EX-99.1 2 a2019q2ex991profthecompany.htm EXHIBIT 99.1 Exhibit



bplogo011719a01.jpg

Boston Private Financial Holdings, Inc. Reports Second Quarter 2019 Results


Second Quarter 2019 Highlights include:

•
GAAP Net income was $19.4 million, or $0.22 per diluted share
•
Return on average common equity was 9.8%
•
Return on average tangible common equity was 11.1%
•
Average total loans were $7.0 billion, a 4% increase year-over-year
•
Average total deposits were $6.6 billion, a 5% increase year-over-year
•
Total assets under management/advisory (“AUM”) were $16.2 billion, a decrease of 4% year-over-year
•
Total net flows were negative $269 million, of which $127 million were attributable to the Wealth Management & Trust segment and $142 million were attributable to Affiliate Partners

Boston, MA - July 24, 2019 - Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported second quarter 2019 GAAP Net income attributable to the Company of $19.4 million, compared to $19.4 million for the first quarter of 2019 and $6.4 million for the second quarter of 2018. Second quarter 2019 GAAP Diluted earnings per share were $0.22, compared to $0.25 in the first quarter of 2019 and $0.03 in the second quarter of 2018.
Summary Financial Results - Reported
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
($ in millions, except for per share data)
 
2Q19

 
1Q19

 
2Q18

 
LQ
 
Y/Y
Net income
 
$19.4
 
$19.4
 
$6.4
 
—
 %
 
nm

Diluted earnings per share
 
$0.22
 
$0.25
 
$0.03
 
(12
)%
 
nm

 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Financial Measures:
 
 
 
 
 
 
 
 
 
 
Pre-tax, pre-provision income
 
$26.2
 
$23.0
 
$25.3
 
14
 %
 
4
%
Return on average common equity (“ROACE”)
 
9.8
%
 
10.3
%
 
3.0
%
 
 
 
 
Return on average tangible common equity (“ROATCE”)
 
11.1
%
 
11.6
%
 
3.9
%
 
 
 
 
nm = not meaningful
 
 
 
 
 
 
 
 
 
 
The Company's reported financial results increased year-over-year primarily as a result of a $12.7 million income tax expense related to the divestiture of Anchor Capital Advisors LLC in the second quarter of 2018.
In addition to presenting the Company’s results in conformity with GAAP, the Company uses certain non-GAAP financial measures to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. For additional information on non-GAAP financial measures, see page 7. A full reconciliation of GAAP to non-GAAP results can be found in the footnotes beginning on page 17.

1



Summary Financial Results - Operating Basis (non-GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
($ in millions, except for per share data)
 
2Q19

 
1Q191


 
2Q182

 
LQ
 
Y/Y
Net income
 
$19.4
 
$20.7
 
$19.5
 
(7
)%
 
(1
)%
Diluted earnings per share
 
$0.22
 
$0.27
 
$0.21
 
(17
)%
 
4
 %
 
 
 
 
 
 
 
 
 
 
 
Pre-tax, pre-provision income
 
$26.2
 
$24.7
 
$25.7
 
6
 %
 
2
 %
Return on average common equity
 
9.8
%
 
11.0
%
 
10.1
%
 
 
 
 
Return on average tangible common equity
 
11.1
%
 
12.4
%
 
12.2
%
 
 
 
 
1 1Q19 results adjusted to exclude the net after-tax impact of $1.6 million restructuring expense
2 2Q18 results adjusted to exclude $12.7 million income tax expense related to the divestiture of Anchor and net after-tax impact of $0.4 million information services expense related to efficiency initiatives
"During the first half of 2019, we have been focused on beginning the process of implementing our strategic vision for growth," said Anthony DeChellis, CEO of Boston Private. "Our second quarter results reflect improvement in pre-tax, pre-provision profitability measures as we exercise expense discipline and realize the benefits from efficiency initiatives. Looking ahead, we will continue to improve our efficiency as we transition our company to achieve the growth objectives we discussed during our Investor Day."
Divested Affiliates
 
 
 
 
 
 
 
 
 
 
The Company completed the sale of Anchor Capital Advisors LLC ("Anchor") and Bingham, Osborn & Scarborough LLC ("BOS") (together, "the Divested Affiliates") during 2018. Financial results from the Divested Affiliates remain consolidated in the Company's financial results through the closing dates of the divestitures. The Anchor divestiture closing date was April 13, 2018, and the BOS divestiture closing date was December 3, 2018.
For presentation purposes, the Divested Affiliates' AUM are excluded from AUM amounts, but are included in the calculation of Core fees and income. The discussion below includes non-GAAP measures that exclude the contributions from these affiliates in order to enhance comparability of trends in the core business.
Net Interest Income and Margin
 
 
 
 
 
 
 
 
 
 
 
 
% Change
($ in millions)
 
2Q19

 
1Q19

 
2Q18

 
LQ
 
Y/Y
Net interest income
 

$57.5

 

$58.3

 

$57.5

 
(2
)%
 
—
%
Less: Interest recovered on previous nonaccrual loans
 
—

 
0.3

 
—

 
nm

 
nm

Core net interest income (non-GAAP)
 

$57.5

 

$58.1

 

$57.5

 
(1
)%
 
—
%
 
 
 
 
 
 
 
 
 
 

Net interest margin
 
2.78
%
 
2.90
%
 
2.85
%
 
 
 
 
Core net interest margin (non-GAAP)
 
2.78
%
 
2.89
%
 
2.85
%
 
 
 
 
Net interest income for the second quarter of 2019 was $57.5 million, a decrease of 2% linked quarter while remaining flat year-over-year. Core net interest income, which excludes interest recovered on previous nonaccrual loans, decreased 1% linked quarter and while remaining flat year-over-year. The linked quarter decrease was primarily driven by higher funding costs and higher borrowing volumes, partially offset by higher average interest-earning asset volumes.
The Company’s Core net interest margin, which excludes interest recovered on previous nonaccrual loans, decreased 11 basis points on a linked quarter basis to 2.78%, primarily driven by higher funding costs and higher borrowing volumes, while interest earning asset yields remained stable.

2



Noninterest Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
($ in millions)
 
2Q19

 
1Q19

 
2Q18

 
LQ
 
Y/Y
Investment management fees
 
$2.5
 
$2.7
 
$4.2
 
(7
)%
 
(42
)%
Wealth advisory fees
 
8.1

 
8.2

 
13.7

 
—
 %
 
(41
)%
Wealth management and trust fees
 
10.8

 
10.9

 
11.2

 
(1
)%
 
(4
)%
Private banking fees 3
 
2.9

 
2.6

 
2.8

 
14
 %
 
4
 %
Total core fees and income
 
$24.3
 
$24.3
 
$31.9
 
—
 %
 
(24
)%
Total other income
 
0.1

 
1.0

 
0.2

 
(91
)%
 
(56
)%
Total noninterest income
 
$24.4
 
$25.2
 
$32.1
 
(3
)%
 
(24
)%
 
 
 
 
 
 
 
 
 
 
 
Memo: Excluding Divested Affiliates
 
 
 
 
Investment management fees (non-GAAP) 4
 
2.5

 
2.7

 
3.1

 
(7
)%
 
(20
)%
Wealth advisory fees (non-GAAP) 5
 
8.1

 
8.2

 
8.0

 
—
 %
 
2
 %
Wealth management and trust fees
 
10.8

10.9

11.2

(1
)%

(4
)%
Private banking fees3
 
2.9

2.6

2.8

14
 %

4
 %
Total core fees and income (non-GAAP) 4 5
 
$24.3
 
$24.3
 
$25.0
 
—
 %
 
(3
)%
Total other income (non-GAAP)
 
0.1

 
1.0

 
0.2

 
(91
)%
 
(48
)%
Total noninterest income (non-GAAP) 4 5
 
$24.4
 
$25.2
 
$25.2
 
(3
)%
 
(3
)%
3 Private banking fees includes Other banking fee income and Gain/ (loss) on sale of loans, net
4 Excludes Anchor revenue of $1.2 million in 2Q18
5 Excludes BOS revenue of $5.8 million in 2Q18
Total core fees and income for the second quarter of 2019 was $24.3 million, flat linked quarter and a decline of 24% year-over-year. The year-over-year decline was primarily driven by the divestitures of Anchor and BOS.
Excluding Divested Affiliates, Total core fees and income decreased 3% year-over-year, primarily driven by lower Investment management fees and Wealth management and trust fees.
Assets Under Management / Advisory
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
($ in millions)
 
2Q19
 
1Q19
 
2Q18
 
LQ
 
Y/Y
Wealth Management and Trust
 
$7,595
 
$7,593
 
$7,789
 
—
%
 
(2
)%
Affiliate Partners 6
 
8,604
 
8,529
 
9,072
 
1
%
 
(5
)%
Total assets under management / advisory 7
 
$16,199
 
$16,122
 
$16,861
 
—
%
 
(4
)%
Total net flows 7
 
$(269)
 
$(963)
 
$(97)
 
 
 
 
6 Segment includes Dalton, Greiner, Hartman, Maher & Co., LLC ("DGHM") and KLS Professional Advisors Group, LLC ("KLS")
7 Excludes Divested Affiliates
Total assets under management / advisory were $16.2 billion at the end of the second quarter of 2019, flat linked quarter and a decrease of 4% year-over-year. The linked quarter comparison was impacted by positive market action offset by negative net flows, while the year-over-year decrease was primarily driven by negative net flows in excess of positive market action.
Net flows during the second quarter of 2019 in the Wealth Management and Trust segment were negative $127 million, while net flows in the Affiliate Partners segment were negative $142 million.

3



Operating Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
($ in millions)
 
2Q19

 
1Q19

 
2Q18

 
LQ
 
Y/Y
Salaries and employee benefits
 
$32.7
 
$35.7
 
$39.4
 
(8
)%
 
(17
)%
Occupancy and equipment
 
7.9

 
8.3

 
8.2

 
(6
)%
 
(5
)%
Professional services
 
3.3

 
3.6

 
2.9

 
(7
)%
 
15
 %
Marketing and business development
 
1.9

 
1.1

 
2.1

 
78
 %
 
(7
)%
Information systems
 
5.1

 
5.9

 
6.8

 
(12
)%
 
(24
)%
Amortization of intangibles
 
0.7

 
0.7

 
0.7

 
—
 %
 
(10
)%
FDIC insurance
 
0.6

 
0.7

 
0.7

 
(11
)%
 
(17
)%
Restructuring
 
—

 
1.6

 
—

 
nm

 
nm

Other
 
3.5

 
3.0

 
3.6

 
15
 %
 
(3
)%
Total operating expense
 
$55.7
 
$60.6
 
$64.4
 
(8
)%
 
(14
)%
 
 
 
 

 
 
 
 
 
 
Memo: Excluding Notable Items8 and Divested Affiliates
 
 
 
 
 
 
 
 
 
 
Information systems 9
 
—

 
—

 
0.4

 
nm

 
nm

Restructuring
 
—

 
1.6

 
—

 
nm

 
nm

Divested Affiliates operating expense
 
—

 
—

 
4.7

 
nm

 
nm

Total operating expense (non-GAAP)
 
$55.7
 
$59.0
 
$59.2
 
(6
)%
 
(6
)%
8 "Notable Items" include adjustments made to GAAP results in prior periods
9 $0.4 million of Information services expense was reclassified to Restructuring expense in conjunction with the Company's formal restructuring plan announced in 4Q18
Total operating expense decreased 8% linked quarter, primarily driven by lower salaries and employee benefits expense, restructuring expense, information systems expense, and occupancy and equipment expense, partially offset by higher marketing and business development expense. Salaries and employee benefits expense declined linked quarter primarily as a result of seasonal payroll tax expense incurred during the first quarter of 2019. Restructuring expense incurred during the first quarter of 2019 was related to executive departures. Information systems expense declined linked quarter primarily as a result of savings attributable to information technology infrastructure consolidation. The year-over-year decline in Total operating expense of 14% was primarily driven by expenses associated with Divested Affiliates that are included in the second quarter of 2018 results.
Excluding Notable Items and Divested Affiliates, Total operating expense for the second quarter of 2019 was $55.7 million, down 6% linked quarter and 6% year-over-year. The year-over-year decline was primarily attributable to efficiency initiatives primarily impacting compensation and technology.
Income Tax Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Company's effective tax rate for the second quarter of 2019 was 21.6%.

4



Loans and Deposits - QTD Averages
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
($ in millions)
 
2Q19

 
1Q19

 
2Q18

 
LQ
 
Y/Y
Commercial and industrial
 
$1,092
 
$1,070
 
$974
 
2
 %
 
12
 %
Commercial real estate
 
2,507
 
2,398
 
2,478
 
5
 %
 
1
 %
Construction and land
 
203
 
211
 
167
 
(4
)%
 
22
 %
Residential
 
3,009
 
2,973
 
2,775
 
1
 %
 
8
 %
Home equity
 
91
 
91
 
94
 
1
 %
 
(3
)%
Other consumer
 
125
 
134
 
180
 
(7
)%
 
(31
)%
Total loans
 
$7,026
 
$6,877
 
$6,668
 
2
 %
 
5
 %
 
 
 
 
 
 
 
 
 
 
 
Non-interest bearing deposits
 
1,927
 
1,975
 
1,908
 
(2
)%
 
1
 %
Interest bearing deposits
 
4,664
 
4,792
 
4,441
 
(3
)%
 
5
 %
Total deposits
 
$6,590
 
$6,767
 
$6,349
 
(3
)%
 
4
 %
 
 
 
 
 
 
 
 
 
 
 
Non-interest bearing deposits as a % of Total deposits
 
29
%

29
%

30
%
 
 
 
 
Average total loans in the second quarter of 2019 increased 5% year-over-year, primarily driven by increases in Residential loans and Commercial and industrial loans.
Average total deposits increased 4% year-over-year, primarily driven by growth in money market accounts, certificates of deposits, and demand deposit accounts, partially offset by declines in savings and NOW accounts. Deposits declined 3% linked quarter
The cost of total deposits was 0.88%, an increase of 4 basis points linked quarter and 35 basis points year-over-year.
Provision and Asset Quality
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
($ in millions)
 
2Q19

 
1Q19

 
4Q18

 
3Q18

 
2Q18

Provision/ (credit) for loan loss
 
$1.4
 
$(1.4)
 
$0.1
 
$(0.9)
 
$0.5
Total criticized loans
 
141.7
 
141.3
 
146.6
 
134.7
 
114.4
Total nonaccrual loans
 
17.2
 
12.0
 
14.1
 
12.1
 
15.7
Total loans 30-89 days past due and accruing
 
2.4
 
17.7
 
22.3
 
11.6
 
5.0
Total net loans (charged-off)/ recovered
 
(0.1)

 
(0.1)
 
1.7

 
1.0
 
0.1
 
 
 
 
 
 
 
 
 
 
 
Ratios:
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses as a % of Total loans
 
1.06
%
 
1.07
%
 
1.09
%
 
1.09
%
 
1.09
%
Nonaccrual loans as a % of Total loans
 
0.24
%
 
0.17
%
 
0.20
%
 
0.18
%
 
0.23
%
The Company recorded a provision expense of $1.4 million for the second quarter of 2019, compared to a provision credit of $1.4 million for the first quarter of 2019 and an expense of $0.5 million in the second quarter of 2018. The provision expense in the second quarter of 2019 was primarily driven by loan growth.
Total criticized loans as of June 30, 2019 was $141.7 million, flat linked quarter and an increase of 24% year-over-year. Total nonaccrual loans as of June 30, 2019 was $17.2 million, or 24 basis points of total loans, compared to $12.0 million, or 17 basis points of total loans as of March 31, 2019, and $15.7 million, or 23 basis points of total loans as of June 30, 2018.

5



Capital
 
 
 
 
 
 
 
 
 
 
($ in millions, except for per share data)
 
2Q19

 
1Q19

 
4Q18

 
3Q18

 
2Q18

Tangible common equity/ Tangible assets 10
 
8.4
%
 
8.3
%
 
8.1
%
 
7.8
%
 
7.5
%
Tangible book value per share 10
 
$8.71
 
$8.47
 
$8.18
 
$7.67
 
$7.62
 
 
 
 
 
 
 
 
 
 
 
Regulatory Capital Ratios: 11
 
 
 
 
 
 
 

 

Tier 1 common equity
 
11.2
%
 
11.4
%
 
11.4
%
 
11.1
%
 
10.9
%
Total risk-based capital
 
13.9
%
 
14.2
%
 
14.3
%
 
14.1
%
 
13.8
%
Tier 1 risk-based capital
 
12.7
%
 
13.0
%
 
13.0
%
 
12.8
%
 
12.6
%
Tier 1 leverage capital
 
9.6
%
 
9.7
%
 
9.5
%
 
9.2
%
 
9.2
%
 
 
 
 
 
 
 
 
 
 
 
Common Equity Repurchase Program:
 
 
 
 
 
 
 
 
 
 
Total shares of common stock repurchased
 
—

 
—

 
1,505,521

 
137,144

 
—

Average price paid per share of common stock
 
—

 
—

 
$12.02
 
$13.89
 
—

Aggregate repurchases of common equity ($ in millions)
 
—

 
—

 
$18.1
 
$1.9
 
—

10 See footnote 6 for a GAAP to non-GAAP reconciliation.
11 Current quarter information is presented based on estimated data.
Tangible book value per share as of June 30, 2019 increased 3% linked quarter and 14% year-over-year to $8.71. The linked quarter increase in Tangible book value per share was primarily driven by increased retained earnings and higher Accumulated other comprehensive income related to unrealized securities gains, while the year-over-year increase was primarily driven by the divestiture of BOS, higher Accumulated other comprehensive income and increased retained earnings, partially offset by common share repurchases.
EPS Calculation
 
 
 
 
 
 
 
 
 
 
For calculation of income for EPS, second quarter 2019 Net income attributable to the common shareholders was negatively impacted by $0.8 million, or $0.01 per share, related to the changes in value of Redeemable noncontrolling interests (“RNCI”).


6



Dividend Payments
Concurrent with the release of second quarter 2019 earnings, the Board of Directors of the Company declared a cash dividend payable to common shareholders of $0.12 per share. The record date for this dividend is August 9, 2019, and the payment date is August 23, 2019.
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, and restructuring, if any; the efficiency ratio; the efficiency ratio excluding amortization of intangibles, and restructuring, if any; net interest income and net interest margin excluding interest recovered on previous nonaccrual loans, also referred to as core net interest income, and core net interest margin, respectively; net income attributable to the Company excluding notable items; net income attributable to the common shareholders, treasury stock method, excluding notable items; diluted earnings per share excluding notable items; operating basis total revenue; operating basis total operating expenses.
A detailed reconciliation table of the Company’s GAAP to non-GAAP measures is included in the footnotes of the attached financial schedules.
Conference Call
Management will hold a conference call at 8:00 a.m. Eastern Time on Thursday, July 25, 2019, to discuss the financial results, business highlights and outlook. To access the call:
Dial In #: (888) 317-6003
Elite Entry Number: 5871776

Replay Information:
Available from July 25, 2019 at 12:00 p.m Eastern Time until August 1, 2019
Dial In #: (877) 344-7529
Conference Number: 10132971
The call will be simultaneously webcast and may be accessed on www.bostonprivate.com.

7



Boston Private Financial Holdings, Inc.
Boston Private Financial Holdings, Inc. is a national financial services organization that owns Wealth Management, Trust, and Commercial and Private Banking affiliates with offices in Boston, New York, Los Angeles, San Francisco, San Jose, and Florida. The Company has total assets of greater than $8 billion, and manages over $16 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 commercial and 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.
###
CONTACT:
Adam Bromley
(617) 912-4386
abromley@bostonprivate.com


8



bplogo011719a01.jpg
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
 
(In thousands, except share and per share data)
Assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
65,756

 
$
96,211

 
$
127,259

 
$
92,634

 
$
364,539

Investment securities available-for-sale
966,731

 
981,951

 
994,065

 
1,056,261

 
1,069,025

Investment securities held-to-maturity
54,482

 
67,548

 
70,438

 
75,468

 
78,955

Equity securities at fair value
19,092

 
7,491

 
14,228

 
7,079

 
7,942

Stock in Federal Home Loan Bank and Federal Reserve Bank
64,453

 
47,053

 
49,263

 
48,727

 
70,127

Loans held for sale
3,640

 
280

 
2,812

 
3,344

 
4,622

Total loans
7,080,260

 
6,926,968

 
6,893,158

 
6,720,420

 
6,767,123

Less: Allowance for loan losses
75,067

 
73,814

 
75,312

 
73,500

 
73,464

Net loans
7,005,193

 
6,853,154

 
6,817,846

 
6,646,920

 
6,693,659

Other real estate owned (“OREO”)
—

 
—

 
401

 
108

 
108

Premises and equipment, net
40,244

 
42,938

 
45,412

 
47,399

 
46,421

Goodwill (1)
57,607

 
57,607

 
57,607

 
75,598

 
75,598

Intangible assets, net
10,884

 
11,555

 
12,227

 
13,834

 
14,584

Fees receivable
3,611

 
3,982

 
5,101

 
10,445

 
10,405

Accrued interest receivable
26,411

 
25,935

 
24,366

 
24,641

 
23,732

Deferred income taxes, net
17,183

 
22,844

 
26,638

 
27,833

 
26,316

Right-of-use assets
110,880

 
104,644

 
—

 
—

 
—

Other assets
266,706

 
248,950

 
246,962

 
245,549

 
230,170

Total assets
$
8,712,873

 
$
8,572,143

 
$
8,494,625

 
$
8,375,840

 
$
8,716,203

Liabilities:
 
 
 
 
 
 
 
 
 
Deposits
$
6,437,963

 
$
6,779,845

 
$
6,781,170

 
$
6,768,723

 
$
6,620,179

Securities sold under agreements to repurchase
62,372

 
58,329

 
36,928

 
39,453

 
58,824

Federal funds purchased
135,000

 
—

 
250,000

 
120,000

 
—

Federal Home Loan Bank borrowings
920,068

 
615,070

 
420,144

 
441,836

 
1,056,938

Junior subordinated debentures
106,363

 
106,363

 
106,363

 
106,363

 
106,363

Lease liabilities
126,740

 
120,162

 
—

 
—

 
—

Other liabilities
124,370

 
112,893

 
143,540

 
149,770

 
129,175

Total liabilities
7,912,876

 
7,792,662

 
7,738,145

 
7,626,145

 
7,971,479

Redeemable noncontrolling interests (“RNCI”)
1,786

 
662

 
2,526

 
11,686

 
10,747

Shareholders’ equity:
 
 
 
 
 
 
 
 
 
Common stock, $1.00 par value; authorized: 170,000,000 shares
83,774

 
83,774

 
83,656

 
84,603

 
84,479

Additional paid-in capital
603,869

 
604,288

 
600,196

 
614,157

 
613,918

Retained earnings
106,443

 
97,155

 
87,821

 
64,618

 
56,912

Accumulated other comprehensive income/ (loss)
4,125

 
(6,398
)
 
(17,719
)
 
(27,578
)
 
(23,328
)
Total Company’s shareholders’ equity
798,211

 
778,819

 
753,954

 
735,800

 
731,981

Noncontrolling interests
—

 
—

 
—

 
2,209

 
1,996

Total shareholders’ equity
798,211

 
778,819

 
753,954

 
738,009

 
733,977

Total liabilities, RNCI and shareholders’ equity
$
8,712,873

 
$
8,572,143

 
$
8,494,625

 
$
8,375,840

 
$
8,716,203



9



Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
 
Three Months Ended
 
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Interest and dividend income:
(In thousands, except share and per share data)
Loans
$
71,943

 
$
69,933

 
$
69,294

 
$
68,254

 
$
64,048

Investment securities
5,728

 
5,983

 
6,242

 
6,230

 
6,302

Short-term investments and other
1,057

 
908

 
1,356

 
1,617

 
1,205

Total interest and dividend income
78,728

 
76,824

 
76,892

 
76,101

 
71,555

Interest expense:
 
 
 
 
 
 
 
 
 
Deposits
14,515

 
14,058

 
13,470

 
11,487

 
8,365

Borrowings
6,753

 
4,428

 
3,425

 
4,973

 
5,645

Total interest expense
21,268

 
18,486

 
16,895

 
16,460

 
14,010

Net interest income
57,460

 
58,338

 
59,997

 
59,641

 
57,545

Provision/ (credit) for loan losses
1,363

 
(1,426
)
 
93

 
(949
)
 
453

Net interest income after provision/ (credit) for loan losses
56,097

 
59,764

 
59,904

 
60,590

 
57,092

Noninterest income:
 
 
 
 
 
 
 
 
 
Investment management fees
2,455

 
2,650

 
2,831

 
3,245

 
4,227

Wealth advisory fees
8,141

 
8,165

 
12,111

 
13,995

 
13,693

Wealth management and trust fees
10,771

 
10,893

 
11,677

 
11,510

 
11,169

Other banking fee income
2,867

 
2,499

 
2,033

 
2,775

 
2,745

Gain on sale of loans, net
58

 
73

 
39

 
67

 
63

Total core fees and income
24,292

 
24,280

 
28,691

 
31,592

 
31,897

Gain/ (loss) on sale of investments, net
—

 
—

 
(596
)
 
—

 
7

Gain/ (loss) on OREO, net
—

 
91

 
—

 
—

 
—

Gain on sale of affiliate
—

 
—

 
18,142

 
—

 
—

Other
88

 
877

 
(392
)
 
722

 
191

Total other income
88

 
968

 
17,154

 
722

 
198

Total revenue (2)
81,840

 
83,586

 
105,842

 
91,955

 
89,640

Operating expense:
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
32,706

 
35,726

 
36,007

 
38,944

 
39,433

Occupancy and equipment
7,852

 
8,348

 
7,975

 
8,164

 
8,229

Professional services
3,313

 
3,560

 
4,229

 
2,877

 
2,872

Marketing and business development
1,934

 
1,085

 
2,275

 
1,710

 
2,070

Information systems
5,137

 
5,860

 
6,296

 
6,233

 
6,770

Amortization of intangibles
672

 
672

 
680

 
750

 
749

FDIC insurance
585

 
660

 
739

 
674

 
708

Restructuring
—

 
1,646

 
2,065

 
5,763

 
—

Other
3,460

 
2,996

 
3,291

 
3,442

 
3,553

Total operating expense
55,659

 
60,553

 
63,557

 
68,557

 
64,384

Income before income taxes
24,818

 
24,459

 
42,192

 
24,347

 
24,803

Income tax expense
5,369

 
4,917

 
8,651

 
5,461

 
17,399

Net income from continuing operations
19,449

 
19,542

 
33,541

 
18,886

 
7,404

Net income/ (loss) from discontinued operations (3)
—

 
—

 
306

 
—

 
(2
)
Net income before attribution to noncontrolling interests
19,449

 
19,542

 
33,847

 
18,886

 
7,402

Less: Net income attributable to noncontrolling interests
69

 
100

 
545

 
924

 
968

Net income attributable to the Company
$
19,380

 
$
19,442

 
$
33,302

 
$
17,962

 
$
6,434

 
 
 
 
 
 
 
 
 
 
Adjustments, treasury stock method (4)
(816
)
 
1,557

 
2,694

 
(829
)
 
(3,524
)
Net income attributable to common shareholders, treasury stock method
$
18,564

 
$
20,999

 
$
35,996

 
$
17,133

 
$
2,910

 
 
 
 
 
 
 
 
 
 
Weighted average basic shares outstanding
83,565,780

 
83,285,095

 
83,750,785

 
84,017,284

 
83,509,115

Weighted average diluted shares outstanding (5)
84,048,972

 
84,010,450

 
84,863,779

 
85,498,568

 
85,413,575

Diluted total earnings per share
$
0.22

 
$
0.25

 
$
0.42

 
$
0.20

 
$
0.03


10



Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
 
Six Months Ended
 
June 30,
2019
 
June 30,
2018
Interest and dividend income:
(In thousands, except share and per share data)
Loans
$
141,876

 
$
124,977

Investment securities
11,711

 
12,720

Short-term investments and other
1,965

 
2,214

Total interest and dividend income
155,552

 
139,911

Interest expense:
 
 
 
Deposits
28,573

 
14,889

Borrowings
11,181

 
10,094

Total interest expense
39,754

 
24,983

Net interest income
115,798

 
114,928

Provision/ (credit) for loan losses
(63
)
 
(1,342
)
Net interest income after provision/ (credit) for loan losses
115,861

 
116,270

Fees and other income:
 
 
 
Investment management fees
5,105

 
15,652

Wealth advisory fees
16,306

 
27,205

Wealth management and trust fees
21,664

 
23,320

Other banking fee income
5,366

 
5,018

Gain on sale of loans, net
131

 
137

Total core fees and income
48,572

 
71,332

Gain/ (loss) on sale of investments, net
—

 
(17
)
Gain/ (loss) on OREO, net
91

 
—

Other
965

 
523

Total other income
1,056

 
506

Total revenue (2)
165,426

 
186,766

Operating expense:
 
 
 
Salaries and employee benefits
68,432

 
86,517

Occupancy and equipment
16,200

 
15,977

Professional services
6,873

 
6,049

Marketing and business development
3,019

 
3,663

Information systems
10,997

 
12,656

Amortization of intangibles
1,344

 
1,499

FDIC insurance
1,245

 
1,452

Restructuring
1,646

 
—

Other
6,456

 
7,428

Total operating expense
116,212

 
135,241

Income before income taxes
49,277

 
52,867

Income tax expense
10,286

 
23,425

Net income from continuing operations
38,991

 
29,442

Net income from discontinued operations (3)
—

 
1,696

Net income before attribution to noncontrolling interests
38,991

 
31,138

Less: Net income attributable to noncontrolling interests
169

 
2,018

Net income attributable to the Company
$
38,822

 
$
29,120

 
 
 
 
Adjustments, treasury stock method (4)
741

 
(3,547
)
Net income attributable to common shareholders, treasury stock method
$
39,563

 
$
25,573

 
 
 
 
Weighted average basic shares outstanding
83,426,213

 
83,304,573

Weighted average diluted shares outstanding (5)
84,036,050

 
85,221,974

Diluted total earnings per share
$
0.47

 
$
0.30


11



Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
(In thousands, except per share data)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
FINANCIAL DATA:
Book value per common share
$
9.53

 
$
9.30

 
$
9.01

 
$
8.72

 
$
8.69

Tangible book value per share (6)
$
8.71

 
$
8.47

 
$
8.18

 
$
7.67

 
$
7.62

Market price per share
$
12.07

 
$
10.96

 
$
10.57

 
$
13.65

 
$
15.90

 
 
 
 
 
 
 
 
 
 
ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"):
 
 
 
 
 
 
 
 
Wealth Management and Trust
$
7,595,000

 
$
7,593,000

 
$
7,602,000

 
$
8,335,000

 
$
7,789,000

Affiliate Partners, excluding BOS
8,604,000

 
8,529,000

 
8,319,000

 
9,388,000

 
9,072,000

Total AUM, excluding BOS (7)
16,199,000

 
16,122,000

 
15,921,000

 
17,723,000

 
16,861,000

AUM at BOS
—

 
—

 
—

 
4,714,000

 
4,525,000

Less: Inter-company relationship
—

 
—

 
—

 
(7,000
)
 
(7,000
)
Total AUM
$
16,199,000

 
$
16,122,000

 
$
15,921,000

 
$
22,430,000

 
$
21,379,000

 
 
 
 
 
 
 
 
 
 
FINANCIAL RATIOS:
 
 
 
 
 
 
 
 
 
Total equity/ Total assets
9.16
%
 
9.09
%
 
8.88
%
 
8.81
%
 
8.42
%
Tangible common equity/ Tangible assets (6)
8.44
%
 
8.35
%
 
8.12
%
 
7.83
%
 
7.46
%
Tier 1 common equity/ Risk weighted assets (6)
11.19
%
 
11.38
%
 
11.40
%
 
11.14
%
 
10.90
%
Allowance for loan losses/ Total loans
1.06
%
 
1.07
%
 
1.09
%
 
1.09
%
 
1.09
%
Allowance for loan losses/ Nonaccrual loans
438
%
 
614
%
 
536
%
 
608
%
 
469
%
Return on average assets (annualized)
0.90
%
 
0.93
%
 
1.56
%
 
0.84
%
 
0.31
%
ROACE (annualized) (non-GAAP) (8)
9.83
%
 
10.29
%
 
17.87
%
 
9.67
%
 
3.03
%
ROATCE (annualized) (non-GAAP) (8)
11.06
%
 
11.63
%
 
20.46
%
 
11.37
%
 
3.90
%
Efficiency ratio (annualized) (non-GAAP) (9)
67.19
%
 
69.67
%
 
57.14
%
 
67.04
%
 
70.29
%
 
 
 
 
 
 
 
 
 
 
DEPOSIT DETAIL:
 
 
 
 
 
 
 
 
 
Demand deposits (non-interest bearing)
$
1,854,091

 
$
2,016,838

 
$
1,951,274

 
$
2,001,275

 
$
2,089,373

NOW
563,130

 
605,852

 
626,685

 
568,148

 
635,841

Savings
68,036

 
68,102

 
73,834

 
72,967

 
73,675

Money market
3,228,608

 
3,302,244

 
3,338,892

 
3,363,062

 
3,128,211

Certificates of deposit
724,098

 
786,809

 
790,485

 
763,271

 
693,079

Total deposits
$
6,437,963

 
$
6,779,845

 
$
6,781,170

 
$
6,768,723

 
$
6,620,179



12



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:
06/30/19
03/31/19
06/30/18
 
06/30/19
03/31/19
06/30/18
 
06/30/19
03/31/19
06/30/18
AVERAGE ASSETS
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and investments (10):
 
 
 
 
 
 
 
 
 
 
 
Taxable investment securities
$
227,029

$
244,230

$
326,482

 
$
1,121

$
1,185

$
1,501

 
1.98
%
1.94
%
1.84
%
Non-taxable investment securities
304,309

306,868

297,852

 
1,901

1,901

1,752

 
2.50
%
2.48
%
2.35
%
Mortgage-backed securities
508,033

521,788

570,845

 
2,706

2,897

3,049

 
2.13
%
2.22
%
2.14
%
Short-term investments and other
130,363

79,603

157,878

 
1,057

908

1,205

 
3.23
%
4.58
%
3.03
%
Total cash and investments
1,169,734

1,152,489

1,353,057

 
6,785

6,891

7,507

 
2.32
%
2.39
%
2.22
%
Loans (10) (11):
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
1,091,903

1,070,161

974,443

 
11,170

10,979

9,201

 
4.05
%
4.10
%
3.74
%
Commercial real estate
2,506,637

2,398,413

2,477,634

 
29,953

28,151

27,387

 
4.73
%
4.69
%
4.37
%
Construction and land
202,609

211,351

166,736

 
2,559

2,641

2,011

 
5.00
%
5.00
%
4.77
%
Residential
3,008,753

2,972,945

2,775,239

 
25,735

25,545

22,590

 
3.42
%
3.44
%
3.26
%
Home equity
91,384

90,646

94,445

 
1,146

1,121

1,041

 
5.03
%
5.02
%
4.42
%
Other consumer
124,778

133,937

179,684

 
1,380

1,496

1,818

 
4.43
%
4.53
%
4.06
%
Total loans
7,026,064

6,877,453

6,668,181

 
71,943

69,933

64,048

 
4.07
%
4.07
%
3.82
%
Total earning assets
8,195,798

8,029,942

8,021,238

 
78,728

76,824

71,555

 
3.82
%
3.83
%
3.55
%
LESS: Allowance for loan losses
73,856

75,537

72,998

 
 
 
 
 
 
 
 
Cash and due from banks (non-interest bearing)
45,705

46,172

45,337

 
 
 
 
 
 
 
 
Other assets
511,859

493,148

396,744

 
 
 
 
 
 
 
 
TOTAL AVERAGE ASSETS
$
8,679,506

$
8,493,725

$
8,390,321

 
 
 
 
 
 
 
 
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits (12):
 
 
 
 
 
 
 
 
 
 
 
Savings and NOW
$
684,507

$
674,872

$
719,159

 
$
276

$
296

$
304

 
0.16
%
0.18
%
0.17
%
Money market
3,226,569

3,341,397

3,033,306

 
10,476

10,072

5,543

 
1.30
%
1.22
%
0.73
%
Certificates of deposit
752,500

775,817

688,567

 
3,763

3,690

2,518

 
2.01
%
1.93
%
1.47
%
Total interest-bearing deposits (12)
4,663,576

4,792,086

4,441,032

 
14,515

14,058

8,365

 
1.25
%
1.19
%
0.76
%
Junior subordinated debentures
106,363

106,363

106,363

 
1,080

1,121

1,008

 
4.02
%
4.22
%
3.75
%
FHLB borrowings and other
952,645

615,985

1,022,636

 
5,673

3,307

4,637

 
2.36
%
2.15
%
1.79
%
Total interest-bearing liabilities (12)
5,722,584

5,514,434

5,570,031

 
21,268

18,486

14,010

 
1.48
%
1.36
%
1.00
%
Non-interest bearing demand deposits (12)
1,926,591

1,974,526

1,908,037

 
 
 
 
 
 
 
 
Other liabilities
238,544

236,426

122,175

 
 
 
 
 
 
 
 
Total average liabilities
7,887,719

7,725,386

7,600,243

 
 
 
 
 
 
 
 
Redeemable noncontrolling interests
943

2,056

14,129

 
 
 
 
 
 
 
 
Average shareholders’ equity
790,844

766,283

775,949

 
 
 
 
 
 
 
 
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY
$
8,679,506

$
8,493,725

$
8,390,321

 
 
 
 
 
 
 
 
Net interest income
 
 
 
 
$
57,460

$
58,338

$
57,545

 
 
 
 
Interest rate spread
 
 
 
 
 
 
 
 
2.34
%
2.47
%
2.55
%
Bank only net interest margin
 
 
 
 
 


 
2.84
%
2.96
%
2.90
%
Net interest margin
 
 
 
 
 
 
 
 
2.78
%
2.90
%
2.85
%
 
 
 
 
 
 
 
 
 
 
 
 
Average total deposits (12)
6,590,167

6,766,612

6,349,069

 
 
 
 
 
0.88
%
0.84
%
0.53
%
Average total deposits and borrowings (12)
7,649,175

7,488,960

7,478,068

 
 
 
 
 
1.11
%
1.00
%
0.75
%

13



Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
 
Average Balance
 
Interest Income/Expense
 
Average Yield/Rate
(In thousands)
Six Months Ended
 
Six Months Ended
 
Six Months Ended
AVERAGE BALANCE SHEET:
06/30/19
06/30/18
 
06/30/19
06/30/18
 
06/30/19
06/30/18
AVERAGE ASSETS
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
Cash and investments:
 
 
 
 
 
 
 
 
Taxable investment securities
$
235,218

$
330,220

 
$
2,306

$
3,011

 
1.92
%
1.83
%
Non-taxable investment securities (10)
305,581

297,407

 
3,802

3,482

 
2.49
%
2.34
%
Mortgage-backed securities
514,872

579,604

 
5,603

6,227

 
2.18
%
2.15
%
Short-term investments and other
105,610

158,853

 
1,965

2,214

 
3.61
%
2.78
%
Total cash and investments
1,161,281

1,366,084

 
13,676

14,934

 
2.34
%
2.19
%
Loans (11):
 
 
 
 
 
 
 
 
Commercial and industrial (10)
1,081,092

953,940

 
22,150

17,661

 
4.08
%
3.68
%
Commercial real estate (10)
2,452,824

2,459,525

 
58,104

53,538

 
4.71
%
4.33
%
Construction and land (10)
206,956

168,052

 
5,200

3,948

 
5.00
%
4.67
%
Residential
2,990,948

2,738,980

 
51,280

44,356

 
3.43
%
3.24
%
Home equity
91,017

95,810

 
2,267

2,083

 
5.02
%
4.39
%
Other consumer
129,332

182,623

 
2,875

3,391

 
4.48
%
3.74
%
Total loans
6,952,169

6,598,930

 
141,876

124,977

 
4.07
%
3.78
%
Total earning assets
8,113,450

7,965,014

 
155,552

139,911

 
3.82
%
3.50
%
LESS: Allowance for loan losses
74,692

73,911

 
 
 
 
 
 
Cash and due from banks (non-interest bearing)
46,010

48,725

 
 
 
 
 
 
Other assets
502,068

408,810

 
 
 
 
 
 
TOTAL AVERAGE ASSETS
$
8,586,836

$
8,348,638

 
 
 
 
 
 
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
Interest-bearing deposits (12):
 
 
 
 
 
 
 
 
Savings and NOW
$
679,716

$
718,051

 
$
572

$
519

 
0.17
%
0.15
%
Money market
3,283,891

3,086,710

 
20,549

9,857

 
1.26
%
0.64
%
Certificates of deposit
764,094

672,736

 
7,452

4,513

 
1.97
%
1.35
%
Total interest-bearing deposits (12)
4,727,701

4,477,497

 
28,573

14,889

 
1.22
%
0.67
%
Junior subordinated debentures
106,363

106,363

 
2,201

1,854

 
4.17
%
3.52
%
FHLB borrowings and other
785,245

950,763

 
8,980

8,240

 
2.27
%
1.72
%
Total interest-bearing liabilities (12)
5,619,309

5,534,623

 
39,754

24,983

 
1.42
%
0.91
%
Non-interest bearing demand deposits (12)
1,950,088

1,890,184

 
 
 
 
 
 
Payables and other liabilities
236,894

126,601

 
 
 
 
 
 
Total average liabilities
7,806,291

7,551,408

 
 
 
 
 
 
Redeemable noncontrolling interests
1,619

17,644

 
 
 
 
 
 
Average shareholders’ equity
778,926

779,586

 
 
 
 
 
 
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY
$
8,586,836

$
8,348,638

 
 
 
 
 
 
Net interest income
 
 
 
$
115,798

$
114,928

 
 
 
Interest rate spread
 
 
 
 
 
 
2.40
%
2.59
%
Bank only net interest margin
 
 
 
 
 
 
2.89
%
2.92
%
Net interest margin
 
 
 
 
 
 
2.84
%
2.87
%
 
 
 
 
 
 
 
 
 
Average total deposits (12)
6,677,789

6,367,681

 
 
 
 
0.86
%
0.47
%
Average total deposits and borrowings (12)
7,569,397

7,424,807

 
 
 
 
1.06
%
0.68
%

14



Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
(In thousands)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
LOAN DATA (13):
 
 
 
 
Other commercial and industrial loans:
 
 
 
 
 
 
 
 
 
New England
$
524,319

 
$
492,800

 
$
503,201

 
$
460,409

 
$
481,081

San Francisco Bay Area
41,131

 
39,829

 
43,702

 
41,256

 
35,220

Southern California
90,736

 
82,741

 
76,134

 
81,549

 
66,892

Total other commercial and industrial loans
$
656,186

 
$
615,370

 
$
623,037

 
$
583,214

 
$
583,193

New England
$
343,359

 
$
342,270

 
$
344,079

 
$
330,753

 
$
332,572

San Francisco Bay Area
95,825

 
96,024

 
96,387

 
96,775

 
94,959

Southern California
11,123

 
11,198

 
11,205

 
11,279

 
11,351

Total commercial tax-exempt loans
$
450,307

 
$
449,492

 
$
451,671

 
$
438,807

 
$
438,882

Total commercial and industrial loans
$
1,106,493

 
$
1,064,862

 
$
1,074,708

 
$
1,022,021

 
$
1,022,075

Commercial real estate loans:
 
 
 
 
 
 
 
 
 
New England
$
1,071,073

 
$
1,068,619

 
$
1,022,061

 
$
1,043,494

 
$
1,069,942

San Francisco Bay Area
770,312

 
720,276

 
714,449

 
724,243

 
739,769

Southern California
689,171

 
650,153

 
659,182

 
631,343

 
694,810

Total commercial real estate loans
$
2,530,556

 
$
2,439,048

 
$
2,395,692

 
$
2,399,080

 
$
2,504,521

Construction and land loans:
 
 
 
 
 
 
 
 
 
New England
$
144,986

 
$
136,097

 
$
153,929

 
$
114,411

 
$
88,068

San Francisco Bay Area
24,725

 
43,130

 
41,516

 
40,755

 
37,783

Southern California
30,667

 
31,391

 
44,861

 
42,358

 
46,173

Total construction and land loans
$
200,378

 
$
210,618

 
$
240,306

 
$
197,524

 
$
172,024

Residential loans:
 
 
 
 
 
 
 
 
 
New England
$
1,708,501

 
$
1,692,421

 
$
1,689,318

 
$
1,650,989

 
$
1,643,039

San Francisco Bay Area
574,937

 
570,132

 
559,578

 
554,502

 
533,394

Southern California
742,320

 
730,579

 
700,077

 
657,388

 
631,773

Total residential loans
$
3,025,758

 
$
2,993,132

 
$
2,948,973

 
$
2,862,879

 
$
2,808,206

Home equity loans:
 
 
 
 
 
 
 
 
 
New England
$
58,806

 
$
59,074

 
$
57,617

 
$
61,291

 
$
61,125

San Francisco Bay Area
19,232

 
18,279

 
19,722

 
19,769

 
17,366

Southern California
11,892

 
11,267

 
13,082

 
12,330

 
13,310

Total home equity loans
$
89,930

 
$
88,620

 
$
90,421

 
$
93,390

 
$
91,801

Other consumer loans:
 
 
 
 
 
 
 
 
 
New England
$
106,177

 
$
110,363

 
$
120,402

 
$
121,685

 
$
145,726

San Francisco Bay Area
12,279

 
11,956

 
12,663

 
14,228

 
14,659

Southern California
8,689

 
8,369

 
9,993

 
9,613

 
8,111

Total other consumer loans
$
127,145

 
$
130,688

 
$
143,058

 
$
145,526

 
$
168,496

Total loans:
 
 
 
 
 
 
 
 
 
New England
$
3,957,221

 
$
3,901,644

 
$
3,890,607

 
$
3,783,032

 
$
3,821,553

San Francisco Bay Area
1,538,441

 
1,499,626

 
1,488,017

 
1,491,528

 
1,473,150

Southern California
1,584,598

 
1,525,698

 
1,514,534

 
1,445,860

 
1,472,420

Total loans
$
7,080,260

 
$
6,926,968

 
$
6,893,158

 
$
6,720,420

 
$
6,767,123


15



Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
(In thousands)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
CREDIT QUALITY (13):
 
 
 
 
Special mention loans:
 
 
 
 
 
 
 
 
 
New England
$
35,235

 
$
34,675

 
$
31,147

 
$
20,382

 
$
18,515

San Francisco Bay Area
10,360

 
23,486

 
18,585

 
18,359

 
19,255

Southern California
25,082

 
28,626

 
28,796

 
28,665

 
15,678

Total special mention loans
$
70,677

 
$
86,787

 
$
78,528

 
$
67,406

 
$
53,448

Accruing classified loans (14):
 
 
 
 
 
 
 
 
 
New England
$
13,012

 
$
15,830

 
$
10,392

 
$
10,083

 
$
11,493

San Francisco Bay Area
25,957

 
20,801

 
24,584

 
24,252

 
12,766

Southern California
14,914

 
5,890

 
19,119

 
21,045

 
21,194

Total accruing classified loans
$
53,883

 
$
42,521

 
$
54,095

 
$
55,380

 
$
45,453

Nonaccruing loans:
 
 
 
 
 
 
 
 
 
New England
$
8,837

 
$
6,161

 
$
6,728

 
$
5,131

 
$
7,282

San Francisco Bay Area
2,644

 
2,480

 
2,488

 
1,169

 
1,319

Southern California
5,674

 
3,378

 
4,841

 
5,797

 
7,050

Total nonaccruing loans
$
17,155

 
$
12,019

 
$
14,057

 
$
12,097

 
$
15,651

Loans 30-89 days past due and accruing (15):
 
 
 
 
 
 
 
 
 
New England
$
1,747

 
$
7,232

 
$
15,961

 
$
9,193

 
$
4,653

San Francisco Bay Area
6

 
2,021

 
2,246

 
1,651

 
—

Southern California
681

 
8,462

 
4,092

 
763

 
324

Total loans 30-89 days past due and accruing
$
2,434

 
$
17,715

 
$
22,299

 
$
11,607

 
$
4,977

Loans (charged-off)/ recovered, net:
 
 
 
 
 
 
 
 
 
New England
$
31

 
$
222

 
$
(100
)
 
$
232

 
$
(73
)
San Francisco Bay Area
20

 
18

 
1,804

 
706

 
91

Southern California
(161
)
 
(312
)
 
15

 
47

 
95

Total net loans (charged-off)/ recovered
$
(110
)
 
$
(72
)
 
$
1,719

 
$
985

 
$
113

Loans (charged-off)/ recovered, net for the year ended:
 
 
 
 
 
 
 
 
 
New England
$
253

 
 
 
 
 
 
 
$
(358
)
San Francisco Bay Area
38

 
 
 
 
 
 
 
158

Southern California
(473
)
 
 
 
 
 
 
 
264

Total Net Loans (Charged-off)/ Recovered
$
(182
)
 
 
 
 
 
 
 
$
64




16



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

FOOTNOTES:
(1)
On April 13, 2018, the Company completed the sale of its ownership interest in Anchor to the management team of Anchor for an upfront cash payment and future payments. Anchor’s results remain consolidated in the Company’s results through the closing date. For presentation purposes, Anchor’s AUM is excluded from prior period AUM amounts, whereas it is included in the calculation of Core fees and income through the closing date. For regulatory purposes, the goodwill and intangible assets of Anchor are included in consolidated calculations through the closing date.

On December 3, 2018, the Company completed the sale of its ownership interest in BOS to the management team of BOS for an upfront cash payment and an eight-year revenue sharing agreement with BOS. For presentation purposes, BOS' AUM is excluded from prior period AUM amounts, whereas it is included in the calculation of Core fees and income through the closing date. For regulatory purposes, the goodwill and intangible assets of BOS are included in consolidated calculations through the closing date.

See footnotes 6 and 8 below.

(2)
Total revenue is the sum of Net interest income, Total core fees and income, and Total other income.

(3)
Net income from discontinued operations consists of contingent payments, net of expenses, related to a divested affiliate, Westfield Capital Management Company, LLC. The Company received its final contingent payment in the first quarter of 2018 related to this affiliate and a tax benefit related to deferred taxes in the fourth quarter of 2018 when annual tax returns were filed.

(4)
Adjustments to Net income attributable to the Company to arrive at Net income attributable to the common shareholders, treasury stock method, as presented in these tables, include decrease/ (increase) in Noncontrolling interests redemption value and dividends paid on preferred stock, if any, including deemed dividends on redemption of the 6.95% non-cumulative perpetual preferred stock, Series D (“the Series D preferred stock”), if any. On June 15, 2018, the Company redeemed all $50 million of the outstanding Series D preferred stock. 

(5)
When the Company has positive Net income from continuing operations attributable to the common shareholders, the Company adds additional shares to basic Weighted average shares outstanding to arrive at Weighted average diluted shares outstanding for the Diluted earnings per share calculation. These additional shares reflect the assumed exercise, conversion, or contingent issuance of dilutive securities. If the additional shares would result in anti-dilution, they would be excluded from the Diluted earnings per share calculation. The potential dilutive shares relate to unexercised stock options, unvested restricted stock units, and unexercised stock warrants, if any. See Part II. Item 8. “Financial Statements and Supplementary Data - Note 16: Earnings Per Share” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for additional information.

(6)
The Company uses certain non-GAAP financial measures, such as: Tangible book value per share and the Tangible common equity (“TCE”) to Tangible assets (“TA”) ratio to provide information for investors to effectively analyze financial trends of ongoing business activities and to enhance comparability with peers across the financial sector.

Reconciliations from the Company’s GAAP Total equity to Total assets ratio to the non-GAAP TCE to TA ratio, and from GAAP Book value to non-GAAP Tangible book value are presented below:

The Company calculates TA by adjusting Total assets to exclude Goodwill and intangible assets. The Company calculates TCE by adjusting Total equity to exclude Goodwill and intangible assets, net. 
(In thousands, except share and per share data)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Total balance sheet assets
$
8,712,873

 
$
8,572,143

 
$
8,494,625

 
$
8,375,840

 
$
8,716,203

LESS: Goodwill and intangible assets, net
(68,491
)
 
(69,162
)
 
(69,834
)
 
(89,432
)
 
(90,182
)
Tangible assets (non-GAAP)
$
8,644,382

 
$
8,502,981

 
$
8,424,791

 
$
8,286,408

 
$
8,626,021

Total shareholders’ equity
$
798,211

 
$
778,819

 
$
753,954

 
$
738,009

 
$
733,977

LESS: Goodwill and intangible assets, net
(68,491
)
 
(69,162
)
 
(69,834
)
 
(89,432
)
 
(90,182
)
Tangible common equity (non-GAAP)
$
729,720

 
$
709,657

 
$
684,120

 
$
648,577

 
$
643,795

Total equity/ Total assets
9.16
%
 
9.09
%
 
8.88
%
 
8.81
%
 
8.42
%
Tangible common equity/ Tangible assets (non-GAAP)
8.44
%
 
8.35
%
 
8.12
%
 
7.83
%
 
7.46
%
 
 
 
 
 
 
 
 
 
 
Total risk weighted assets *
$
6,494,049

 
$
6,304,444

 
$
6,161,677

 
$
6,057,002

 
$
6,104,586

Tier 1 common equity *
$
726,872

 
$
717,138

 
$
702,728

 
$
674,641

 
$
665,628

Tier 1 common equity/ Risk weighted assets *
11.19
%
 
11.38
%
 
11.40
%
 
11.14
%
 
10.90
%
 
 
 
 
 
 
 
 
 
 
End of period shares outstanding
83,774,335

 
83,773,650

 
83,655,651

 
84,602,519

 
84,478,858

 
 
 
 
 
 
 
 
 
 
Book value per common share
$
9.53

 
$
9.30

 
$
9.01

 
$
8.72

 
$
8.69

Tangible book value per share (non-GAAP)
$
8.71

 
$
8.47

 
$
8.18

 
$
7.67

 
$
7.62

*     Risk weighted assets and Tier 1 common equity for June 30, 2019 are presented based on estimated data.

17



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

(7)
Assets under management and advisory have been reduced to exclude those assets managed or advised by BOS for periods when BOS was owned by the Company.

(8)
The Company uses certain non-GAAP financial measures, such as ROACE and ROATCE to provide information for investors to effectively analyze financial trends of ongoing business activities and to enhance comparability with peers across the financial sector.

Reconciliations from the Company’s GAAP Return on average equity ratio to the non-GAAP ROACE and the non-GAAP ROATCE ratios are presented below:

The Company annualizes income data based on the number of days in the period presented and a 365 day year. The Company calculates Average common equity by adjusting Average equity to exclude Average preferred equity, if any. The Company calculates Average tangible common equity by adjusting Average equity to exclude Average goodwill and intangible assets, net and Average preferred equity, if any.
 
Three Months Ended
(In thousands)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Total average shareholders’ equity
$
790,844

 
$
766,283

 
$
739,313

 
$
737,188

 
$
775,949

LESS: Average Series D preferred stock
—

 
—

 
—

 
—

 
(39,881
)
Average common equity (non-GAAP)
790,844

 
766,283

 
739,313

 
737,188

 
736,068

LESS: Average goodwill and intangible assets, net
(68,889
)
 
(69,498
)
 
(83,153
)
 
(89,830
)
 
(102,533
)
Average tangible common equity (non-GAAP)
$
721,955

 
$
696,785

 
$
656,160

 
$
647,358

 
$
633,535

 


 

 
 
 
 
 

Net income attributable to the Company
$
19,380

 
$
19,442

 
$
33,302

 
$
17,962

 
$
6,434

LESS: Dividends on Series D preferred stock
—

 
—

 
—

 
—

 
(869
)
Common net income (non-GAAP)
19,380

 
19,442

 
33,302

 
17,962

 
5,565

ADD: Amortization of intangibles, net of tax
531

 
531

 
537

 
593

 
592

Tangible common net income (non-GAAP)
$
19,911

 
$
19,973

 
$
33,839

 
$
18,555

 
$
6,157

 
 
 
 
 
 
 
 
 
 
Return on average equity - (annualized)
9.83
%
 
10.29
%
 
17.87
%
 
9.67
%
 
3.33
%
ROACE - (annualized) (non-GAAP)
9.83
%
 
10.29
%
 
17.87
%
 
9.67
%
 
3.03
%
ROATCE - (annualized) (non-GAAP)
11.06
%
 
11.63
%
 
20.46
%
 
11.37
%
 
3.90
%
 
Six Months Ended
(In thousands)
June 30,
2019
 
June 30,
2018
Total average shareholders’ equity
$
778,926

 
$
779,586

LESS: Average Series D preferred stock (non-convertible)
—

 
(43,795
)
Average common equity (non-GAAP)
778,926

 
735,791

LESS: Average goodwill and intangible assets, net
(69,211
)
 
(117,839
)
Average tangible common equity (non-GAAP)
$
709,715

 
$
617,952

 
 
 
 
Net income attributable to the Company
$
38,822

 
$
29,120

LESS: Dividends on Series D preferred stock
—

 
(1,738
)
Common net income (non-GAAP)
38,822

 
27,382

ADD: Amortization of intangibles, net of tax
1,062

 
1,184

Tangible common net income (non-GAAP)
$
39,884

 
$
28,566

 
 
 
 
Return on average equity
10.05
%
 
7.53
%
Return on average common equity (non-GAAP)
10.05
%
 
7.50
%
Return on average tangible common equity (non-GAAP)
11.33
%
 
9.32
%

(9)
The Company uses certain non-GAAP financial measures, such as Pre-tax, pre-provision income; Total operating expenses excluding amortization of intangibles and restructuring expense, if any; and the Efficiency ratio to provide information for investors to effectively analyze financial trends of ongoing business activities and to enhance comparability with peers across the financial sector.

Reconciliations from the Company’s GAAP Income from continuing operations before income taxes to non-GAAP Pre-tax, pre-provision income; from GAAP Total operating expense to non-GAAP Total operating expense excluding amortization of intangibles and restructuring, if any; and from GAAP Efficiency ratio to non-GAAP Efficiency ratio, excluding amortization of intangibles, impairment of goodwill, and restructuring, if any, are presented below:

18



Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited)
 
Three Months Ended
(In thousands)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Income before income taxes (GAAP)
$
24,818

 
$
24,459

 
$
42,192

 
$
24,347

 
$
24,803

ADD BACK: Provision/ (credit) for loan losses
1,363

 
(1,426
)
 
93

 
(949
)
 
453

Pre-tax, pre-provision income (non-GAAP)
$
26,181

 
$
23,033

 
$
42,285

 
$
23,398

 
$
25,256

 
 
 
 
 
 
 
 
 
 
Total operating expense (GAAP)
$
55,659

 
$
60,553

 
$
63,557

 
$
68,557

 
$
64,384

Less: Amortization of intangibles
672

 
672

 
680

 
750

 
749

Less: Restructuring
—

 
1,646

 
2,065

 
5,763

 
—

Total operating expense (non-GAAP)
$
54,987

 
$
58,235

 
$
60,812

 
$
62,044

 
$
63,635

 
 
 
 
 
 
 
 
 
 
Net interest income
$
57,460

 
$
58,338

 
$
59,997

 
$
59,641

 
$
57,545

Total core fees and income
24,292

 
24,280

 
28,691

 
31,592

 
31,897

Gain on sale of affiliate
—

 
—

 
18,142

 
—

 
—

Total other income
88

 
968

 
(988
)
 
722

 
198

Total revenue (10)
$
81,840

 
$
83,586

 
$
105,842

 
$
91,955

 
$
89,640

Efficiency ratio (GAAP)
68.01
%
 
72.44
%
 
60.05
%
 
74.55
%
 
71.83
%
Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) (10)
67.19
%
 
69.67
%
 
57.14
%
 
67.04
%
 
70.29
%
 
Six Months Ended
(In thousands)
June 30,
2019
 
June 30,
2018
Income before income taxes (GAAP)
$
49,277

 
$
52,867

ADD BACK: Provision/ (credit) for loan losses
(63
)
 
(1,342
)
Pre-tax, pre-provision income (non-GAAP)
$
49,214

 
$
51,525

 
 
 
 
Total operating expense (GAAP)
$
116,212

 
$
135,241

Less: Amortization of intangibles
1,344

 
1,499

Less: Restructuring
1,646

 
—

Total operating expense (non-GAAP)
$
113,222

 
$
133,742

 
 
 
 
Net interest income
$
115,798

 
$
114,928

Total core fees and income
48,572

 
71,332

Total other income
1,056

 
506

Total revenue (10)
$
165,426

 
$
186,766

Efficiency ratio (GAAP)
70.25
%
 
72.41
%
Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) (10)
68.44
%
 
70.90
%
 
 
 
 

(10)
Currently, the FTE adjustment for interest income on Non-taxable investments and loans is immaterial and therefore has not been applied. For comparison purposes, GAAP amounts are shown for all periods presented.
    
(11)
Average loans includes Loans held for sale and Nonaccrual loans.

(12)
Average total deposits is the sum of Average total interest-bearing deposits and Average non-interest bearing demand deposits. Average total deposits and borrowings is the sum of Average total interest-bearing liabilities and Average non-interest bearing demand deposits.

(13)
The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lenders' regional offices.

(14)
Accruing classified loans include loans that are classified as substandard but are still accruing interest income. Boston Private Bank & Trust Company may classify a loan as substandard where known information about possible credit problems of the related borrowers causes management to have doubts as to the ability of such borrowers to comply with the present repayment terms and which may result in disclosure of such loans as nonaccrual at some time in the future.


19



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

(15)
In addition to loans 30-89 days past due and accruing, at June 30, 2019, the Company had one loan totaling $0.9 million that was more than 90 days past due but still on accrual status. This loan originated in the New England region. The Company had no loans outstanding more than 90 days past due but still on accrual status in comparative periods.
    
(16)
The Company uses certain non-GAAP financial measures, such as Net interest income excluding interest recovered on previous nonaccrual loans and Net interest margin excluding interest recovered on previous nonaccrual loans, also referred to as Core net interest margin, to provide information for investors to effectively analyze financial trends of ongoing business activities and to enhance comparability with peers across the financial sector.
Reconciliations from the Company’s GAAP Net interest income to non-GAAP Net interest income excluding interest recovered on previous nonaccrual loans and from GAAP Net interest margin to non-GAAP Net interest margin excluding interest recovered on previous nonaccrual loans are presented below:
 
Three Months Ended
(In thousands)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Net interest income (GAAP basis)
$
57,460

 
$
58,338

 
$
59,997

 
$
59,641

 
$
57,545

LESS: Interest recovered on previous nonaccrual loans
—

 
258

 
986

 
986

 
—

Net interest income, excluding interest recovered while loans on nonaccrual status (non-GAAP) - also referred to as Core net interest income (non-GAAP)
57,460

 
58,080

 
59,011

 
58,655

 
57,545

Net interest margin, excluding interest recovered while loans on nonaccrual status (non-GAAP) - also referred to as Core net interest margin (non-GAAP)
2.78
%
 
2.89
%
 
2.90
%
 
2.85
%
 
2.85
%



20



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

(17)
The Company uses certain non-GAAP financial measures, such as Net income attributable to the Company excluding notable items and Diluted earnings per share excluding notable items to provide information for investors to effectively analyze financial trends of ongoing business activities and to enhance comparability with peers across the financial sector. Reconciliations from the Company’s GAAP Net income attributable to the Company to non-GAAP Net income attributable to the Company excluding notable items and from GAAP Diluted earnings per share to non-GAAP Diluted earnings per share excluding notable items are presented below:
 
Three Months Ended
(In thousands, except share and per share data)
June 30,
2019
 
March 31,
2019
 
December 31,
2018
 
September 30,
2018
 
June 30,
2018
Net income attributable to the Company (GAAP)
$
19,380

 
$
19,442

 
$
33,302

 
$
17,962

 
$
6,434

LESS: Gain on sale of affiliate
—

 
—

 
18,142

 
—

 
—

ADD BACK: Information services *
—

 
—

 
(441
)
 
—

 
441

ADD BACK: Restructuring
—

 
1,646

 
2,065

 
5,763

 
—

ADD BACK: Tax adjustments **
—

 
—

 
3,502

 
—

 
12,706

Tax effect at statutory rate
—

 
(346
)
 
(341
)
 
(1,210
)
 
(93
)
Net income attributable to the Company excluding notable items (non-GAAP)
$
19,380

 
$
20,742

 
$
19,945

 
$
22,515

 
$
19,488

 
 
 
 
 
 
 
 
 
 
Net income attributable to the common shareholders, treasury stock method (GAAP)
$
18,564

 
$
20,999

 
$
35,996

 
$
17,133

 
$
2,910

ADD BACK: Deemed dividend due to redemption of Series D preferred stock
—

 
—

 
—

 
—

 
2,247

LESS: Gain on sale of affiliate
—

 
—

 
18,142

 
—

 
—

ADD BACK: Information services *
—

 
—

 
(441
)
 
—

 
441

ADD BACK: Restructuring
—

 
1,646

 
2,065

 
5,763

 
—

ADD BACK: Tax adjustments **
—

 
—

 
3,502

 
—

 
12,706

Tax effect at statutory rate
—

 
(346
)
 
(341
)
 
(1,210
)
 
(93
)
Net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP)
$
18,564

 
$
22,299

 
$
22,639

 
$
21,686

 
$
18,211

 
 
 
 
 
 
 
 
 
 
Weighted average diluted shares outstanding
84,048,972

 
84,010,450

 
84,863,779

 
85,498,568

 
85,413,575

 
 
 
 
 
 
 
 
 
 
Diluted total earnings per share (GAAP)
$
0.22

 
$
0.25

 
$
0.42

 
$
0.20

 
$
0.03

Diluted total earnings per share, excluding notable items (non-GAAP)
$
0.22

 
$
0.27

 
$
0.27

 
$
0.25

 
$
0.21

 
 
 
 
 
 
 
 
 
 
Average common equity (non-GAAP)
$
790,844

 
$
766,283

 
$
739,313

 
$
737,188

 
$
736,068

Average tangible common equity (non-GAAP)
$
721,955

 
$
696,785

 
$
656,160

 
$
647,358

 
$
633,535

Return on average common equity - (annualized), excluding notable items (non-GAAP)
9.83
%
 
10.98
%
 
10.70
%
 
12.12
%
 
10.15
%
Return on average tangible common equity - (annualized), excluding notable items (non-GAAP)
11.06
%
 
12.38
%
 
12.38
%
 
14.16
%
 
12.16
%
 
 
 
 
 
 
 
 
 
 
Pre-tax, pre-provision income (non-GAAP)
$
26,181

 
$
23,033

 
$
42,285

 
$
23,398

 
$
25,256

LESS: Gain on sale of affiliate
—

 
—

 
18,142

 
—

 
—

ADD BACK: Information services *
—

 
—

 
(441
)
 
—

 
441

ADD BACK: Restructuring
—

 
1,646

 
2,065

 
5,763

 
—

Pre-tax, pre-provision income, excluding notable items (non-GAAP)
$
26,181

 
$
24,679

 
$
25,767

 
$
29,161

 
$
25,697


*
In the fourth quarter of 2018, $0.4 million of Information services expense was reclassified to Restructuring expense in conjunction with the announcement of the Company's formal restructuring plan.
**
Additional tax expense in the second quarter of 2018 relates to the tax impact of the April 2018 completion of the sale of Anchor and additional expense in the fourth quarter of 2018 relates to the completion of the sale of BOS.
 
 
 
 
 
 
 
 
 
 
 
 
    

21