Investor Relations

Press Release

Boston Private Financial Holdings, Inc. Reports Fourth Quarter and Full Year 2017 Results; Raises Dividend to $0.12 Per Share

Company Release - 1/17/2018 4:15 PM ET

Fourth Quarter and Full Year Highlights:

  • Average Total Deposits increased 7% year-over-year to $6.4 billion, and Average Total Loans increased 7% year-over-year to $6.4 billion.
  • Total Assets Under Management/Advisory (“AUM”), excluding Anchor Capital Advisors LLC ("Anchor"), were $21.2 billion at the end of the fourth quarter, and Net Flows during the fourth quarter were $128 million.
  • Operating Return on Average Common Equity for the fourth quarter was 10.2% and Operating Return on Average Tangible Common Equity was 13.4%.
  • Full year Operating Return on Average Common Equity was 10.1% and Operating Return on Average Tangible Common Equity was 13.6%.
  • The Board of Directors approved a quarterly cash dividend of $0.12 per share of common stock, an increase from $0.11 per share in the prior quarter.

Notable Items impacting fourth quarter results:

  • $1.3 million loss on sale, $0.4 million of legal expense, and $24.9 goodwill impairment expense related to the Held for Sale classification and previously announced divestiture of Anchor
  • $12.9 million Income Tax Expense related to the Tax Cuts and Jobs Act

BOSTON--(BUSINESS WIRE)-- Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported fourth quarter 2017 GAAP Net loss attributable to the Company of $18.3 million, compared to Net Income of $19.8 million for the third quarter of 2017 and $17.6 million for the fourth quarter of 2016. Fourth quarter 2017 diluted earnings per share were ($0.24), compared to $0.22 in the third quarter of 2017, and $0.19 in the fourth quarter of 2016. For the full year of 2017, BPFH reported GAAP Net Income attributable to the Company of $40.6 million or $0.42 of diluted earnings per share.

This press release includes references to Operating metrics (non-GAAP) that exclude the impact of Notable Items listed above. A full reconciliation of these adjustments can be found in the footnotes.

 
Summary of fourth quarter and full year financial results (GAAP basis and Operating basis)
($ in millions, except for per share data)      

Quarter ended
December 31, 2017

 

   

Year ended
December 31, 2017

 

GAAP or
Reported

  Operating

GAAP or
Reported

  Operating

Net income / (loss) attributable to the Company (18)

$(18.3) $20.6 $40.6 $79.5

Diluted Total Earnings Per Share (5), (18)

$(0.24) $0.22 $0.42 $0.88
 
Non-GAAP Financial Measures Reported Operating Reported Operating

Return on Average Common Equity (8), (18)

(9.9)% 10.2% 5.0% 10.1%

Return on Average Tangible Common Equity (8), (18)

(11.9)% 13.4% 7.0% 13.6%
 

"Our results this quarter include a combined impact of $38.9 million of charges resulting from our agreement to divest Anchor and the Tax Cuts and Jobs Act," said Clayton G. Deutsch, CEO. "Divesting Anchor will liberate capital for us, creating flexibility to reinvest in a more focused company, and the Tax Cuts and Jobs Act will result in a significantly lower effective tax rate going forward."

"Excluding the impact of these items, our Company showed a strong core earnings performance, generating $74.6 million of Operating Net Income in 2017 with an Operating Return on Average Common Equity of 10.1%. During 2017, we increased the tangible book value per share of our Company by 8%, and we raised the quarterly dividend on our common stock to $0.12 per share as of the first quarter of 2018."

Divestiture

During the fourth quarter, the Company entered into an agreement to sell its ownership interest in Anchor in a transaction that will result in Anchor being majority owned by members of its management team. The transaction is expected to close in the first quarter of 2018. Results attributed to Anchor’s performance remain consolidated in the Company’s results during current and prior periods. For presentation purposes, Anchor’s AUM is excluded from current and prior period AUM amounts, but is included in the calculation of Core Fees and Income. The Company has classified the assets and liabilities of Anchor as Held for Sale at December 31, 2017, which are included with Other Assets and Other Liabilities, respectively, on the Company’s Consolidated Balance Sheet.

Core Fees and Income/Assets Under Management

Total Core Fees and Income for the fourth quarter were $40.2 million, a 3% increase on a linked quarter basis and a 4% increase year-over-year. The increase reflects higher levels of AUM in the Wealth Management & Trust, Investment Management, and Wealth Advisory segments on both a linked quarter basis and year-over-year basis. Other Banking Fees decreased linked quarter due to lower loan fees, while increasing year-over-year due to increased BOLI income.

AUM, excluding Anchor, was $21.2 billion at the end of the fourth quarter, an increase of 3% linked quarter and 13% year-over-year. The Company experienced net flows of $128 million during the fourth quarter of 2017. Net flows by segment were $79 million for Wealth Management & Trust, $20 million for Investment Management, and $29 million for Wealth Advisory.

Net Interest Income

Net Interest Income for the fourth quarter was $57.3 million, an increase of 1% from $56.6 million for the third quarter of 2017 and an increase of 11% from $51.5 million for the fourth quarter of 2016.

Net Interest Margin was 3.04% for the fourth quarter of 2017, an increase of 2 basis points from the third quarter of 2017 and an increase of 16 basis points from the fourth quarter of 2016. Excluding interest recovered on previous nonaccrual loans, Net Interest Margin for the fourth quarter was 3.02%, flat from the third quarter of 2017 and an increase of 16 basis points from the fourth quarter of 2016.

Total Operating Expense

Total Operating Expense for the fourth quarter of 2017 was $94.0 million, up 36% linked quarter and 31% year-over-year. Notable expenses excluded from non-GAAP results include goodwill impairment charges of $24.9 million in the fourth quarter of 2017 and $9.5 million in the fourth quarter of 2016, and $0.4 of legal expense related to the divestiture of Anchor Capital in the fourth quarter of 2017.

On an operating basis (non-GAAP), Total Expense during the fourth quarter of 2017 was $68.7 million, a decrease of 1% linked quarter and an increase of 10% year-over-year. For the full year, operating basis Total Expense was $274.6 million, an increase of 8% year-over-year.

Provision and Asset Quality

The Company recorded a provision credit of $0.9 million for the fourth quarter of 2017, compared to a provision credit of $0.4 million for the third quarter of 2017 and $1.1 million for the fourth quarter of 2016. The provision credit in the fourth quarter of 2017 was due to net recoveries and improved loss factors, partially offset by an increase in Criticized Loans and loan growth.

Criticized Loans as of December 31, 2017 were $154.8 million, an increase of 6% linked quarter and an increase of 31% year-over-year. Nonaccrual Loans (“Nonaccruals”) as of December 31, 2017 were $14.3 million, an increase of 5% linked quarter and a decrease of 17% year-over-year. As a percentage of Total Loans, Nonaccruals were 22 basis points as of December 31, 2017, up 1 basis point compared to September 30, 2017, and down 6 basis points from December 31, 2016.

Additional credit metrics are listed below:

             
(In millions)

December 31,
2017

September 30,
2017

June 30,
2017

March 31,
2017

December 31,
2016

Total Criticized Loans $ 154.8 $ 146.0 $ 129.5 $ 135.1 $ 118.5

Total Loans 30-89 Days Past Due
and Accruing (15)

$ 25.0 $ 5.3 $ 3.2 $ 28.7 $ 15.1

Total Net Loans (Charged-off)/
Recovered

$ 0.8 $ 0.3 $ 3.1 $ 0.1 $ 1.5

Allowance for Loan Losses/Total Loans

 

1.15

%

1.17 % 1.19 % 1.25 % 1.28 %
 

Income Tax Expense

The Company recorded $21.4 million of Income Tax Expense during the current quarter. As a result of the Tax Cuts and Jobs Act, the company recorded $12.2 million of Income Tax Expense due to the revaluation of the Company’s Deferred Tax Asset (“DTA”) and Deferred Tax Liability (“DTL”) and Low Income Housing Tax Credit (“LIHTC”) investments. The Company also incurred a $0.7 million Income Tax Expense due to nondeductible executive compensation as a result of the Tax Cuts and Jobs Act and the divestiture of Anchor Capital.

 
Summary of Adjustments to Income Tax Expense
(In millions)      

Quarter ended
December 31,

     

Year ended
December 31,

2017   2016 2017   2016
Income Tax Expense $       21.4 $       7.2 $       46.2 $       31.0
Adjustments:

Revaluation of DTA, DTL and LITHC

12.2 - 12.2 -

Nondeductible executive compensation

0.7 - 0.7 -

Tax impact of notable items (17)

(0.6 ) (2.3 ) (0.6 ) (3.0 )
Total Non-GAAP adjustments 12.3   (2.3 ) 12.3   (3.0 )
Operating Income Tax Expense $       9.1   $       9.5   $       33.9   $       34.0  

Effective Tax Rate on Continuing Operations
(excluding Total Non-GAAP adjustments)

30.3 % 30.5 % 30.0 % 30.9 %
 

Capital Ratios

The Company’s capital ratios are listed below:

             
December 31,
2017
September 30,
2017
June 30,
2017
March 31,
2017
  December 31,
2016
BPFH Ratios:
Total Risk-Based Capital * 14.1 % 14.3 % 14.1 % 13.8 % 13.9 %
Tier I Risk-Based Capital * 12.8 % 13.0 % 12.9 % 12.6 % 12.6 %
Tier I Leverage Capital * 9.3 % 9.4 % 9.3 % 9.2 % 9.4 %
TCE/TA (6) 7.3 % 7.4 % 7.4 % 7.0 % 7.1 %

Tier I Common Equity/Risk Weighted Assets *

 

10.3 % 10.4 % 10.3 % 10.0 % 10.0 %
 

*December 31, 2017 information is presented based on estimated data.

Dividend Payments
Concurrent with the release of fourth quarter 2017 earnings, the Board of Directors of the Company declared a cash dividend to common shareholders of $0.12 per share. The record date for this dividend is February 2, 2018, and the payment date is February 16, 2018.

The Board of Directors of the Company also declared a cash dividend to holders of the Non-Cumulative Perpetual Preferred Stock, Series D of $17.375 per share, which will result in a dividend of $0.434375 per depositary share. The record date for this dividend is February 15, 2018, and the payment date is March 15, 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; the efficiency ratio (FTE basis); the efficiency ratio (FTE basis) excluding amortization of intangibles, goodwill impairment, and restructuring; 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 attached.

Conference Call

Management will hold a conference call at 8 a.m. Eastern Time on Thursday, January 18, 2018, to discuss the financial results, business highlights and outlook. To access the call:

Dial In #: (888) 317-6003
Elite Entry Number: 2399470

Replay Information:
Available from January 18, 2018 at 12 noon until January 25, 2018
Dial In #: (877) 344-7529
Conference Number: 10115473

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 approximately $8 billion, and manages over $20 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.

Selected Financial Data (Unaudited)

 
      December 31,
2017
  September 30,
2017
  June 30,
2017
  March 31,
2017
  December 31,
2016
(In thousands, except share and per share data)
Assets:
Cash and cash equivalents $ 120,541 $ 110,440 $ 97,032 $ 165,186 $ 106,557
Investment securities available-for-sale 1,170,328 1,189,827 1,188,720 1,256,208 1,264,132
Investment securities held-to-maturity 74,576 84,090 99,024 98,424 93,079

Stock in Federal Home Loan Bank and Federal
Reserve Bank

59,973 61,714 45,568 50,133 44,077
Loans held for sale 4,697 1,957 2,870 350 3,464
Total loans 6,505,028 6,413,201 6,279,928 6,250,217 6,114,354
Less: Allowance for loan losses 74,742   74,873   75,009   78,031   78,077  
Net loans 6,430,286 6,338,328 6,204,919 6,172,186 6,036,277
Other real estate owned (“OREO”)

1,690

Premises and equipment, net 37,640 36,546 34,135 32,974 31,827

Goodwill (1)

75,598 142,554 142,554 142,554 142,554

Intangible assets, net (1)

16,083 22,447 23,873 25,299 26,725
Fees receivable 11,154 12,560 12,639 12,230 13,400
Accrued interest receivable 22,322 21,823 20,680 20,790 20,479
Deferred income taxes, net 29,031 46,088 49,827 53,686 55,460

Other assets (1)

259,515   201,024   185,805   185,100   130,753  
Total assets $ 8,311,744   $ 8,269,398   $ 8,107,646   $ 8,215,120   $ 7,970,474  
Liabilities:
Deposits $ 6,510,246 $ 6,262,347 $ 6,381,339 $ 6,246,620 $ 6,085,146
Securities sold under agreements to repurchase 32,169 59,903 29,232 67,249 59,624
Federal funds purchased 30,000 70,000 40,000 80,000
Federal Home Loan Bank borrowings 693,681 812,773 618,989 885,445 734,205
Junior subordinated debentures 106,363 106,363 106,363 106,363 106,363

Other liabilities (1)

135,880   127,069   115,088   110,310   119,683  
Total liabilities 7,508,339   7,438,455   7,291,011   7,415,987   7,185,021  
Redeemable Noncontrolling Interests (“RNCI”) 17,461 15,882 17,216 17,232 16,972
Shareholders’ Equity:

Preferred stock, $1.00 par value; authorized:
2,000,000 shares

47,753 47,753 47,753 47,753 47,753

Common stock, $1.00 par value; authorized:
170,000,000 shares

84,208 84,082 84,015 84,134 83,732
Additional paid-in capital 607,929 606,802 602,507 602,748 597,454
Retained earnings 47,991 76,455 66,807 53,510 47,929
Accumulated other comprehensive income/ (loss) (7,123 ) (4,823 ) (6,038 ) (10,237 ) (12,548 )
Total Company’s shareholders’ equity 780,758   810,269   795,044   777,908   764,320  
Noncontrolling interests 5,186   4,792   4,375   3,993   4,161  
Total shareholders’ equity 785,944   815,061   799,419   781,901   768,481  

Total liabilities, redeemable noncontrolling
interests and shareholders’ equity

$ 8,311,744   $ 8,269,398   $ 8,107,646   $ 8,215,120   $ 7,970,474  
 
 

Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)

 

     
Three Months Ended
December 31,
2017
  September 30,
2017
  June 30,
2017
  March 31,
2017
  December 31,
2016
Interest and dividend income: (In thousands, except share and per share data)
Loans $ 59,496 $ 58,096 $ 57,736 $ 53,636 $ 51,499
Taxable investment securities 1,562 1,569 1,592 1,670 1,592
Non-taxable investment securities 1,697 1,664 1,655 1,606 1,520
Mortgage-backed securities 3,125 3,267 3,495 3,504 3,290
Federal funds sold and other 978   916   831   600   508  
Total interest and dividend income 66,858   65,512   65,309   61,016   58,409  
Interest expense:
Deposits 6,048 5,356 4,949 4,531 4,152
Federal Home Loan Bank borrowings 2,626 2,657 2,489 2,111 1,987
Junior subordinated debentures 771 761 716 671 674
Repurchase agreements and other short-term borrowings 141   111   10   61   77  
Total interest expense 9,586   8,885   8,164   7,374   6,890  
Net interest income 57,272 56,627 57,145 53,642 51,519
Provision/ (credit) for loan losses (942 ) (432 ) (6,114 ) (181 ) (1,128 )

Net interest income after provision/ (credit) for loan
losses

58,214   57,059   63,259   53,823   52,647  
Fees and other income:
Investment management fees 12,321 11,274 11,081 10,839 12,408
Wealth advisory fees 13,496 13,279 12,961 12,823 12,568
Wealth management and trust fees 11,756 11,619 11,161 10,826 11,031
Other banking fee income 2,531 2,726 1,964 1,694 2,387
Gain on sale of loans, net 85   169   59   138   105  
Total core fees and income 40,189   39,067   37,226   36,320   38,499  
Gain/ (loss) on sale of investments, net (110 ) 230 237 19 2
Gain/ (loss) on OREO, net (46 ) (110 )
Gain/ (loss) on sale of affiliates or offices (1,264 ) 2,862
Other 360   970   555   213   2,705  
Total other income (1,014 ) 1,200   792   186   5,459  

Total revenue (2)

96,447 96,894 95,163 90,148 95,477
Operating expense:
Salaries and employee benefits 43,920 45,168 43,493 45,825 39,669
Occupancy and equipment 7,753 7,944 7,283 7,185 7,047
Professional services 4,035 3,308 3,106 3,314 2,756
Marketing and business development 1,919 2,216 1,971 1,660 2,022
Information systems 5,635 5,282 5,500 5,379 5,030
Amortization of intangibles 1,323 1,426 1,426 1,426 1,542
Impairment of goodwill 24,901 9,528
FDIC insurance 677 647 879 766 727
Other 3,826   3,355   4,163   3,225   3,522  
Total operating expense 93,989   69,346   67,821   68,780   71,843  
Income before income taxes 3,400 27,980 33,456 21,549 24,762
Income tax expense 21,391   8,289   9,963   6,553   7,247  
Net income/ (loss) from continuing operations (17,991 ) 19,691 23,493 14,996 17,515

Net income from discontinued operations (3)

989   1,186   1,063   1,632   1,184  

Net income/ (loss) before attribution to
noncontrolling interests

(17,002 ) 20,877 24,556 16,628 18,699
Less: Net income attributable to noncontrolling interests 1,278   1,074   1,150   966   1,147  
Net income/ (loss) attributable to the Company $ (18,280 ) $ 19,803   $ 23,406   $ 15,662   $ 17,552  
 
 

Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)

     
Year Ended
December 31,
2017
  December 31,
2016
Interest and dividend income:

(In thousands, except share
and per share data)

Loans $ 228,964 $ 201,349
Taxable investment securities 6,393 6,230
Non-taxable investment securities 6,622 5,754
Mortgage-backed securities 13,391 12,416
Federal funds sold and other 3,325   1,890  
Total interest and dividend income 258,695   227,639  
Interest expense:
Deposits 20,884 16,571
Federal Home Loan Bank borrowings 9,883 8,008
Junior subordinated debentures 2,919 2,427
Repurchase agreements and other short-term borrowings 323   195  
Total interest expense 34,009   27,201  
Net interest income 224,686 200,438
Provision/ (credit) for loan losses (7,669 ) (6,935 )
Net interest income after provision/ (credit) for loan losses 232,355   207,373  
Fees and other income:
Investment management fees 45,515 44,410
Wealth advisory fees 52,559 50,581
Wealth management and trust fees 45,362 43,980
Other banking fee income 8,915 12,050
Gain on sale of loans, net 451   667  
Total core fees and income 152,802   151,688  
Gain/ (loss) on sale of investments, net 376 521
Gain/ (loss) on OREO, net (46 ) 306
Gain/ (loss) on sale of affiliates or offices (1,264 ) 2,862
Other 2,098   3,410  
Total other income 1,164   7,099  

Total revenue (2)

378,652 359,225
Operating expense:
Salaries and employee benefits 178,406 163,767
Occupancy and equipment 30,165 28,007
Professional services 13,763 11,576
Marketing and business development 7,766 7,626
Information systems 21,796 19,229
Amortization of intangibles 5,601 6,282
Impairment of goodwill 24,901 9,528
FDIC insurance 2,969 3,484
Restructuring 2,017
Other 14,569   13,437  
Total operating expense 299,936   264,953  
Income before income taxes 86,385 101,207
Income tax expense 46,196   30,963  
Net income from continuing operations 40,189 70,244

Net income from discontinued operations (3)

4,870   5,541  
Net income before attribution to noncontrolling interests 45,059 75,785
Less: Net income attributable to noncontrolling interests 4,468   4,157  
Net income attributable to the Company $ 40,591   $ 71,628  
 
 

Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)

     
Three Months Ended
PER SHARE DATA: December 31,
2017
  September 30,
2017
  June 30,
2017
  March 31,
2017
  December 31,
2016
(In thousands, except share and per share data)
Calculation of Income for EPS:
Net income/ (loss) attributable to the Company $ (18,280 ) $ 19,803 $ 23,406 $ 15,662 $ 17,552

Adjustments to Net income/ (loss) attributable to the
Company to arrive at Net income/ (loss) attributable to
Common Shareholders, treasury stock method (4)

(1,998 ) (1,146 ) (577 ) (1,166 ) (1,798 )

Net income/ (loss) attributable to the Common
Shareholders, treasury stock method

$ (20,278 ) $ 18,657   $ 22,829   $ 14,496   $ 15,755  
 
End of Period Common Shares Outstanding 84,208,538 84,082,250 84,015,141 84,134,104 83,731,769
 
Weighted Average Shares Outstanding:
Weighted average basic shares outstanding 82,904,776 82,556,225 82,298,493 81,951,179 81,217,391

Weighted average diluted shares outstanding (5)

82,904,776 84,888,311 84,741,680 84,560,918 83,438,137
 
Diluted Total Earnings/ (Loss) per Share $ (0.24 ) $ 0.22 $ 0.27 $ 0.17 $ 0.19
 
     
Year Ended
PER SHARE DATA: December 31,
2017
  December 31,
2016
(In thousands, except share

and per share data)

Calculation of Income for EPS:
Net income attributable to the Company $ 40,591 $ 71,628

Adjustments to Net income attributable to the Company to arrive at Net income attributable to Common
Shareholders, treasury stock method (4)

(4,887 ) (4,063 )
Net Income Attributable to the Common Shareholders, treasury stock method $ 35,704   $ 67,565  
 
Weighted Average Shares Outstanding:
Weighted average basic shares outstanding 82,430,633 81,264,273

Weighted average diluted shares outstanding (5)

84,802,565 83,209,126
 
Diluted Total Earnings per Share $ 0.42 $ 0.81
 
 

Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)

             
(In thousands, except per share data) December 31,
2017
September 30,
2017
June 30,
2017
March 31,
2017
December 31,
2016
FINANCIAL DATA:
Book Value Per Common Share $ 8.77 $ 9.13 $ 8.95 $ 8.73 $ 8.61

Tangible Book Value Per Share (6)

$ 7.12 $ 7.16 $ 6.97 $ 6.73 $ 6.59
Market Price Per Share $ 15.45 $ 16.55 $ 15.35 $ 16.40 $ 16.55
 
ASSETS UNDER MANAGEMENT AND ADVISORY:
Wealth Management and Trust $ 7,865,000 $ 7,703,000 $ 7,429,000 $ 7,260,000 $ 7,008,000

Investment Managers (7)

2,004,000 1,902,000 1,829,000 1,849,000 1,803,000
Wealth Advisory 11,350,000 10,992,000 10,744,000 10,579,000 9,989,000
Less: Inter-company Relationship (11,000 ) (11,000 ) (11,000 ) (11,000 ) (11,000 )

Total Assets Under Management and Advisory, excluding
Anchor (7)

$ 21,208,000   $ 20,586,000   $ 19,991,000   $ 19,677,000   $ 18,789,000  
Assets Under Management and Advisory at Anchor 9,277,000   9,181,000   9,072,000   9,058,000   8,768,000  

Total Assets Under Management and Advisory, including
Anchor

$ 30,485,000   $ 29,767,000   $ 29,063,000   $ 28,735,000   $ 27,557,000  
 
FINANCIAL RATIOS:
Total Equity/ Total Assets 9.46 % 9.86 % 9.86 % 9.52 % 9.64 %

Tangible Common Equity/ Tangible Assets (6)

7.33 % 7.43 % 7.37 % 7.04 % 7.07 %

Tier I Common Equity/ Risk Weighted Assets (6)

10.29 % 10.42 % 10.28 % 9.97 % 10.00 %
Allowance for Loan Losses/ Total Loans 1.15 % 1.17 % 1.19 % 1.25 % 1.28 %
Allowance for Loan Losses/ Nonaccrual Loans 523 % 550 % 464 % 373 % 451 %

Return on Average Assets - Three Months Ended
(Annualized)

(0.88 )% 0.96 % 1.15 % 0.79 % 0.89 %

Return on Average Common Equity - Three Months Ended
(Annualized) (8)

(9.92 )% 9.87 % 12.12 % 8.26 % 9.07 %

Return on Average Tangible Common Equity - Three
Months Ended (Annualized) (8)

(11.94 )% 13.24 % 16.27 % 11.43 % 12.75 %

Efficiency Ratio - Three Months Ended (9)

68.23 % 68.06 % 67.69 % 72.45 % 61.87 %
 
DEPOSIT DETAIL:
Demand deposits (noninterest-bearing) $ 2,025,690 $ 1,850,833 $ 1,935,622 $ 1,772,854 $ 1,753,648
NOW 645,361 636,013 631,973 620,280 578,657
Savings 70,935 74,333 69,892 74,293 74,162
Money market 3,121,811 3,009,779 3,055,642 3,176,472 3,102,048
Certificates of deposit 646,449   691,389   688,210   602,721   576,631  
Total Deposits $ 6,510,246   $ 6,262,347   $ 6,381,339   $ 6,246,620   $ 6,085,146  
 
 

Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)

 
      Average Balance   Interest Income/Expense   Average Yield/Rate
(In thousands) Three Months Ended Three Months Ended Three Months Ended
AVERAGE BALANCE SHEET: 12/31/17 09/30/17 12/31/16 12/31/17 09/30/17 12/31/16 12/31/17 09/30/17 12/31/16
AVERAGE ASSETS
Interest-Earning Assets:
Cash and Investments:
Taxable investment securities $ 345,743 $ 353,374 $ 375,913 $ 1,562 $ 1,569 $ 1,592 1.81 % 1.77 % 1.69 %

Non-taxable investment securities (10)

298,851 295,727 285,330 2,611 2,559 2,338 3.50 % 3.46 % 3.28 %
Mortgage-backed securities 608,508 631,052 679,644 3,125 3,267 3,290 2.05 % 2.07 % 1.94 %
Federal funds sold and other 172,656   146,285   130,740   978   916   508   2.23 % 2.47 % 1.53 %
Total Cash and Investments 1,425,758   1,426,438   1,471,627   8,276   8,311   7,728   2.32 % 2.33 % 2.10 %

Loans (11):

Commercial and Industrial (10)

962,159 994,388 1,110,268 9,603 10,001 10,892 3.91 % 3.94 % 3.84 %

Commercial Real Estate (10)

2,369,526 2,381,583 2,109,601 26,473 25,579 21,153 4.37 % 4.20 % 3.92 %

Construction and Land (10)

131,107 113,562 96,242 1,568 1,415 1,018 4.68 % 4.88 % 4.14 %
Residential 2,650,014 2,567,044 2,350,644 21,248 20,423 17,999 3.21 % 3.18 % 3.06 %
Home Equity 105,044 106,744 117,985 1,074 1,128 1,050 4.06 % 4.19 % 3.54 %
Other Consumer 177,951   187,184   188,908   1,489   1,554   1,323   3.32 % 3.29 % 2.79 %
Total Loans 6,395,801   6,350,505   5,973,648   61,455   60,100   53,435   3.79 % 3.73 % 3.53 %
Total Earning Assets 7,821,559   7,776,943   7,445,275   69,731   68,411   61,163   3.52 % 3.48 % 3.25 %
LESS: Allowance for Loan Losses 75,608 75,166 79,440

Cash and due From Banks (Non-Interest
Bearing)

43,648 42,031 39,133
Other Assets 452,744   455,820   427,545  
TOTAL AVERAGE ASSETS $ 8,242,343   $ 8,199,628   $ 7,832,513  

AVERAGE LIABILITIES, RNCI,
AND SHAREHOLDERS’ EQUITY

Interest-Bearing Liabilities:

Interest-Bearing Deposits (11):

NOW $ 614,198 $ 630,282 $ 567,538 $ 186 $ 189 $ 126 0.12 % 0.12 % 0.09 %
Savings 72,974 71,900 76,033 (38 ) 16 18 (0.21 )% 0.09 % 0.09 %
Money Market 3,177,687 3,065,059 2,969,292 3,998 3,436 2,807 0.50 % 0.44 % 0.38 %
Certificates of Deposit 685,136   671,992   563,045   1,902   1,715   1,201   1.10 % 1.01 % 0.85 %

Total Interest-Bearing Deposits (12)

4,549,995 4,439,233 4,175,908 6,048 5,356 4,152 0.53 % 0.48 % 0.40 %
Junior Subordinated Debentures 106,363 106,363 106,363 771 761 674 2.84 % 2.80 % 2.48 %
FHLB Borrowings and Other 728,374   736,035   742,247   2,767   2,768   2,064   1.49 % 1.47 % 1.09 %
Total Interest-Bearing Liabilities 5,384,732   5,281,631   5,024,518   9,586   8,885   6,890   0.70 % 0.66 % 0.54 %

Non-interest Bearing Demand
Deposits (11) (12)

 

1,894,924 1,966,479 1,870,130
Payables and Other Liabilities 128,075   121,288   140,006  
Total Average Liabilities 7,407,731 7,369,398 7,034,654
Redeemable Noncontrolling Interests 21,094 21,634 20,393
Average Shareholders’ Equity 813,518   808,596   777,466  

TOTAL AVERAGE LIABILITIES,
RNCI, AND SHAREHOLDERS’ EQUITY

$ 8,242,343   $ 8,199,628   $ 7,832,513  

Net Interest Income - on a Fully Taxable
Equivalent Basis (FTE)

$ 60,145 $ 59,526 $ 54,273

LESS: FTE Adjustment (10)

2,873   2,899   2,754  
Net Interest Income (GAAP Basis) $ 57,272   $ 56,627   $ 51,519  
Interest Rate Spread 2.82 % 2.82 % 2.71 %
Bank only Net Interest Margin 3.08 % 3.07 % 2.91 %
Net Interest Margin 3.04 % 3.02 % 2.88 %
 
 

Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)

         
Average Balance Interest Income/Expense Average Yield/Rate
(In thousands) Year Ended Year Ended Year Ended
AVERAGE BALANCE SHEET: 12/31/17 12/31/16 12/31/17 12/31/16 12/31/17 12/31/16
AVERAGE ASSETS
Interest-Earning Assets:
Cash and Investments:
Taxable investment securities $ 363,760 $ 373,937 $ 6,393 $ 6,230 1.76 % 1.67 %

Non-taxable investment securities (10)

296,117 270,320 10,187 8,850 3.44 % 3.27 %
Mortgage-backed securities 641,157 615,873 13,391 12,416 2.09 % 2.02 %
Federal funds sold and other 170,017   152,616   3,325   1,890   1.96 % 1.24 %
Total Cash and Investments 1,471,051   1,412,746   33,296   29,386   2.26 % 2.08 %

Loans (11):

Commercial and Industrial (10)

981,822 1,081,658 38,680 43,250 3.94 % 4.00 %

Commercial Real Estate (10)

2,358,658 1,964,544 102,030 80,369 4.33 % 4.09 %

Construction and Land (10)

119,530 134,651 5,604 5,385 4.69 % 4.00 %
Residential 2,533,437 2,284,478 80,236 70,553 3.17 % 3.09 %
Home Equity 109,815 120,878 4,376 4,310 3.99 % 3.57 %
Other Consumer 188,122   176,683   5,989   4,516   3.18 % 2.56 %
Total Loans 6,291,384   5,762,892   236,915   208,383   3.77 % 3.62 %
Total Earning Assets 7,762,435   7,175,638   270,211   237,769   3.48 % 3.31 %
LESS: Allowance for Loan Losses 77,365 78,368
Cash and due From Banks (Non-Interest Bearing) 42,420 39,669
Other Assets 440,268   430,972