BPFH Boston Private Financial Holdings Inc

First Quarter Highlights:

• Revenue Growth: Total Revenue increased 4% linked quarter and 13% year-over-year to $87.4 million.
• Deposit and Loan Growth: Average Total Deposits increased 7% year-over-year to $5.4 billion. On a linked quarter basis, Average Total Deposits decreased 1% due to seasonal outflows, while Average Total Loans grew 3% year-over-year and 1% linked quarter. The Average Loan-to-Deposit ratio was 97% at the end of the first quarter, down from 101% in the first quarter of 2014.
• Provision Credit: The Company recorded a provision credit of $2.5 million due to net recoveries of $3.9 million in the quarter, offset by provision for criticized and classified loans.

Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported first quarter 2015 GAAP Net Income Attributable to the Company of $18.8 million, compared to $12.2 million for the fourth quarter of 2014. First quarter 2015 diluted earnings per share were $0.21, a $0.08 increase from the fourth quarter of 2014, and a $0.01 increase from the first quarter of 2014.

“We continue to focus our efforts on expanding our private clients business,” said Clayton G. Deutsch, CEO and President. "In February, we officially introduced Boston Private Wealth to the marketplace, our newly formed wealth management subsidiary within Boston Private Bank & Trust Company. In addition, our West Coast Private Banking group has maintained the positive momentum it experienced in 2014 in the first quarter.”

Core Fees and Income Increased 27% Year-Over-Year

Core Fees and Income increased 27% year-over-year to $40.2 million. The increase reflects organic growth as well as increases from Banyan Partners LLC, which was acquired in October 2014. On a linked quarter basis, Core Fees and Income increased 1% from $39.6 million in the fourth quarter of 2014.

Total Assets Under Management/Advisory (“AUM”) were flat on a linked basis quarter and up 21% year-over-year to $30.0 billion. The year-over-year increase includes organic growth and AUM related to the Banyan acquisition.

Net Interest Income

Net Interest Income for the first quarter was $46.1 million, up 4% from $44.1 million for the fourth quarter of 2014. On a year-over-year basis, Net Interest Income increased 3% from $44.5 million. Included in the first quarter 2015 Net Interest Income is $1.7 million of interest recovered on previous non-accrual loans. Excluding the $1.7 million of interest recovered, Net Interest Income was $44.4 million.

Net Interest Margin was 3.00% for the first quarter, up 17 basis points from 2.83% for the fourth quarter of 2014. Net Interest Margin was down 4 basis points from 3.04% for the first quarter of 2014. Excluding interest recovered on previous nonaccrual loans, Net Interest Margin was 2.89% for the first quarter of 2015.

Total Operating Expenses

Total Operating Expenses for the first quarter of 2015 were $63.4 million, down 1% from $63.8 million for the fourth quarter of 2014. On a year-over-year basis, Total Operating Expenses increased 15% from $55.0 million, primarily due to the impact of the Banyan acquisition.

Provision and Asset Quality

The Company recorded a provision credit of $2.5 million for the first quarter of 2015, compared to a provision expense of $2.4 million for the fourth quarter of 2014. The provision credit was driven by net recoveries of $3.9 million, partially offset by loan downgrades. The Company recorded a provision credit of $1.2 million for the first quarter of 2014.

Criticized Loans increased 3% on a linked quarter basis and decreased 12% year-over-year. Nonaccrual Loans (“Nonaccruals”) decreased 27% to $32.1 million on a linked quarter basis. On a year-over-year basis, Nonaccruals decreased 24% from $42.1 million. As a percentage of Total Loans, Nonaccruals were 61 basis points at March 31, 2015, down 23 basis points from December 31, 2014, and down 20 basis points from March 31, 2014.

Additional credit metrics are listed below on a linked quarter and year-over-year basis:

              (In millions) March 31, 2015 December 31, 2014 March 31, 2014 Total Criticized Loans $ 164.1 $ 159.6 $ 187.3

Total Loans 30-89 Days Past Due and Accruing (11)

$ 25.4 $ 7.0 $ 10.6 Total Net Loans (Charged-off)/ Recovered $ 3.9 $ (1.8 ) $ 1.4 Allowance for Loan Losses/ Total Loans 1.46 % 1.44 % 1.48 %  

Capital Ratios

Capital ratios are listed below on a linked quarter and year-over-year basis:

              March 31, 2015 December 31, 2014 March 31, 2014 BPFH Ratios: Total Risk-Based Capital * 14.0 % 14.5 % 15.0 % Tier I Risk-Based Capital * 12.3 % 13.3 % 13.7 % Tier I Leverage Capital * 9.5 % 9.5 % 10.2 % TCE/TA 7.2 % 7.0 % 7.1 % Tier I Common Equity/ Risk Weighted Assets * 9.8 % 9.8 % 10.1 %

*March 31, 2015 information is presented based on estimated data and incorporates the implementation of Basel III.

Dividend PaymentsConcurrent with the release of first quarter 2015 earnings, the Board of Directors of the Company declared a cash dividend to common stock shareholders of $0.09 per share. The record date for this dividend is May 8, 2015, and the payment date is May 22, 2015.

The Board of Directors of the Company also declared a cash dividend to holders of the Non-Cumulative Perpetual Preferred Stock, Series D of $17.375 per share, which will result in a dividend of $0.434375 per depositary share. The record date for this dividend is May 15, 2015, and the payment date is June 15, 2015.

Non-GAAP Financial MeasuresThe Company uses certain non-GAAP financial measures, such as tangible book value per share; the TCE/TA ratio; return on average common equity; return on average tangible common equity; pre-tax, pre-provision earnings; and the efficiency ratio (FTE basis), to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.

Conference CallManagement will hold a conference call at 8 a.m. Eastern Time on Wednesday, April 15, 2015, to discuss the financial results, business highlights and outlook. To access the call:

Dial In #: (888) 317-6003Elite Entry Number: 2955905

Replay Information:Available from April 15, 2015 at 12 noon until April 22, 2015Dial In #: (877) 344-7529Conference Number: 10063688

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

Boston Private Financial Holdings, Inc.Boston Private Financial Holdings, Inc. is a national financial services organization that owns Wealth Management and Private Banking affiliates with offices in Boston, New York, Los Angeles, San Francisco, San Jose, Atlanta, Florida, Wisconsin, and Texas. The Company has a $7 billion Private Banking balance sheet, and manages approximately $30 billion of client assets.

The Company positions its affiliates to 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 StatementsCertain 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 private banking, investment management and wealth advisory 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; increasing government regulation; the risk that goodwill and intangibles recorded in the Company's financial statements will become impaired; the risk that the Company's deferred tax asset may not be realized; risks related to the identification and implementation of acquisitions, dispositions and restructurings; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company's Annual Report on Form 10-K and updated by the Company's Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statement is made.

Note to Editors:Boston Private Financial Holdings, Inc. is not to be confused with Boston Private Bank & Trust Company. Boston Private Bank & Trust Company is a wholly-owned subsidiary of BPFH. The information reported in this press release is related to the performance and results of BPFH.

                  Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited)       (In thousands, except share and per share data)   3/31/2015     12/31/2014     3/31/2014   Assets: Cash and cash equivalents $ 88,118 $ 172,609 $ 398,687 Investment securities available for sale 971,842 829,993 700,531 Investment securities held to maturity 134,978 140,727 127,938 Stock in Federal Home Loan Banks 32,761 32,281 37,450 Loans held for sale 10,570 7,099 2,297 Total loans 5,295,013 5,269,936 5,162,470 Less: Allowance for loan losses   77,263     75,838     76,605   Net loans 5,217,750 5,194,098 5,085,865 Other real estate owned (“OREO”) 929 929 921 Premises and equipment, net 30,999 32,199 29,045 Goodwill 152,082 152,082 110,180 Intangible assets, net 38,116 39,718 19,551 Fees receivable 12,519 12,517 11,039 Accrued interest receivable 15,990 16,071 15,057 Deferred income taxes, net 45,614 47,576 53,716 Other assets   117,504     119,975     113,143   Total assets $ 6,869,772   $ 6,797,874   $ 6,705,420   Liabilities: Deposits $ 5,373,407 $ 5,453,879 $ 5,341,644 Securities sold under agreements to repurchase 52,237 30,496 93,550 Federal funds purchased 50,000 — 15,000 Federal Home Loan Bank borrowings 450,022 370,150 394,458 Junior subordinated debentures 106,363 106,363 106,363 Other liabilities   97,773     112,170     87,652   Total liabilities   6,129,802     6,073,058     6,038,667   Redeemable Noncontrolling Interests 21,280 20,905 20,774 Shareholders’ Equity: Preferred stock, $1.00 par value; authorized: 2,000,000 shares 47,753 47,753 47,753

Common stock, $1.00 par value; authorized: 170,000,000 shares; issued and outstanding: 83,051,675 shares at March 31, 2015; 82,961,855 shares at December 31, 2014; 80,001,139 shares at March 31, 2014

83,052 82,962 80,001 Additional paid-in capital 604,386 610,903 610,590 Accumulated deficit (18,613 ) (37,396 ) (89,170 ) Accumulated other comprehensive income/ (loss)   1,120     (697 )   (3,305 ) Total Company’s shareholders’ equity   717,698     703,525     645,869   Noncontrolling interests   992     386     110   Total shareholders’ equity   718,690     703,911     645,979   Total liabilities, redeemable noncontrolling interests and shareholders’ equity $ 6,869,772   $ 6,797,874   $ 6,705,420                         Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited) Three Months Ended (In thousands, except share and per share data)   3/31/2015     12/31/2014     3/31/2014   Interest and dividend income: Loans $ 48,000 $ 47,117 $ 47,214 Taxable investment securities 995 920 636 Non-taxable investment securities 1,021 978 904 Mortgage-backed securities 2,614 1,695 1,936 Federal funds sold and other   234     381     346   Total interest and dividend income   52,864     51,091     51,036   Interest expense: Deposits 3,892 3,908 3,216 Federal Home Loan Bank borrowings 1,931 2,069 2,326 Junior subordinated debentures 956 976 955 Repurchase agreements and other short-term borrowings   13     10     17   Total interest expense   6,792     6,963     6,514   Net interest income 46,072 44,128 44,522 Provision/ (credit) for loan losses   (2,500 )   2,400     (1,200 ) Net interest income after provision/ (credit) for loan losses   48,572     41,728     45,722   Fees and other income: Investment management fees 11,714 11,897 11,461 Wealth advisory fees 12,675 12,352 11,473 Wealth management and trust fees 13,558 13,327 6,961 Other banking fee income 1,910 1,841 1,680 Gain on sale of loans, net   303     192     89   Total core fees and income   40,160     39,609     31,664   Gain/ (loss) on sale of investments, net 8 (16 ) 1 Gain/ (loss) on OREO, net 89 (31 ) 819 Other   1,088     360     249   Total other income   1,185     313     1,069   Operating expense: Salaries and employee benefits 42,127 39,881 36,574 Occupancy and equipment 9,035 8,549 7,797 Professional services 3,021 3,308 2,843 Marketing and business development 1,348 2,425 1,426 Contract services and data processing 1,437 1,527 1,438 Amortization of intangibles 1,603 1,707 1,053 FDIC insurance 1,011 852 896 Restructuring — 739 — Other   3,845     4,772     2,941   Total operating expense   63,427     63,760     54,968   Income before income taxes 26,490 17,890 23,487 Income tax expense   8,572     5,901     7,138   Net income from continuing operations 17,918 11,989 16,349 Net income from discontinued operations (1)   2,094     1,510     1,928   Net income before attribution to noncontrolling interests 20,012 13,499 18,277 Less: Net income attributable to noncontrolling interests   1,229     1,322     1,236   Net income attributable to the Company $ 18,783   $ 12,177   $ 17,041       Boston Private Financial Holdings, Inc.                 Selected Financial Data (Unaudited) (In thousands, except share and per share data)

Three Months Ended

PER SHARE DATA:   3/31/2015     12/31/2014     3/31/2014   Calculation of Income for EPS: Net income attributable to the Company $ 18,783 $ 12,177 $ 17,041

Adjustments to Net Income Attributable to the Company to Arrive at NetIncome Attributable to Common Shareholders (2)

  (1,005 )   (1,176 )   (1,061 ) Net Income Attributable to the Common Shareholders 17,778 11,001 15,980 LESS: Amount allocated to participating securities   (60 )   (27 )   (117 )

Net Income Attributable to the Common Shareholders, after allocation toparticipating securities

$ 17,718   $ 10,974   $ 15,863     End of Period Common Shares Outstanding 83,051,675 82,961,855 80,001,139   Weighted Average Shares Outstanding: Weighted average basic shares, including participating securities 80,983,916 80,880,508 79,107,968 LESS: Participating securities (469,557 ) (487,596 ) (962,783 ) PLUS: Dilutive potential common shares   2,079,966     2,096,172     1,865,705   Weighted Average Diluted Shares (3)   82,594,325     82,489,084     80,010,890     Diluted Total Earnings per Share $ 0.21 $ 0.13 $ 0.20                       Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited) (In thousands, except per share data) FINANCIAL DATA:   3/31/2015     12/31/2014     3/31/2014   Book Value Per Common Share $ 8.08 $ 7.91 $ 7.48 Tangible Book Value Per Share (4) $ 5.79 $ 5.60 $ 5.86 Market Price Per Share $ 12.15 $ 13.47 $ 13.53   ASSETS UNDER MANAGEMENT AND ADVISORY: Wealth Management and Trust $ 9,306,000 $ 9,274,000 $ 4,612,000 Investment Managers 10,730,000 10,772,000 10,505,000 Wealth Advisory 10,012,000 9,883,000 9,641,000 Less: Inter-company Relationship   (22,000 )   (22,000 )   (22,000 ) Total Assets Under Management and Advisory $ 30,026,000   $ 29,907,000   $ 24,736,000     BPFH FINANCIAL RATIOS: Total Equity/ Total Assets 10.46 % 10.35 % 9.63 % Tangible Common Equity/ Tangible Assets (4) 7.20 % 7.03 % 7.12 % Tier I Common Equity/ Risk Weighted Assets (4) 9.76 % 9.76 % 10.11 % Allowance for Loan Losses/ Total Loans 1.46 % 1.44 % 1.48 % Allowance for Loan Losses/ Nonaccrual Loans 240 % 172 % 182 % Return on Average Assets - Three Months Ended (Annualized) 1.10 % 0.71 % 1.06 % Return on Average Common Equity - Three Months Ended (Annualized) (5) 10.79 % 6.97 % 10.91 % Return on Average Tangible Common Equity - Three Months Ended (Annualized) (5) 16.03 % 10.69 % 14.58 % Efficiency Ratio - Three Months Ended (6) 68.74 % 70.83 % 67.88 %     Boston Private Financial Holdings, Inc.                                                   Selected Financial Data (Unaudited)   Average Balance Interest Income/Expense Average Yield/Rate (In thousands) Three Months Ended Three Months Ended Three Months Ended AVERAGE BALANCE SHEET:   3/31/15   12/31/14   3/31/14   3/31/15   12/31/14   3/31/14 3/31/15   12/31/14   3/31/14   AVERAGE ASSETS Interest-Earning Assets: Cash and Investments: Taxable investment securities $ 320,373 $ 305,118 $ 254,407 $ 995 $ 920 $ 636 1.24 % 1.21 % 1.00 % Non-taxable investment securities (7) 230,251 229,157 224,054 1,571 1,504 1,391 2.73 % 2.63 % 2.48 % Mortgage-backed securities 516,032 350,312 341,082 2,614 1,695 1,936 2.03 % 1.93 % 2.27 % Federal funds sold and other   147,999   389,833   204,157   234   381   346 0.64 % 0.39 % 0.68 % Total Cash and Investments   1,214,655   1,274,420   1,023,700   5,414   4,500   4,309 1.78 % 1.41 % 1.68 % Loans (8): Commercial and Construction (7) 2,851,801 2,852,064 2,833,475 31,366 30,855 30,921 4.40 % 4.23 % 4.37 % Residential 2,140,525 2,120,416 2,035,232 16,656 16,447 16,169 3.11 % 3.10 % 3.18 % Home Equity and Other Consumer   277,967   254,387   245,596   1,953   1,799   1,805 2.85 % 2.80 % 2.98 % Total Loans   5,270,293   5,226,867   5,114,303   49,975   49,101   48,895 3.80 % 3.71 % 3.83 % Total Earning Assets   6,484,948   6,501,287   6,138,003   55,389   53,601   53,204 3.42 % 3.26 % 3.47 % LESS: Allowance for Loan Losses 77,039 75,590 77,228 Cash and due From Banks (Non-Interest Bearing) 38,062 41,595 41,559 Other Assets   406,799   411,546   347,721 TOTAL AVERAGE ASSETS $ 6,852,770 $ 6,878,838 $ 6,450,055  

AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLINGINTERESTS, AND SHAREHOLDERS' EQUITY

Interest-Bearing Liabilities: Interest-Bearing Deposits: Savings and NOW $ 599,695 $ 584,210 $ 545,973 $ 103 $ 112 $ 98 0.07 % 0.08 % 0.07 % Money Market 2,812,827 2,836,731 2,490,836 2,596 2,589 1,845 0.37 % 0.36 % 0.30 % Certificates of Deposit   604,404   597,460   624,547   1,193   1,207   1,273 0.80 % 0.80 % 0.83 % Total Interest-Bearing Deposits 4,016,926 4,018,401 3,661,356 3,892 3,908 3,216 0.39 % 0.39 % 0.36 % Junior Subordinated Debentures 106,363 106,363 106,363 956 976 955 3.59 % 3.59 % 3.59 % FHLB Borrowings and Other   470,392   447,955   506,864   1,944   2,079   2,343 1.65 % 1.82 % 1.85 % Total Interest-Bearing Liabilities   4,593,681   4,572,719   4,274,583   6,792   6,963   6,514 0.60 % 0.60 % 0.61 % Noninterest Bearing Demand Deposits 1,422,202 1,465,145 1,422,928 Payables and Other Liabilities   102,255   121,318   91,863 Total Average Liabilities 6,118,138 6,159,182 5,789,374 Redeemable Noncontrolling Interests 22,748 22,802 20,132 Average Shareholders' Equity   711,884   696,854   640,549  

TOTAL AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLINGINTERESTS, AND SHAREHOLDERS' EQUITY

$ 6,852,770 $ 6,878,838 $ 6,450,055 Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) $ 48,597 $ 46,638 $ 46,690 LESS: FTE Adjustment (7)   2,525   2,510   2,168 Net Interest Income (GAAP Basis) $ 46,072 $ 44,128 $ 44,522 Interest Rate Spread 2.82 % 2.66 % 2.86 % Bank only Net Interest Margin 3.07 % 2.90 % 3.11 % Net Interest Margin 3.00 % 2.83 % 3.04 %     Boston Private Financial Holdings, Inc.                 Selected Financial Data (Unaudited) (In thousands) LOAN DATA (9):   3/31/2015   12/31/2014   3/31/2014 Commercial and Industrial Loans: New England $ 786,334 $ 781,646 $ 704,056 San Francisco Bay 122,418 117,105 108,365 Southern California   58,086   54,334   39,780 Total Commercial and Industrial Loans $ 966,838 $ 953,085 $ 852,201 Commercial Real Estate Loans: New England $ 684,395 $ 690,965 $ 730,709 San Francisco Bay 601,305 619,222 644,108 Southern California   477,341   478,216   483,817 Total Commercial Real Estate Loans $ 1,763,041 $ 1,788,403 $ 1,858,634 Construction and Land Loans: New England $ 91,764 $ 85,272 $ 94,966 San Francisco Bay 31,012 31,329 62,879 Southern California   14,318   8,748   16,871 Total Construction and Land Loans $ 137,094 $ 125,349 $ 174,716 Residential Loans: New England $ 1,295,955 $ 1,299,568 $ 1,227,114 San Francisco Bay 459,310 462,497 456,372 Southern California   387,771   370,030   352,369 Total Residential Loans $ 2,143,036 $ 2,132,095 $ 2,035,855 Home Equity Loans: New England $ 82,716 $ 82,877 $ 77,470 San Francisco Bay 29,835 27,575 28,159 Southern California   3,639   4,407   3,334 Total Home Equity Loans $ 116,190 $ 114,859 $ 108,963 Other Consumer Loans: New England $ 156,042 $ 143,166 $ 119,500 San Francisco Bay 7,245 6,505 7,311 Southern California 5,527 6,474 5,246 Eliminations and other, net   —   —   44 Total Other Consumer Loans $ 168,814 $ 156,145 $ 132,101 Total Loans: New England $ 3,097,206 $ 3,083,494 $ 2,953,815 San Francisco Bay 1,251,125 1,264,233 1,307,194 Southern California 946,682 922,209 901,417 Eliminations and other, net   —   —   44 Total Loans $ 5,295,013 $ 5,269,936 $ 5,162,470     Boston Private Financial Holdings, Inc.                 Selected Financial Data (Unaudited) (In thousands) CREDIT QUALITY (9):   3/31/2015   12/31/2014     3/31/2014 Special Mention Loans: New England $ 47,635 $ 32,254 $ 41,920 San Francisco Bay 16,350 18,161 25,055 Southern California   22,161   26,325     36,452 Total Special Mention Loans $ 86,146 $ 76,740   $ 103,427 Accruing Substandard Loans (10): New England $ 18,534 $ 11,126 $ 12,319 San Francisco Bay 21,996 23,403 26,294 Southern California   5,472   4,331     3,507 Total Accruing Substandard Loans $ 46,002 $ 38,860   $ 42,120 Nonaccruing Loans: New England $ 18,271 $ 26,205 $ 21,569 San Francisco Bay 9,347 13,430 12,541 Southern California   4,515   4,547     7,944 Total Nonaccruing Loans $ 32,133 $ 44,182   $ 42,054 Other Real Estate Owned: New England $ 344 $ 344 $ 336 San Francisco Bay 585 585 585 Southern California   —   —     — Total Other Real Estate Owned $ 929 $ 929   $ 921 Loans 30-89 Days Past Due and Accruing (11): New England $ 18,236 $ 6,572 $ 4,472 San Francisco Bay 3,398 375 2,577 Southern California   3,760   13     3,528 Total Loans 30-89 Days Past Due and Accruing $ 25,394 $ 6,960   $ 10,577 Loans (Charged-off)/ Recovered, Net for the Three Months Ended: New England $ 890 $ (2,516 ) $ 540 San Francisco Bay 2,738 607 640 Southern California   297   64     254 Total Net Loans (Charged-off)/ Recovered $ 3,925 $ (1,845 ) $ 1,434    

FOOTNOTES:

(1)

          Net income from discontinued operations consists of contingent payments or expenses related to our divested affiliates, including Davidson Trust Company; Boston Private Value Investors, Inc.; Sand Hill Advisors, LLC; RINET Company, LLC; Gibraltar Private Bank & Trust Company; and Westfield Capital Management Company, LLC.  

(2)

Adjustments to net income attributable to the Company to arrive at net income attributable to the common shareholders, as presented in these tables, include decrease/ (increase) in noncontrolling interests redemption value, dividends paid on preferred stock, and dividends on participating securities.  

(3)

When the Company has positive net income from continuing operations attributable to the common shareholders, the Company adds additional shares to basic weighted average shares outstanding to arrive at diluted weighted average shares outstanding for the diluted earnings per share calculation. These additional shares reflect the assumed exercise, conversion, or contingent issuance of dilutive securities. If the additional shares would result in anti-dilution they would be excluded from the diluted earnings per share calculation. The potential dilutive shares relate to: unexercised stock options, unvested non-participating restricted stock, and unexercised stock warrants. See Part II. Item 8. "Financial Statements and Supplementary Data - Note 16: Earnings Per Share" in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 for additional information.

 

(4)

The Company uses certain non-GAAP financial measures, such as: Tangible Book Value Per Share and the Tangible Common Equity ("TCE") to Tangible Assets ("TA") ratio to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.   Reconciliations from the Company's GAAP Total Equity to Total Assets ratio to the Non-GAAP TCE to TA ratio, and from GAAP Book Value to Non-GAAP Tangible Book Value are presented below:   The Company calculates Tangible Assets by adjusting Total Assets to exclude Goodwill and Intangible Assets.   The Company calculates Tangible Common Equity by adjusting Total Equity to exclude non-convertible Series D Preferred stock and exclude Goodwill and Intangible Assets, net.                   (In thousands, except per share data)   3/31/2015     12/31/2014     3/31/2014   Total Balance Sheet Assets $ 6,869,772 $ 6,797,874 $ 6,705,420 LESS: Goodwill and Intangible Assets, net   (190,198 )   (191,800 )   (129,731 ) Tangible Assets (non-GAAP) $ 6,679,574 $ 6,606,074 $ 6,575,689 Total Shareholders' Equity $ 718,690 $ 703,911 $ 645,979 LESS: Series D Preferred Stock (non-convertible) (47,753 ) (47,753 ) (47,753 ) LESS: Goodwill and Intangible Assets, net   (190,198 )   (191,800 )   (129,731 ) Total adjusting items   (237,951 )   (239,553 )   (177,484 ) Tangible Common Equity (non-GAAP) $ 480,739   $ 464,358   $ 468,495   Total Equity/Total Assets 10.46 % 10.35 % 9.63 % Tangible Common Equity/Tangible Assets (non-GAAP) 7.20 % 7.03 % 7.12 %   Total Risk Weighted Assets * $ 5,159,073 $ 4,803,633 $ 4,707,604 Tier I Common Equity * $ 503,564 $ 468,612 $ 475,930 Tier I Common Equity/ Risk Weighted Assets 9.76 % 9.76 % 10.11 %   End of Period Shares Outstanding 83,052 82,962 80,001   Book Value Per Common Share $ 8.08 $ 7.91 $ 7.48 Tangible Book Value Per Share (non-GAAP) $ 5.79 $ 5.60 $ 5.86

* Risk Weighted Assets and Tier I Common Equity for March 31, 2015 are presented based on estimated data.

   

(5)

          The Company uses certain non-GAAP financial measures, such as: Return on Average Common Equity and Return on Average Tangible Common Equity to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.   Reconciliations from the Company's GAAP Return on Average Equity ratio to the Non-GAAP Return on Average Common Equity ratio, and the Non-GAAP Return on Average Tangible Common Equity ratio are presented below:   The Company calculates Average Common Equity by adjusting Average Equity to exclude Average Preferred Equity.   The Company calculates Average Tangible Common Equity by adjusting Average Equity to exclude Average Goodwill and Intangible Assets, net and Average Preferred Equity.                  

Three Months Ended

(In thousands)

  3/31/2015     12/31/2014     3/31/2014   Total average shareholders' equity $ 711,884 $ 696,854 $ 640,549 LESS: Average Series D preferred stock (non-convertible)   (47,753 )   (47,753 )   (47,753 ) Average common equity (non-GAAP)   664,131     649,101     592,796   LESS: Average goodwill and intangible assets, net   (191,053 )   (184,473 )   (130,272 ) Total adjusting items   (191,053 )   (184,473 )   (130,272 ) Average Tangible Common Equity (non-GAAP) $ 473,078   $ 464,628   $ 462,524     Net income attributable to the Company $ 18,783 $ 12,177 $ 17,041 LESS: Dividends on Series D preferred stock   (869 )   (869 )   (869 ) Common net income (non-GAAP) 17,914 11,308 16,172 ADD: Amortization of intangibles, net of tax (35%)   1,042     1,110     684   Tangible common net income (non-GAAP) $ 18,956   $ 12,418   $ 16,856     Return on Average Equity - (Annualized) 10.55 % 6.99 % 10.64 % Return on Average Common Equity - (Annualized) (non-GAAP) 10.79 % 6.97 % 10.91 % Return on Average Tangible Common Equity - (Annualized) (non-GAAP) 16.03 % 10.69 % 14.58 %    

(6)

          The Company uses certain non-GAAP financial measures, such as: pre-tax, pre-provision earnings and the efficiency ratio to provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial sector.  

Reconciliations from the Company's GAAP income from continuing operations before income taxes to non-GAAP pre-tax, pre-provision earnings; and from GAAP efficiency ratio to Non-GAAP efficiency ratio (FTE basis), excluding restructuring, are presented below:

                   

Three Months Ended

(In thousands)

  3/31/2015     12/31/2014     3/31/2014   Income before income taxes (GAAP) $ 26,490 $ 17,890 $ 23,487 ADD BACK: Provision/ (credit) for loan losses   (2,500 )   2,400     (1,200 ) Pre-tax, pre-provision earnings (non-GAAP) $ 23,990 $ 20,290 $ 22,287   Total operating expense (GAAP) $ 63,427 $ 63,760 $ 54,968 Less: Amortization of intangibles 1,603 1,707 1,053 Less: Restructuring   —     739     —   Total operating expense (excluding amortization of intangibles and restructuring) (non-GAAP) $ 61,824 $ 61,314 $ 53,915   Net interest income $ 46,072 $ 44,128 $ 44,522 Total core fees and income 40,160 39,609 31,664 Total other income 1,185 313 1,069 FTE income   2,525     2,510     2,168   Total revenue (FTE basis) $ 89,942 $ 86,560 $ 79,423 Efficiency Ratio, before deduction of intangible amortization (GAAP) 72.56 % 75.86 % 71.15 % Efficiency Ratio, FTE Basis (non-GAAP) 68.74 % 70.83 % 67.88 %    

(7)

          Interest Income on Non-taxable Investments and Loans are presented on an FTE basis using the federal statutory rate of 35% for each period presented.  

(8)

Includes Loans Held for Sale and Nonaccrual Loans.  

(9)

The concentration of the Private Banking loan data and credit quality is primarily based on the location of the lender's regional offices. Net loans from the Company to certain principals of the Company's affiliate partners, loans at the Company's non-banking segments, and inter-company loan eliminations are identified as “Eliminations and other, net”.  

(10)

Accruing substandard 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.  

(11)

In addition to loans 30-89 days past due and accruing, at March 31, 2015 and December 31, 2014 the Company had no loans were more than 90 days past due but still on accrual status. At March 31, 2014, the Company had three loans totaling $0.6 million that were more than 90 days past due but still on accrual status. These loans originated in the New England region.

Boston Private Financial Holdings, Inc.Steven Gaven, 617-912-3793Vice President Corporate Finance and Director of Investor Relationssgaven@bostonprivate.com