EX-99.1 2 ex991pressreleaseofthecomp.htm PRESS RELEASE OF THE COMPANY DATED JANUARY 27, 2011 WebFilings | EDGAR view
 

Exhibit 99.1
 
Boston Private Financial Holdings Reports Fourth Quarter 2010 Results
 
Boston, MA - January 27, 2011 - Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported a fourth quarter 2010 GAAP Net Loss Attributable to the Company of $10 million, compared to a $7.2 million net loss in the third quarter of 2010. The net loss for the fourth quarter was primarily driven by $32.6 million in Provision for Loan Losses, largely attributable to continued credit-related stress in the commercial real estate (“CRE”) portfolio at the Company's Northern California banking affiliate.
After accounting for non-cash equity adjustments and preferred dividends, BPFH reported a fourth quarter 2010 GAAP net loss per share of $0.14 compared to a $0.10 GAAP net loss per share in the third quarter of 2010.
For the full year 2010, the Company reported a GAAP net loss of $11 million, compared to GAAP net income of $5.2 million for 2009. After accounting for non-cash equity adjustments and preferred dividends, BPFH reported a 2010 GAAP net loss per share of $0.29, compared to a $0.52 GAAP net loss per share for 2009.
“Managing credit has been our top priority for the past several quarters, with a particular focus on Northern California,” said CEO and President Clay Deutsch. “Working out our problem assets continues to be the primary factor influencing our results. Further degradation of previously criticized loans, primarily in the Northern California CRE portfolio, was the main driver of our elevated provision in the fourth quarter of 2010.”
“We do see encouraging signs of balance sheet improvement,” continued Mr. Deutsch. “Our overall levels of classified and non-accrual loans were reduced substantially during the fourth quarter and we continue to see substantial paydowns in January. We continue to reduce construction exposure as evidenced by the 50% decline in construction loans outstanding year-over-year. This mix shift may sacrifice nominal yield, but it also lowers our risk profile substantially and reflects our commitment to focus on high performance private banking.”
“We also see a number of positive indicators that speak to the client attraction and development strengths of our core private banking and wealth management businesses,” continued Mr. Deutsch. “Year-over-year, our residential mortgage portfolio has increased 12%, our deposit base grew 5% at attractive funding costs and fee-based revenues have grown 10%.”
In addition to reporting fourth quarter results, the Company made two additional restructuring announcements.
The BPFH board of directors has approved a plan to merge the Company's four private banks into one consolidated banking entity. While subject to regulatory and related approvals, the Company intends to begin immediately working on a 12-month integration program.
“We are very committed to integrating our banks into one high-performing private bank,” said Mr. Deutsch. “Our primary motive is superior client service and client growth as we consistently deliver the full power of our Company's product set and skill set across all our markets. In addition, we will realize substantial gains in productivity and profitability.”
“We have developed a comprehensive transition plan to guide the next 12 months. Detailed analysis suggests an estimated cost savings of 8-9% of our current banking cost base when fully implemented, and a substantial improvement in building margins and overall profitability. Of the 8-9% in estimated savings, two-thirds is employment related, which translates into an 11% reduction in force in the Private Banking Group.”
In a separate announcement, BPFH's wealth advisory affiliate Coldstream Holdings, Inc. announced today that it has repurchased all of BPFH's stock holdings in the firm. BPFH had been a minority shareholder of Coldstream since 2002. Coldstream contributed less than $0.1 million to the Company's total revenue in 2010. This transaction is expected to result in a pre-tax gain of $0.5 million in the first quarter of 2011.
Key Financials (Note: All comparisons relate only to continuing operations).
•    
Revenue for the fourth quarter was $76.4 million, an increase of $2.6 million, or 4%, from $73.7 million on a linked quarter basis. On a year to date basis, Revenue was up 2% to $292.5 million.
◦    
Net Interest Income for the fourth quarter was $45 million, a decrease of $1.5 million, or 3%, from $46.4

 

 

◦    
million on a linked quarter basis. On a year to date basis, Net Interest Income was up 13% to $180.7 million.
◦    
Fee Income (Investment Management, Wealth Advisory and Other Private Banking Fees) for the fourth quarter was $26.7 million, an increase of $1.2 million, or 5%, from $25.5 million on linked quarter basis. On a year to date basis, Fee Income was up 10%, to $103.5 million.
•    
Net Interest Margin for the fourth quarter was 3.18%, down 24 basis points from 3.42% on a linked quarter basis. Net Interest Margin for the year was 3.30%, up 21 basis points from the prior year.
•    
Operating Expenses for the fourth quarter were $63.2 million, an increase of $2.2 million, or 4%, from $61 million on a linked quarter basis. On a year to date basis, Operating Expenses were up 6% to $236.9 million.
•    
Tangible Common Equity/Tangible Assets (“TCE/TA”) as of the end of the fourth quarter was 6.34%, down 46 basis points from 6.80% as of the end of the third quarter, and down 32 basis points from 6.66% as of the end of 2009.
•    
Total Balance Sheet Assets as of the end of the fourth quarter were $6.2 billion, an increase of $121.6 million, or 2%, from $6.0 billion as of the end of the third quarter and were up 2% from $6.0 billion as of the end of 2009.
•    
Provision for Loan Losses for the fourth quarter was $32.6 million, an increase of $0.5 million, or 2%, from $32.1 million on a linked quarter basis. On a year to date basis, Provision for Loan Losses was $87.2 million, up 94% from $45 million as of the end of 2009.
•    
Allowance for Loan Losses as a percentage of Total Loans as of the end of the fourth quarter was 2.20%, down 1 basis point from 2.21%, as of the end of the third quarter and up 61 basis points from 1.59% as of the end of 2009.
“Our pro forma Tier 1 Risk-Based Capital Ratio remained solid in the fourth quarter at 13.1%, partially due to a continued mix shift away from higher risk construction loans and into residential mortgage,” said David Kaye, Chief Financial Officer. “Our Allowance for Loan Losses remains strong and now covers 93% of non-accrual loans compared to 71% in the third quarter.”
Total Deposits were flat on a linked quarter basis at $4.5 billion and were up 5% from $4.3 billion as of the end of 2009. Total Loans decreased 1% as of the end of the fourth quarter to $4.5 billion from the end of the third quarter, and were up 4% from $4.3 billion as of the end of 2009.
Non-Performing Loans as a percentage of Total Loans were 2.39% as of the end of the fourth quarter, down from 3.16% as of the end of the third quarter of 2010. Net Charge-offs for the fourth quarter 2010 were $34.2 million, which represented approximately 76 basis points of Total Loans, compared to $11.1 million of Net Charge-offs during the third quarter 2010, or 25 basis points of Total Loans. Past Due Loans (30-89 days) as a percentage of Total Loans increased 18 basis points on a linked quarter basis to 0.55%.
Total Assets Under Management/Advisory (“AUM”) increased 5%, or $932 million, to $19.5 billion in the fourth quarter. Total AUM was up 11% on a year-over-year basis. The Company experienced fourth quarter AUM inflows of $69 million, as compared to $2 million of inflows in the prior quarter. AUM inflows for the year were $151 million.
Dividend Payments
Concurrent with the release of the fourth quarter 2010 earnings, the Board of Directors of the Company declared a cash dividend to shareholders of $0.01 per share. The record date for this dividend is February 14, 2011 and the payment date is February 28, 2011.
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures, such as the TCE/TA ratio and pre-tax, pre-provision income, to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.  A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.
Conference Call
Management will hold a conference call at 8:00 a.m. Eastern Time on Friday, January 28, to discuss the financial results in more detail. To access the call:
Dial In #: 866-843-0890

 

 

International Dial In #: 412-317-9250
Elite Entry Number: 7112827
Replay Information:
Available from Jan. 28 at 10 a.m. to Feb. 9
Dial In #: 877-344-7529
International Dial In #: 412-317-0088
Conference Number: 447229
Boston Private Financial Holdings, Inc.
Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) is a national financial services organization comprised of affiliates located in key regions of the U.S. that offer private banking, wealth advisory and investment management services to the high net worth marketplace, selected businesses and institutions. The Company enters demographically attractive markets through selective acquisitions and then expands by way of organic growth. Its business strategy is to empower its affiliates to serve their clients at the local level, while at the same time providing strategic oversight and access to resources, both financial and intellectual, to support management, compliance and risk management, legal, marketing, and operations.
For more information about BPFH, visit the Company's website at www.bostonprivate.com.
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 locally operated and wholly-owned subsidiary of BPFH. The information reported in this press release is related to the performance and results of BPFH.
###
CONTACT:
Jeanne Hess
Assistant Vice President, Investor Relations
Boston Private Financial Holdings, Inc.
(617) 912-3798
jhess@bostonprivate.com
John Hartz
Sloane & Company
857-598-4779
jhartz@sloanepr.com
Statements in this press release that are not historical facts are 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, changes in assumptions or unanticipated factors adversely affecting the timing, among other matters, of expenses or cost savings relating to or resulting from the consolidation of the Company's banking subsidiaries; adverse conditions in the capital and debt markets and the impact of such conditions on the Company's private banking, investment management and wealth advisory activities; changes in interest rates; competitive pressures from other financial institutions; the effects of a continuing deterioration in general economic conditions on a national basis or in the local markets in which the Company operates, including changes which adversely affect borrowers' ability to service and repay our loans; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of loan loss reserves, or deposit levels necessitating increased borrowing to fund loans and investments; increasing government regulation, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the risk that goodwill and intangibles recorded in the Company's financial statements will become impaired; risks related to the identification and implementation of acquisitions; 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. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

 

 

Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
(In thousands, except per share data)
December 31, 2010
December 31, 2009
September 30, 2010
FINANCIAL DATA:
Total Balance Sheet Assets (1)
$
6,152,901
 
$
6,049,265
 
$
6,031,266
 
Total Equity
518,878
 
651,154
 
533,762
 
Cash and Investment Securities
1,338,238
 
1,387,483
 
1,157,657
 
 
 
 
 
Commercial Loans
2,356,233
 
2,213,020
 
2,386,378
 
Construction and Land Loans
150,702
 
315,661
 
210,915
 
Residential Mortgage Loans
1,673,934
 
1,494,703
 
1,634,958
 
Home Equity and Other Consumer Loans
299,478
 
283,656
 
298,023
 
Total Loans
4,480,347
 
4,307,040
 
4,530,274
 
 
 
 
 
Loans Held for Sale
9,145
 
12,714
 
22,290
 
Other Real Estate Owned ("OREO")
12,925
 
16,600
 
13,069
 
 
 
 
 
Deposits
4,486,726
 
4,255,219
 
4,492,516
 
Borrowings
1,027,925
 
992,034
 
886,741
 
 
 
 
 
Book Value Per Common Share
$
6.04
 
$
6.51
 
$
6.21
 
Market Price Per Share
$
6.55
 
$
5.77
 
$
6.54
 
 
 
 
 
ASSETS UNDER MANAGEMENT AND ADVISORY:
 
 
 
Private Banking
$
3,592,000
 
$
3,479,000
 
$
3,561,000
 
Investment Managers
8,140,000
 
7,048,000
 
7,521,000
 
Wealth Advisory
7,836,000
 
7,161,000
 
7,553,000
 
Less: Inter-company Relationship
(19,000
)
(18,000
)
(18,000
)
Assets Under Management and Advisory
$
19,549,000
 
$
17,670,000
 
$
18,617,000
 
 
 
 
 
FINANCIAL RATIOS:
 
 
 
Total Equity/Total Assets
8.43
%
10.76
%
8.85
%
Tangible Common Equity/Tangible Assets (2)
6.34
%
6.66
%
6.80
%
Allowance for Loan Losses/Total Loans
2.20
%
1.59
%
2.21
%
Allowance for Loan Losses/Non-Accrual Loans
93
%
79
%
71
%

 

 

 
Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
 
Three Months Ended
 
Twelve Months Ended
 
Dec 31,
Dec 31,
Sept 30,
 
Dec 31,
Dec 31,
OPERATING RESULTS:
2010
2009
2010
 
2010
2009
Net Interest Income
$
44,953
 
$
41,057
 
$
46,444
 
 
$
180,725
 
$
159,485
 
Investment Management and Trust Fees:
 
 
 
 
 
 
Private Banking
5,744
 
5,482
 
5,599
 
 
22,826
 
20,810
 
Investment Managers
9,682
 
9,029
 
8,712
 
 
36,941
 
33,189
 
Total Investment Management and Trust Fees
15,426
 
14,511
 
14,311
 
 
59,767
 
53,999
 
Total Wealth Advisory Fees
9,787
 
9,138
 
9,525
 
 
37,874
 
34,834
 
Other Private Banking Fees
1,513
 
1,249
 
1,678
 
 
5,832
 
5,652
 
Total Fees
26,726
 
24,898
 
25,514
 
 
103,473
 
94,485
 
Gain on Repurchase of Debt
 
18,332
 
 
 
 
18,739
 
Gain/(Loss) on Sale of Loans and OREO, net
3,385
 
(2,120
)
713
 
 
2,410
 
4,302
 
Other Revenue, Gains and (Losses), net (3)
1,301
 
1,254
 
1,072
 
 
5,889
 
8,923
 
Total Fees and Other Income
31,412
 
42,364
 
27,299
 
 
111,772
 
126,449
 
   Total Revenue
76,365
 
83,421
 
73,743
 
 
292,497
 
285,934
 
 
 
 
 
 
 
 
Provision for Loan Losses
32,551
 
13,804
 
32,050
 
 
87,178
 
44,959
 
 
 
 
 
 
 
 
Salaries and Employee Benefits
36,084
 
32,434
 
38,662
 
 
143,248
 
127,707
 
Occupancy and Equipment
7,254
 
6,981
 
7,036
 
 
27,773
 
26,818
 
Professional Services
5,470
 
5,479
 
4,857
 
 
19,495
 
19,841
 
FDIC Insurance
2,113
 
2,012
 
2,137
 
 
8,603
 
9,746
 
Other Operating Expenses (4)
12,256
 
10,833
 
8,287
 
 
37,736
 
38,846
 
Total Operating Expense
63,177
 
57,739
 
60,979
 
 
236,855
 
222,958
 
 
 
 
 
 
 
 
Income/(Loss) from Continuing Operations, before Tax
(19,363
)
11,878
 
(19,286
)
 
(31,536
)
18,017
 
Income Tax Expense/(Benefit)
(8,172
)
2
 
(12,412
)
 
(19,451
)
1,632
 
Net Income/(Loss) from Continuing Operations
(11,191
)
11,876
 
(6,874
)
 
(12,085
)
16,385
 
Discontinued Operations, Net of Tax (1)
1,917
 
31,501
 
267
 
 
3,729
 
(7,505
)
Net Income/(Loss) before Attribution to Noncontrolling Interest
(9,274
)
43,377
 
(6,607
)
 
(8,356
)
8,880
 
Less: Net Income Attributable to the Noncontrolling Interest
684
 
1,169
 
629
 
 
2,614
 
3,649
 
Net Income/(Loss) Attributable to the Company
$
(9,958
)
$
42,208
 
$
(7,236
)
 
$
(10,970
)
$
5,231
 

 

 

 
Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
 
Three Months Ended
 
Twelve Months Ended
 
Dec 31,
Dec 31,
Sept 30,
 
Dec 31,
Dec 31,
PER SHARE DATA:
2010
2009
2010
 
2010
2009
Calculation of Income/(Loss) for EPS:
 
 
 
 
 
 
Net Income/(Loss) from Continuing Operations
$
(11,191
)
$
11,876
 
$
(6,874
)
 
$
(12,085
)
$
16,385
 
Less: Net Income Attributable to Noncontrolling Interests
684
 
1,169
 
629
 
 
2,614
 
3,649
 
Net Income/(Loss) from Continuing Operations Attributable to the Company
$
(11,875
)
$
10,707
 
$
(7,503
)
 
$
(14,699
)
$
12,736
 
Adjustments to Net Income/(Loss) Attributable to the Company to Arrive at Net Income/(Loss) Attributable to Common Shareholders (5)
(300
)
(13,873
)
163
 
 
(9,766
)
(40,231
)
Net Income/(Loss) from Continuing Operations Attributable to the Common Shareholders
$
(12,175
)
$
(3,166
)
$
(7,340
)
 
$
(24,465
)
$
(27,495
)
Net Income/(Loss) from Discontinued Operations
$
1,917
 
$
31,501
 
$
267
 
 
$
3,729
 
$
(7,505
)
Net Income/(Loss) Attributable to the Common Shareholder
$
(10,258
)
$
28,335
 
$
(7,073
)
 
$
(20,736
)
$
(35,000
)
 
 
 
 
 
 
 
Calculation of Average Shares Outstanding:
 
 
 
 
 
 
Weighted Average Basic and Diluted Shares
74,371
 
67,637
 
74,154
 
 
71,321
 
66,697
 
 
 
 
 
 
 
 
Earnings/(Loss) per Share - Basic and Diluted
 
 
 
 
 
 
Earnings/(Loss) per Share from Continuing Operations
$
(0.16
)
$
(0.05
)
$
(0.10
)
 
$
(0.34
)
$
(0.41
)
Income/(Loss) per Share from Discontinued Operations
$
0.02
 
$
0.47
 
$
 
 
$
0.05
 
$
(0.11
)
Earnings/(Loss) per Share
$
(0.14
)
$
0.42
 
$
(0.10
)
 
$
(0.29
)
$
(0.52
)

 

 

 
 
 
Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
 
Average Balance
Interest Income/Expense
Average Yeild/Rate
 
Three Months Ended
Three Months Ended
Three Months Ended
 
Dec 31,
Dec 31,
Sept 30,
Dec 31,
Dec 31,
Sept 30,
Dec 31,
Dec 31,
Sept 30,
AVERAGE BALANCE SHEET:
2010
2009
2010
2010
2009
2010
2010
2009
2010
AVERAGE ASSETS
 
 
 
 
 
 
 
 
 
Earning Assets
 
 
 
 
 
 
 
 
 
Cash and Investments (6)
$
1,303,356
 
$
1,412,415
 
$
1,084,506
 
$
5,518
 
$
6,684
 
$
5,689
 
1.69
%
1.89
%
2.10
%
Loans (7)
 
 
 
 
 
 
 
 
 
Commercial and Construction (6)
2,568,964
 
2,637,992
 
2,587,847
 
34,920
 
37,395
 
36,481
 
5.35
%
5.62
%
5.56
%
Residential Mortgage
1,660,775
 
1,478,772
 
1,637,831
 
19,183
 
18,883
 
19,621
 
4.61
%
5.11
%
4.79
%
Home Equity and Other Consumer
300,273
 
214,088
 
295,395
 
3,064
 
2,500
 
3,116
 
4.02
%
4.59
%
4.16
%
Total Earning Assets
5,833,368
 
5,743,267
 
5,605,579
 
62,685
 
65,462
 
64,907
 
4.25
%
4.53
%
4.59
%
Allowance for Loan Losses
(99,025
)
(73,613
)
(81,543
)
 
 
 
 
 
 
Cash and due From Banks (Non-Interest Bearing)
32,516
 
27,113
 
27,983
 
 
 
 
 
 
 
Other Assets
441,632
 
580,466
 
443,124
 
 
 
 
 
 
 
TOTAL AVERAGE ASSETS
$
6,208,491
 
$
6,277,233
 
$
5,995,143
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AVERAGE LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
Interest-Bearing Liabilities:
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
Savings and NOW
$
608,474
 
$
492,295
 
$
559,413
 
454
 
$
728
 
$
467
 
0.30
%
0.59
%
0.33
%
Money Market
1,814,159
 
1,576,760
 
1,698,381
 
3,718
 
4,521
 
3,821
 
0.81
%
1.14
%
0.89
%
Certificates of Deposits
1,183,250
 
1,569,426
 
1,277,670
 
3,877
 
7,622
 
4,422
 
1.30
%
1.93
%
1.37
%
Total Deposits
3,605,883
 
3,638,481
 
3,535,464
 
8,049
 
12,871
 
8,710
 
0.89
%
1.40
%
0.98
%
Junior Subordinated Debentures and Other Long-term Debt
193,645
 
215,895
 
193,645
 
2,523
 
2,851
 
2,511
 
5.21
%
5.28
%
5.19
%
FHLB Borrowings and Other
685,208
 
721,999
 
614,459
 
5,293
 
6,916
 
5,392
 
3.02
%
3.75
%
3.43
%
Total Interest-Bearing Liabilities
4,484,736
 
4,576,375
 
4,343,568
 
15,865
 
22,638
 
16,613
 
1.40
%
1.96
%
1.51
%
Non-interest Bearing Demand Deposits
1,063,592
 
906,351
 
986,892
 
 
 
 
 
 
 
Payables and Other Liabilities
112,406
 
98,229
 
104,806
 
 
 
 
 
 
 
Total Liabilities
5,660,734
 
5,580,955
 
5,435,266
 
 
 
 
 
 
 
Redeemable Non-Controlling Interest
19,070
 
53,177
 
19,542
 
 
 
 
 
 
 
Stockholders' Equity
528,687
 
643,101
 
540,335
 
 
 
 
 
 
 
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS' EQUITY
$
6,208,491
 
$
6,277,233
 
$
5,995,143
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Interest Income - on a Fully Taxable Equivalent Basis (FTE)
 
 
 
$
46,820
 
$
42,824
 
$
48,294
 
 
 
 
FTE Adjustment (6)
 
 
 
1,867
 
1,767
 
1,850
 
 
 
 
Net Interest Income (GAAP Basis)
 
 
 
$
44,953
 
$
41,057
 
$
46,444
 
 
 
 
Interest Rate Spread
 
 
 
 
 
 
2.85
%
2.57
%
3.08
%
Net Interest Margin
 
 
 
 
 
 
3.18
%
2.97
%
3.42
%
 
 

 

 

Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
 
Average Balance
Interest Income/Expense
Average Yeild/Rate
 
Twelve Months Ended
Twelve Months Ended
Twelve Months Ended
 
Dec 31,
Dec 31,
Dec 31,
Dec 31,
Dec 31,
Dec 31,
AVERAGE BALANCE SHEET:
2010
2009
2010
2009
2010
2009
AVERAGE ASSETS
 
 
 
 
 
 
Earning Assets
 
 
 
 
 
 
Cash and Investments (6)
$
1,255,767
 
$
1,127,045
 
$
23,360
 
$
30,530
 
1.86
%
2.71
%
Loans (7)
 
 
 
 
 
 
Commercial and Construction (6)
2,567,009
 
2,679,722
 
144,402
 
154,358
 
5.63
%
5.76
%
Residential Mortgage
1,595,056
 
1,377,159
 
76,940
 
72,214
 
4.82
%
5.24
%
Home Equity and Other Consumer
286,044
 
206,894
 
12,482
 
9,321
 
4.36
%
4.51
%
Total Earning Assets
5,703,876
 
5,390,820
 
257,184
 
266,423
 
4.51
%
4.94
%
Allowance for Loan Losses
(81,393
)
(70,771
)
 
 
 
 
Cash and due From Banks (Non-Interest Bearing)
30,375
 
25,677
 
 
 
 
 
Other Assets
485,170
 
610,657
 
 
 
 
 
TOTAL AVERAGE ASSETS
$
6,138,028
 
$
5,956,383
 
 
 
 
 
 
 
 
 
 
 
 
AVERAGE LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
Interest-Bearing Liabilities:
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
Savings and NOW
$
555,244
 
$
457,280
 
$
2,029
 
$
3,240
 
0.37
%
0.71
%
Money Market
1,701,772
 
1,315,082
 
15,223
 
19,518
 
0.89
%
1.48
%
Certificates of Deposits
1,316,818
 
1,525,844
 
19,518
 
36,114
 
1.48
%
2.37
%
Total Deposits
3,573,834
 
3,298,206
 
36,770
 
58,872
 
1.03
%
1.78
%
Junior Subordinated Debentures and Other Long-term Debt
193,645
 
240,419
 
10,028
 
12,324
 
5.18
%
5.13
%
FHLB Borrowings and Other
648,226
 
817,830
 
22,414
 
28,633
 
3.46
%
3.50
%
Total Interest-Bearing Liabilities
4,415,705
 
4,356,455
 
69,212
 
99,829
 
1.57
%
2.29
%
Non-interest Bearing Demand Deposits
1,025,431
 
846,916
 
 
 
 
 
Payables and Other Liabilities
103,836
 
62,599
 
 
 
 
 
Total Liabilities
5,544,972
 
5,265,970
 
 
 
 
 
Redeemable Non-Controlling Interest
20,175
 
42,119
 
 
 
 
 
Stockholders' Equity
572,881
 
648,294
 
 
 
 
 
TOTAL AVERAGE LIABILITIES & STOCKHOLDERS' EQUITY
$
6,138,028
 
$
5,956,383
 
 
 
 
 
 
 
 
 
 
 
 
Net Interest Income - on an FTE Basis
 
 
$
187,972
 
$
166,594
 
 
 
FTE Adjustment (6)
 
 
7,247
 
7,109
 
 
 
Net Interest Income (GAAP Basis)
 
 
$
180,725
 
$
159,485
 
 
 
Interest Rate Spread
 
 
 
 
2.94
%
2.65
%
Net Interest Margin
 
 
 
 
3.30
%
3.09
%
 
 
 Three Months Ended
 
 Twelve Months Ended
 
 Dec 31,
 Dec 31,
Sept 30,
 
 Dec 31,
 Dec 31,
 
2010
2009
2010
 
2010
2009
OPERATING RATIOS:
 
 
 
 
 
 
Return on Average Equity
(7.53%)
26.25
%
(5.36%)
 
(1.91%)
0.81
%
Return on Average Assets
(0.64%)
2.69
%
(0.48%)
 
(0.18%)
0.09
%
 

 

 

Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
LOAN DATA AND CREDIT QUALITY (8):
Dec 31,
Dec 31,
Sept 30,
 
2010
2009
2010
Commercial Loans:
 
 
 
New England
$
1,125,669
 
$
943,740
 
$
1,082,877
 
Northern California
859,073
 
927,074
 
935,994
 
Southern California
234,926
 
231,684
 
233,383
 
Pacific Northwest
136,745
 
111,039
 
134,337
 
Eliminations and other, net
(180
)
(517
)
(213
)
Total Commercial Loans
$
2,356,233
 
$
2,213,020
 
$
2,386,378
 
 
 
 
 
Construction and Land Loans:
 
 
 
New England
$
80,021
 
$
117,817
 
$
97,585
 
Northern California
55,284
 
161,839
 
97,791
 
Southern California
1,840
 
7,719
 
1,869
 
Pacific Northwest
13,557
 
28,286
 
13,670
 
Total Construction and Land Loans
$
150,702
 
$
315,661
 
$
210,915
 
 
 
 
 
Residential Mortgage Loans:
 
 
 
New England
$
1,181,399
 
$
1,113,842
 
$
1,154,671
 
Northern California
293,622
 
219,394
 
277,321
 
Southern California
153,102
 
124,212
 
159,321
 
Pacific Northwest
45,811
 
37,255
 
43,645
 
Total Residential Mortgage Loans
$
1,673,934
 
$
1,494,703
 
$
1,634,958
 
 
 
 
 
Home Equity and Other Consumer Loans:
 
 
 
New England
$
199,454
 
$
179,792
 
$
201,569
 
Northern California
73,172
 
74,192
 
72,152
 
Southern California
17,654
 
20,947
 
15,529
 
Pacific Northwest
7,098
 
5,278
 
6,567
 
Eliminations and other, net
2,100
 
3,447
 
2,206
 
Total Home Equity and Other Consumer Loans
$
299,478
 
$
283,656
 
$
298,023
 
 
 
 
 
Total Loans
 
 
 
New England
$
2,586,543
 
$
2,355,191
 
$
2,536,702
 
Northern California
1,281,151
 
1,382,499
 
1,383,258
 
Southern California
407,522
 
384,562
 
410,102
 
Pacific Northwest
203,211
 
181,858
 
198,219
 
Eliminations and other, net
1,920
 
2,930
 
1,993
 
Total Loans
$
4,480,347
 
$
4,307,040
 
$
4,530,274
 

 

 

 
Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data) (Unaudited)
 
Dec 31,
Dec 31,
Sept 30,
 
2010
2009
2010
Allowance for Loan Losses:
 
 
 
New England
$
32,938
 
$
27,363
 
$
30,948
 
Northern California
46,117
 
19,950
 
49,824
 
Southern California
12,375
 
11,659
 
12,346
 
Pacific Northwest
6,973
 
9,472
 
6,892
 
Total Allowance for Loan Losses
$
98,403
 
$
68,444
 
$
100,010
 
Special Mention Loans:
 
 
 
New England
$
70,114
 
$
41,421
 
$
54,375
 
Northern California
74,991
 
20,577
 
66,493
 
Southern California
22,691
 
8,900
 
7,872
 
Pacific Northwest
19,819
 
18,255
 
21,325
 
Total Special Mention Loans
$
187,615
 
$
89,153
 
$
150,065
 
Accruing Classified Loans (9):
 
 
 
New England
$
19,745
 
$
14,534
 
$
19,228
 
Northern California
62,518
 
14,768
 
66,061
 
Southern California
6,802
 
8,117
 
11,467
 
Pacific Northwest
8,373
 
15,118
 
9,308
 
Total Accruing Classified Loans
$
97,438
 
$
52,537
 
$
106,064
 
Non-performing Loans:
 
 
 
New England
$
25,172
 
$
8,346
 
$
20,872
 
Northern California
60,373
 
37,584
 
99,573
 
Southern California (10)
10,663
 
21,953
 
12,585
 
Pacific Northwest
10,783
 
22,455
 
10,060
 
Total Non-performing Loans
$
106,991
 
$
90,338
 
$
143,090
 
Other Real Estate Owned:
 
 
 
New England
$
 
$
870
 
$
892
 
Northern California
10,207
 
9,025
 
4,283
 
Southern California
1,128
 
4,382
 
4,141
 
Pacific Northwest
1,590
 
2,323
 
3,753
 
Total Other Real Estate Owned
$
12,925
 
$
16,600
 
$
13,069
 
Loans 30-89 Days Past Due:
 
 
 
New England
$
12,844
 
$
6,658
 
$
5,515
 
Northern California
11,219
 
6,799
 
8,270
 
Southern California
682
 
4,259
 
2,860
 
Pacific Northwest
 
3,478
 
226
 
Total Loans 30-89 Days Past Due
$
24,745
 
$
21,194
 
$
16,871
 
Loans Charged-off/(Recovered), Net for the Three Months Ended:
 
 
 
New England
$
510
 
$
555
 
$
393
 
Northern California
33,957
 
6,937
 
11,896
 
Southern California
(118
)
5,065
 
(1,224
)
Pacific Northwest
(191
)
5,813
 
48
 
Total Net Loans Charged-off
$
34,158
 
$
18,370
 
$
11,113
 
Loans Charged-off/(Recovered), Net for the Twelve Months Ended:
 
 
 
New England
$
3,725
 
$
2,495
 
 
Northern California
54,858
 
8,387
 
 
Southern California
(1,753
)
13,017
 
 
Pacific Northwest
389
 
16,707
 
 
Total Net Loans Charged-off
$
57,219
 
$
40,606
 
 

 

 

 
 
Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
 
(1)    In 2009, the Company completed the sale of its affiliates Boston Private Value Investors, Sand Hill Advisors, RINET, Gibraltar, and Westfield Capital Management. Accordingly, prior period and current financial information related to the divested companies are included with discontinued operations.
 
(2)    The Company uses certain non-GAAP financial measures, such as the Tangible Common Equity to Tangible Assets ratio, and Pre-tax Pre-provision Income to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.
 
A reconciliation from the Company's GAAP Total Equity to Total Assets ratio to the Non-GAAP Tangible Common Equity to Tangible Assets ratio is 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: the equity from the TARP funding, Goodwill and Intangible Assets, net and includes the difference between Redemption Value and value per ARB 51 for Redeemable Non-controlling Interests.
 
Dec 31,
Dec 31,
Sept 30,
 
2010
2009
2010
Total Balance Sheet Assets(1)
$
6,152,901
 
$
6,049,265
 
$
6,031,266
 
LESS: Goodwill and Intangible Assets, net
(151,212
)
(150,117
)
(146,153
)
Tangible Assets (non-GAAP)
6,001,689
 
5,899,148
 
5,885,113
 
 
 
 
 
Total Equity
518,878
 
651,154
 
533,762
 
 
 
 
 
LESS: Goodwill and Intangible Assets, net
(151,212
)
(150,117
)
(146,153
)
TARP Funding
 
(154,000
)
 
ADD: Difference between Redemption Value of Non-controlling Interests and value under ARB 51
12,578
 
46,016
 
12,608
 
Total adjusting items
(138,634
)
(258,101
)
(133,545
)
 
 
 
 
Tangible Common Equity (non-GAAP)
380,244
 
393,053
 
400,217
 
 
 
 
 
Total Equity/Total Assets
8.43
%
10.76
%
8.85
%
Tangible Common Equity/Tangible Assets (non-GAAP)
6.34
%
6.66
%
6.80
%
 
A reconciliation from the Company's GAAP Income/(Loss) from Continuing Operations, before tax to the Non-GAAP Income/(Loss) Pre-tax, Pre-provision is presented below:
 
The Company calculates Pre-tax Pre-provision income by adding the Provision for Loan Losses to Income/(Loss) from Continuing Operations, before Tax.
 
    
 
Three Months Ended
 
Twelve Months Ended
 
Dec 31,
Dec 31,
Sept 30,
 
Dec 31,
Dec 31,
 
2010
2009
2010
 
2010
2009
Income/(Loss) from Continuing Operations, before Tax
$
(19,363
)
$
11,878
 
$
(19,286
)
 
$
(31,536
)
$
18,017
 
Provision for Loan Losses
32,551
 
13,804
 
32,050
 
 
87,178
 
44,959
 
Income/(Loss) Pre-tax, Pre-provision
$
13,188
 
$
25,682
 
$
12,764
 
 
$
55,642
 
$
62,976
 
 
(3)    Other Revenue, Gains and (Losses), net, as presented in these tables include Gain on Sale of Investments, net; and Other Miscellaneous Revenue.
 
(4)    Other Operating Expenses, as presented in these tables, include expenses related to Marketing and Business Development, Contract Services and Processing, Impairment Expense and Amortization of Intangibles.

 

 

Boston Private Financial Holdings, Inc.
Selected Financial Data (1)
(In Thousands, except share data)
(Unaudited)
 
(5)    Adjustments to Net Income Attributable to the Company to arrive at Net Income/(Loss) Attributable to the Common Shareholders, as presented in these tables, include decrease/ (increase) in Noncontrolling Interests Redemption Value; Dividends on Preferred Securities; Accretion of Discount on Series C Preferred Stock; and Accretion of Series B Preferred Stock Beneficial Conversion Feature.
 
(6)    Interest Income on Non-taxable Investments and Loans are presented on an FTE basis using the federal statutory rate.
    
(7)    Includes Loans Held for Sale and Non-accrual Loans.
    
(8)    The concentration of the Private Banking loan data and credit quality is based on the location of the lender. Net loans from the Holding Company to certain principals of the Company's affiliate partners, loans at the Company's non-banking segments, and inter-company loan eliminations are identified as “Eliminations and other, net”.
 
(9)    Accruing classified loans include loans that are classified as substandard but are still accruing interest income. The Banks 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 nonperforming at some time in the future.
 
(10)    Includes the non-strategic loans held for sale of $1.5 million, $3.6 million, and $2.9 million, at Dec 31, 2010, Dec 31, 2009 and Sept 30, 2010, respectively.