ | 775,949 | $ | 784,025 | $ | 813,518 | $ | 808,596 | ||||||||||
| LESS: Average Series D preferred stock (non-convertible) | — | (39,881 | ) | (47,753 | ) | (47,753 | ) | (47,753 | ) | |||||||||||
| Average common equity (non-GAAP) | 737,188 | 736,068 | 736,272 | 765,765 | 760,843 | |||||||||||||||
| LESS: Average goodwill and intangible assets, net * | (89,830 | ) | (102,533 | ) | (138,451 | ) | (157,978 | ) | (165,766 | ) | ||||||||||
| Average tangible common equity (non-GAAP) | $ | 647,358 | $ | 633,535 | $ | 597,821 | $ | 607,787 | $ | 595,077 | ||||||||||
| Net income/ (loss) attributable to the Company | $ | 17,962 | $ | 6,434 | $ | 22,686 | $ | (18,280 | ) | $ | 19,803 | |||||||||
| LESS: Dividends on Series D preferred stock | — | (869 | ) | (869 | ) | (869 | ) | (868 | ) | |||||||||||
| Common net income/ (loss) (non-GAAP) | 17,962 | 5,565 | 21,817 | (19,149 | ) | 18,935 | ||||||||||||||
| ADD: Amortization of intangibles, net of tax (35% in 2017, 21% in 2018) | 593 | 592 | 593 | 860 | 927 | |||||||||||||||
| Tangible common net income/ (loss) (non-GAAP) | $ | 18,555 | $ | 6,157 | $ | 22,410 | $ | (18,289 | ) | $ | 19,862 | |||||||||
| Return on average equity - (annualized) | 9.67 | % | 3.33 | % | 11.73 | % | (8.91 | )% | 9.72 | % | ||||||||||
| Return on average common equity - (annualized) (non-GAAP) | 9.67 | % | 3.03 | % | 12.02 | % | (9.92 | )% | 9.87 | % | ||||||||||
| Return on average tangible common equity - (annualized) (non-GAAP) | 11.37 | % | 3.90 | % | 15.20 | % | (11.94 | )% | 13.24 | % | ||||||||||
| Nine Months Ended | ||||||||
| (In thousands) | September 30, 2018 | September 30, 2017 | ||||||
| Total average shareholders’ equity | $ | 766,725 | $ | 792,645 | ||||
| LESS: Average Series D preferred stock (non-convertible) | (29,037 | ) | (47,753 | ) | ||||
| Average common equity (non-GAAP) | 737,688 | 744,892 | ||||||
| LESS: Average goodwill and intangible assets, net * | (109,324 | ) | (167,209 | ) | ||||
| Average tangible common equity (non-GAAP) | $ | 628,364 | $ | 577,683 | ||||
| Net income/ (loss) attributable to the Company | $ | 47,082 | $ | 58,871 | ||||
| LESS: Dividends on Series D preferred stock | (1,738 | ) | (2,606 | ) | ||||
| Common net income/ (loss) (non-GAAP) | 45,344 | 56,265 | ||||||
| ADD: Amortization of intangibles, net of tax (35% in 2017, 21% in 2018) | 1,777 | 2,781 | ||||||
| Tangible common net income/ (loss) (non-GAAP) | $ | 47,121 | $ | 59,046 | ||||
| Return on average equity - (annualized) | 8.21 | % | 9.93 | % | ||||
| Return on average common equity - (annualized) (non-GAAP) | 8.22 | % | 10.10 | % | ||||
| Return on average tangible common equity - (annualized) (non-GAAP) | 10.03 | % | 13.67 | % | ||||
* Includes goodwill and intangible assets at affiliates held for sale at March 31, 2018 and December 31, 2017. | ||||||||
| (9) | The Company uses certain non-GAAP financial measures, such as: Pre-tax, pre-provision income, Total operating expenses excluding amortization of intangibles, goodwill impairment, and restructuring expense, if any, and the Efficiency ratio to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. | |
| Reconciliations from the Company’s GAAP Income from continuing operations before income taxes to non-GAAP Pre-tax, pre-provision income; from GAAP Total operating expense to non-GAAP Total operating expense excluding amortization of intangibles, goodwill impairment, and restructuring, if any; and from GAAP Efficiency ratio to Non-GAAP Efficiency ratio (FTE basis), excluding amortization of intangibles, goodwill impairment, and restructuring, if any, are presented below: | ||
| Three Months Ended | ||||||||||||||||||||
| (In thousands) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | |||||||||||||||
| Income before income taxes (GAAP) | $ | 24,347 | $ | 24,803 | $ | 28,064 | $ | 3,400 | $ | 27,980 | ||||||||||
| ADD BACK: Provision/ (credit) for loan losses | (949 | ) | 453 | (1,795 | ) | (942 | ) | (432 | ) | |||||||||||
| Pre-tax, pre-provision income (non-GAAP) | $ | 23,398 | $ | 25,256 | $ | 26,269 | $ | 2,458 | $ | 27,548 | ||||||||||
| Total operating expense (GAAP) | $ | 68,557 | $ | 64,384 | $ | 70,857 | $ | 93,989 | $ | 69,346 | ||||||||||
| Less: Amortization of intangibles | 750 | 749 | 750 | 1,323 | 1,426 | |||||||||||||||
| Less: Goodwill impairment | — | — | — | 24,901 | — | |||||||||||||||
| Less: Restructuring | 5,763 | — | — | — | — | |||||||||||||||
| Total operating expense (excluding amortization of intangibles, restructuring, and goodwill impairment) (non-GAAP) | $ | 62,044 | $ | 63,635 | $ | 70,107 | $ | 67,765 | $ | 67,920 | ||||||||||
| Net interest income | $ | 59,641 | $ | 57,545 | $ | 57,383 | $ | 57,272 | $ | 56,627 | ||||||||||
| Total core fees and income | 31,592 | 31,897 | 39,435 | 40,189 | 39,067 | |||||||||||||||
| Total other income | 722 | 198 | 308 | (1,014 | ) | 1,200 | ||||||||||||||
| FTE income | 591 | 895 | 974 | 2,873 | 2,899 | |||||||||||||||
| Total revenue (FTE basis) | $ | 92,546 | $ | 90,535 | $ | 98,100 | $ | 99,320 | $ | 99,793 | ||||||||||
| Efficiency ratio (GAAP) | 74.55 | % | 71.83 | % | 72.95 | % | 97.45 | % | 71.57 | % | ||||||||||
| Efficiency ratio, FTE Basis excluding amortization of intangibles, restructuring, and goodwill impairment (non-GAAP) | 67.04 | % | 70.29 | % | 71.46 | % | 68.23 | % | 68.06 | % | ||||||||||
| Nine Months Ended | ||||||||
| (In thousands) | September 30, 2018 | September 30, 2017 | ||||||
| Income before income taxes (GAAP) | $ | 77,214 | $ | 82,985 | ||||
| ADD BACK: Provision/ (credit) for loan losses | (2,291 | ) | (6,727 | ) | ||||
| Pre-tax, pre-provision income (non-GAAP) | $ | 74,923 | $ | 76,258 | ||||
| Total operating expense (GAAP) | $ | 203,798 | $ | 205,947 | ||||
| Less: Amortization of intangibles | 2,249 | 4,278 | ||||||
| Less: Restructuring | 5,763 | — | ||||||
| Total operating expense (excluding amortization of intangibles, restructuring, and goodwill impairment) (non-GAAP) | $ | 195,786 | $ | 201,669 | ||||
| Net interest income | $ | 174,569 | $ | 167,414 | ||||
| Total core fees and income | 102,924 | 112,613 | ||||||
| Total other income | 1,228 | 2,178 | ||||||
| FTE income | 2,460 | 8,642 | ||||||
| Total revenue (FTE basis) | $ | 281,181 | $ | 290,847 | ||||
| Efficiency ratio (GAAP) | 73.12 | % | 72.98 | % | ||||
| Efficiency ratio, FTE Basis excluding amortization of intangibles, restructuring, and goodwill impairment (non-GAAP) | 69.63 | % | 69.34 | % | ||||
| (10) | Interest income on Non-taxable investments and loans are presented on an FTE basis using the federal statutory rate of 35% in 2017 and 21% in 2018 for each respective period presented. | |
| (11) | Average loans includes Loans held for sale and Nonaccrual loans. | |
| (12) | Average total deposits is the sum of Average total interest-bearing deposits and Average non-interest bearing demand deposits. Average total deposits and borrowings is the sum of Average total interest-bearing liabilities and Average non-interest bearing demand deposits. | |
| (13) | The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lender’s regional offices. | |
| (14) | Accruing substandard loans include loans that are classified as substandard but are still accruing interest income. Boston Private Bank & Trust Company may classify a loan as substandard where known information about possible credit problems of the related borrowers causes management to have doubts as to the ability of such borrowers to comply with the present repayment terms and which may result in disclosure of such loans as nonaccrual at some time in the future. | |
| (15) | The Company uses certain non-GAAP financial measures, such as: Net interest income excluding interest recovered on previous nonaccrual loans and Net interest margin excluding interest recovered on previous nonaccrual loans, also referred to as Core net interest margin, to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. | |
| Reconciliations from the Company’s GAAP Net interest income to non-GAAP Net interest income excluding interest recovered on previous nonaccrual loans; and from GAAP Net interest margin to non-GAAP Net interest margin excluding interest recovered on previous nonaccrual loans, are presented below: | ||
| Three Months Ended | ||||||||||||||||||||
| (In thousands) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | |||||||||||||||
| Net interest income (GAAP basis) | $ | 59,641 | $ | 57,545 | $ | 57,383 | $ | 57,272 | $ | 56,627 | ||||||||||
| LESS: Interest recovered on previously nonaccrual loans | 986 | — | 80 | 429 | 133 | |||||||||||||||
| Net interest income, excluding interest recovered on previously nonaccrual loans (non-GAAP) - also referred to as Core net interest income (non-GAAP) | 58,655 | 57,545 | 57,303 | 56,843 | 56,494 | |||||||||||||||
| ADD: FTE income | 591 | 895 | 974 | 2,873 | 2,899 | |||||||||||||||
| Net interest income, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP) - also referred to as Core net interest income, FTE basis (non-GAAP) | 59,246 | 58,440 | 58,277 | 59,716 | 59,393 | |||||||||||||||
| Net interest margin (FTE basis) | 2.93 | % | 2.89 | % | 2.95 | % | 3.04 | % | 3.02 | % | ||||||||||
| Net interest margin, FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP) - also referred to as Core net interest margin (FTE basis) | 2.88 | % | 2.89 | % | 2.94 | % | 3.02 | % | 3.02 | % | ||||||||||
| Net interest margin, non-FTE basis, excluding interest recovered on previously nonaccrual loans (non-GAAP) - also referred to as Core net interest margin (non-FTE basis) (non-GAAP) | 2.85 | % | 2.85 | % | 2.90 | % | 2.87 | % | 2.87 | % | ||||||||||
Boston Private Financial Holdings, Inc. | ||
Selected Financial Data | ||
(Unaudited) | ||
| (16) | The Company uses certain non-GAAP financial measures, such as: Net income attributable to the Company excluding notable items and Diluted earnings per share excluding notable items to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. | |
| Reconciliations from the Company’s GAAP Net income attributable to the Company to non-GAAP Net income attributable to the Company excluding notable items and from GAAP Diluted earnings per share to non-GAAP Diluted earnings per share excluding notable items are presented below: | ||
| Three Months Ended | ||||||||||||||||||||
| (In thousands, except share and per share data) | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | |||||||||||||||
| Net income/ (loss) attributable to the Company (GAAP) | $ | 17,962 | $ | 6,434 | $ | 22,686 | $ | (18,280 | ) | $ | 19,803 | |||||||||
| LESS: Gain/ (loss) on sale of affiliates or offices | — | — | — | (1,264 | ) | — | ||||||||||||||
| ADD BACK: Anchor divestiture legal expense | — | — | — | 400 | — | |||||||||||||||
| ADD BACK: Impairment of goodwill | — | — | — | 24,901 | — | |||||||||||||||
| ADD BACK: Restructuring | 5,763 | — | — | — | — | |||||||||||||||
| ADD BACK: Tax adjustments * | — | 12,706 | — | 12,880 | — | |||||||||||||||
| Tax effect at statutory rate (35% in '17, 21% in '18) ** | (1,210 | ) | — | — | (582 | ) | — | |||||||||||||
|
Net income attributable to the Company
excluding notable items (non-GAAP) | $ | 22,515 | $ | 19,140 | $ | 22,686 | $ | 20,583 | $ | 19,803 | ||||||||||
| Net income/ (loss) attributable to the common shareholders, treasury stock method (GAAP) | $ | 17,133 | $ | 2,910 | $ | 22,663 | $ | (20,278 | ) | $ | 18,657 | |||||||||
| ADD BACK: Deemed dividend due to redemption of Series D preferred stock | — | 2,247 | — | — | — | |||||||||||||||
| LESS: Gain/ (loss) on sale of affiliates or offices | — | — | — | (1,264 | ) | — | ||||||||||||||
| ADD BACK: Anchor divestiture legal expense | — | — | — | 400 | — | |||||||||||||||
| ADD BACK: Impairment of goodwill | — | — | — | 24,901 | — | |||||||||||||||
| ADD BACK: Restructuring | 5,763 | — | — | — | — | |||||||||||||||
| ADD BACK: Tax adjustments * | — | 12,706 | — | 12,880 | — | |||||||||||||||
| Tax effect at statutory rate (35% in '17, 21% in '18) ** | (1,210 | ) | — | — | (582 | ) | — | |||||||||||||
| Net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP) | $ | 21,686 | $ | 17,863 | $ | 22,663 | $ | 18,585 | $ | 18,657 | ||||||||||
| Weighted average diluted shares outstanding (GAAP) | 85,498,568 | 85,413,575 | 85,271,650 | 82,904,776 | 84,888,311 | |||||||||||||||
| Weighted average diluted shares outstanding, excluding notable items (non-GAAP) *** | 85,498,568 | 85,413,575 | 85,271,650 | 85,196,760 | 84,888,311 | |||||||||||||||
| Diluted total earnings/ (loss) per share (GAAP) | $ | 0.20 | $ | 0.03 | $ | 0.27 | $ | (0.24 | ) | $ | 0.22 | |||||||||
| Diluted total earnings per share, excluding notable items (non-GAAP) | $ | 0.25 | $ | 0.21 | $ | 0.27 | $ | 0.22 | $ | 0.22 | ||||||||||
| Average common equity (non-GAAP) | $ | 737,188 | $ | 736,068 | $ | 736,272 | $ | 765,765 | $ | 760,843 | ||||||||||
| Average tangible common equity (non-GAAP) | $ | 647,358 | $ | 633,535 | $ | 597,821 | $ | 607,787 | $ | 595,077 | ||||||||||
| Return on average common equity - (annualized), excluding notable items (non-GAAP) | 12.12 | % | 9.96 | % | 12.02 | % | 10.21 | % | 9.87 | % | ||||||||||
| Return on average tangible common equity - (annualized), excluding notable items (non-GAAP) | 14.16 | % | 11.94 | % | 15.20 | % | 13.43 | % | 13.24 | % | ||||||||||
| Pre-tax, pre-provision income (non-GAAP) | $ | 23,398 | $ | 25,256 | $ | 26,269 | $ | 2,458 | $ | 27,548 | ||||||||||
| LESS: Gain/ (loss) on sale of affiliates or offices | — | — | — | (1,264 | ) | — | ||||||||||||||
| ADD BACK: Anchor divestiture legal expense | — | — | — | 400 | — | |||||||||||||||
| ADD BACK: Impairment of goodwill | — | — | — | 24,901 | — | |||||||||||||||
| ADD BACK: Restructuring | 5,763 | — | — | — | — | |||||||||||||||
| Pre-tax, pre-provision income, excluding notable items (non-GAAP) | $ | 29,161 | $ | 25,256 | $ | 26,269 | $ | 29,023 | $ | 27,548 | ||||||||||
* Additional tax expense in the second quarter of 2018 relates to
the tax impact of the April 2018 completion of the sale of Anchor. | ||||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181017005832/en/
Contacts:
Adam Bromley, 617-912-4386
abromley@bostonprivate.com
