Exhibit

EX-99.1 2 a2019q3ex991profthecom.htm EXHIBIT 99.1 Exhibit

Boston Private Reports Third Quarter 2019 Results

Third Quarter 2019 Highlights include:


•	Net income was $20.0 million, or $0.24 per diluted share


•	Return on average common equity (non-GAAP) was 9.8%


•	Return on average tangible common equity (non-GAAP) was 11.0%


•	Average total loans were $7.0 billion, a 4% increase year-over-year


•	Average total deposits were $6.7 billion, a 1% decrease year-over-year


•	Total assets under management/advisory (“AUM”) were $16.2 billion, a decrease of 8% year-over-year


•	Total net flows were negative $137 million, of which negative $100 million were attributable to the Wealth Management & Trust segment


•	Completed the integration of wholly-owned affiliates Boston Private Wealth LLC and KLS Professional Advisors Group, LLC ("KLS")

Boston, MA - October 24, 2019 - Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported third quarter 2019 Net income attributable to the Company of $20.0 million, compared to $19.4 million for the second quarter of 2019 and $18.0 million for the third quarter of 2018. Third quarter 2019 Diluted earnings per share were $0.24, compared to $0.22 in the second quarter of 2019 and $0.20 in the third quarter of 2018.

"Our team is making strong progress building a platform to support the growth initiatives we shared during our Investor Day," said Anthony DeChellis, CEO of Boston Private. "Our third quarter results reflect disciplined expense management in a challenging net interest income environment, as we position our businesses to be more cohesive and competitive.

"This quarter, we welcomed John Longley as the President of the Western Region and Pat Dwyer as the Head of Strategic Business Development to help drive growth across the company. We also completed the formal integration of Boston Private Wealth and KLS Professional Advisors, a key milestone towards simplifying the BPFH business model and scaling Boston Private's ability to compete at the highest levels of the financial services industry."



Summary Financial Results - Reported
							% Change
($ in millions, except for per share data)	3Q19		2Q19		3Q18		LQ		Y/Y
Net income	$20.0		$19.4		$18.0		3	%	11	%
Diluted earnings per share	$0.24		$0.22		$0.20		9	%	20	%

Non-GAAP Financial Measures:
Pre-tax, pre-provision income	$25.7		$26.2		$23.4		(2	)%	10	%
Return on average common equity ("ROACE")	9.8	%	9.8	%	9.7	%
Return on average tangible common equity ("ROATCE")	11.0	%	11.1	%	11.4	%

The Company's reported financial results increased year-over-year primarily as a result of a $5.8 million restructuring expense during the third 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 measures, see page 6. A reconciliation of GAAP to non-GAAP results can be found beginning on page 17.



Summary Financial Results - Operating Basis (non-GAAP)
							% Change
($ in millions, except for per share data)	3Q19		2Q19		3Q18¹		LQ		Y/Y
Net income	$20.0		$19.4		$22.5		3	%	(11	)%
Diluted earnings per share	$0.24		$0.22		$0.25		9	%	(5	)%

Pre-tax, pre-provision income	$25.7		$26.2		$29.2		(2	)%	(12	)%
Return on average common equity	9.8	%	9.8	%	12.1	%
Return on average tangible common equity	11.0	%	11.1	%	14.2	%
¹3Q18 results adjusted to exclude the impact of $5.8 million restructuring expense, net of $1.2 million tax effect



Divested Affiliates

The Company completed the sale of Bingham, Osborn & Scarborough LLC ("BOS") during 2018. Financial results from BOS remain consolidated in the Company's financial results through the closing date of December 3, 2018.

For presentation purposes, BOS's AUM is excluded from AUM amounts, but is included in the calculation of Core fees and income. The discussion below includes non-GAAP measures that exclude the contributions from BOS in order to enhance comparability of trends in the core business.



Net Interest Income and Margin
							% Change
($ in millions)	3Q19		2Q19		3Q18		LQ		Y/Y
Net interest income	$56.2		$57.5		$59.6		(2	)%	(6	)%
Less: Interest recovered on previous nonaccrual loans	0.2		—		1.0		nm		nm
Core net interest income (non-GAAP)	$56.0		$57.5		$58.7		(3	)%	(5	)%

Net interest margin	2.72	%	2.78	%	2.90	%
Core net interest margin (non-GAAP)	2.71	%	2.78	%	2.90	%
nm = not meaningful

Net interest income for the third quarter of 2019 was $56.2 million, a decrease of 2% linked quarter and 6% year-over-year. Core net interest income, which excludes interest recovered on previous nonaccrual loans, decreased 3% linked quarter and 5% year-over-year. The linked quarter decrease was primarily driven by the repricing of variable rate loans and lower interest-earning asset volumes, partially offset by lower borrowing volumes.

The Company’s Core net interest margin, which excludes interest recovered on previous nonaccrual loans, decreased 7 basis points on a linked quarter basis to 2.71%, primarily driven by lower interest-earning asset yields and higher deposit costs, partially offset by lower borrowing volumes.



Noninterest Income
				% Change
($ in millions)	3Q19	2Q19	3Q18	LQ		Y/Y
Wealth management and trust fees	$19.1	$18.9	$25.5	1	%	(25	)%
Investment management fees	2.5	2.5	3.2	2	%	(23	)%
Private banking fees ²	3.6	2.9	2.8	23	%	26	%
Total core fees and income	$25.2	$24.3	$31.6	4	%	(20	)%
Total other income	—	0.1	0.7	(100	)%	(100	)%
Total noninterest income	$25.1	$24.4	$32.3	3	%	(22	)%

Memo: Excluding BOS
Wealth management and trust fees (non-GAAP) ³	$19.1	$18.9	$19.6	1	%	(3	)%
Investment management fees	2.5	2.5	3.2	2	%	(23	)%
Private banking fees	3.6	2.9	2.8	23	%	26	%
Total core fees and income (non-GAAP) ³	$25.2	$24.3	$25.7	4	%	(2	)%
Total other income	—	0.1	0.7	(100	)%	(100	)%
Total noninterest income (non-GAAP) ³	$25.1	$24.4	$26.4	3	%	(5	)%
² Private banking fees includes Other banking fee income and Gain/ (loss) on sale of loans, net ³ Excludes BOS revenue of $5.9 million in 3Q18

As previously announced, KLS and Boston Private Wealth LLC now operate as a single registered investment advisor ("RIA"). Revenue from the RIA, the legacy affiliates, and the trust operations of Boston Private Bank & Trust Company is included as Wealth management and trust fees during the current period and all prior periods.

Total core fees and income for the third quarter of 2019 was $25.2 million, a 4% increase linked quarter, primarily driven by a gain on sale of loans associated with the sale of approximately $90 million of mortgage loans. The 20% decline year-over-year was primarily driven by the divestiture of BOS.

Excluding BOS, Total core fees and income (non-GAAP) decreased 2% year-over-year, primarily driven by lower Investment Management fees and Wealth management and trust fees as a result of negative net flows.



Assets Under Management / Advisory
				% Change
($ in millions)	3Q19	2Q19	3Q18	LQ		Y/Y
Wealth Management and Trust	$14,695	$14,649	$15,598	—	%	(6	)%
Other ⁴	1,533	1,550	2,125	(1	)%	(28	)%
Total assets under management / advisory	$16,228	$16,199	$17,723	—	%	(8	)%
⁴ Includes results from Dalton, Greiner, Hartman, Maher & Co, LLC ("DGHM")

Total assets under management / advisory were $16.2 billion at the end of the third quarter of 2019, flat linked quarter and a decrease of 8% year-over-year. The linked quarter comparison was impacted by positive market action partially offset by negative net flows, while the year-over-year decrease was primarily driven by negative net flows in excess of positive market action.

Total net flows were negative $137 million during the third quarter of 2019, of which $100 million were attributable to the Wealth Management & Trust segment.



Noninterest Expense
				% Change
($ in millions)	3Q19	2Q19	3Q18	LQ		Y/Y
Salaries and employee benefits	$31.7	$32.7	$38.9	(3	)%	(19	)%
Occupancy and equipment	8.3	7.9	8.2	5	%	1	%
Professional services	4.4	3.3	2.9	34	%	54	%
Marketing and business development	1.4	1.9	1.7	(27	)%	(18	)%
Information systems	5.2	5.1	6.2	1	%	(17	)%
Amortization of intangibles	0.7	0.7	0.8	—	%	(11	)%
FDIC insurance	0.1	0.6	0.7	(90	)%	(91	)%
Restructuring	—	—	5.8	—	%	(100	)%
Other	3.9	3.5	3.4	11	%	12	%
Total noninterest expense	$55.5	$55.7	$68.6	—	%	(19	)%

Memo: Excluding Notable Items⁵ and BOS
Restructuring	—	—	5.8	—	%	(100	)%
BOS noninterest expense	—	—	4.0	—	%	(100	)%
Total noninterest expense (non-GAAP)	$55.5	$55.7	$58.8	—	%	(6	)%
⁵"Notable Items" include a $5.8 million restructuring expense in 3Q18

Total noninterest expense was flat linked quarter as lower salaries and employee benefits expense, marketing and business development expense, and an FDIC insurance assessment credit offset higher professional services expense and higher occupancy and equipment expense.

Excluding Notable Items and BOS, Total noninterest expense (non-GAAP) for the third quarter of 2019 was $55.5 million, flat linked quarter and down 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 third quarter of 2019 was 21.6%.



Loans and Deposits - QTD Averages
							% Change
($ in millions)	3Q19		2Q19		3Q18		LQ		Y/Y
Commercial and industrial	$1,102		$1,092		$999		1	%	10	%
Commercial real estate	2,518		2,507		2,475		—	%	2	%
Construction and land	196		203		179		(3	)%	9	%
Residential	3,016		3,009		2,837		—	%	6	%
Home equity	89		91		94		(3	)%	(5	)%
Other consumer	128		125		163		3	%	(22	)%
Total loans	$7,049		$7,026		$6,747		—	%	4	%

Non-interest bearing deposits	1,953		1,927		2,064		1	%	(5	)%
Interest bearing deposits	4,705		4,664		4,668		1	%	1	%
Total deposits	$6,658		$6,591		$6,732		1	%	(1	)%

Non-interest bearing deposits as a % of Total deposits	29	%	29	%	31	%

Average total loans in the third quarter of 2019 increased 4% year-over-year, primarily driven by increases in Residential loans and Commercial and industrial loans. End of period residential loans declined $62 million linked quarter to $3.0 billion following a loan sale of approximately $90 million that was completed in September of 2019.

Average total deposits decreased 1% year-over-year, primarily driven by a decline in demand deposit accounts, partially offset by growth in money market accounts and certificates of deposits.

The cost of total deposits was 0.92%, an increase of 4 basis points linked quarter and 24 basis points year-over-year.



Provision and Asset Quality

($ in millions)	3Q19		2Q19		1Q19		4Q18		3Q18
Provision/ (credit) for loan loss	$0.2		$1.4		$(1.4)		$0.1		$(0.9)
Total criticized and classified loans	139.0		141.7		141.3		146.6		134.7
Total nonaccrual loans	17.6		17.2		12.0		14.1		12.1
Total loans 30-89 days past due and accruing	4.2		2.4		17.7		22.3		11.6
Total net loans (charged-off)/ recovered	0.1		(0.1)		(0.1)		1.7		1.0

Ratios:
Allowance for loan losses as a % of Total loans	1.07	%	1.06	%	1.07	%	1.09	%	1.09	%
Nonaccrual loans as a % of Total loans	0.25	%	0.24	%	0.17	%	0.20	%	0.18	%

The Company recorded a provision expense of $0.2 million for the third quarter of 2019, compared to a provision expense of $1.4 million for the second quarter of 2019 and a provision credit of $0.9 million in the third quarter of 2018. The provision expense in the third quarter of 2019 was primarily driven by required reserves for criticized and classified loans, partially offset by lower reserves for pass-rated loans.

Total criticized loans as of September 30, 2019 was $139.0 million, a 2% decline linked quarter and an increase of 3% year-over-year. Total nonaccrual loans as of September 30, 2019 was $17.6 million, or 25 basis points of Total loans, compared to $17.2 million, or 24 basis points of total loans as of June 30, 2019, and $12.1 million, or 18 basis points of Total loans as of September 30, 2018.



Capital

($ in millions, except for per share data)	3Q19		2Q19		1Q19		4Q18		3Q18
Tangible common equity/ Tangible assets (non-GAAP)	8.6	%	8.4	%	8.3	%	8.1	%	7.8	%
Tangible book value per share (non-GAAP)	$8.90		$8.71		$8.47		$8.18		$7.67

Regulatory Capital Ratios: ⁶
Tier 1 common equity	11.2	%	11.2	%	11.4	%	11.4	%	11.1	%
Total risk-based capital	13.9	%	13.9	%	14.2	%	14.3	%	14.1	%
Tier 1 risk-based capital	12.8	%	12.7	%	13.0	%	13.0	%	12.8	%
Tier 1 leverage capital	9.7	%	9.6	%	9.7	%	9.5	%	9.2	%

Common Equity Repurchase Program:
Total shares of common stock repurchased	678,165		—		—		1,505,521		137,144
Average price paid per share of common stock	$10.61		—		—		$12.02		$13.89
Aggregate repurchases of common equity ($ in millions)	$7.2		—		—		$18.1		$1.9
⁶ Current quarter information is presented based on estimated data.

During the third quarter of 2019, the Company implemented a $20 million share repurchase program and repurchased 678,165 shares of common stock at an average cost of $10.61 per share. $12.8 million remains available to be repurchased under the current program.

Tangible book value per share as of September 30, 2019 increased 2% linked quarter and 16% year-over-year to $8.90. 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, partially offset by common share repurchases.



EPS Calculation

For calculation of income for EPS, third quarter 2019 Net income attributable to the common shareholders was positively impacted by $0.3 million related to the change in value of Redeemable noncontrolling interests (“RNCI”).



Dividend Payments

Concurrent with the release of third 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 November 8, 2019, and the payment date is November 22, 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: return on average common equity; return on average tangible common equity; pre-tax, pre-provision income; 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; tangible common equity / tangible assets, total noninterest expense excluding intangibles and restructuring, if any; the efficiency ratio excluding amortization and intangibles, and restructuring, if any; 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 noninterest expenses

A detailed reconciliation table of the Company’s GAAP to non-GAAP measures is included in the tables of this release and beginning on page 18 of the attached financial statements.



Conference Call

Management will hold a conference call at 8:00 a.m. Eastern Time on Friday, October 25, 2019, to discuss the financial results, business highlights and outlook. To access the call:

Dial In #: (888) 317-6003

Elite Entry Number: 9751347

Replay Information:

Available from October 25, 2019 at 12:00 p.m Eastern Time until November 1, 2019

Dial In #: (877) 344-7529

Conference Number: 10135524

The call will be simultaneously webcast and may be accessed on www.bostonprivate.com.



About Boston Private

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 business 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.

###

CONTACT:

Adam Bromley

(617) 912-4386

abromley@bostonprivate.com



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Balance Sheet
Unaudited ($ in thousands, except share and per share data)
	3Q19		2Q19		1Q19			4Q18			3Q18
ASSETS:
Cash and cash equivalents	$	78,010	$	65,756	$	96,211		$	127,259		$	92,634
Investment securities available-for-sale	935,538		966,731		981,951			994,065			1,056,261
Investment securities held-to-maturity	51,379		54,482		67,548			70,438			75,468
Equity securities at fair value	21,780		19,092		7,491			14,228			7,079
Stock in Federal Home Loan Bank and Federal Reserve Bank	47,756		64,453		47,053			49,263			48,727
Loans held for sale	6,658		3,640		280			2,812			3,344
Loans	7,067,151		7,080,260		6,926,968			6,893,158			6,720,420
Less: Allowance for loan losses	75,359		75,067		73,814			75,312			73,500
Loans, net of allowance for loan losses	6,991,792		7,005,193		6,853,154			6,817,846			6,646,920
Other real estate owned (“OREO”)	—		—		—			401			108
Premises and equipment, net	42,658		40,244		42,938			45,412			47,399
Goodwill ⁷	57,607		57,607		57,607			57,607			75,598
Intangible assets, net ⁷	10,622		10,884		11,555			12,227			13,834
Accrued interest receivable	24,851		26,411		25,935			24,366			24,641
Deferred income taxes, net	15,704		17,183		22,844			26,638			27,833
Right-of-use assets	107,045		110,880		104,644			—			—
Other assets ⁷	299,544		270,317		252,932			252,063			255,994
TOTAL ASSETS	$	8,690,944	$	8,712,873	$	8,572,143		$	8,494,625		$	8,375,840

LIABILITIES:
Deposits	$	6,658,242	$	6,437,963	$	6,779,845		$	6,781,170		$	6,768,723
Securities sold under agreements to repurchase	48,860		62,372		58,329			36,928			39,453
Federal funds purchased	230,000		135,000		—			250,000			120,000
Federal Home Loan Bank borrowings	570,904		920,068		615,070			420,144			441,836
Junior subordinated debentures	106,363		106,363		106,363			106,363			106,363
Lease liabilities	122,799		126,740		120,162			—			—
Other liabilities ⁷	143,607		124,370		112,893			143,540			149,770
TOTAL LIABILITIES	7,880,775		7,912,876		7,792,662			7,738,145			7,626,145

REDEEMABLE NONCONTROLLING INTEREST (“RNCI”)	1,481		1,786		662			2,526			11,686
SHAREHOLDERS' EQUITY:
Common stock, $1.00 par value; authorized: 170,000,000 shares	83,242		83,774		83,774			83,656			84,603
Additional paid-in capital	599,877		603,869		604,288			600,196			614,157
Retained earnings	116,210		106,443		97,155			87,821			64,618
Accumulated other comprehensive income/ (loss)	9,359		4,125		(6,398		)	(17,719		)	(27,578		)
TOTAL COMPANY'S SHAREHOLDERS' EQUITY	808,688		798,211		778,819			753,954			735,800
Noncontrolling interests	—		—		—			—			2,209
TOTAL SHAREHOLDERS' EQUITY	808,688		798,211		778,819			753,954			738,009
TOTAL LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY	$	8,690,944	$	8,712,873	$	8,572,143		$	8,494,625		$	8,375,840

⁷ 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 regulatory purposes, the goodwill and intangible assets of BOS are included in consolidated calculations through the closing date.



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statement
Unaudited ($ in thousands, except share and per share data)
	3Q19			2Q19			1Q19			4Q18		3Q18
REVENUE:
Interest income	$	77,604		$	78,728		$	76,824		$	76,892	$	76,101
Interest expense	21,451			21,268			18,486			16,895		16,460
Net interest income	56,153			57,460			58,338			59,997		59,641
Provision/ (credit) for loan losses	167			1,363			(1,426		)	93		(949		)
Net interest income after provision/ (credit) for loan losses	55,986			56,097			59,764			59,904		60,590

Wealth management and trust fees ⁸	19,067			18,912			19,058			23,788		25,505
Investment management fees	2,496			2,455			2,650			2,831		3,245
Private banking fee income	2,658			2,867			2,499			2,033		2,775
Gain on sale of loans, net	934			58			73			39		67
Total core fees and income	25,155			24,292			24,280			28,691		31,592
Total other income	(29		)	88			968			17,154		722
TOTAL REVENUE ⁹	81,279			81,840			83,586			105,842		91,955

NONINTEREST EXPENSE:
Salaries and employee benefits	31,684			32,706			35,726			36,007		38,944
Occupancy and equipment	8,260			7,852			8,348			7,975		8,164
Professional services	4,435			3,313			3,560			4,229		2,877
Marketing and business development	1,403			1,934			1,085			2,275		1,710
Information systems	5,169			5,137			5,860			6,296		6,233
Amortization of intangibles	671			672			672			680		750
FDIC insurance	59			585			660			739		674
Restructuring	—			—			1,646			2,065		5,763
Other	3,856			3,460			2,996			3,291		3,442
TOTAL NONINTEREST EXPENSE	55,537			55,659			60,553			63,557		68,557

INCOME BEFORE INCOME TAXES	25,575			24,818			24,459			42,192		24,347
Provision for income taxes	5,517			5,369			4,917			8,651		5,461
Net income from continuing operations	20,058			19,449			19,542			33,541		18,886
Net income from discontinued operations ¹⁰	—			—			—			306		—
Net income before attribution to noncontrolling interests	20,058			19,449			19,542			33,847		18,886
Less: Net income attributable to noncontrolling interests	96			69			100			545		924
NET INCOME ATTRIBUTABLE TO THE COMPANY	$	19,962		$	19,380		$	19,442		$	33,302	$	17,962

Adjustments, treasury stock method ¹¹	304			(816		)	1,557			2,694		(829		)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	20,266		$	18,564		$	20,999		$	35,996	$	17,133

COMMON SHARE DATA:
Weighted average basic shares outstanding	83,631,403			83,565,780			83,285,095			83,750,785		84,017,284
Weighted average diluted shares outstanding ¹²	83,956,708			84,048,972			84,010,450			84,863,779		85,498,568
Diluted total earnings per share	$	0.24		$	0.22		$	0.25		$	0.42	$	0.20

⁸Wealth management and trust fees consists of revenue from Boston Private Wealth LLC, KLS Professional Advisors, BOS, and the trust operations of Boston Private Bank & Trust Company. ⁹Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. ¹⁰Net 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. ¹¹Adjustments to Net income attributable to the Company to arrive at Net income attributable to common shareholders, treasury stock method, as presented in these tables, include decrease/ (increase) in Noncontrolling interests redemption value. ¹²For a description of the Company's policies regarding Diluted earnings per share, please refer to 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.



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statement
Unaudited ($ in thousands, except share and per share data)
	Nine months ended September 30,
	2019		2018
REVENUE:
Interest income	$	233,156	$	216,012
Interest expense	61,205		41,443
Net interest income	171,951		174,569
Provision/ (credit) for loan losses	104		(2,291		)
Net interest income after provision/ (credit) for loan losses	171,847		176,860

Wealth management and trust fees ⁸	57,037		76,030
Investment management fees	7,601		18,897
Private banking fee income	8,024		7,793
Gain on sale of loans, net	1,065		204
Total core fees and income	73,727		102,924
Total other income	1,027		1,228
TOTAL REVENUE ⁹	246,705		278,721

NONINTEREST EXPENSE:
Salaries and employee benefits	100,116		125,461
Occupancy and equipment	24,460		24,141
Professional services	11,308		8,926
Marketing and business development	4,422		5,373
Information systems	16,166		18,889
Amortization of intangibles	2,015		2,249
FDIC insurance	1,304		2,126
Restructuring	1,646		5,763
Other	10,312		10,870
TOTAL NONINTEREST EXPENSE	171,749		203,798

INCOME BEFORE INCOME TAXES	74,852		77,214
Income tax expense	15,803		28,886
Net income from continuing operations	59,049		48,328
Net income from discontinued operations ¹⁰	—		1,696
Net income before attribution to noncontrolling interests	59,049		50,024
Less: Net income attributable to noncontrolling interests	265		2,942
NET INCOME ATTRIBUTABLE TO THE COMPANY	$	58,784	$	47,082

Adjustments, treasury stock method ¹¹	1,045		(4,376		)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	59,829	$	42,706

COMMON SHARE DATA
Weighted average basic shares outstanding	83,495,361		83,544,754
Weighted average diluted shares outstanding ¹²	84,003,281		85,254,295
Diluted total earnings per share	$	0.71	$	0.50

⁸Wealth management and trust fees consists of revenue from Boston Private Wealth LLC, KLS Professional Advisors, BOS, and the trust operations of Boston Private Bank & Trust Company. ⁹Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. ¹⁰Net 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. ¹¹Adjustments to Net income attributable to the Company to arrive at Net income attributable to 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. ¹²For a description of the Company's policies regarding Diluted earnings per share, please refer to 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.



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Financial Highlights
Unaudited ($ in thousands, except share and per share data)
	3Q19			2Q19			1Q19			4Q18			3Q18
KEY STATISTICS:
Return on average assets (non-GAAP) ¹³	0.91		%	0.90		%	0.93		%	1.56		%	0.84		%
ROACE (non-GAAP)¹³	9.80		%	9.83		%	10.29		%	17.87		%	9.67		%
ROATCE (non-GAAP)¹³	10.99		%	11.06		%	11.63		%	20.46		%	11.37		%
Efficiency ratio (non-GAAP)¹³	67.5		%	67.2		%	69.7		%	57.1		%	67.0		%
Noninterest income to total revenue	30.9		%	29.8		%	30.2		%	43.3		%	35.1		%

Net interest margin	2.72		%	2.78		%	2.90		%	2.94		%	2.90		%
Average loan to average deposit ratio	105.9		%	106.6		%	101.6		%	98.0		%	100.2		%
Cost of total deposits	0.92		%	0.88		%	0.84		%	0.77		%	0.68		%
Cost of interest-bearing deposits	1.31		%	1.25		%	1.19		%	1.11		%	0.98		%
Cost of total funding	1.12		%	1.11		%	1.00		%	0.89		%	0.86		%

Allowance for Loan Loss / Total Loans	1.07		%	1.06		%	1.07		%	1.09		%	1.09		%
Nonperforming loans / Total Loans	0.25		%	0.24		%	0.17		%	0.20		%	0.18		%
Net (charge-offs) / recoveries / Total loans ¹³	0.01		%	(0.01		)%	—		%	0.10		%	0.06		%


CAPITAL HIGHLIGHTS:
Tier 1 common equity ¹⁴	$	732,980		$	726,872		$	717,138		$	702,728		$	674,641
Tier 1 capital ¹⁴	$	833,431		$	827,299		$	817,600		$	803,311		$	776,328
Total capital ¹⁴	$	910,076		$	903,675		$	892,764		$	879,927		$	851,399

Risk-weighted assets ("RWA") ¹⁴	$	6,533,882		$	6,491,184		$	6,304,444		$	6,161,677		$	6,057,002
Average assets for leverage ¹⁴	$	8,588,358		$	8,617,803		$	8,447,143		$	8,416,195		$	8,436,411

TIer 1 common equity ratio ¹⁴	11.22		%	11.20		%	11.38		%	11.40		%	11.14		%
Tier 1 ratio ¹⁴	12.76		%	12.74		%	12.97		%	13.04		%	12.82		%
Total capital ratio ¹⁴	13.93		%	13.92		%	14.16		%	14.28		%	14.06		%
Leverage ratio ¹⁴	9.70		%	9.60		%	9.68		%	9.54		%	9.20		%

Total equity / Total assets	9.30		%	9.16		%	9.09		%	8.88		%	8.81		%
Tangible common equity / Tangible assets (non-GAAP)	8.59		%	8.44		%	8.35		%	8.12		%	7.83		%

Market price per share	$	11.66		$	12.07		$	10.96		$	10.57		$	13.65
End of period shares outstanding	83,241,952			83,774,335			83,773,650			83,655,651			84,602,519
Book value per common share	$	9.71		$	9.53		$	9.30		$	9.01		$	8.72
Tangible book value per share (non-GAAP)	$	8.90		$	8.71		$	8.47		$	8.18		$	7.67

Common Equity Repurchase Program:
Total shares of common stock repurchased	678,165			—			—			1,505,521			137,144
Average price paid per share of common stock	$	10.61		$	—		$	—		$	12.02		$	13.89
Aggregate repurchases of common equity ($ in millions)	$	7.2		$	—		$	—		$	18.1		$	1.9

¹³ Annualized ¹⁴ Current quarter capital highlights are presented based on estimated data.



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated AUM and Balance Sheet - End of Period Balances
Unaudited ($ in thousands)
	3Q19			2Q19			1Q19			4Q18			3Q18

ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"):
Wealth Management and Trust	$	14,695,000		$	14,649,000		$	14,564,000		$	14,206,000		$	15,598,000
Other	1,533,000			1,550,000			1,558,000			1,715,000			2,125,000
Total AUM, excluding BOS ¹⁵	16,228,000			16,199,000			16,122,000			15,921,000			17,723,000
AUM at BOS	—			—			—			—			4,714,000
Less: Inter-company relationship	—			—			—			—			(7,000		)
Total AUM	$	16,228,000		$	16,199,000		$	16,122,000		$	15,921,000		$	22,430,000

AUM Reconciliation:
Beginning balance	$	16,199,000		$	16,122,000		$	15,921,000		$	17,723,000		$	16,861,000
Net flows	(137,000		)	(269,000		)	(963,000		)	(143,000		)	260,000
Market	166,000			346,000			1,164,000			(1,659,000		)	602,000
Ending balance	$	16,228,000		$	16,199,000		$	16,122,000		$	15,921,000		$	17,723,000

AUM Net Flows:
Wealth Management & Trust	$	(100,000	)	$	(233,000	)	$	(580,000	)	$	(137,000	)	$	215,000
Other	(37,000		)	(36,000		)	(383,000		)	(6,000		)	45,000
Total Net flows	$	(137,000	)	$	(269,000	)	$	(963,000	)	$	(143,000	)	$	260,000

DEPOSITS:
Demand deposits (non-interest bearing)	$	1,947,363		$	1,854,091		$	2,016,838		$	1,951,274		$	2,001,275
NOW	598,048			563,130			605,852			626,685			568,148
Savings	68,059			68,036			68,102			73,834			72,967
Money market	3,366,623			3,228,608			3,302,244			3,338,892			3,363,062
Certificates of deposit	678,149			724,098			786,809			790,485			763,271
TOTAL DEPOSITS	$	6,658,242		$	6,437,963		$	6,779,845		$	6,781,170		$	6,768,723

LOANS:
Commercial and Industrial	$	695,029		$	656,186		$	615,370		$	623,037		$	583,214
Commercial tax exempt	448,488			450,307			449,492			451,671			438,807
Commercial real estate	2,533,346			2,530,556			2,439,048			2,395,692			2,399,080
Construction and land	209,741			200,378			210,618			240,306			197,524
Residential	2,964,042			3,025,758			2,993,132			2,948,973			2,862,879
Home Equity	84,432			89,930			88,620			90,421			93,390
Consumer	132,073			127,145			130,688			143,058			145,526
TOTAL LOANS	$	7,067,151		$	7,080,260		$	6,926,968		$	6,893,158		$	6,720,420

¹⁵Assets 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



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Asset Quality
Unaudited ($ in thousands)
	3Q19			2Q19			1Q19			4Q18			3Q18
CHARGE-OFFS:
Loan charge-offs	$	(185	)	$	(195	)	$	(564	)	$	(370	)	$	—
Loan recoveries	310			85			492			2,089			985
NET (CHARGE-OFFS) / RECOVERIES	$	125		$	(110	)	$	(72	)	$	1,719		$	985
Net charge-offs to average loans (annualized)	0.01		%	(0.01		)%	—		%	0.10		%	0.06		%

Net Charge-offs by Loan Type:
Commercial and industrial	$	95		$	(155	)	$	188		$	(77	)	$	153
Commercial real estate	27			30			189			1,394			820
Construction and land	—			—			—			—			—
Residential	—			—			100			402			—
Home Equity	6			—			(562		)	—			—
Consumer	(3		)	15			13			—			12
NET (CHARGE-OFFS) / RECOVERIES	$	125		$	(110	)	$	(72	)	$	1,719		$	985

NONPERFORMING LOAN DATA:
Special mention loans	$	58,133		$	70,677		$	86,787		$	78,528		$	67,406

Accruing classified loans ¹⁶	63,278			53,883			42,521			54,095			55,380
Nonaccrual loans	17,565			17,155			12,019			14,057			12,097
Total Classified	80,843			71,038			54,540			68,152			67,477
Criticized and Classified Loans	$	138,976		$	141,715		$	141,327		$	146,680		$	134,883

Loans 30-89 days past due and accruing ¹⁷	$	4,179		$	2,434		$	17,715		$	22,299		$	11,607

¹⁶Accruing 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. ¹⁷In 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.



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Average Balances, Yields, and Rates
Unaudited ($ in thousands)
	Average Balance						Interest Income/Expense						Average Yield/Rate
	3Q19		2Q19		3Q18		3Q19		2Q19		3Q18		3Q19		2Q19		3Q18
INTEREST-EARNING ASSETS
Cash and investments:
Taxable investment securities	$	198,655	$	227,029	$	324,583	$	938	$	1,121	$	1,510	1.95	%	1.98	%	1.86	%
Non-taxable investment securities	305,108		304,309		297,710		1,924		1,901		1,779		2.52	%	2.50	%	2.39	%
Mortgage-backed securities	492,514		508,033		552,820		2,622		2,706		2,941		2.13	%	2.13	%	2.13	%
Short-term investments and other	101,958		130,363		204,814		1,084		1,057		1,617		4.06	%	3.23	%	3.11	%
Total cash and investments	1,098,235		1,169,734		1,379,927		6,568		6,785		7,847		2.39	%	2.32	%	2.27	%
Loans: ¹⁸
Commercial and industrial	1,101,672		1,091,903		998,817		11,523		11,170		9,894		4.09	%	4.05	%	3.88	%
Commercial real estate	2,518,048		2,506,637		2,475,143		29,118		29,953		29,482		4.52	%	4.73	%	4.66	%
Construction and land	195,843		202,609		179,248		2,410		2,559		2,193		4.82	%	5.00	%	4.79	%
Residential	3,016,265		3,008,753		2,836,593		25,567		25,735		23,907		3.39	%	3.42	%	3.37	%
Home equity	89,068		91,384		94,050		1,121		1,146		1,089		4.99	%	5.03	%	4.59	%
Other consumer	127,987		124,778		163,224		1,297		1,380		1,689		4.02	%	4.43	%	4.11	%
Total loans	7,048,883		7,026,064		6,747,075		71,036		71,943		68,254		3.98	%	4.07	%	3.99	%
Total earning assets	8,147,118		8,195,798		8,127,002		77,604		78,728		76,101		3.76	%	3.82	%	3.70	%

LESS: Allowance for loan losses	75,199		73,856		73,861
Cash and due from banks	49,065		45,705		46,056
Other assets	544,368		511,859		392,757
TOTAL AVERAGE ASSETS	$	8,665,352	$	8,679,506	$	8,491,954

INTEREST-BEARING LIABILITIES
Interest-bearing deposits: ¹⁹
Savings and NOW	$	615,730	$	684,507	$	693,419	$	275	$	276	$	301	0.18	%	0.16	%	0.17	%
Money market	3,378,006		3,226,569		3,244,628		11,523		10,476		8,110		1.35	%	1.30	%	0.99	%
Certificates of deposit	711,299		752,500		730,117		3,689		3,763		3,076		2.06	%	2.01	%	1.67	%
Total interest-bearing deposits ¹⁹	4,705,035		4,663,576		4,668,164		15,487		14,515		11,487		1.31	%	1.25	%	0.98	%
Junior subordinated debentures	106,363		106,363		106,363		1,022		1,080		1,028		3.76	%	4.02	%	3.78	%
FHLB borrowings and other	833,535		952,645		768,015		4,942		5,673		3,945		2.32	%	2.36	%	2.01	%
Total interest-bearing liabilities ¹⁹	5,644,933		5,722,584		5,542,542		21,451		21,268		16,460		1.50	%	1.48	%	1.17	%

Non-interest bearing demand deposits ¹⁹	1,953,214		1,926,591		2,063,642
Other liabilities	258,371		238,544		135,508
Total average liabilities	7,856,518		7,887,719		7,741,692
Redeemable noncontrolling interests	944		943		13,074
Average shareholders’ equity	807,890		790,844		737,188
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY	$	8,665,352	$	8,679,506	$	8,491,954
Net interest income							$	56,153	$	57,460	$	59,641
Interest rate spread													2.26	%	2.34	%	2.53	%
Net interest margin													2.72	%	2.78	%	2.90	%

Average total deposits ¹⁹	$	6,658,249	$	6,590,167	$	6,731,806							0.92	%	0.88	%	0.68	%
Average total deposits and borrowings ¹⁹	$	7,598,147	$	7,649,175	$	7,606,184							1.12	%	1.11	%	0.86	%
¹⁸Average loans includes Loans held for sale and Nonaccrual loans ¹⁹Average 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.



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Average Balances, Yields, and Rates
Unaudited ($ in thousands)
	Average Balance				Interest Income/Expense				Average Yield/Rate
	Nine Months Ended				Nine Months Ended				Nine Months Ended
INTEREST-EARNING ASSETS	9/30/19		9/30/18		9/30/19		9/30/18		9/30/19		9/30/18
Cash and investments:
Taxable investment securities	$	223,072	$	328,054	$	3,244	$	4,521	1.94	%	1.84	%
Non-taxable investment securities	305,422		297,509		5,726		5,261		2.50	%	2.36	%
Mortgage-backed securities	507,338		570,578		8,225		9,168		2.16	%	2.14	%
Short-term investments and other	104,225		174,736		3,049		3,831		3.78	%	2.91	%
Total cash and investments	1,140,057		1,370,877		20,244		22,781		2.36	%	2.21	%
Loans: ¹⁸
Commercial and industrial	1,088,027		969,063		33,673		27,554		4.08	%	3.75	%
Commercial real estate	2,474,804		2,464,788		87,222		83,020		4.65	%	4.44	%
Construction and land	203,211		171,825		7,610		6,142		4.94	%	4.71	%
Residential	2,999,480		2,771,875		76,847		68,263		3.42	%	3.28	%
Home equity	90,361		95,217		3,388		3,172		5.01	%	4.45	%
Other consumer	128,879		176,086		4,172		5,080		4.33	%	3.86	%
Total loans	6,984,762		6,648,854		212,912		193,231		4.04	%	3.85	%
Total earning assets	8,124,819		8,019,731		233,156		216,012		3.80	%	3.57	%

LESS: Allowance for loan losses	74,863		73,894
Cash and due from banks (non-interest bearing)	46,906		47,859
Other assets	516,642		404,375
TOTAL AVERAGE ASSETS	$	8,613,504	$	8,398,071

INTEREST-BEARING LIABILITIES
Interest-bearing deposits: ¹⁹
Savings and NOW	$	658,154	$	709,751	$	847	$	820	0.17	%	0.15	%
Money market	3,317,117		3,139,107		32,072		17,967		1.29	%	0.77	%
Certificates of deposit	746,453		691,670		11,141		7,589		2.00	%	1.47	%
Total interest-bearing deposits ¹⁹	4,721,724		4,540,528		44,060		26,376		1.25	%	0.78	%
Junior subordinated debentures	106,363		106,363		3,223		2,882		4.05	%	3.62	%
FHLB borrowings and other	801,519		889,178		13,922		12,185		2.29	%	1.81	%
Total interest-bearing liabilities ¹⁹	5,629,606		5,536,069		61,205		41,443		1.45	%	1.00	%

Non-interest bearing demand deposits ¹⁹	1,949,948		1,948,573
Payables and other liabilities	243,370		130,410
Total average liabilities	7,822,924		7,615,052
Redeemable noncontrolling interests	1,642		16,294
Average shareholders’ equity	788,938		766,725
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY	$	8,613,504	$	8,398,071
Net interest income					$	171,951	$	174,569
Interest rate spread									2.35	%	2.57	%
Net interest margin									2.80	%	2.88	%

Average total deposits ¹⁹	$	6,671,672	$	6,489,101					0.88	%	0.54	%
Average total deposits and borrowings ¹⁹	$	7,579,554	$	7,484,642					1.08	%	0.74	%
¹⁸Average loans includes Loans held for sale and Nonaccrual loans ¹⁹Average 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.



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Regional Loan Data
Unaudited ($ in thousands)
	3Q19			2Q19			1Q19			4Q18			3Q18
LOANS: ²⁰
New England	$	3,868,690		$	3,957,221		$	3,901,644		$	3,890,607		$	3,783,032
San Francisco Bay Area	1,559,569			1,538,441			1,499,626			1,488,017			1,491,528
Southern California	1,638,892			1,584,598			1,525,698			1,514,534			1,445,860
Total loans	$	7,067,151		$	7,080,260		$	6,926,968		$	6,893,158		$	6,720,420

Loans (charged-off) / recovered, net:
New England	$	275		$	31		$	222		$	(100	)	$	232
San Francisco Bay Area	6			20			18			1,804			706
Southern California	(156		)	(161		)	(312		)	15			47
Total net loans (charged-off) / recovered	$	125		$	(110	)	$	(72	)	$	1,719		$	985

Special mention loans:
New England	$	19,828		$	35,235		$	34,675		$	31,147		$	20,382
San Francisco Bay Area	4,821			10,360			23,486			18,585			18,359
Southern California	33,484			25,082			28,626			28,796			28,665
Total special mention loans	$	58,133		$	70,677		$	86,787		$	78,528		$	67,406

Accruing classified loans:
New England	$	21,830		$	13,012		$	15,830		$	10,392		$	10,083
San Francisco Bay Area	23,938			25,957			20,801			24,584			24,252
Southern California	17,510			14,914			5,890			19,119			21,045
Total accruing classified loans	$	63,278		$	53,883		$	42,521		$	54,095		$	55,380

Nonaccruing loans:
New England	$	8,999		$	8,837		$	6,161		$	6,728		$	5,131
San Francisco Bay Area	2,395			2,644			2,480			2,488			1,169
Southern California	6,171			5,674			3,378			4,841			5,797
Total nonaccruing loans	$	17,565		$	17,155		$	12,019		$	14,057		$	12,097

²⁰The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lenders' regional offices.



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands)
	3Q19			2Q19			1Q19			4Q18			3Q18

ROACE AND ROATCE:
Net income attributable to the Company (GAAP) (A)	$	19,962		$	19,380		$	19,442		$	33,302		$	17,962
ADD: Amortization of intangibles, net of tax	530			531			531			537			593
Tangible common net income (non-GAAP) (B)	$	20,492		$	19,911		$	19,973		$	33,839		$	18,555

Total average shareholders’ equity (C)	$	807,890		$	790,844		$	766,283		$	739,313		$	737,188
LESS: Average goodwill and intangible assets, net	(68,359		)	(68,889		)	(69,498		)	(83,153		)	(89,830		)
Average tangible common equity (non-GAAP) (D)	$	739,531		$	721,955		$	696,785		$	656,160		$	647,358

ROACE (annualized) (A / C)	9.80		%	9.83		%	10.29		%	17.87		%	9.67		%
ROATCE (annualized) (B / D)	10.99		%	11.06		%	11.63		%	20.46		%	11.37		%


PRE-TAX, PRE-PROVISION INCOME:
Income before income taxes (GAAP)	$	25,575		$	24,818		$	24,459		$	42,192		$	24,347
ADD BACK: Provision/ (credit) for loan losses	167			1,363			(1,426		)	93			(949		)
Pre-tax, pre-provision income (non-GAAP)	$	25,742		$	26,181		$	23,033		$	42,285		$	23,398


CORE NET INTEREST INCOME AND MARGIN:
Net interest income (GAAP)	$	56,153		$	57,460		$	58,338		$	59,997		$	59,641
LESS: Interest recovered on previous nonaccrual loans	180			—			258			986			986
Net interest income, excluding interest recovered while loans on nonaccrual status ("Core net interest income") (non-GAAP)	$	55,973		$	57,460		$	58,080		$	59,011		$	58,655
Net interest margin, excluding interest recovered while loans on nonaccrual status ("Core net interest margin") (non-GAAP)	2.71		%	2.78		%	2.89		%	2.90		%	2.90		%


TANGIBLE COMMON EQUITY:
Total Shareholders’ Equity (GAAP)	$	808,688		$	798,211		$	778,819		$	753,954		$	738,009
LESS: Goodwill and intangible assets, net	(68,229		)	(68,491		)	(69,162		)	(69,834		)	(89,432		)
Tangible common equity (non-GAAP) (A)	$	740,459		$	729,720		$	709,657		$	684,120		$	648,577

Total Assets (GAAP)	$	8,690,944		$	8,712,873		$	8,572,143		$	8,494,625		$	8,375,840
LESS: Goodwill and intangible assets, net	(68,229		)	(68,491		)	(69,162		)	(69,834		)	(89,432		)
Tangible assets (non-GAAP) (B)	$	8,622,715		$	8,644,382		$	8,502,981		$	8,424,791		$	8,286,408

End of Period Shares Outstanding (C)	83,241,952			83,774,335			83,773,650			83,655,651			84,602,519

Tangible common equity/ Tangible assets (non-GAAP) (A / B)	8.59		%	8.44		%	8.35		%	8.12		%	7.83		%
Tangible Book Value Per Share (non-GAAP) (A / C)	$8.90			$8.71			$8.47			$8.18			$7.67



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands)
	3Q19			2Q19			1Q19			4Q18			3Q18
RETURN ON AVERAGE ASSETS:
Net income (GAAP) (A)	$	19,962		$	19,380		$	19,442		$	33,302		$	17,962
Average Assets (non-GAAP) (B)	8,665,352			8,679,506			8,493,725			8,445,298			8,491,954
Return on average assets (non-GAAP) (A / B)	0.91		%	0.90		%	0.93		%	1.56		%	0.84		%


EFFICIENCY RATIO:
Total noninterest expense (GAAP) (A)	$	55,537		$	55,659		$	60,553		$	63,557		$	68,557
Less: Amortization of intangibles	671			672			672			680			750
Less: Restructuring	—			—			1,646			2,065			5,763
Total noninterest expense (non-GAAP) (B)	$	54,866		$	54,987		$	58,235		$	60,812		$	62,044

Net interest income (GAAP)	$	56,153		$	57,460		$	58,338		$	59,997		$	59,641
Total core fees and income (GAAP)	25,155			24,292			24,280			28,691			31,592
Gain on sale of affiliate (GAAP)	—			—			—			18,142			—
Total other income (GAAP)	(29		)	88			968			(988		)	722
Total revenue (C)	$	81,279		$	81,840		$	83,586		$	105,842		$	91,955

Efficiency ratio (GAAP) (A / C)	68.3		%	68.0		%	72.4		%	60.0		%	74.6		%
Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) (B / C)	67.5		%	67.2		%	69.7		%	57.1		%	67.0		%


OTHER INCOME: (GAAP)
Gain/ (loss) on sale of investments, net	$	—		$	—		$	—		$	(596	)	$	—
Gain/ (loss) on OREO, net	—			—			91			—			—
Gain on sale of affiliate	—			—			—			18,142			—
Other	(29		)	88			877			(392		)	722
Total other income (GAAP)	$	(29	)	$	88		$	968		$	17,154		$	722



BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP measures: Operating Adjustments
Unaudited ($ in thousands, except share and per share data)
	3Q19			2Q19			1Q19			4Q18			3Q18
NET INCOME ATTRIBUTABLE TO THE COMPANY:
NET INCOME ATTRIBUTABLE TO THE COMPANY (GAAP)	$	19,962		$	19,380		$	19,442		$	33,302		$	17,962
LESS: Gain on sale of affiliate	—			—			—			18,142			—
ADD: Information services ²¹	—			—			—			(441		)	—
ADD: Restructuring	—			—			1,646			2,065			5,763
ADD: Tax adjustments ²²	—			—			—			3,502			—
Tax effect at statutory rate	—			—			(346		)	(341		)	(1,210		)
NET INCOME ATTRIBUTABLE TO THE COMPANY (NON-GAAP)	$	19,962		$	19,380		$	20,742		$	19,945		$	22,515

NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS:
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS (GAAP)	$	20,266		$	18,564		$	20,999		$	35,996		$	17,133
LESS: Gain on sale of affiliate	—			—			—			18,142			—
ADD: Information services ²¹	—			—			—			(441		)	—
ADD: Restructuring	—			—			1,646			2,065			5,763
ADD: Tax adjustments ²²	—			—			—			3,502			—
Tax effect at statutory rate	—			—			(346		)	(341		)	(1,210		)
Net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP)	$	20,266		$	18,564		$	22,299		$	22,639		$	21,686

Weighted average diluted shares outstanding	83,956,708			84,048,972			84,010,450			84,863,779			85,498,568
Diluted total earnings per share (GAAP)	$	0.24		$	0.22		$	0.25		$	0.42		$	0.20
Diluted total earnings per share, excluding notable items (non-GAAP)	$	0.24		$	0.22		$	0.27		$	0.27		$	0.25

Average common equity (non-GAAP)	$	807,890		$	790,844		$	766,283		$	739,313		$	737,188
Average tangible common equity (non-GAAP)	$	739,531		$	721,955		$	696,785		$	656,160		$	647,358
Return on average common equity, excluding notable items (non-GAAP)	9.80		%	9.83		%	10.98		%	10.70		%	12.12		%
Return on average tangible common equity, excluding notable items (non-GAAP)	10.99		%	11.06		%	12.38		%	12.38		%	14.16		%

Pre-tax, pre-provision income (non-GAAP)	$	25,742		$	26,181		$	23,033		$	42,285		$	23,398
LESS: Gain on sale of affiliate	—			—			—			18,142			—
ADD: Information services ²¹	—			—			—			(441		)	—
ADD: Restructuring	—			—			1,646			2,065			5,763
Pre-tax, pre-provision income, excluding notable items (non-GAAP)	$	25,742		$	26,181		$	24,679		$	25,767		$	29,161

²¹In 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. ²²Additional tax expense in the fourth quarter of 2018 relates to the completion of the sale of BOS.