EX-99.1 2 a2019q4ex991profthecom.htm EXHIBIT 99.1

Boston Private Reports Fourth Quarter and Full Year 2019 Results

Fourth Quarter 2019 Highlights include:

•GAAP Net income was $21.2 million, or $0.26 per diluted share, and operating net income was $20.5 million, or $0.25 per diluted share

•Return on average common equity (non-GAAP) was 10.3%; operating return on average common equity was 9.9%

•Return on average tangible common equity (non-GAAP) was 11.5%; operating return on average tangible common equity was 11.1%

•Average total deposits were $7.0 billion, a 1% increase year-over-year

•Average total loans were $7.1 billion, a 4% increase year-over-year

•Total assets under management/advisory (“AUM”) were $16.8 billion, a 5% increase year-over-year

•Total net flows were negative $209 million, of which negative $114 million were attributable to the Wealth Management and Trust segment

Notable Items impacting Fourth Quarter 2019 Results ("Notable Items"):

•$1.1 million gain related to the revaluation of a receivable from the divestiture of Bingham, Osborn & Scarborough, LLC ("BOS")

Full Year 2019 Highlights include:

•GAAP Net income was $80.0 million, or $0.97 per diluted share, and operating net income was $80.5 million, or $0.97 per diluted share

•Returned $47.6 million of capital to common shareholders through dividends and share repurchases

•Tangible book value per share increased 10% year-over-year to $9.02

Boston, MA - January 22, 2020 - Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported fourth quarter 2019 Net income attributable to the Company of $21.2 million, compared to $20.0 million for the third quarter of 2019 and $33.3 million for the fourth quarter of 2018. Fourth quarter 2019 Diluted earnings per share were $0.26, compared to $0.24 in the third quarter of 2019 and $0.42 in the fourth quarter of 2018.

"Our fourth quarter results reflect linked quarter net income growth as continued strength in asset quality drove a provision credit," said Anthony DeChellis, CEO of Boston Private. "During the quarter, we increased our client advisor count, while achieving key technology milestones. As we move into 2020 and execute on our growth initiatives, investing in talent and technology will remain the key priorities to achieving our strategic objectives."

Summary Financial Results - Reported
																								% Change
($ in millions, except for per share data)						4Q19						3Q19						4Q18						LQ						Y/Y
Net income						$21.2						$20.0						$33.3						6		%				(36)		%
Diluted earnings per share						$0.26						$0.24						$0.42						8		%				(38)		%
Non-GAAP Financial Measures:
Pre-tax, pre-provision income						$24.5						$25.7						$42.3						(5)		%				(42)		%
Return on average common equity ("ROACE")						10.3		%				9.8		%				17.9		%
Return on average tangible common equity ("ROATCE")						11.5		%				11.0		%				20.5		%

The Company's reported financial results decreased year-over-year primarily as a result of a gain on sale related to the divestiture of BOS in the fourth quarter of 2018.

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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)						4Q191						3Q19						4Q182						LQ						Y/Y
Net income						$20.5						$20.0						$19.9						2		%				3		%
Diluted earnings per share						$0.25						$0.24						$0.27						2		%				(8)		%
Pre-tax, pre-provision income						$23.4						$25.7						$25.8						(9)		%				(9)		%
Return on average common equity						9.9		%				9.8		%				10.7		%
Return on average tangible common equity						11.1		%				11.0		%				12.4		%
14Q19 results adjusted to exclude the net after-tax impact of $1.1 million gain related to the revaluation of a receivable from the divestiture of BOS and $0.3 million of tax expense 24Q18 results adjusted to exclude the net after-tax impact of $18.1 million gain on sale and $3.2 million tax expense related to the divestiture of BOS and $1.6 million restructuring expense

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)						4Q19						3Q19						4Q18						LQ						Y/Y
Net interest income						$56.1						$56.2						$60.0						—		%				(6)		%
Less: Interest recovered on previous nonaccrual loans						—						0.2						1.0						(87)		%				(98)		%
Core net interest income (non-GAAP)						$56.1						$56.0						$59.0						—		%				(5)		%
Net interest margin						2.70		%				2.72		%				2.94		%
Core net interest margin (non-GAAP)						2.70		%				2.71		%				2.90		%
nm = not meaningful

Net interest income for the fourth quarter of 2019 was $56.1 million, flat linked quarter and a 6% decrease year-over-year. Core net interest income, which excludes interest recovered on previous nonaccrual loans, was flat linked quarter and decreased 5% year-over-year. The linked quarter comparison was positively impacted by lower deposit costs, lower borrowing costs, and lower borrowing volumes, while it was negatively impacted by variable rate loans repricing lower.

The Company’s Core net interest margin, which excludes interest recovered on previous nonaccrual loans, decreased 1 basis point on a linked quarter basis to 2.70% as net interest income was flat and interest-earning assets increased 1%. Client deposit inflows during the fourth quarter enabled the repayment of higher cost borrowings, which contributed to a linked quarter decrease of 13 basis points in the total cost of funds from 1.12% to 0.99%.

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Noninterest Income
																								% Change
($ in millions)						4Q19						3Q19						4Q18						LQ						Y/Y
Wealth management and trust fees						$18.7						$19.1						$23.8						(2)		%				(21)		%
Investment management fees						2.6						2.5						2.8						2		%				(10)		%
Private banking fees 3						3.5						3.6						2.1						(3)		%				68		%
Total core fees and income						$24.8						$25.2						$28.7						(2)		%				(14)		%
Total other income						2.0						—						17.2						nm						(88)		%
Total noninterest income						$26.8						$25.1						$45.8						7		%				(42)		%
Memo: Excluding BOS and Notable Items
Wealth management and trust fees (non-GAAP) 4						$18.7						$19.1						$20.0						(2)		%				(6)		%
Investment management fees						2.6						2.5						2.8						2		%				(10)		%
Private banking fees						3.5						3.6						2.1						(3)		%				68		%
Total core fees and income (non-GAAP) 4						$24.8						$25.2						$24.9						(2)		%				—		%
Total other income (non-GAAP) 5						0.9						—						(1.0)						nm						nm
Total noninterest income (non-GAAP) 4 5						$25.7						$25.1						$23.9						2		%				8		%
3 Private banking fees includes Other banking fee income and Gain/ (loss) on sale of loans, net 4 Excludes BOS revenue of $3.9 million in 4Q18 5 Excludes $18.1 million gain on sale related to BOS in 4Q18 and $1.1 gain related to revaluation of a receivable from the divestiture of BOS in 4Q19

Total core fees and income for the fourth quarter of 2019 was $24.8 million, a 2% decrease linked quarter, primarily driven by lower Wealth management and trust fees. The 14% decline year-over-year was primarily driven by the divestiture of BOS.

Excluding BOS and Notable Items, Total core fees and income (non-GAAP) were flat year-over-year primarily driven by higher Private banking fees associated with higher swap fees and gain on sale of loans, partially offset by lower Wealth management and trust fees associated with negative net flows.

Assets Under Management / Advisory
																								% Change
($ in millions)						4Q19						3Q19						4Q18						LQ						Y/Y
Wealth Management and Trust						$15,224						$14,695						$14,206						4		%				7		%
Other 6						1,544						1,533						1,715						1		%				(10)		%
Total assets under management / advisory						$16,768						$16,228						$15,921						3		%				5		%
6 Includes results from Dalton, Greiner, Hartman, Maher & Co, LLC ("DGHM")

Total assets under management / advisory were $16.8 billion at the end of the fourth quarter of 2019, a 3% increase linked quarter and 5% increase year-over-year. The linked quarter and year-over-year comparisons were impacted by positive market action partially offset by negative net flows.

Total net flows were negative $209 million during the fourth quarter of 2019, of which $114 million were attributable to the Wealth Management and Trust segment.

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Noninterest Expense
																								% Change
($ in millions)						4Q19						3Q19						4Q18						LQ						Y/Y
Salaries and employee benefits						$34.2						$31.7						$36.0						8		%				(5)		%
Occupancy and equipment						7.6						8.3						8.0						(8)		%				(5)		%
Professional services						3.9						4.4						4.2						(12)		%				(7)		%
Marketing and business development						2.0						1.4						2.3						44		%				(11)		%
Information systems						6.5						5.2						6.3						25		%				3		%
Amortization of intangibles						0.7						0.7						0.7						1		%				(1)		%
FDIC insurance						—						0.1						0.7						nm						nm
Restructuring						—						—						2.1						—		%				(100)		%
Other						3.6						3.9						3.3						(6)		%				10		%
Total noninterest expense						$58.5						$55.5						$63.6						5		%				(8)		%
Memo: Excluding Notable Items and BOS
Information systems 6						—						—						(0.4)						nm						(100)		%
Restructuring						—						—						2.1						nm						(100)		%
BOS noninterest expense						—						—						2.8						nm						(100)		%
Total noninterest expense (non-GAAP)						$58.5						$55.5						$59.1						5		%				(1)		%
6 $0.4 million of Information systems expense was reclassified to Restructuring expense in conjunction with a formal restructuring plan announced in 4Q18

Total noninterest expense increased 5% linked quarter primarily driven by higher salaries and employee benefits expense and Information systems expense related to technology investments placed in service during the fourth quarter of 2019, partially offset by lower occupancy and equipment and professional services.

Excluding Notable Items and BOS, Total noninterest expense (non-GAAP) for the fourth quarter of 2019 was $58.5 million, down 1% year-over-year, primarily driven by an FDIC insurance assessment credit received in the fourth quarter of 2019.

Income Tax Expense

The Company's effective tax rate for the fourth quarter of 2019 was 24.1%. This rate is higher than prior quarters of 2019 primarily as a result of a slight increase in the full year effective tax rate as compared to the estimated annual effective tax rate in prior quarters. The effective tax rate for the full year 2019 was 21.9%.

Loans and Deposits - QTD Averages
																								% Change
($ in millions)						4Q19						3Q19						4Q18						LQ						Y/Y
Commercial and industrial						$1,142						$1,102						$1,027						4		%				11		%
Commercial real estate						2,562						2,518						2,402						2		%				7		%
Construction and land						217						196						209						11		%				3		%
Residential						2,935						3,016						2,907						(3)		%				1		%
Home equity						85						89						94						(5)		%				(10)		%
Other consumer						132						128						141						3		%				(6)		%
Total loans						$7,073						$7,049						$6,781						—		%				4		%
Non-interest bearing deposits						2,002						1,953						2,092						2		%				(4)		%
Interest bearing deposits						4,957						4,705						4,826						5		%				3		%
Total deposits						$6,959						$6,658						$6,918						5		%				1		%
Non-interest bearing deposits as a % of Total deposits						29		%				29		%				30		%

Average total loans in the fourth quarter of 2019 increased 4% year-over-year, while remaining flat linked quarter. Linked quarter averages were impacted by commercial real estate growth and increased line of credit borrowings (included in Commercial and industrial loans), partially offset by a residential loan sale of $100 million during the fourth quarter.

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Average total deposits increased 1% year-over-year, primarily driven by an increase in money market accounts, partially offset by a decline in demand deposit accounts and certificates of deposits. The decline in certificates of deposit was driven by the run-off of brokered certificates of deposits, which declined $135 million year-over-year or 2% of fourth quarter 2018 total deposits.

The cost of total deposits was 0.86%, a decrease of 6 basis points linked quarter.

Provision and Asset Quality
($ in millions)						4Q19						3Q19						2Q19						1Q19						4Q18
Provision/ (credit) for loan loss						$(3.7)						$0.2						$1.4						$(1.4)						$0.1
Total criticized and classified loans						126.0						139.0						141.7						141.3						146.6
Total nonaccrual loans						16.1						17.6						17.2						12.0						14.1
Total loans 30-89 days past due and accruing						25.9						4.2						2.4						17.7						22.3
Total net loans (charged-off)/ recovered						0.3						0.1						(0.1)						(0.1)						1.7
Ratios:
Allowance for loan losses as a % of Total loans						1.03		%				1.07		%				1.06		%				1.07		%				1.09		%
Nonaccrual loans as a % of Total loans						0.23		%				0.25		%				0.24		%				0.17		%				0.20		%

The Company recorded a provision credit of $3.7 million for the fourth quarter of 2019, compared to a provision expense of $0.2 million for the third quarter of 2019 and a provision expense of $0.1 million in the fourth quarter of 2018. The provision credit in the fourth quarter of 2019 was primarily driven by a decrease in criticized and classified loans and a decrease in loss factors.

Total criticized and classified loans as of December 31, 2019 was $126.0 million, a decline of 10% linked quarter and 14% year-over-year. Total nonaccrual loans as of December 31, 2019 was $16.1 million, or 23 basis points of Total loans, compared to $17.6 million, or 25 basis points of Total loans, as of September 30, 2019, and $14.1 million, or 20 basis points of Total loans, as of December 31, 2018.

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Capital
($ in millions, except for per share data)						4Q19						3Q19						2Q19						1Q19						4Q18
Tangible common equity/ Tangible assets (non-GAAP)						8.6		%				8.6		%				8.4		%				8.3		%				8.1		%
Tangible book value per share (non-GAAP)						$9.02						$8.90						$8.71						$8.47						$8.18
Regulatory Capital Ratios: 7
Tier 1 common equity						11.4		%				11.2		%				11.2		%				11.4		%				11.4		%
Total risk-based capital						14.1		%				13.9		%				13.9		%				14.2		%				14.3		%
Tier 1 risk-based capital						13.0		%				12.8		%				12.7		%				13.0		%				13.0		%
Tier 1 leverage capital						9.8		%				9.7		%				9.6		%				9.7		%				9.5		%
Common Equity Repurchase Program:
Total shares of common stock repurchased						—						678,165						—						—						1,505,521
Average price paid per share of common stock						—						$10.61						—						—						$12.02
Aggregate repurchases of common equity						—						$7.2						—						—						$18.1
7 Current quarter information is presented based on estimated data.

The Company did not repurchase any common stock during the fourth quarter of 2019. The current program has $12.8 million remaining available to be repurchased.

Tangible book value per share (non-GAAP) as of December 31, 2019 increased 1% linked quarter and 10% year-over-year to $9.02. The linked quarter increase in Tangible book value per share was primarily driven by increased retained earnings, partially offset by dividends to shareholders.

Dividend Payments

Concurrent with the release of fourth 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 February 7, 2020, and the payment date is February 21, 2020.

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 17 of the attached financial statements.

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Conference Call

Management will hold a conference call at 8:00 a.m. Eastern Time on Thursday, January 23, 2020, to discuss the financial results, business highlights and outlook. To access the call:

Dial In #: (888) 317-6003

Elite Entry Number: 8476896

Replay Information:

Available from January 23, 2020 at 12:00 p.m Eastern Time until January 30, 2020

Dial In #: (877) 344-7529

Conference Number: 10137972

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

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About Boston Private

Boston Private is a leading provider of integrated wealth management, trust and banking services to high-net-worth individuals, families, businesses and nonprofits.

For more than 30 years, Boston Private has delivered comprehensive advice coupled with deep technical expertise to help clients simplify their lives and achieve their goals. The firm offers the capabilities of a large institution with the superior service of a boutique firm to clients across the United States. The Company has total assets of greater than $8 billion, and manages over $16 billion of client assets.

Boston Private is the corporate brand of Boston Private Financial Holdings, Inc. (NASDAQ: BPFH).

For more information, visit 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.

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CONTACT:

Adam Bromley

(617) 912-4386

abromley@bostonprivate.com

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Balance Sheets
Unaudited ($ in thousands, except share and per share data)
			4Q19						3Q19						2Q19						1Q19						4Q18
ASSETS:
Cash and cash equivalents			$	292,479					$	78,010					$	65,756					$	96,211					$	127,259
Investment securities available-for-sale			978,284						935,538						966,731						981,951						994,065
Investment securities held-to-maturity			48,212						51,379						54,482						67,548						70,438
Equity securities at fair value			18,810						21,780						19,092						7,491						14,228
Stock in Federal Home Loan Bank and Federal Reserve Bank			39,078						47,756						64,453						47,053						49,263
Loans held for sale			7,386						6,658						3,640						280						2,812
Loans			6,976,704						7,067,151						7,080,260						6,926,968						6,893,158
Less: Allowance for loan losses			71,982						75,359						75,067						73,814						75,312
Loans, net of allowance for loan losses			6,904,722						6,991,792						7,005,193						6,853,154						6,817,846
Other real estate owned (“OREO”)			—						—						—						—						401
Premises and equipment, net			44,527						42,658						40,244						42,938						45,412
Goodwill			57,607						57,607						57,607						57,607						57,607
Intangible assets, net			10,352						10,622						10,884						11,555						12,227
Accrued interest receivable			24,175						24,851						26,411						25,935						24,366
Deferred income taxes, net			11,383						15,704						17,183						22,844						26,638
Right-of-use assets			102,075						107,045						110,880						104,644						—
Other assets			291,411						299,544						270,317						252,932						252,063
TOTAL ASSETS			$	8,830,501					$	8,690,944					$	8,712,873					$	8,572,143					$	8,494,625
LIABILITIES:
Deposits			$	7,241,476					$	6,658,242					$	6,437,963					$	6,779,845					$	6,781,170
Securities sold under agreements to repurchase			53,398						48,860						62,372						58,329						36,928
Federal funds purchased			—						230,000						135,000						—						250,000
Federal Home Loan Bank borrowings			350,829						570,904						920,068						615,070						420,144
Junior subordinated debentures			106,363						106,363						106,363						106,363						106,363
Lease liabilities			117,214						122,799						126,740						120,162						—
Other liabilities			140,820						143,607						124,370						112,893						143,540
TOTAL LIABILITIES			8,010,100						7,880,775						7,912,876						7,792,662						7,738,145
REDEEMABLE NONCONTROLLING INTERESTS (“RNCI”)			1,383						1,481						1,786						662						2,526
SHAREHOLDERS' EQUITY:
Common stock, $1.00 par value; authorized: 170,000,000 shares			83,266						83,242						83,774						83,774						83,656
Additional paid-in capital			600,708						599,877						603,869						604,288						600,196
Retained earnings			127,469						116,210						106,443						97,155						87,821
Accumulated other comprehensive income/(loss)			7,575						9,359						4,125						(6,398)						(17,719)
TOTAL SHAREHOLDERS' EQUITY			819,018						808,688						798,211						778,819						753,954
TOTAL LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY			$	8,830,501					$	8,690,944					$	8,712,873					$	8,572,143					$	8,494,625

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statements
Unaudited ($ in thousands, except share and per share data)
			4Q19						3Q19						2Q19						1Q19						4Q18
REVENUE:
Interest income			$	75,291					$	77,604					$	78,728					$	76,824					$	76,892
Interest expense			19,166						21,451						21,268						18,486						16,895
Net interest income			56,125						56,153						57,460						58,338						59,997
Provision/(credit) for loan losses			(3,668)						167						1,363						(1,426)						93
Net interest income after provision/(credit) for loan losses			59,793						55,986						56,097						59,764						59,904
Wealth management and trust fees 8			18,720						19,067						18,912						19,058						23,788
Investment management fees			2,554						2,496						2,455						2,650						2,831
Private banking fee income			2,924						2,658						2,867						2,499						2,033
Gain on sale of loans, net			557						934						58						73						39
Total core fees and income			24,755						25,155						24,292						24,280						28,691
Total other income			2,038						(29)						88						968						17,154
TOTAL REVENUE 9			82,918						81,279						81,840						83,586						105,842
NONINTEREST EXPENSE:
Salaries and employee benefits			34,186						31,684						32,706						35,726						36,007
Occupancy and equipment			7,578						8,260						7,852						8,348						7,975
Information systems			6,476						5,169						5,137						5,860						6,296
Professional services			3,920						4,435						3,313						3,560						4,229
Marketing and business development			2,017						1,403						1,934						1,085						2,275
Amortization of intangibles			676						671						672						672						680
FDIC insurance			(19)						59						585						660						739
Restructuring			—						—						—						1,646						2,065
Other			3,623						3,856						3,460						2,996						3,291
TOTAL NONINTEREST EXPENSE			58,457						55,537						55,659						60,553						63,557
INCOME BEFORE INCOME TAXES			28,129						25,575						24,818						24,459						42,192
Provision for income taxes			6,788						5,517						5,369						4,917						8,651
Net income from continuing operations			21,341						20,058						19,449						19,542						33,541
Net income from discontinued operations 10			—						—						—						—						306
Net income before attribution to noncontrolling interests			21,341						20,058						19,449						19,542						33,847
Less: Net income attributable to noncontrolling interests			97						96						69						100						545
NET INCOME ATTRIBUTABLE TO THE COMPANY			$	21,244					$	19,962					$	19,380					$	19,442					$	33,302
Adjustments, treasury stock method 11			98						304						(816)						1,557						2,694
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS			$	21,342					$	20,266					$	18,564					$	20,999					$	35,996
COMMON SHARE DATA:
Weighted average basic shares outstanding			83,238,982						83,631,403						83,565,780						83,285,095						83,750,785
Weighted average diluted shares outstanding 12			83,637,786						83,956,708						84,048,972						84,010,450						84,863,779
Diluted total earnings per share			$	0.26					$	0.24					$	0.22					$	0.25					$	0.42
8 Wealth management and trust fees consists of revenue from Boston Private Wealth LLC ("BPW"), KLS Professional Advisors Group, LLC ("KLS") through the effective date of its merger with BPW, BOS (through the closing date), and the trust operations of Boston Private Bank & Trust Company. 9 Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. 10 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. 11 Adjustments 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. 12 For 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.

10

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Income Statements
Unaudited ($ in thousands, except share and per share data)
						Year ended December 31,
						2019						2018
REVENUE:
Interest income						$	308,447					$	292,904
Interest expense						80,371						58,338
Net interest income						228,076						234,566
Provision/(credit) for loan losses						(3,564)						(2,198)
Net interest income after provision/(credit) for loan losses						231,640						236,764
Wealth management and trust fees 8						75,757						99,818
Investment management fees 13						10,155						21,728
Private banking fee income						10,948						9,826
Gain on sale of loans, net						1,622						243
Total core fees and income						98,482						131,615
Total other income						3,065						18,382
TOTAL REVENUE 9						329,623						384,563
NONINTEREST EXPENSE:
Salaries and employee benefits						134,302						161,468
Occupancy and equipment						32,038						32,116
Information systems						22,642						25,185
Professional services						15,228						13,155
Marketing and business development						6,439						7,648
Amortization of intangibles						2,691						2,929
FDIC insurance 9						1,285						2,865
Restructuring						1,646						7,828
Other						13,935						14,161
TOTAL NONINTEREST EXPENSE						230,206						267,355
INCOME BEFORE INCOME TAXES						102,981						119,406
Income tax expense						22,591						37,537
Net income from continuing operations						80,390						81,869
Net income from discontinued operations 10						—						2,002
Net income before attribution to noncontrolling interests						80,390						83,871
Less: Net income attributable to noncontrolling interests						362						3,487
NET INCOME ATTRIBUTABLE TO THE COMPANY						$	80,028					$	80,384
Adjustments, treasury stock method 11						1,143						(1,682)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS						$	81,171					$	78,702
COMMON SHARE DATA
Weighted average basic shares outstanding						83,430,740						83,596,685
Weighted average diluted shares outstanding 12						83,920,792						85,331,314
Diluted total earnings per share						$	0.97					$	0.92
8 Wealth management and trust fees consists of revenue from BPW, KLS (through the effective date of its merger with BPW), Anchor Capital Advisors, LLC ("Anchor") and BOS (through the respective closing dates), and the trust operations of Boston Private Bank & Trust Company. 9 Total revenue is the sum of Net interest income, Total core fees and income, and Total other income. 10 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. 11 Adjustments 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. 12 For 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. 13 Investment management fees consists of revenue from DGHM and Anchor (through the closing date).

11

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated Financial Highlights
Unaudited ($ in thousands, except share and per share data)
			4Q19						3Q19						2Q19						1Q19						4Q18
KEY STATISTICS:
Return on average assets (non-GAAP) 14			0.96		%				0.91		%				0.90		%				0.93		%				1.56		%
ROACE (non-GAAP) 14			10.29		%				9.80		%				9.83		%				10.29		%				17.87		%
ROATCE (non-GAAP) 14			11.51		%				10.99		%				11.06		%				11.63		%				20.46		%
Efficiency ratio (non-GAAP) 14			69.7		%				67.5		%				67.2		%				69.7		%				57.1		%
Noninterest income to total revenue			32.3		%				30.9		%				29.8		%				30.2		%				43.3		%
Net interest margin			2.70		%				2.72		%				2.78		%				2.90		%				2.94		%
Average loan to average deposit ratio			101.6		%				105.9		%				106.6		%				101.6		%				98.0		%
Cost of total deposits			0.86		%				0.92		%				0.88		%				0.84		%				0.77		%
Cost of interest-bearing deposits			1.20		%				1.31		%				1.25		%				1.19		%				1.11		%
Cost of total funding			0.99		%				1.12		%				1.11		%				1.00		%				0.89		%
Allowance for Loan Loss / Total Loans			1.03		%				1.07		%				1.06		%				1.07		%				1.09		%
Nonperforming loans / Total Loans			0.23		%				0.25		%				0.24		%				0.17		%				0.20		%
Net (charge-offs)/recoveries / Total loans 14			0.02		%				0.01		%				(0.01)		%				—		%				0.10		%
CAPITAL HIGHLIGHTS:
Tier 1 common equity 15			$	745,887					$	732,980					$	726,872					$	717,138					$	702,728
Tier 1 capital 15			$	846,298					$	833,431					$	827,299					$	817,600					$	803,311
Total capital 15			$	919,534					$	910,076					$	903,675					$	892,764					$	879,927
Risk-weighted assets ("RWA") 15			$	6,529,626					$	6,533,884					$	6,491,184					$	6,304,444					$	6,161,677
Average assets for leverage 15			$	8,654,576					$	8,588,358					$	8,617,803					$	8,447,143					$	8,416,195
Tier 1 common equity ratio 15			11.42		%				11.22		%				11.20		%				11.38		%				11.40		%
Tier 1 risk-based capital ratio 15			12.96		%				12.76		%				12.74		%				12.97		%				13.04		%
Total risk-based capital ratio 15			14.08		%				13.93		%				13.92		%				14.16		%				14.28		%
Tier 1 leverage capital ratio 15			9.77		%				9.70		%				9.60		%				9.68		%				9.54		%
Total equity / Total assets			9.27		%				9.30		%				9.16		%				9.09		%				8.88		%
Tangible common equity / Tangible assets (non-GAAP)			8.57		%				8.59		%				8.44		%				8.35		%				8.12		%
Market price per share			$	12.03					$	11.66					$	12.07					$	10.96					$	10.57
End of period shares outstanding			83,265,674						83,241,952						83,774,335						83,773,650						83,655,651
Book value per common share			$	9.84					$	9.71					$	9.53					$	9.30					$	9.01
Tangible book value per share (non-GAAP)			$	9.02					$	8.90					$	8.71					$	8.47					$	8.18
Common Equity Repurchase Program:
Total shares of common stock repurchased			—						678,165						—						—						1,505,521
Average price paid per share of common stock			$	—					$	10.61					$	—					$	—					$	12.02
Aggregate repurchases of common equity ($ in millions)			$	—					$	7.2					$	—					$	—					$	18.1
14 Annualized. 15 Current quarter capital highlights are presented based on estimated data.

12

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Consolidated AUM and Balance Sheet - End of Period Balances
Unaudited ($ in thousands)
			4Q19						3Q19						2Q19						1Q19						4Q18
ASSETS UNDER MANAGEMENT AND ADVISORY ("AUM"):
Wealth Management and Trust			$	15,224,000					$	14,695,000					$	14,649,000					$	14,564,000					$	14,206,000
Other			1,544,000						1,533,000						1,550,000						1,558,000						1,715,000
Total AUM			16,768,000						16,228,000						16,199,000						16,122,000						15,921,000
AUM Rollforward:
Beginning balance 16			$	16,228,000					$	16,199,000					$	16,122,000					$	15,921,000					$	17,723,000
Net flows			(209,000)						(137,000)						(269,000)						(963,000)						(143,000)
Market			749,000						166,000						346,000						1,164,000						(1,659,000)
Ending balance			$	16,768,000					$	16,228,000					$	16,199,000					$	16,122,000					$	15,921,000
AUM Net Flows:
Wealth Management and Trust			$	(114,000)					$	(100,000)					$	(233,000)					$	(580,000)					$	(137,000)
Other			(95,000)						(37,000)						(36,000)						(383,000)						(6,000)
Total Net flows			$	(209,000)					$	(137,000)					$	(269,000)					$	(963,000)					$	(143,000)
DEPOSITS:
Demand deposits (non-interest bearing)			$	1,971,013					$	1,947,363					$	1,854,091					$	2,016,838					$	1,951,274
Savings and NOW			646,199						666,107						631,166						673,954						700,519
Money market			3,969,330						3,366,623						3,228,608						3,302,244						3,338,892
Certificates of deposit			654,934						678,149						724,098						786,809						790,485
TOTAL DEPOSITS			$	7,241,476					$	6,658,242					$	6,437,963					$	6,779,845					$	6,781,170
LOANS:
Commercial and industrial			$	694,034					$	695,029					$	656,186					$	615,370					$	623,037
Commercial tax exempt			447,927						448,488						450,307						449,492						451,671
Commercial real estate			2,551,274						2,533,346						2,530,556						2,439,048						2,395,692
Construction and land			225,983						209,741						200,378						210,618						240,306
Residential			2,839,155						2,964,042						3,025,758						2,993,132						2,948,973
Home equity			83,657						84,432						89,930						88,620						90,421
Consumer			134,674						132,073						127,145						130,688						143,058
TOTAL LOANS			$	6,976,704					$	7,067,151					$	7,080,260					$	6,926,968					$	6,893,158
16 AUM have been reduced to exclude those assets managed or advised by BOS for period when BOS was owned by the Company

13

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Asset Quality
Unaudited ($ in thousands)
			4Q19						3Q19						2Q19						1Q19						4Q18
CHARGE-OFFS:
Loan charge-offs			$	(285)					$	(185)					$	(195)					$	(564)					$	(370)
Loan recoveries			576						310						85						492						2,089
NET (CHARGE-OFFS)/RECOVERIES			$	291					$	125					$	(110)					$	(72)					$	1,719
Net charge-offs to average loans (annualized)			0.02		%				0.01		%				(0.01)		%				—		%				0.10		%
Net (Charge-offs)/Recoveries by Loan Type:
Commercial and industrial			$	118					$	95					$	(155)					$	188					$	(77)
Commercial real estate			183						27						30						189						1,394
Construction and land			—						—						—						—						—
Residential			—						—						—						100						402
Home equity			4						6						—						(562)						—
Consumer			(14)						(3)						15						13						—
NET (CHARGE-OFFS)/ RECOVERIES			$	291					$	125					$	(110)					$	(72)					$	1,719
LOAN QUALITY DATA:
Special mention loans			$	52,026					$	58,133					$	70,677					$	86,787					$	78,528
Accruing classified loans 17			57,922						63,278						53,883						42,521						54,095
Nonaccrual loans			16,103						17,565						17,155						12,019						14,057
Total classified			74,025						80,843						71,038						54,540						68,152
Criticized and classified loans			$	126,051					$	138,976					$	141,715					$	141,327					$	146,680
Loans 30-89 days past due and accruing 18			$	25,945					$	4,179					$	2,434					$	17,715					$	22,299
17 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. 18 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 other loans outstanding more than 90 days past due but still on accrual status in comparative periods.

14

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Average Balances, Yields, and Rates
Unaudited ($ in thousands)
			Average Balance																		Interest Income/Expense																		Average Yield/Rate
			4Q19			3Q19			4Q18						4Q19			3Q19			4Q18						4Q19			3Q19			4Q18
INTEREST-EARNING ASSETS
Cash and investments:
Taxable investment securities			$	201,535		$	198,655		$	317,230					$	869		$	938		$	1,486					1.72		%	1.95		%	1.87		%
Non-taxable investment securities			311,705			305,108			301,242						1,976			1,924			1,833						2.54		%	2.52		%	2.43		%
Mortgage-backed securities			489,927			492,514			536,264						2,568			2,622			2,923						2.10		%	2.13		%	2.18		%
Short-term investments and other			130,519			101,958			134,182						1,210			1,084			1,356						3.65		%	4.06		%	3.98		%
Total cash and investments			1,133,686			1,098,235			1,288,918						6,623			6,568			7,598						2.33		%	2.39		%	2.35		%
Loans: 19
Commercial and industrial			1,142,015			1,101,672			1,027,128						11,276			11,523			10,431						3.86		%	4.09		%	3.97		%
Commercial real estate			2,562,380			2,518,048			2,402,304						28,285			29,118			29,017						4.32		%	4.52		%	4.73		%
Construction and land			216,754			195,843			209,475						2,588			2,410			2,589						4.67		%	4.82		%	4.83		%
Residential			2,934,786			3,016,265			2,907,446						24,275			25,567			24,629						3.31		%	3.39		%	3.39		%
Home equity			84,632			89,068			93,656						965			1,121			1,148						4.53		%	4.99		%	4.86		%
Other consumer			132,143			127,987			140,591						1,279			1,297			1,480						3.84		%	4.02		%	4.18		%
Total loans			7,072,710			7,048,883			6,780,600						68,668			71,036			69,294						3.83		%	3.98		%	4.03		%
Total earning assets			8,206,396			8,147,118			8,069,518						75,291			77,604			76,892						3.62		%	3.76		%	3.76		%
LESS: Allowance for loan losses			75,283			75,199			75,006
Cash and due from banks			48,287			49,065			53,633
Other assets			559,350			544,368			397,153
TOTAL AVERAGE ASSETS			$	8,738,750		$	8,665,352		$	8,445,298
INTEREST-BEARING LIABILITIES
Interest-bearing deposits: 20
Savings and NOW			$	644,502		$	615,730		$	649,937					$	252		$	275		$	377					0.16		%	0.18		%	0.23		%
Money market			3,632,258			3,378,006			3,392,039						11,449			11,523			9,502						1.25		%	1.35		%	1.11		%
Certificates of deposit			680,466			711,299			784,184						3,322			3,689			3,591						1.94		%	2.06		%	1.82		%
Total interest-bearing deposits 20			4,957,226			4,705,035			4,826,160						15,023			15,487			13,470						1.20		%	1.31		%	1.11		%
Junior subordinated debentures			106,363			106,363			106,363						966			1,022			1,043						3.56		%	3.76		%	3.84		%
FHLB borrowings and other			591,682			833,535			515,734						3,177			4,942			2,382						2.10		%	2.32		%	1.81		%
Total interest-bearing liabilities 20			5,655,271			5,644,933			5,448,257						19,166			21,451			16,895						1.34		%	1.50		%	1.23		%
Non-interest bearing demand deposits 20			2,001,714			1,953,214			2,092,070
Payables and other liabilities			261,503			258,371			154,612
Total average liabilities			7,918,488			7,856,518			7,694,939
Redeemable noncontrolling interests			1,446			944			11,046
Average shareholders’ equity			818,816			807,890			739,313
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY			$	8,738,750		$	8,665,352		$	8,445,298
Net interest income															$	56,125		$	56,153		$	59,997
Interest rate spread																											2.28		%	2.26		%	2.53		%
Net interest margin																											2.70		%	2.72		%	2.94		%
Average total deposits 20			$	6,958,940		$	6,658,249		$	6,918,230																	0.86		%	0.92		%	0.77		%
Average total deposits and borrowings 20			$	7,656,985		$	7,598,147		$	7,540,327																	0.99		%	1.12		%	0.89		%
19 Average loans includes Loans held for sale and Nonaccrual loans 20 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.

15

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Average Balances, Yields, and Rates
Unaudited ($ in thousands)
			Average Balance												Interest Income/Expense												Average Yield/Rate
			Year Ended												Year Ended												Year Ended
INTEREST-EARNING ASSETS			12/31/19			12/31/18						12/31/19			12/31/18						12/31/19			12/31/18
Cash and investments:
Taxable investment securities			$	217,653		$	325,159					$	4,113		$	6,007					1.89		%	1.85		%
Non-taxable investment securities			307,005			298,450						7,702			7,094						2.51		%	2.38		%
Mortgage-backed securities			502,949			561,929						10,793			12,091						2.15		%	2.15		%
Short-term investments and other			110,877			164,712						4,259			5,187						3.84		%	3.15		%
Total cash and investments			1,138,484			1,350,250						26,867			30,379						2.36		%	2.25		%
Loans: 19
Commercial and industrial			1,101,635			983,699						44,949			37,985						4.08		%	3.86		%
Commercial real estate			2,496,878			2,449,039						115,507			112,037						4.63		%	4.57		%
Construction and land			206,624			181,315						10,198			8,731						4.94		%	4.82		%
Residential			2,983,173			2,806,046						101,122			92,892						3.39		%	3.31		%
Home equity			88,917			94,823						4,353			4,320						4.90		%	4.56		%
Other consumer			129,701			167,139						5,451			6,560						4.20		%	3.92		%
Total loans			7,006,928			6,682,061						281,580			262,525						4.02		%	3.93		%
Total earning assets			8,145,412			8,032,311						308,447			292,904						3.79		%	3.65		%
LESS: Allowance for loan losses			74,969			74,174
Cash and due from banks			47,286			49,282
Other assets			527,269			402,821
TOTAL AVERAGE ASSETS			$	8,644,998		$	8,410,240
INTEREST-BEARING LIABILITIES
Interest-bearing deposits: 20
Savings and NOW			$	654,712		$	694,674					$	1,099		$	1,197					0.17		%	0.17		%
Money market			3,395,842			3,202,616						43,521			27,469						1.28		%	0.86		%
Certificates of deposit			730,693			714,827						14,463			11,180						1.98		%	1.56		%
Total interest-bearing deposits 20			4,781,247			4,612,117						59,083			39,846						1.24		%	0.86		%
Junior subordinated debentures			106,363			106,363						4,189			3,925						3.94		%	3.69		%
FHLB borrowings and other			748,628			795,050						17,099			14,567						2.28		%	1.83		%
Total interest-bearing liabilities 20			5,636,238			5,513,530						80,371			58,338						1.43		%	1.06		%
Non-interest bearing demand deposits 20			1,962,951			1,984,660
Payables and other liabilities			247,163			137,323
Total average liabilities			7,846,352			7,635,513
Redeemable noncontrolling interests			1,593			14,859
Average shareholders’ equity			797,053			759,868
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY			$	8,644,998		$	8,410,240
Net interest income												$	228,076		$	234,566
Interest rate spread																					2.36		%	2.59		%
Net interest margin																					2.80		%	2.92		%
Average total deposits 20			$	6,744,198		$	6,596,777														0.88		%	0.60		%
Average total deposits and borrowings 20			$	7,599,189		$	7,498,190														1.06		%	0.78		%
19 Average loans includes Loans held for sale and Nonaccrual loans 20 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.

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Regional Loan Data
Unaudited ($ in thousands)
			4Q19						3Q19						2Q19						1Q19						4Q18
New England			$	3,776,747					$	3,868,690					$	3,957,221					$	3,901,644					$	3,890,607
Northern California			1,532,786						1,559,569						1,538,441						1,499,626						1,488,017
Southern California			1,667,171						1,638,892						1,584,598						1,525,698						1,514,534
Total loans			$	6,976,704					$	7,067,151					$	7,080,260					$	6,926,968					$	6,893,158
Loans (charged-off)/recovered, net:
New England			$	414					$	275					$	31					$	222					$	(100)
Northern California			(10)						6						20						18						1,804
Southern California			(113)						(156)						(161)						(312)						15
Total net loans (charged-off)/recovered			$	291					$	125					$	(110)					$	(72)					$	1,719
Special mention loans:
New England			$	21,691					$	19,828					$	35,235					$	34,675					$	31,147
Northern California			5,227						4,821						10,360						23,486						18,585
Southern California			25,108						33,484						25,082						28,626						28,796
Total special mention loans			$	52,026					$	58,133					$	70,677					$	86,787					$	78,528
Accruing classified loans:
New England			$	20,428					$	21,830					$	13,012					$	15,830					$	10,392
Northern California			24,946						23,938						25,957						20,801						24,584
Southern California			12,548						17,510						14,914						5,890						19,119
Total accruing classified loans			$	57,922					$	63,278					$	53,883					$	42,521					$	54,095
Nonaccruing loans:
New England			$	9,764					$	8,999					$	8,837					$	6,161					$	6,728
Northern California			319						2,395						2,644						2,480						2,488
Southern California			6,020						6,171						5,674						3,378						4,841
Total nonaccruing loans			$	16,103					$	17,565					$	17,155					$	12,019					$	14,057
21 The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lenders' regional offices.

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands)
			4Q19						3Q19						2Q19						1Q19						4Q18
ROACE AND ROATCE:
Net income attributable to the Company (GAAP) (A)			$	21,244					$	19,962					$	19,380					$	19,442					$	33,302
ADD: Amortization of intangibles, net of tax			534						530						531						531						537
Tangible common net income (non-GAAP) (B)			$	21,778					$	20,492					$	19,911					$	19,973					$	33,839
Total average shareholders’ equity (C)			$	818,816					$	807,890					$	790,844					$	766,283					$	739,313
LESS: Average goodwill and intangibles, net 22			(68,031)						(68,359)						(68,889)						(69,498)						(83,153)
Average tangible common equity (non-GAAP) (D)			$	750,785					$	739,531					$	721,955					$	696,785					$	656,160
ROACE (annualized) (A/C)			10.29		%				9.80		%				9.83		%				10.29		%				17.87		%
ROATCE (annualized) (B/D)			11.51		%				10.99		%				11.06		%				11.63		%				20.46		%
PRE-TAX, PRE-PROVISION INCOME:
Income before income taxes (GAAP)			$	28,129					$	25,575					$	24,818					$	24,459					$	42,192
ADD BACK: Provision/ (credit) for loan losses			(3,668)						167						1,363						(1,426)						93
Pre-tax, pre-provision income (non-GAAP)			$	24,461					$	25,742					$	26,181					$	23,033					$	42,285
CORE NET INTEREST INCOME AND MARGIN:
Net interest income (GAAP)			$	56,125					$	56,153					$	57,460					$	58,338					$	59,997
LESS: Interest recovered on previous nonaccrual loans			24						180						—						258						986
Net interest income, excluding interest recovered while loans on nonaccrual status ("Core net interest income") (non-GAAP)			$	56,101					$	55,973					$	57,460					$	58,080					$	59,011
Net interest margin, excluding interest recovered while loans on nonaccrual status ("Core net interest margin") (non-GAAP)			2.70		%				2.71		%				2.78		%				2.89		%				2.90		%
TANGIBLE COMMON EQUITY:
Total Shareholders’ Equity (GAAP)			$	819,018					$	808,688					$	798,211					$	778,819					$	753,954
LESS: Goodwill and intangibles, net			(67,959)						(68,229)						(68,491)						(69,162)						(69,834)
Tangible common equity (non-GAAP) (A)			$	751,059					$	740,459					$	729,720					$	709,657					$	684,120
Total Assets (GAAP)			$	8,830,501					$	8,690,944					$	8,712,873					$	8,572,143					$	8,494,625
LESS: Goodwill and intangibles, net			(67,959)						(68,229)						(68,491)						(69,162)						(69,834)
Tangible assets (non-GAAP) (B)			$	8,762,542					$	8,622,715					$	8,644,382					$	8,502,981					$	8,424,791
End of Period Shares Outstanding (C)			83,265,674						83,241,952						83,774,335						83,773,650						83,655,651
Tangible common equity/ Tangible assets (non-GAAP) (A/B)			8.57		%				8.59		%				8.44		%				8.35		%				8.12		%
Tangible Book Value Per Share (non-GAAP) (A/C)			$9.02						$8.90						$8.71						$8.47						$8.18
22 Average goodwill and intangibles, net includes the balances of BOS through the closing date in 2018.

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP Financial Measures
Unaudited ($ in thousands)
			4Q19						3Q19						2Q19						1Q19						4Q18
RETURN ON AVERAGE ASSETS:
Net income (GAAP) (A)			$	21,244					$	19,962					$	19,380					$	19,442					$	33,302
Average Assets (non-GAAP) (B)			8,738,750						8,665,352						8,679,506						8,493,725						8,445,298
Return on average assets (annualized) (non-GAAP) (A/B)			0.96		%				0.91		%				0.90		%				0.93		%				1.56		%
EFFICIENCY RATIO:
Total noninterest expense (GAAP) (A)			$	58,457					$	55,537					$	55,659					$	60,553					$	63,557
Less: Amortization of intangibles			676						671						672						672						680
Less: Restructuring			—						—						—						1,646						2,065
Total noninterest expense (non-GAAP) (B)			$	57,781					$	54,866					$	54,987					$	58,235					$	60,812
Net interest income (GAAP)			$	56,125					$	56,153					$	57,460					$	58,338					$	59,997
Total core fees and income (GAAP)			24,755						25,155						24,292						24,280						28,691
Gain on sale of affiliate (GAAP)			—						—						—						—						18,142
Total other income (GAAP)			2,038						(29)						88						968						(988)
Total revenue (GAAP) (C)			$	82,918					$	81,279					$	81,840					$	83,586					$	105,842
Efficiency ratio (GAAP) (A/C)			70.5		%				68.3		%				68.0		%				72.4		%				60.0		%
Efficiency ratio, excluding amortization of intangibles and restructuring, if any (non-GAAP) (B/C)			69.7		%				67.5		%				67.2		%				69.7		%				57.1		%
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			2,038						(29)						88						877						(392)
Total other income (GAAP)			$	2,038					$	(29)					$	88					$	968					$	17,154

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP measures: Operating Adjustments
Unaudited ($ in thousands, except share and per share data)
			4Q19						3Q19						2Q19						1Q19						4Q18
NET INCOME ATTRIBUTABLE TO THE COMPANY:
Net Income Attributable to the Company (GAAP)			$	21,244					$	19,962					$	19,380					$	19,442					$	33,302
LESS: Gain on fair value of contingent considerations receivable 23			1,109						—						—						—						—
LESS: Gain on sale of affiliate			—						—						—						—						18,142
ADD: Information services 24			—						—						—						—						(441)
ADD: Restructuring			—						—						—						1,646						2,065
ADD: Tax adjustments 25			—						—						—						—						3,502
Tax effect at statutory rate			322						—						—						(346)						(341)
Net Income Attributable to the Company (non-GAAP)			$	20,457					$	19,962					$	19,380					$	20,742					$	19,945
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Net Income Attributable to Common Shareholders (GAAP)			$	21,342					$	20,266					$	18,564					$	20,999					$	35,996
LESS: Gain on fair value of contingent considerations receivable 23			1,109						—						—						—						—
LESS: Gain on sale of affiliate			—						—						—						—						18,142
ADD: Information services 24			—						—						—						—						(441)
ADD: Restructuring			—						—						—						1,646						2,065
ADD: Tax adjustments 25			—						—						—						—						3,502
Tax effect at statutory rate			322						—						—						(346)						(341)
Net income attributable to the common shareholders, treasury stock method, excluding notable items (non-GAAP)			$	20,555					$	20,266					$	18,564					$	22,299					$	22,639
Weighted average diluted shares outstanding			83,637,786						83,956,708						84,048,972						84,010,450						84,863,779
Diluted total earnings per share (GAAP)			$	0.26					$	0.24					$	0.22					$	0.25					$	0.42
Diluted total earnings per share, excluding notable items (non-GAAP)			$	0.25					$	0.24					$	0.22					$	0.27					$	0.27
Average common equity (non-GAAP)			$	818,816					$	807,890					$	790,844					$	766,283					$	739,313
Average tangible common equity (non-GAAP)			$	750,785					$	739,531					$	721,955					$	696,785					$	656,160
Return on average common equity, excluding notable items (non-GAAP)			9.91		%				9.80		%				9.83		%				10.98		%				10.70		%
Return on average tangible common equity, excluding notable items (non-GAAP)			11.09		%				10.99		%				11.06		%				12.38		%				12.38		%
Pre-tax, pre-provision income (non-GAAP)			$	24,461					$	25,742					$	26,181					$	23,033					$	42,285
LESS: Gain on fair value of contingent considerations receivable 23			1,109						—						—						—						—
LESS: Gain on sale of affiliate			—						—						—						—						18,142
ADD: Information services 24			—						—						—						—						(441)
ADD: Restructuring			—						—						—						1,646						2,065
Pre-tax, pre-provision income, excluding notable items (non-GAAP)			$	23,352					$	25,742					$	26,181					$	24,679					$	25,767
23 In the fourth quarter of 2019, there was a $1.1 million gain related to the revaluation of the fair value of the estimated future cash flows related to the BOS contingent consideration receivable. 24 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. 25 Additional tax expense in the fourth quarter of 2018 relates to the completion of the sale of BOS.

20

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BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
Reconciliations of Non-GAAP measures: Operating Adjustments
Unaudited ($ in thousands, except share and per share data)
			Three Months Ended																														Year Ended
			December 31, 2019																														December 31, 2019
			GAAP or Reported Value						Notable Items						Operating Basis (Non-GAAP)						GAAP or Reported Value						Notable Items						Operating Basis (Non-GAAP)
Total revenue			$	82,918					$	(1,109)					$	81,809					$	329,623					$	(1,109)					$	328,514
Total operating expense			58,457						—						58,457						230,206						(1,646)						228,560
Pre-tax, pre-provision income			24,461						(1,109)						23,352						99,417						537						99,954
Income before income taxes			28,129						(1,109)						27,020						102,981						537						103,518
Income tax (expense)/benefit			6,788						(322)						6,466						22,591						24						22,615
Net income attributable to the Company			$	21,244					$	(787)					$	20,457					$	80,028					$	513					$	80,541
Net income attributable to the Common Shareholders			$	21,342					$	(787)					$	20,555					$	81,171					$	513					$	81,684
Weighted average diluted shares outstanding			83,637,786						83,637,786						83,637,786						83,920,792						83,920,792						83,920,792
Diluted total earnings per share			$	0.26					$	(0.01)					$	0.25					$	0.97					$	—					$	0.97
Average common equity			818,816												818,816						797,053												797,053
Return on average common equity			10.29		%										9.91		%				10.04		%										10.10		%
Average tangible common equity			750,785												750,785						728,370												728,370
Return on average tangible common equity			11.51		%										11.09		%				11.28		%										11.35		%
Effective tax rate on continuing operations			24.1		%										23.9		%				21.9		%										21.8		%

21