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| Boston Private Reports Financial Results for the Fourth Quarter and Year End 2007 |
BOSTON--(BUSINESS WIRE)-- Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the "Company") today reported fourth quarter 2007 non-GAAP cash earnings per diluted share (defined later in this press release) of $0.52, a 4% increase over $0.50 per diluted share in the fourth quarter 2006. For the year, non-GAAP cash earnings were $1.96 per diluted share, an increase of 8% compared to $1.82 per diluted share for the year ended 2006. GAAP net loss was ($0.55) per share for the fourth quarter of 2007, compared to GAAP earnings of $0.40 per diluted share for the fourth quarter 2006. As previously announced, included in the 2007 results was a fourth quarter non-cash charge to GAAP earnings of approximately $29 million, or $0.75 per diluted share, related to a reduction in the carrying value of goodwill with respect to Gibraltar Private Bank. Also included in the 2007 fourth quarter results is a non-cash charge to GAAP earnings of approximately $13.9 million pre-tax ($8.1 million after-tax), or $0.22 per diluted share, related to a reduction in the value of intangible assets at Dalton, Greiner, Hartman, Maher & Co., LLC (DGHM). This charge is the result of management's re-evaluation of certain assumptions used in the valuation models, given less robust asset flows than were previously expected, as well as market conditions. Excluding these impairment charges, operating earnings for the fourth quarter would have been $0.42 per diluted share, an increase of 5% from the fourth quarter last year. For the year, GAAP earnings were $0.39 per diluted share, a decrease of 73% compared to $1.43 per diluted share for the same period in 2006. Also, included in the fourth quarter 2007 financials are the results from the acquisition of Charter Bank ("Charter") on July 1, 2007. In addition, the revenues and expenses of Bingham Osborn & Scarborough LLC ("BOS") were included in the Company's consolidated results after they became a majority-owned affiliate partner in August 2007. Loan Credit Quality The Company's credit quality continues to compare favorably to industry averages.
-- The Company recorded $506 thousand in net charge offs during
the quarter, which represented less than 1 basis point of
total loans, well below the SNL Bank Index average of 30 basis
points (using third quarter 2007 statistics).
-- Non-performing assets as a percentage of total assets
increased 11 basis points, or $8.6 million, to $36.8 million
from the prior quarter, which represents 0.54% of total
assets, as of December 31, 2007. In comparison, the average
bank in the SNL Bank Index had non-performing assets that
represented 70 basis points of total assets for the third
quarter 2007.
-- The allowance for loan losses as a percentage of total loans
was 1.05%, up 2 basis points from the prior quarter and 4
basis points from the fourth quarter of 2006.
Financial Highlights
-- Operating earnings (as defined below) increased to $62.2
million for the year, a 14% increase over 2006. The Company's
private banking segment had operating earnings of $52.8
million, a 7% increase; the investment management segment had
operating income of $27.4 million, a 29% increase; and the
wealth advisory segment operating income was $5.0 million or a
50% increase.
-- Total Revenues for 2007 increased 17% to $404.7 million,
compared to $344.9 million a year ago. Fourth quarter revenues
were up 22% to $110.6 million from the fourth quarter of 2006.
-- Net Interest Income increased $15.5 million, or 9%, to $189.0
million. On a same affiliate basis, net interest income
increased $8.1 million, or 5%, to $181.6 million compared with
2006.
-- The net interest margin was 3.46%, a decrease of 12 basis
points from a year ago, and a decrease of 13 basis points
from the third quarter 2007.
-- The decline in net interest margin in the fourth quarter
resulted from declining loan yields caused by the three
Federal Reserve rate cuts since September, which were not
offset by corresponding declines in the cost of deposits due
to the competitive landscape.
-- Wealth Advisory Fee Income increased $9.3 million to $36.2
million for 2007, an increase of 34% over the prior year.
-- Investment Management Fee Income for 2007 totaled $162.6
million, an increase of 24% over 2006.
-- Total Assets Under Management/Advisory from consolidated and
unconsolidated affiliates increased 16%, or $5.1 billion, over
the prior year to $37.8 billion. On a linked quarter basis,
total assets under management and advisory from consolidated
and unconsolidated affiliates increased approximately $567
million, of which $545 million was due to net flows.
-- Change in Assets Under Management. On a consolidated basis,
Boston Private had net inflows of funds from the investment
managers and banks of approximately $1 billion for the full
year related to organic growth and an increase of
approximately $3 billion related to positive market
appreciation for the year.
Walter Pressey, President, said, "In 2007, Dalton Greiner appointed a new CEO, Bruce Geller, a new CIO, Jeff Baker, and adjusted their investment approach. These actions have positively impacted their results. Since June 2007, performance at DGHM has improved significantly. Virtually all of DGHM's products are currently exceeding relative benchmarks for the 1, 3, and 10 year periods. The 1 year performance of DGHM's flagship small cap value product ranks in the top 15% of its peer group. We believe that once the market recognizes Dalton Greiner's performance, assets will follow." Timothy L. Vaill, Chairman and Chief Executive Officer, said, "The Company continued its growth in revenues posting a nearly 22% increase for the fourth quarter as compared to 2006. I was gratified that this top line growth came despite a challenging macro-economic environment. We are inevitably going to have some credit issues and potentially some charge-offs at certain points in the economic cycle--we are not totally immune from that. But due to our business philosophy and sound credit culture we believe we will continue to compare favorably against the SNL Bank Index. I believe that the strength of our credit quality stems directly from our client-focused approach across all of our banking affiliates. Our people believe in uncompromising attention to detail and high quality, customized service. This approach has continued to stand us in good stead in the industry." David J. Kaye, Boston Private's Chief Financial Officer, noted, "I was pleased to see strong year over year operating earnings growth of 15% fueled by each one of our three segments, further validating our diversification strategy as a potent driver of our financial results. In addition, I believe we are well positioned as we enter 2008, as our net asset inflows of $545 million gave us one of the strongest quarters the Company has had in the last five years." Boston Private has also announced a change in its corporate management structure. Executives have been named as industry segment leaders replacing the geographic alignment formerly in place. J. H. Cromarty, formerly the President of the Eastern Region, will head up the Wealth Advisory business; James D. Dawson, formerly the President of Boston Private Bank, has been named the leader for the Private Banking segment, effective April 1, 2008; and for the Investment Management business--Timothy G. Dalton, the founder of Dalton, Greiner, Hartman & Maher LLC, will serve on an interim basis while the Company seeks a permanent leader. Jonathan H. Parker and Walter Pressey were also named Vice Chairs of the holding company. CEO Vaill commented, "We have been reporting financial results internally on a business segment basis for several quarters, and these changes will give management the focus needed to increase our effectiveness and profitability while we continue to grow our national franchise. Importantly, the executive skills and relevant experience being brought to bear by these three individuals will result in a stronger competitive stance." He concluded, "The banking and wealth management industries face challenges today. We believe this new management structure positions the Company to achieve its long-term objective to deliver organic growth and generate solid returns to our shareholders." Dividend Payment Increased Concurrent with the release of the fourth quarter 2007 earnings, the Board of Directors of the Company declared a cash dividend to shareholders of $0.10 per share, reflecting the quarterly earnings performance. The record date for this dividend is February 1, 2008 and the payment date is February 15, 2008. This is an increase from the previous quarterly level by $0.01 per share and reflects the eighth annual increase since the Company instituted a dividend in 1999. Cash Earnings Boston Private calculates its non-GAAP cash earnings by adjusting net income to exclude net amortization of intangibles, goodwill and intangibles impairment, and the impact of certain non-cash share based compensation plans, and includes related tax benefits that result from purchase accounting that are deferred under GAAP. In addition to GAAP earnings, the Company believes its non-GAAP cash earnings report the additional value to shareholders generated by purchase accounting adjustments and the non-cash share based compensation plans. (A detailed reconciliation table is attached.) Operating Earnings Boston Private defines operating earnings to be net income excluding goodwill and intangibles impairment charges, and related taxes, if applicable. Conference Call Management will host a conference call to review the Company's financial performance and business developments on January 24, 2008 at 9 a.m. Eastern time. Interested parties may join the call by dialing 800-867-0731 and the password required is "Boston". The call will be simultaneously web cast and may be accessed on the Internet by linking through www.bostonprivate.com. A continuous telephone replay will be available beginning at 11:30 a.m. Eastern time. The replay telephone number is 800-388-9064. Boston Private Wealth Management Group Boston Private is a financial services company that owns independently operated affiliates located in key geographic regions of the U.S. Boston Private's affiliates offer private banking, wealth advisory and investment management services to the high net worth marketplace, selected businesses and institutions. The Company's strategy is to enter new markets primarily through selected acquisitions, and then expand its wealth management business by way of organic growth. It makes investments in mid-size firms in demographically attractive areas, forming geographic clusters that represent the firm's three key disciplines. Boston Private provides continuing assistance to its affiliates with strategic matters, marketing, compliance and operations. For more information about Boston Private, visit the Company's web site at www.bostonprivate.com This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company's management uses these non-GAAP measures in its analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude the effects of net amortization of intangibles, tax benefits related to purchase accounting, stock options, goodwill and intangible impairment and ESPP expense. Because these items and their impact on the Company's performance are difficult to predict, management believes that presentations of financial measures considering the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.
Statements in this press release that are not historical facts are
forward-looking statements as defined by United States securities
laws. Forward-looking statements involve risks and uncertainties.
These statements include, but are not limited to, prospects for long
term financial performance, the impact on the Company's results of
market conditions and prevailing and future interest rates, prospects
for growth in balance sheet assets and assets under management and
advisory, 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
Boston Private's control and could cause actual results to differ
materially from those set forth in the forward-looking statements.
Factors that could cause actual results to differ materially from
those set forth in the forward-looking statements include, among
others, adverse conditions in the capital and debt markets and the
impact of such conditions on Boston Private's investment advisory
activities; interest rate compression which may adversely impact net
interest income; competitive pressures from other financial
institutions which, together with other factors, may affect the
Company's growth and financial performance; the effects of national
and local economic conditions; asset quality issues; and the risk that
goodwill and intangibles recorded in the Company's financial
statements will become impaired or further impaired; as well as the
other risks and uncertainties detailed in Boston Private's Annual
Report on Form 10-K and other filings submitted to the Securities and
Exchange Commission. Boston Private does not undertake any obligation
to update any forward-looking statement to reflect circumstances or
events that occur after the date the forward-looking statements are
made.
Boston Private Financial Holdings, Inc.
Selected Financial Data
(In Thousands, except share data)
(Unaudited)
-------------------------
December December
31, 31,
FINANCIAL DATA: 2007 2006
-------------------------
Total Balance Sheet Assets $ 6,828,519 $ 5,763,544
Stockholders' Equity 673,246 635,197
Tangible Capital:
Boston Private Bank & Trust 180,815 160,639
Borel Private Bank & Trust 105,267 91,300
First Private Bank & Trust 53,513 48,388
Gibraltar Private Bank & Trust 90,157 78,692
Charter Bank 28,237 -
Investment Securities 719,934 577,903
Goodwill 349,889 335,633
Intangible Assets 108,349 125,331
Commercial and Construction Loans 3,183,139 2,496,234
Residential Mortgage Loans 1,765,217 1,546,965
Home Equity and Other Consumer Loans 312,602 268,053
-------------------------
Total Loans 5,260,958 4,311,252
Loans Held for Sale 6,782 5,224
Allowance for Loan Losses and Off-Balance
Sheet Risk 59,446 48,973
Non-performing Loans 35,601 9,999
Repossessed Assets, Net 475 550
Other Real Estate Owned, Net 711 -
Total Non-performing Assets 36,787 10,549
Deposits 4,375,101 4,077,831
Borrowings 1,632,944 914,529
Book Value Per Share $ 17.97 $ 17.36
Market Price Per Share $ 27.08 $ 28.21
ASSETS UNDER MANAGEMENT AND ADVISORY:
Boston Private Bank & Trust $ 2,812,000 $ 2,369,000
Borel Private Bank & Trust 819,000 731,000
Gibraltar Private Bank & Trust 1,082,000 907,000
First Private Bank & Trust 25,000 5,000
-------------------------
Total Banks 4,738,000 4,012,000
Westfield Capital Management 13,140,000 10,102,000
Dalton, Greiner, Hartman, Maher & Co. 1,509,000 2,302,000
Anchor Capital Holdings 7,606,000 6,444,000
Boston Private Value Investors 803,000 961,000
-------------------------
Total Asset Managers 23,058,000 19,809,000
Sand Hill Advisors 1,186,000 1,252,000
RINET Company 1,457,000 1,262,000
KLS Professional Advisors Group 4,315,000 3,727,000
Bingham, Osborn, & Scarborough (1) 2,097,000 1,777,000
-------------------------
Total Wealth Advisors 9,055,000 8,018,000
Less: Inter-company Relationship (286,000) (238,000)
-------------------------
Consolidated Affiliate Assets Under
Management and Advisory $36,565,000 $31,601,000
Coldstream Capital Management 1,188,000 1,090,000
-------------------------
Total Assets Under Management and
Advisory $37,753,000 $32,691,000
FINANCIAL RATIOS:
Stockholders' Equity/Total Assets 9.86% 11.02%
Non-performing Loans/Total Loans 0.68% 0.23%
Allowance for Loan Losses and Off-Balance
Sheet Risk/Total Loans 1.13% 1.14%
Tangible Capital/ Tangible Assets 3.38% 3.29%
Three Months Ended Twelve Months
Ended
December December December December
31, 31, 31, 31,
OPERATING RESULTS: 2007 2006 2007 2006
-------------------- ------------------
Net Interest Income - on a
Fully Taxable Equivalent
Basis (FTE) $ 53,045 $44,960 $195,995 $179,276
FTE Adjustment 1,837 1,575 7,016 5,763
-------------------- ------------------
Net Interest Income 51,208 43,385 188,979 173,513
-------------------- ------------------
Investment Management &
Trust Fees:
Westfield Capital
Management 20,597 15,567 75,411 57,445
Boston Private Bank &
Trust 4,240 3,578 15,804 13,818
Boston Private Value
Investors 1,573 1,748 6,809 6,805
Borel Private Bank &
Trust 1,229 1,130 4,853 4,326
Gibraltar Private Bank &
Trust 2,149 1,764 8,095 6,479
Dalton, Greiner, Hartman,
Maher & Co. 3,778 5,043 16,363 26,182
First Private Bank &
Trust 42 5 116 5
Anchor Capital Holdings
(8) 9,199 7,356 35,164 16,474
-------------------- ------------------
Total Investment Management
& Trust Fees 42,807 36,191 162,615 131,534
Wealth Advisory Fees:
RINET Company 2,184 2,135 9,097 8,181
Sand Hill Advisors 1,583 1,556 6,612 6,198
KLS Professional Advisors
Group 3,910 3,336 14,665 12,375
Bingham, Osborn, &
Scarborough (1) 3,386 - 5,657 -
Other 53 55 201 204
-------------------- ------------------
Total Wealth Advisory Fees 11,116 7,082 36,232 26,958
-------------------- ------------------
Other Fees 2,876 2,312 11,135 7,843
-------------------- ------------------
Total Fees 56,799 45,585 209,982 166,335
-------------------- ------------------
Earnings in Equity
Investments 2,120 1,515 3,782 3,034
Gain on Sale of Loans, Net 440 434 1,963 1,972
-------------------- ------------------
Total Fees and Other Income 59,359 47,534 215,727 171,341
-------------------- ------------------
Total Revenue 110,567 90,919 404,706 344,854
-------------------- ------------------
Provision for Loan Losses 3,347 987 9,006 6,179
-------------------- ------------------
Salaries and Employee
Benefits 52,940 41,611 196,524 163,438
Occupancy and Equipment 8,999 7,900 33,684 29,149
Professional Services 4,341 3,651 15,629 13,346
Marketing and Business
Development 3,103 2,169 11,083 8,705
Contract Services and
Processing 1,816 1,321 6,555 5,125
Amortization of Intangibles 3,699 3,874 14,484 13,649
Provision for Unfunded Loan
Commitments 116 240 (1,328) 839
Other 5,244 4,272 18,366 16,198
-------------------- ------------------
Total Operating Expense 80,258 65,038 294,997 250,449
-------------------- ------------------
Income before Minority
Interest, Income Taxes &
Impairment 26,962 24,894 100,703 88,226
Impairment of Goodwill and
Intangibles, net (7) 37,150 - 47,204 -
-------------------- ------------------
Income before Minority
Interest and Income Taxes (10,188) 24,894 53,499 88,226
Minority Interest 1,511 1,020 4,842 3,699
Income Before Income Taxes (11,699) 23,874 48,657 84,527
Income Tax Expense, net of
impairment 8,673 8,266 33,702 30,154
-------------------- ------------------
Net (Loss ) Income ($20,372) $15,608 $ 14,955 $ 54,373
-------------------- ------------------
-------------------- ------------------
Three Months Ended Twelve Months
Ended
December December December December
31, 31, 31, 31,
RECONCILIATION OF GAAP
EARNINGS 2007 2006 2007 2006
-------------------- ------------------
TO CASH EARNINGS:
Net (Loss) Income (GAAP
Basis) ($20,372) $15,608 $ 14,955 $ 54,373
Cash Basis Earnings (2)
Book Amortization of
Purchased Intangibles, net
of tax 2,052 2,091 7,855 7,514
Cash Benefit of Tax
Deductions
from Purchased Intangibles
& Goodwill 1,098 1,138 4,398 4,206
Impairment of Goodwill and
Intangibles, net (7) 37,150 - 47,204 -
Stock options and ESPP, net
of tax 950 830 4,032 3,622
-------------------- ------------------
Total Cash Basis Adjustment 41,250 4,059 63,489 15,342
-------------------- ------------------
Cash Basis Earnings $ 20,878 $19,667 $ 78,444 $ 69,715
-------------------- ------------------
-------------------- ------------------
Three Months Ended Twelve Months
Ended
December December December December
31, 31, 31, 31,
2007 2006 2007 2006
-------------------- ------------------
PER SHARE DATA: (In
thousands, except per share
data)
Calculation of Net Income for
EPS:
Net (Loss) Income as
reported and for basic EPS ($20,372) $15,608 $ 14,955 $ 54,373
Interest on convertible
trust preferred
securities, net of tax (6) - 765 - 3,060
-------------------- ------------------
Net Income for diluted EPS ($20,372) $16,373 $ 14,955 $ 57,433
Interest on convertible
trust preferred
securities, net of tax for
Cash EPS (6) 750 - 3,000 -
Calculation of average shares
outstanding:
Weighted average basic
shares 37,058 36,064 36,732 35,453
Dilutive effect of:
Stock Options, Stock Grants
and Other (6) - 1,560 1,583 1,453
Convertible trust preferred
securities (6) - 3,183 - 3,183
-------------------- ------------------
Dilutive potential
common shares - 4,743 1,583 4,636
Weighted average diluted
shares for EPS 37,058 40,807 38,315 40,089
Weighted average diluted
shares for Cash EPS 41,960 40,807 41,499 40,089
Earnings per Share:
Basic ($0.55) $ 0.43 $ 0.41 $ 1.53
Diluted (6) ($0.55) $ 0.40 $ 0.39 $ 1.43
RECONCILIATION OF GAAP EPS
TO CASH EPS (2):
(on a Diluted Basis)
Earnings Per Share (GAAP
Basis) ($0.55) $ 0.40 $ 0.39 $ 1.43
Cash Basis Adjustment $ 1.07 $ 0.10 $ 1.57 $ 0.39
-------------------- ------------------
Cash Basis Earnings Per
Diluted Share $ 0.52 $ 0.50 $ 1.96 $ 1.82
-------------------- ------------------
-------------------- ------------------
Three Months Ended Twelve Months
Ended
December December December December
31, 31, 31, 31,
2007 2006 2007 2006
-------------------- ------------------
OPERATING RATIOS &
STATISTICS:
Return on Average Equity -11.79% 9.96% 2.24% 9.27%
Return on Average Assets -1.19% 1.10% 0.24% 1.02%
Net Interest Margin 3.46% 3.58% 3.54% 3.84%
Core Net Interest Margin(3) 3.70% 3.85% 3.79% 4.12%
Total Fees and Other
Income/Total Revenue 53.69% 52.28% 53.30% 49.69%
Efficiency Ratio 69.59% 67.29% 69.42% 68.27%
Loans Charged-off, Net of
(Recoveries) $ 506 ($39) $ 78 $ 399
RECONCILIATION OF NIM TO CORE
NIM
Net Interest Margin 3.46% 3.58% 3.54% 3.84%
Effect of Trust Preferred &
Acquisition Financing 0.24% 0.27% 0.25% 0.28%
Core Net Interest Margin(3) 3.70% 3.85% 3.79% 4.12%
CASH OPERATING RATIOS:
Return on Average Equity (4) 12.09% 12.54% 11.74% 11.89%
Return on Average Assets (5) 1.22% 1.39% 1.25% 1.31%
-------------------- ------------------
----------------------------------------------------------------------
AVERAGE Three Months Ended Three Months Ended
BALANCE
SHEET:
December 31, 2007 December 31, 2006
---------------------------- ---------------------------
Average Income/ Yield/ Average Income/ Yield/
AVERAGE Balance Expense Rate Balance Expense Rate
ASSETS:
-------------------- ------- ------------------- -------
Earning
Assets
Cash and
investment $ 896,755 $ 11,095 4.93% $ 725,252 $ 8,625 4.72%
Loans
Commercial
and
Construction 3,109,737 60,046 7.59% 2,411,415 47,432 7.74%
Residential
Mortgage 1,754,303 26,589 6.06% 1,535,098 21,819 5.69%
Home Equity
and Other
Consumer 305,759 5,721 7.32% 273,830 5,607 7.78%
----------- -------- -------------------
Total Earning
Assets 6,066,554 103,451 6.74% 4,945,595 83,483 6.66%
----------- -------- -------------------
Allowance for
Loan Losses (54,135) (42,634)
Cash and due
From Banks 67,231 55,612
Other Assets 741,956 693,800
----------- -----------
TOTAL AVERAGE
ASSETS $6,821,606 $5,652,373
=========== ===========
AVERAGE LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest-
Bearing
Liabilities:
Deposits:
Savings and
NOW $ 585,175 $ 3,068 2.08% $ 459,196 $ 2,167 1.87%
Money
Market 1,870,804 15,731 3.34% 1,878,662 15,439 3.26%
Certificate
of Deposits 1,161,921 14,058 4.80% 871,428 10,028 4.57%
----------- -------- -------------------
Total
Deposits 3,617,900 32,857 3.60% 3,209,286 27,634 3.42%
Junior Sub-
ordinated
Debentures
and Other
Long-Term
Debt 525,553 5,985 5.71% 234,021 3,318 5.55%
FHLB
Borrowings
and Other 1,043,429 11,564 4.34% 684,867 7,571 4.35%
----------- -------- -------------------
Total
Interest-
Bearing
Liabilities 5,186,882 50,406 3.84% 4,128,174 38,523 3.49%
----------- -------- -------------------
Non-interest
Bearing
Demand
Deposits 794,829 741,198
Payables and
Other
Liabilities 148,943 155,861
------------ -----------
Total
Liabilities 6,130,654 5,025,233
Stock-
holders'
Equity 690,952 627,140
------------ -----------
TOTAL AVERAGE
LIABILITIES &
STOCKHOLDERS'
EQUITY $6,821,606 $5,652,373
=========== ===========
Net Interest
Income (FTE) $ 53,045 $ 44,960
-------------------- ------- ------------------- -------
-------------------- ------- ------------------- -------
AVERAGE Twelve Months Ended Twelve Months Ended
BALANCE
SHEET:
December 31, 2007 December 31, 2006
---------------------------- ---------------------------
Average Income/ Yield/ Average Income/ Yield/
AVERAGE Balance Expense Rate Balance Expense Rate
ASSETS:
-------------------- ------- ------------------- -------
Earning
Assets
Cash and
investment $ 774,907 $ 38,319 4.94% $ 701,653 $ 30,824 4.39%
Loans
Commercial
and
Construction 2,801,717 222,176 7.93% 2,226,396 172,002 7.70%
Residential
Mortgage 1,670,145 95,296 5.71% 1,466,182 82,255 5.61%
Home Equity
and Other
Consumer 286,024 21,978 7.68% 263,045 20,714 7.75%
----------- -------- -------------------
Total
Earning
Assets 5,532,793 377,769 6.83% 4,657,276 305,795 6.55%
----------- -------- -------------------
Allowance
for Loan
Losses (50,333) (40,101)
Cash and due
From Banks 74,503 60,681
Other Assets 703,517 633,886
----------- -----------
TOTAL AVERAGE
ASSETS $6,260,480 $5,311,742
=========== ===========
AVERAGE LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest-
Bearing
Liabilities:
Deposits:
Savings and
NOW $ 564,758 $ 11,995 2.12% $ 453,587 $ 6,754 1.49%
Money Market 1,864,603 62,722 3.36% 1,768,655 49,002 2.77%
Certificate
of Deposits 1,011,244 48,428 4.79% 767,736 31,506 4.10%
----------- -------- -------------------
Total
Deposits 3,440,605 123,145 3.58% 2,989,978 87,262 2.92%
Junior Sub-
ordinated
Debentures
and Other
Long-Term
Debt 365,845 18,361 5.67% 234,021 13,167 5.63%
FHLB
Borrowings
and Other 895,963 40,268 4.49% 624,955 26,090 4.13%
----------- -------- -------------------
Total
Interest-
Bearing
Liabilities 4,702,413 181,774 3.87% 3,848,954 126,519 3.28%
----------- -------- -------------------
Non-interest
Bearing
Demand
Deposits 748,538 735,224
Payables and
Other
Liabilities 141,414 141,098
------------ -----------
Total
Liabilities 5,592,365 4,725,276
Stock-
holders'
Equity 668,115 586,466
------------ -----------
TOTAL AVERAGE
LIABILITIES &
STOCKHOLDERS'
EQUITY $6,260,480 $5,311,742
============ ===========
Net Interest
Income (FTE) $195,995 $179,276
-------------------- ------- ------------------- -------
Private Banking Data - Period End Data December 31, December 31,
2007 2006
-------------------------
Loans:
Boston Private Bank & Trust $ 2,063,190 $ 1,784,579
Borel Private Bank & Trust 1,047,545 888,147
First Private Bank & Trust 544,849 417,852
Gibraltar Private Bank & Trust 1,353,617 1,216,977
Charter Bank 246,807 -
Deposits:
Boston Private Bank & Trust 1,843,389 1,822,304
Borel Private Bank & Trust 1,000,264 865,025
First Private Bank & Trust 504,587 459,413
Gibraltar Private Bank & Trust 832,818 952,387
Charter Bank 221,477 -
-------------------------
-------------------------
Three Months Ended
December 31, December 31,
2007 2006
-------------------------
NIM:
Boston Private Bank & Trust 2.94% 3.09%
Borel Private Bank & Trust 4.27% 4.64%
First Private Bank & Trust 5.47% 5.68%
Gibraltar Private Bank & Trust 3.62% 3.90%
Charter Bank 4.71% -
-------------------------
December 31, September
30,
2007 2007
-------------------------
FINANCIAL DATA:
Total Balance Sheet Assets $ 6,828,519 $ 6,595,539
Stockholders' Equity 673,246 690,303
Tangible Capital:
Boston Private Bank & Trust 180,815 172,652
Borel Private Bank & Trust 105,267 102,305
First Private Bank & Trust 53,513 51,257
Gibraltar Private Bank & Trust 90,157 86,907
Charter Bank 28,237 26,653
Investment Securities 719,934 620,821
Goodwill 349,889 365,862
Intangible Assets 108,349 124,442
Commercial and Construction Loans 3,183,139 2,974,098
Residential Mortgage Loans 1,765,217 1,761,538
Home Equity and Other Consumer Loans 312,602 302,360
-------------------------
Total Loans 5,260,958 5,037,996
Loans Held for Sale 6,782 2,959
Allowance for Loan Losses and Off-Balance
Sheet Risk 59,446 56,161
Non-performing Loans 35,601 25,574
Repossessed Assets, Net 475 475
Other Real Estate Owned 711 2,116
Total Non-performing Assets 36,787 28,165
Deposits 4,375,101 4,310,908
Borrowings 1,632,944 1,465,000
Book Value Per Share $ 17.97 $ 18.46
Market Price Per Share $ 27.08 $ 27.84
ASSETS UNDER MANAGEMENT AND ADVISORY:
Boston Private Bank & Trust $ 2,812,000 $ 2,784,000
Borel Private Bank & Trust 819,000 740,000
Gibraltar Private Bank & Trust 1,082,000 1,046,000
First Private Bank & Trust 25,000 22,000
-------------------------
Total Banks 4,738,000 4,592,000
Westfield Capital Management 13,140,000 12,306,000
Dalton, Greiner, Hartman, Maher & Co. 1,509,000 1,780,000
Anchor Capital Holdings 7,606,000 7,648,000
Boston Private Value Investors 803,000 870,000
-------------------------
Total Asset Managers 23,058,000 22,604,000
Sand Hill Advisors 1,186,000 1,205,000
RINET Company 1,457,000 1,398,000
KLS Professional Advisors Group 4,315,000 4,355,000
Bingham, Osborn, & Scarborough (1) 2,097,000 2,098,000
-------------------------
Total Wealth Advisors 9,055,000 9,056,000
Less: Inter-company Relationship (286,000) (254,000)
-------------------------
Consolidated Affiliate Assets Under
Management and Advisory 36,565,000 35,998,000
Coldstream Capital Management 1,188,000 1,188,000
-------------------------
Total Unconsolidated Assets Under
Management and Advisory $37,753,000 $37,186,000
FINANCIAL RATIOS:
Stockholders' Equity/Total Assets 9.86% 10.47%
Nonperforming Loans/Total Loans 0.68% 0.51%
Allowance for Loan Losses and Off-Balance
Sheet Risk/Total Loans 1.13% 1.11%
Tangible Capital/Tangible Assets 3.38% 3.28%
-------------------------
Three Months Ended
December 31, September 30,
OPERATING RESULTS: 2007 2007
--------------------------
Net Interest Income - on a Fully Taxable
Equivalent Basis (FTE) $53,045 $51,969
FTE Adjustment 1,837 1,821
--------------------------
Net Interest Income 51,208 50,148
--------------------------
Investment Management & Trust Fees:
Westfield Capital Management 20,597 19,405
Boston Private Bank & Trust 4,240 4,021
Boston Private Value Investors 1,573 1,737
Borel Private Bank & Trust 1,229 1,256
Gibraltar Private Bank & Trust 2,149 2,051
Dalton, Greiner, Hartman, Maher & Co. 3,778 4,079
First Private Bank & Trust 42 25
Anchor Capital 9,199 9,229
--------------------------
Total Investment Management & Trust Fees 42,807 41,803
Wealth Advisory Fees
RINET Company 2,184 2,403
Sand Hill Advisors 1,583 1,629
KLS Professional Advisors Group 3,910 3,760
Bingham, Osborn, & Scarborough (1) 3,386 2,271
Other 53 55
--------------------------
Total Wealth Advisory Fees 11,116 10,118
--------------------------
Other Fees 2,876 2,783
--------------------------
Total Fees 56,799 54,704
--------------------------
Earnings in Equity Investments 2,120 398
Gain on Sale of Loans, Net 440 296
Total Fees and Other Income 59,359 55,398
--------------------------
Total Revenue 110,567 105,546
--------------------------
Provision for Loan Losses 3,347 3,738
--------------------------
Salaries and Benefits 52,940 50,312
Occupancy and Equipment 8,999 8,708
Professional Services 4,341 3,953
Marketing and Business Development 3,103 2,548
Contract Services and Processing 1,816 1,696
Amortization of Intangibles 3,699 3,728
Provision for Unfunded Loan Commitments 116 (2,029)
Other 5,244 4,640
--------------------------
Total Operating Expense 80,258 73,556
--------------------------
Income before Minority Interest, Income
Taxes & Impairment 26,962 28,252
Impairment of Goodwill and Intangibles,
net (7) 37,150 -
Income before Minority Interest and
Income Taxes (10,188) 28,252
Minority Interest 1,511 1,509
Income Before Income Taxes (11,699) 26,743
Income Tax Expense 8,673 9,326
--------------------------
Net (Loss) Income ($20,372) $17,417
--------------------------
Three Months Ended
December 31, September 30,
RECONCILIATION OF GAAP EARNINGS 2007 2007
--------------------------
TO CASH EARNINGS (2):
Net (Loss) Income (GAAP Basis) ($20,372) $17,417
Cash Basis Earnings
Book Amortization of
Purchased Intangibles, net of tax 2,052 2,002
Cash Benefit of Tax Deductions
from Purchased Intangibles & Goodwill 1,098 1,112
Impairment of Goodwill and Intangibles,
net (7) 37,150 -
Stock options and ESPP, net of tax 950 1,036
--------------------------
Total Cash Basis Adjustment 41,250 4,150
--------------------------
Cash Basis Earnings $20,878 21,567
--------------------------
Three Months Ended
December 31, September 30,
2007 2007
--------------------------
PER SHARE DATA: (In thousands, except per
share data)
Calculation of Net Income for EPS:
Net (Loss )Income as reported and for
basic EPS ($20,372) $17,417
Interest on convertible trust preferred
securities, net of tax (6) - 750
--------------------------
Net Income for diluted EPS ($20,372) $18,167
Interest on convertible trust preferred
securities, net of tax for Cash EPS (6) 750 -
Calculation of Average Shares Outstanding:
Weighted average basic shares 37,058 36,976
Dilutive effect of:
Stock Options, Stock Grants, and Other
(6) - 1,463
Convertible trust preferred securities
(6) - 3,184
--------------------------
Dilutive potential common shares - 4,647
Weighted average diluted shares for EPS 37,058 41,623
Weighted average diluted shares for Cash
EPS 41,960 41,623
Earnings per Share:
Basic ($0.55) $0.47
Diluted ($0.55) $0.44
RECONCILIATION OF GAAP EPS
TO CASH EPS (2):
(on a Diluted Basis)
Earnings Per Share (GAAP Basis) ($0.55) $0.44
Cash Basis Adjustment $1.07 $0.10
--------------------------
Cash Basis Earnings Per Diluted Share $0.52 $0.54
--------------------------
OPERATING RATIOS & STATISTICS:
Return on Average Equity -11.79% 10.29%
Return on Average Assets -1.19% 1.07%
Net Interest Margin 3.46% 3.59%
Core Net Interest Margin (3) 3.70% 3.83%
Total Fees and Other Income/Total Revenue 53.69% 52.49%
Efficiency Ratio 69.59% 67.36%
Loans Charged-off, Net of (Recoveries) $506 $90
RECONCILIATION OF NIM TO CORE NIM
Net Interest Margin 3.46% 3.59%
Effect of Trust Preferred , Net 0.24% 0.24%
Core Net Interest Margin (3) 3.70% 3.83%
--------------------------
AVERAGE BALANCE
SHEET: Three Months Ended Three Months Ended
------------------------- -------------------------
December 31, 2007 September 30, 2007
------------------------- -------------------------
Average Income/ Yield/ Average Income/ Yield/
AVERAGE ASSETS: Balance Expense Rate Balance Expense Rate
------------------------- ---------- --------------
Earning Assets
Cash and
investment $896,755 $11,095 4.93% $775,588 $8,631 5.01%
Loans
Commercial and
Construction 3,109,737 60,046 7.59% 2,922,801 57,117 7.79%
Residential
Mortgage 1,754,303 26,589 6.06% 1,733,467 26,383 6.09%
Home Equity and
Other Consumer 305,759 5,721 7.32% 296,020 6,025 7.94%
---------- ------- ---------- -------
Total Earning
Assets 6,066,554 103,451 6.74% 5,727,876 98,156 7.20%
------------------ ------ ---------- -------
Allowance for Loan
Losses (54,135) (52,170)
Cash and due From
Banks 67,231 80,293
Other Assets 741,956 738,978
---------- ----------
TOTAL AVERAGE
ASSETS $6,821,606 $6,494,977
========== ==========
AVERAGE LIABILITIES
AND STOCKHOLDERS'
EQUITY:
Interest-Bearing
Liabilities:
Deposits:
Savings and NOW $585,175 $3,068 2.08% $563,174 $2,983 2.10%
Money Market 1,870,804 15,731 3.34% 1,836,110 15,554 3.36%
Certificate of
Deposits 1,161,921 14,058 4.80% 1,067,439 13,067 4.86%
---------- ------- ---------- -------
Total Deposits 3,617,900 32,857 3.60% 3,466,723 31,604 3.62%
Junior
Subordinated
Debentures and
Other Long-Term
Debt 525,553 5,985 5.71% 507,174 5,784 5.47%
FHLB Borrowings
and Other 1,043,429 11,564 4.34% 932,362 10,620 4.44%
---------- ------- ---------- -------
Total Interest-
Bearing
Liabilities 5,186,882 50,406 3.84% 4,906,259 48,008 4.47%
---------- ------- ---------- -------
Non-interest
Bearing Demand
Deposits 794,829 762,768
Payables and Other
Liabilities 148,943 148,818
----------- ----------
Total Liabilities 6,130,654 5,817,845
Stockholders'
Equity 690,952 677,132
----------- ----------
TOTAL AVERAGE
LIABILITIES &
STOCKHOLDERS'
EQUITY $6,821,606 $6,494,977
========== ==========
Net Interest
Income $53,045 $50,148
------- -------
Private Banking Data - Period End Data December 31, September 30,
2007 2007
--------------------------
Loans:
Boston Private Bank & Trust $2,063,190 $1,959,709
Borel Private Bank & Trust 1,047,545 979,417
First Private Bank & Trust 544,849 521,730
Gibraltar Private Bank & Trust 1,353,617 1,326,385
Charter Bank 246,807 248,710
Deposits:
Boston Private Bank & Trust 1,843,389 1,825,365
Borel Private Bank & Trust 1,000,264 926,085
First Private Bank & Trust 504,587 527,171
Gibraltar Private Bank & Trust 832,818 847,070
Charter Bank 221,477 216,630
--------------------------
--------------------------
Three Months Ended
December 31, September 30,
2007 2007
--------------------------
NIM:
Boston Private Bank & Trust 2.94% 3.04%
Borel Private Bank & Trust 4.27% 4.43%
First Private Bank & Trust 5.47% 5.67%
Gibraltar Private Bank & Trust 3.62% 3.77%
Charter Bank 4.71% 5.10%
SAME AFFILIATES
Growth Excluding Acquisitions
Same
As Reported Acquisitions Affiliates
December 31, December 31, December 31, December 31,
FINANCIAL DATA: 2007 2006 2007 2007
------------------------- ------------ ------------
Total Balance
Sheet Assets $6,828,519 $5,763,544 $427,616 $6,400,903
Stockholders'
Equity 673,246 635,197 44,373 628,873
Tangible Capital:
Boston Private
Bank & Trust 180,815 160,639 - 180,815
Borel Private
Bank & Trust 105,267 91,300 - 105,267
First Private
Bank & Trust 53,513 48,388 - 53,513
Gibraltar
Private Bank &
Trust 90,157 75,340 - 90,157
Charter Bank 28,237 - 28,237 -
Investment
Securities 719,934 577,903 50,662 669,272
Goodwill 349,889 335,633 49,535 300,354
Intangible Assets 108,349 125,331 6,647 101,702
Commercial and
Construction
Loans 3,183,139 2,496,234 218,117 2,965,022
Residential
Mortgage Loans 1,765,217 1,546,965 24,526 1,740,691
Home Equity and
Other Consumer
Loans 312,602 268,053 4,164 308,438
------------------------- ------------ ------------
Total Loans 5,260,958 4,311,252 246,807 5,014,151
Loans Held for
Sale 6,782 5,224 - 6,782
Allowance for
Loan Losses and
Off-Balance
Sheet Risk 59,446 48,973 2,704 56,742
Non-performing
Loans 35,601 9,999 - 35,601
Repossessed
Assets, Net 475 550 - 475
Other Real Estate
Owned, Net 711 - - 711
Total Non-
performing
Assets 36,787 10,549 - 36,787
Deposits 4,375,101 4,077,831 221,477 4,153,624
Borrowings 1,632,944 914,529 102,410 1,530,534
ASSETS UNDER
MANAGEMENT AND
ADVISORY:
Boston Private
Bank & Trust $2,812,000 $2,369,000 - $2,812,000
Borel Private
Bank & Trust 819,000 731,000 - 819,000
Gibraltar Private
Bank & Trust 1,082,000 907,000 - 1,082,000
First Private
Bank & Trust 25,000 5,000 - 25,000
-------------------------
Total Banks 4,738,000 4,012,000 - 4,738,000
Westfield Capital
Management 13,140,000 10,102,000 - 13,140,000
Dalton, Greiner,
Hartman, Maher &
Co. 1,509,000 2,302,000 - 1,509,000
Anchor Capital
Holdings 7,606,000 6,444,000 - 7,606,000
Boston Private
Value Investors 803,000 961,000 - 803,000
-------------------------
Total Asset
Managers 23,058,000 19,809,000 - 23,058,000
Sand Hill
Advisors 1,186,000 1,252,000 - 1,186,000
RINET Company 1,457,000 1,262,000 - 1,457,000
KLS Professional
Advisors Group 4,315,000 3,727,000 - 4,315,000
Bingham, Osborn,
& Scarborough
(1) 2,097,000 1,777,000 - 2,097,000
-------------------------
Total Wealth
Advisors 9,055,000 8,018,000 - 9,055,000
Less: Inter-
company
Relationship (286,000) (238,000) - (286,000)
------------------------- ------------ ------------
Consolidated
Affiliate
Assets Under
Management and
Advisory $36,565,000 $31,601,000 - 36,565,000
Coldstream
Capital
Management 1,188,000 1,090,000 - 1,188,000
------------------------- ------------ ------------
Total Assets
Under
Management and
Advisory $37,753,000 $32,691,000 - $37,753,000
---------------------------------------------------
Three Months Ended
---------------------------------------------------
Same
As Reported Acquisitions Affiliates
December 31, December 31, December 31, December 31,
OPERATING RESULTS 2007 2006 2007 2007
---------------------------------------------------
Net Interest
Income - on a
Fully Taxable
Equivalent Basis
(FTE) $53,045 $44,960 $3,528 $49,517
FTE Adjustment 1,837 1,575 - 1,837
------------------------- ------------ ------------
Net Interest
Income 51,208 43,385 3,528 47,680
------------------------- ------------ ------------
Investment
Management &
Trust Fees:
Westfield
Capital
Management 20,597 15,567 - 20,597
Boston Private
Bank & Trust 4,240 3,578 - 4,240
Boston Private
Value
Investors 1,573 1,748 - 1,573
Borel Private
Bank & Trust 1,229 1,130 - 1,229
Gibraltar
Private Bank
& Trust 2,149 1,764 - 2,149
Dalton,
Greiner,
Hartman,
Maher & Co. 3,778 5,043 - 3,778
First Private
Bank & Trust 42 5 - 42
Anchor Capital
Holdings 9,199 7,356 - 9,199
------------------------- ------------ ------------
Total Investment
Management &
Trust Fees 42,807 36,191 - 42,807
Wealth Advisory
Fees:
RINET Company 2,184 2,135 - 2,184
Sand Hill
Advisors 1,583 1,556 - 1,583
KLS
Professional
Advisors
Group 3,910 3,336 - 3,910
Bingham,
Osborn, &
Scarborough
(1) 3,386 - - 3,386
Other 53 55 - 53
------------------------- ------------ ------------
Total Wealth
Advisory Fees 11,116 7,082 - 11,116
------------------------- ------------ ------------
Other Fees 2,876 2,312 180 2,696
------------------------- ------------ ------------
Total Fees 56,799 45,585 180 56,619
------------------------- ------------ ------------
Earnings in
Equity
Investments 2,120 1,515 - 2,120
Gain on Sale of
Loans, Net 440 434 - 440
------------------------- ------------ ------------
Total Fees and
Other Income 59,359 47,534 180 59,179
------------------------- ------------ ------------
Total Revenue 110,567 90,919 3,708 106,859
------------------------- ------------ ------------
Provision for
Loan Losses 3,347 987 51 3,296
------------------------- ------------ ------------
Salaries and
Employee
Benefits 52,940 41,611 1,611 51,329
Occupancy and
Equipment 8,999 7,900 291 8,708
Professional
Services 4,341 3,651 151 4,190
Marketing and
Business
Development 3,103 2,169 79 3,024
Contract Services
and Processing 1,816 1,321 76 1,740
Amortization of
Intangibles 3,699 3,874 272 3,427
Provision for
Unfunded Loan
Commitments 116 240 - 116
Other 5,244 4,272 360 4,884
------------------------- ------------ ------------
Total Operating
Expense 80,258 65,038 2,840 77,418
------------------------- ------------ ------------
Income before
Minority
Interest,
Income Taxes &
Impairment 26,962 24,894 817 26,145
Impairment of
Goodwill and
Intangibles, net
(7) 37,150 - - 37,150
Income before
Minority
Interest and
Income Taxes (10,188) 24,894 817 (11,005)
Minority Interest 1,511 1,020 - 1,511
Income Before
Income Taxes (11,699) 23,874 817 (12,516)
Income Tax
Expense 8,673 8,266 192 8,481
------------------------- ------------ ------------
Net (Loss)
Income ($20,372) $15,608 $625 ($20,997)
------------------------- ------------ ------------
Twelve Months Ended
---------------------------------------------------
Same
As Reported Acquisitions Affiliates
December 31, December 31, December 31, December 31,
OPERATING RESULTS: 2007 2006 2007 2007
------------------------- ------------ ------------
Net Interest
Income - on a
Fully Taxable
Equivalent Basis
(FTE) $195,995 $179,276 $7,360 $188,635
FTE Adjustment 7,016 5,763 - 7,016
------------------------- ------------ ------------
Net Interest
Income 188,979 173,513 7,360 181,619
------------------------- ------------ ------------
Investment
Management &
Trust Fees:
Westfield
Capital
Management 75,411 57,445 - 75,411
Boston Private
Bank & Trust 15,804 13,818 - 15,804
Boston Private
Value
Investors 6,809 6,805 - 6,809
Borel Private
Bank & Trust 4,853 4,326 - 4,853
Gibraltar
Private Bank
& Trust 8,095 6,479 - 8,095
Dalton,
Greiner,
Hartman,
Maher & Co. 16,363 26,182 - 16,363
First Private
Bank & Trust 116 - - 116
Anchor Capital
Holdings (8) 35,164 16,474 13,908 21,256
------------------------- ------------ ------------
Total Investment
Management &
Trust Fees 162,615 131,529 13,908 148,707
Wealth Advisory
Fees:
RINET Company 9,097 8,181 - 9,097
Sand Hill
Advisors 6,612 6,198 - 6,612
KLS
Professional
Advisors
Group 14,665 12,375 - 14,665
Bingham,
Osborn, &
Scarborough
(1) 5,657 - - 5,657
Other 201 204 - 201
------------------------- ------------ ------------
Total Wealth
Advisory Fees 36,232 26,958 - 36,232
------------------------- ------------ ------------
Other Fees 11,135 7,843 465 10,670
------------------------- ------------ ------------
Total Fees 209,982 166,330 14,373 195,609
------------------------- ------------ ------------
Earnings in
Equity
Investments 3,782 3,034 - 3,782
Gain on Sale of
Loans, Net 1,963 1,972 - 1,963
------------------------- ------------ ------------
Total Fees and
Other Income 215,727 171,336 14,373 201,354
------------------------- ------------ ------------
Total Revenue 404,706 344,849 21,733 382,973
------------------------- ------------ ------------
Provision for
Loan Losses 9,006 6,179 170 8,836
------------------------- ------------ ------------
Salaries and
Employee
Benefits 196,524 163,438 10,298 186,226
Occupancy and
Equipment 33,684 29,149 892 32,792
Professional
Services 15,629 13,346 344 15,285
Marketing and
Business
Development 11,083 8,705 443 10,640
Contract Services
and Processing 6,555 5,125 239 6,316
Amortization of
Intangibles 14,484 13,649 1,915 12,569
Provision for
Unfunded Loan
Commitments (1,328) 839 - (1,328)
Other 18,366 16,198 897 17,469
------------------------- ------------ ------------
Total Operating
Expense 294,997 250,449 15,028 279,969
------------------------- ------------ ------------
Income before
Minority
Interest,
Income Taxes &
Impairment 100,703 88,221 6,535 94,168
Impairment of
Goodwill and
Intangibles, net
(7) 47,204 - - 47,204
Income before
Minority
Interest and
Income Taxes 53,499 88,221 6,535 46,964
Minority Interest 4,842 3,699 891 3,951
Income Before
Income Taxes 48,657 84,522 5,644 43,013
Income Tax
Expense 33,702 30,154 2,104 31,598
------------------------- ------------ ------------
Net Income $14,955 $54,368 $3,540 $11,415
------------------------- ------------ ------------
(1) The Company went from a minority to majority ownership of Bingham, Osborn, and Scarborough in Q3 2007. Prior period financial information is included with Earnings in Equity Investments. Prior period AUM data is shown for comparative purposes as being included with the consolidated Company. (2) The Company calculates its cash earnings by adjusting net income to exclude the amortization of the purchased intangibles (net of tax), the tax benefit on the portion of the purchase price allocated to goodwill, which is deductible over a 15 year life, impairment, and certain non-cash share based compensation plans (net of tax). The tax savings are deferred under GAAP accounting but are included in cash earnings since the tax savings (lower tax payment) will be retained unless the acquired company is sold. The Company uses certain non-GAAP financial measures, such as Cash Earnings, to provide information for investors to effectively analyze financial trends of ongoing business activities. (3) The Company defines Core Net Interest Margin as Net Interest Margin excluding the interest expense on the Junior Subordinated Debentures and $30 million of the convertible bond that was used for the purchase of Charter Bank. The Company utilizes Trust Preferred Securities to assist in the funding of acquisitions and believes it is useful to compare Net Interest Margin excluding the impact of this acquisition funding vehicle. (4) The Company calculates Return on Average Equity on a cash basis as Cash Basis Earnings divided by Average Equity. (5) The Company calculates Return on Average Assets on a cash basis as Cash Basis Earnings divided by Average Assets. (6) The convertible trust preferred debt, stock options and restricted shares were anti-dilutive for the 4th quarter of 2007 and therefore excluded from diluted earnings per share. The convertible trust preferred was also anti-dilutive for the year, whereas the restricted stock and stock options were dilutive. The separate evaluations for quarterly and year-to-date computations may result in year-to-date earnings per share that do not equal the sum of the quarterly earnings per share. (7) Since Gibraltar Private Bank and Trust ("Gibraltar") was acquired pursuant to a tax-free reorganization, all goodwill generated by the acquisition of Gibraltar is not deductible for tax purposes. As a result, there is no tax benefit attributable to the $29.1 million impairment charge related to Gibraltar. The acquisition of Dalton, Greiner, Hartman, Maher and Co ("DGHM") was acquired pursuant to a taxable transaction, all goodwill generated by the acquisition of DGHM is generally deductible for tax purposes. As a result, there is a $13.6 million tax benefit attributable to the $31.8 million impairment charge related to DGHM, which results in an impairment charge, net, of $18.2 million. (8) The Company acquired Anchor Capital Holdings on June 1, 2006. Source: Boston Private Financial Holdings, Inc. Contact: Boston Private Financial Holdings, Inc. |