BPFH Boston Private Financial Holdings Inc

Second Quarter Highlights:

• Revenue Growth: Total Revenue increased 9% year-over-year and was flat on a linked quarter basis at $87.7 million. The year-over-year increase was driven by the acquisition of Banyan Partners LLC and organic growth.
• Deposit and Loan Growth: Average Total Deposits increased 6% year-over-year to $5.4 billion. On a linked quarter basis, Average Total Deposits decreased 1%, while Average Total Loans grew 4% year-over-year and 1% linked quarter. The Average Loan-to-Deposit ratio was 99% at the end of the second quarter, down from 102% in the second quarter of 2014.
• No Provision for Loan Loss: The Company recorded no provision for loan loss due to net recoveries of $1.0 million in the quarter and payoffs of classified loans, offset by loan growth and loan downgrades.
• Assets Under Management: Total Assets Under Management/Advisory (“AUM”) increased 17% year-over-year to $29.6 billion, reflecting the acquisition of Banyan Partners and organic growth. On a linked quarter basis, AUM were down 1%, due to negative net flows and market action.

Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the “Company” or “BPFH”) today reported second quarter 2015 GAAP Net Income Attributable to the Company of $17.6 million, compared to $18.8 million for the first quarter of 2015. Second quarter 2015 diluted earnings per share were $0.20, compared to $0.21 in the first quarter of 2015, and $0.25 in the second quarter of 2014. In the second quarter of 2014 the Company sold $57 million of Commercial Loans, which resulted in a $1.6 million gain on sale of loans and a $1.2 million provision credit.

“Our integrated Private Bank and Wealth Management business reached a number of important milestones in the second quarter," said Clayton G. Deutsch, CEO. "In June, we substantially completed the integration of Banyan Partners and announced the opening of the new Boston Private Wealth headquarters at One Federal Street in Boston. Now that we have met this goal, our focus will shift full time to building our private clients business in our select markets nationally."

Core Fees and Income Increased 18% Year-Over-Year

Core Fees and Income increased 18% year-over-year to $40.3 million. The increase reflects revenue from Banyan Partners, which was acquired in October 2014, as well as organic growth. On a linked quarter basis, Core Fees and Income were flat.

Total Assets Under Management decreased to $29.6 billion in the second quarter, down 1% from $30.0 billion in the first quarter of 2015. AUM increased 17% year-over-year. The year-over-year increase includes AUM related to the Banyan Partners acquisition and positive market action, partially offset by net outflows. The Company experienced second quarter 2015 AUM net outflows of $193 million, as compared to first quarter 2015 AUM net outflows of $382 million. AUM net outflows for the second quarter 2014 were $86 million. AUM net outflows for the year to date 2015 were $575 million as compared to net inflows of $17 million for the same period of 2014.

Net Interest Income

Net Interest Income for the second quarter was $45.1 million, down 2% from $46.1 million for the first quarter of 2015. On a year-over-year basis, Net Interest Income decreased 3% from $46.3 million. The current quarter includes $0.1 million of interest recovered on previous non-accrual loans while the first quarter of 2015 and the second quarter of 2014 includes recoveries of $1.7 million and $2.5 million, respectively. Excluding interest recovered on previous non-accrual loans, Net Interest Income increased 2% linked quarter and 4% year-over-year.

Net Interest Margin was 2.90% for the second quarter, down 10 basis points from 3.00% for the first quarter of 2015. Net Interest Margin was down 24 basis points from 3.14% in the second quarter of 2014. Excluding interest recovered on previous nonaccrual loans, Net Interest Margin was up one basis point linked quarter and down seven basis points year-over-year.

Other Income

Other income was $2.3 million in the second quarter of 2015 compared to $1.1 million in the first quarter of 2015. The second quarter of 2015 included $1.1 million related to the market value adjustment for the Banyan Partners earnout and $0.6 million in gains on partnership investments, while first quarter included a $0.4 million market value adjustment for the Banyan Partners earnout and $0.2 million in gains on partnership investments.

Total Operating Expenses

Total Operating Expenses for the second quarter of 2015 were $62.4 million, down 2% from $63.4 million for the first quarter of 2015. On a year-over-year basis, Total Operating Expenses increased 15% from $54.4 million, primarily due to the impact of the Banyan Partners acquisition.

Provision and Asset Quality

The Company recorded no provision for loan loss for the second quarter of 2015, compared to a provision credit of $2.5 million for the first quarter of 2015. The lack of provision was due to net recoveries of $1.0 million in the quarter and payoffs of classified loans, offset by loan growth and loan downgrades.

Criticized Loans increased 2% on a linked quarter basis and decreased 11% year-over-year. Nonaccrual Loans (“Nonaccruals”) decreased 7% to $29.9 million on a linked quarter basis. On a year-over-year basis, Nonaccruals decreased 28% from $41.6 million. As a percentage of Total Loans, Nonaccruals were 55 basis points at June 30, 2015, down 6 basis points from March 31, 2015, and down 27 basis points from June 30, 2014.

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

(In millions)     June 30, 2015       March 31, 2015       June 30, 2014 Total Criticized Loans $     167.3 $     164.1 $     188.2 Total Loans 30-89 Days Past Due and Accruing (11) $ 4.3 $ 25.4 $ 6.0 Total Net Loans (Charged-off)/ Recovered $ 1.0 $ 3.9 $ 2.9 Allowance for Loan Losses/ Total Loans 1.43 % 1.46 % 1.46 %

Capital Ratios

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

    June 30, 2015       March 31, 2015       June 30, 2014 BPFH Ratios: Total Risk-Based Capital * 13.8 % 14.0 % 14.7 % Tier I Risk-Based Capital * 12.2 % 12.3 % 13.4 % Tier I Leverage Capital * 9.7 % 9.5 % 10.4 % TCE/TA 7.2 % 7.2 % 7.8 % Tier I Common Equity/ Risk Weighted Assets * 9.7 % 9.8 % 10.0 %

*June 30, 2015 information is presented based on estimated data.

Dividend Payments

Concurrent with the release of second 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 August 7, 2015, and the payment date is August 21, 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 August 14, 2015, and the payment date is September 15, 2015.

Non-GAAP Financial Measures

The 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 Call

Management will hold a conference call at 8 a.m. Eastern Time on Thursday, July 16, 2015, to discuss the financial results, business highlights and outlook. To access the call:

Dial In #: (888) 317-6003Elite Entry Number: 0224623

Replay Information:Available from July 16, 2015 at 12 noon until July 30, 2015Dial In #: (877) 344-7529Conference Number: 10068908

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

Note to Editors:

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

                  Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited)       (In thousands, except share and per share data)   6/30/2015     3/31/2015     6/30/2014   Assets: Cash and cash equivalents $ 63,099 $ 88,118 $ 139,181 Investment securities available for sale 992,007 971,842 683,590 Investment securities held to maturity 128,258 134,978 138,380 Stock in Federal Home Loan Banks 35,668 32,761 35,276 Loans held for sale 19,512 10,570 2,841 Total loans 5,463,250 5,295,013 5,106,051 Less: Allowance for loan losses   78,251     77,263     74,547   Net loans 5,384,999 5,217,750 5,031,504 Other real estate owned (“OREO”) 929 929 921 Premises and equipment, net 31,337 30,999 28,410 Goodwill 152,082 152,082 110,180 Intangible assets, net 36,461 38,116 18,506 Fees receivable 12,486 12,519 11,957 Accrued interest receivable 16,383 15,990 14,337 Deferred income taxes, net 47,388 45,614 50,516 Other assets   125,330     117,504     123,224   Total assets $ 7,045,939   $ 6,869,772   $ 6,388,823   Liabilities: Deposits $ 5,429,028 $ 5,373,407 $ 4,951,852 Securities sold under agreements to repurchase 26,660 52,237 137,334 Federal funds purchased 100,000 50,000 — Federal Home Loan Bank borrowings 541,529 450,022 416,579 Junior subordinated debentures 106,363 106,363 106,363 Other liabilities   95,074     97,773     93,149   Total liabilities   6,298,654     6,129,802     5,705,277   Redeemable Noncontrolling Interests 19,200 19,911 20,895 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: 83,539,785 shares at June 30, 2015; 83,051,675 shares at March 31, 2015; 80,394,009 shares at June 30, 2014 83,540 83,052 80,394 Additional paid-in capital 597,424 604,146 603,652 Accumulated deficit (1,003 ) (18,613 ) (67,838 ) Accumulated other comprehensive income/ (loss)   (2,525 )   1,120     (1,542 ) Total Company’s shareholders’ equity   725,189     717,458     662,419   Noncontrolling interests   2,896     2,601     232   Total shareholders’ equity   728,085     720,059     662,651   Total liabilities, redeemable noncontrolling interests and shareholders’ equity $ 7,045,939   $ 6,869,772   $ 6,388,823   Boston Private Financial Holdings, Inc.                         Selected Financial Data (Unaudited) Three Months Ended Six Months Ended (In thousands, except share and per share data)   6/30/2015   3/31/2015     6/30/2014     6/30/2015     6/30/2014   Interest and dividend income: Loans $ 46,663 $ 48,000 $ 49,396 $ 94,663 $ 96,610 Taxable investment securities 1,075 995 730 2,070 1,366 Non-taxable investment securities 1,125 1,021 914 2,146 1,818 Mortgage-backed securities 2,775 2,614 1,689 5,389 3,625 Federal funds sold and other   282   234     253     516     599   Total interest and dividend income   51,920   52,864     52,982     104,784     104,018   Interest expense: Deposits 3,822 3,892 3,375 7,714 6,591 Federal Home Loan Bank borrowings 2,017 1,931 2,359 3,948 4,685 Junior subordinated debentures 967 956 965 1,923 1,920 Repurchase agreements and other short-term borrowings   29   13     15     42     32   Total interest expense   6,835   6,792     6,714     13,627     13,228   Net interest income 45,085 46,072 46,268 91,157 90,790 Provision/ (credit) for loan losses   —   (2,500 )   (5,000 )   (2,500 )   (6,200 ) Net interest income after provision/ (credit) for loan losses   45,085   48,572     51,268     93,657     96,990   Fees and other income: Investment management fees 11,731 11,714 11,754 23,445 23,215 Wealth advisory fees 12,678 12,675 11,979 25,353 23,452 Wealth management and trust fees 13,545 13,558 7,043 27,103 14,004 Other banking fee income 2,031 1,910 1,677 3,941 3,357 Gain on sale of loans, net   362   303     1,694     665     1,783   Total core fees and income   40,347   40,160     34,147     80,507     65,811   Gain on repurchase of debt — — — — — Gain/ (loss) on sale of investments, net 8 8 — 16 1 Gain/ (loss) on OREO, net — 89 19 89 838 Other   2,305   1,088     208     3,393     457   Total other income   2,313   1,185     227     3,498     1,296   Operating expense: Salaries and employee benefits 39,816 42,127 34,338 81,943 70,912 Occupancy and equipment 9,095 9,035 7,349 18,130 15,146 Professional services 3,214 3,021 3,526 6,235 6,369 Marketing and business development 1,706 1,348 2,730 3,054 4,156 Contract services and data processing 1,495 1,437 1,447 2,932 2,885 Amortization of intangibles 1,655 1,602 1,045 3,257 2,098 FDIC insurance 963 1,011 854 1,974 1,750 Restructuring 220 — — 220 — Other   4,254   3,846     3,113     8,100     6,054   Total operating expense   62,418   63,427     54,402     125,845     109,370   Income before income taxes 25,327 26,490 31,240 51,817 54,727 Income tax expense   8,000   8,572     10,333     16,572     17,471   Net income from continuing operations 17,327 17,918 20,907 35,245 37,256 Net income from discontinued operations (1)   1,546   2,094     1,450     3,640     3,378   Net income before attribution to noncontrolling interests 18,873 20,012 22,357 38,885 40,634 Less: Net income attributable to noncontrolling interests   1,263   1,229     1,025     2,492     2,261   Net income attributable to the Company $ 17,610 $ 18,783   $ 21,332   $ 36,393   $ 38,373                           Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited) (In thousands, except share and per share data) Three Months Ended Six Months Ended PER SHARE DATA:   6/30/2015     3/31/2015     6/30/2014     6/30/2015     6/30/2014   Calculation of Income for EPS: Net income attributable to the Company $ 17,610 $ 18,783 $ 21,332 $ 36,393 $ 38,373 Adjustments to Net Income Attributable to the Company to Arrive at Net Income Attributable to Common Shareholders (2)   (1,064 )   (1,005 )   (1,195 )   (2,069 )   (2,256 ) Net Income Attributable to the Common Shareholders 16,546 17,778 20,137 34,324 36,117 LESS: Amount allocated to participating securities   (33 )   (60 )   (132 )   (92 )   (255 ) Net Income Attributable to the Common Shareholders, after allocation to participating securities $ 16,513   $ 17,718   $ 20,005   $ 34,232   $ 35,862     End of Period Common Shares Outstanding 83,539,785 83,051,675 80,394,009   Weighted Average Shares Outstanding: Weighted average basic shares, including participating securities 81,074,380 80,983,916 79,195,082 81,029,398 79,151,765 LESS: Participating securities (295,818 ) (469,557 ) (756,446 ) (382,207 ) (859,044 ) PLUS: Dilutive potential common shares   2,259,919     2,079,966     1,859,789     2,181,638     1,866,121   Weighted Average Diluted Shares (3)   83,038,481     82,594,325     80,298,425     82,828,829     80,158,842     Diluted Total Earnings per Share $ 0.20 $ 0.21 $ 0.25 $ 0.41 $ 0.45             Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited) (In thousands, except per share data) FINANCIAL DATA:   6/30/2015     3/31/2015     6/30/2014   Book Value Per Common Share $ 8.14 $ 8.10 $ 7.65 Tangible Book Value Per Share (4) $ 5.89 $ 5.80 $ 6.05 Market Price Per Share $ 13.41 $ 12.15 $ 13.44   ASSETS UNDER MANAGEMENT AND ADVISORY: Wealth Management and Trust $ 9,028,000 $ 9,305,000 $ 4,716,000 Investment Managers 10,695,000 10,730,000 10,917,000 Wealth Advisory 9,941,000 10,012,000 9,760,000 Less: Inter-company Relationship   (22,000 )   (22,000 )   (23,000 ) Total Assets Under Management and Advisory $ 29,642,000   $ 30,025,000   $ 25,370,000     BPFH FINANCIAL RATIOS: Total Equity/ Total Assets 10.33 % 10.48 % 10.37 % Tangible Common Equity/ Tangible Assets (4) 7.17 % 7.22 % 7.77 % Tier I Common Equity/ Risk Weighted Assets (4) 9.70 % 9.76 % 9.99 % Allowance for Loan Losses/ Total Loans 1.43 % 1.46 % 1.46 % Allowance for Loan Losses/ Nonaccrual Loans 262 % 240 % 179 % Return on Average Assets - Three Months Ended (Annualized) 1.02 % 1.10 % 1.32 % Return on Average Common Equity - Three Months Ended (Annualized) (5) 9.91 % 10.94 % 13.53 % Return on Average Tangible Common Equity - Three Months Ended (Annualized) (5) 14.63 % 16.25 % 17.77 % Efficiency Ratio - Three Months Ended (6) 66.99 % 68.74 % 64.39 %                                           Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited) Average Balance Interest Income/Expense Average Yield/Rate (In thousands) Three Months Ended Three Months Ended Three Months Ended AVERAGE BALANCE SHEET:   06/30/15       03/31/15       06/30/14   06/30/15       03/31/15       06/30/14 06/30/15       03/31/15       06/30/14   AVERAGE ASSETS Interest-Earning Assets: Cash and Investments: Taxable investment securities $ 342,259 $ 320,373 $ 262,253 $ 1,075 $ 995 $ 730 1.26 % 1.24 % 1.12 % Non-taxable investment securities (7) 242,387 230,251 224,634 1,731 1,571 1,406 2.86 % 2.73 % 2.50 % Mortgage-backed securities 538,688 516,032 332,928 2,775 2,614 1,689 2.06 % 2.03 % 2.03 % Federal funds sold and other   90,616       147,999       187,722   282       234       253 1.23 %     0.64 %     0.62 % Total Cash and Investments   1,213,950       1,214,655       1,007,537   5,863       5,414       4,078 1.93 %     1.78 %     1.64 % Loans (8): Commercial and Construction (7) 2,874,547 2,851,801 2,856,603 30,013 31,366 33,397 4.13 % 4.40 % 4.62 % Residential 2,160,987 2,140,525 2,039,146 16,637 16,656 15,984 3.08 % 3.11 % 3.14 % Home Equity and Other Consumer   290,029       277,967       242,988   2,038       1,953       1,744 2.82 %     2.85 %     2.88 % Total Loans   5,325,563       5,270,293       5,138,737   48,688       49,975       51,125 3.63 %     3.80 %     3.95 % Total Earning Assets   6,539,513       6,484,948       6,146,274   54,551       55,389       55,203 3.32 %     3.42 %     3.57 % LESS: Allowance for Loan Losses 77,938 77,039 79,071 Cash and due From Banks (Non-Interest Bearing) 41,596 38,062 32,016 Other Assets   410,296       406,799       366,833 TOTAL AVERAGE ASSETS $ 6,913,467     $ 6,852,770     $ 6,466,052 AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY Interest-Bearing Liabilities: Interest-Bearing Deposits: Savings and NOW $ 589,123 $ 599,695 $ 601,104 $ 87 $ 103 $ 111 0.06 % 0.07 % 0.07 % Money Market 2,754,817 2,812,827 2,509,400 2,551 2,596 1,994 0.37 % 0.37 % 0.32 % Certificates of Deposit   597,617       604,404       615,325   1,184       1,193       1,270 0.79 %     0.80 %     0.83 % Total Interest-Bearing Deposits 3,941,557 4,016,926 3,725,829 3,822 3,892 3,375 0.39 % 0.39 % 0.36 % Junior Subordinated Debentures 106,363 106,363 106,363 967 956 965 3.60 % 3.59 % 3.59 % FHLB Borrowings and Other   576,403       470,392       527,418   2,046       1,944       2,374 1.40 %     1.65 %     1.78 % Total Interest-Bearing Liabilities   4,624,323       4,593,681       4,359,610   6,835       6,792       6,714 0.59 %     0.60 %     0.61 % Noninterest Bearing Demand Deposits 1,443,228 1,422,202 1,334,791 Payables and Other Liabilities   97,641       102,255       93,539 Total Average Liabilities 6,165,192 6,118,138 5,787,940 Redeemable Noncontrolling Interests 22,760 22,748 23,850 Average Shareholders' Equity   725,515       711,884       654,262 TOTAL AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY $ 6,913,467     $ 6,852,770     $ 6,466,052 Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) $ 47,716 $ 48,597 $ 48,489 LESS: FTE Adjustment (7)   2,631       2,525       2,221 Net Interest Income (GAAP Basis) $ 45,085     $ 46,072     $ 46,268 Interest Rate Spread 2.73 % 2.82 % 2.96 % Bank only Net Interest Margin 2.97 % 3.07 % 3.21 % Net Interest Margin 2.90 % 3.00 % 3.14 %                               Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited) Average Balance Interest Income/Expense Average Yield/Rate (In thousands) Six Months Ended Six Months Ended   Six Months Ended AVERAGE BALANCE SHEET:   06/30/15       06/30/14   06/30/15       06/30/14 06/30/15       06/30/14   AVERAGE ASSETS Interest-Earning Assets: Cash and Investments: Taxable investment securities $ 331,565 $ 258,470 $ 2,070 $ 1,366 1.25 % 1.06 % Non-taxable investment securities (7) 236,352 224,346 3,301 2,797 2.79 % 2.49 % Mortgage-backed securities 527,423 336,982 5,389 3,625 2.04 % 2.15 % Federal funds sold and other   118,749       195,632   516       599 0.93 %     0.62 % Total Cash and Investments   1,214,089       1,015,430   11,276       8,387 1.87 %     1.66 % Loans (8): Commercial and Construction (7) 2,863,237 2,845,103 61,379 64,317 4.26 % 4.50 % Residential 2,150,813 2,037,200 33,292 32,154 3.10 % 3.16 % Home Equity and Other Consumer   284,031       244,285   3,992       3,549 2.83 %     2.93 % Total Loans   5,298,081       5,126,588   98,663       100,020 3.71 %     3.89 % Total Earning Assets   6,512,170       6,142,018   109,939       108,407 3.37 %     3.52 % LESS: Allowance for Loan Losses 77,491 78,155 Cash and due From Banks (Non-Interest Bearing) 39,894 36,835 Other Assets   411,724       367,856 TOTAL AVERAGE ASSETS $ 6,886,297     $ 6,468,554 AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY Interest-Bearing Liabilities: Interest-Bearing Deposits: Savings and NOW $ 594,380 $ 573,691 $ 191 $ 209 0.06 % 0.07 % Money Market 2,783,569 2,499,981 5,146 3,839 0.37 % 0.31 % Certificates of Deposit   600,992       619,884   2,377       2,543 0.80 %     0.83 % Total Interest-Bearing Deposits 3,978,941 3,693,556 7,714 6,591 0.39 % 0.36 % Junior Subordinated Debentures 106,363 106,363 1,923 1,920 3.60 % 3.59 % FHLB Borrowings and Other   523,691       517,198   3,990       4,717 1.52 %     1.81 % Total Interest-Bearing Liabilities   4,608,995       4,317,117   13,627       13,228 0.59 %     0.61 % Noninterest Bearing Demand Deposits 1,434,460 1,380,285 Payables and Other Liabilities   100,529       100,221 Total Average Liabilities 6,143,984 5,797,623 Redeemable Noncontrolling Interests 22,205 23,285 Average Shareholders' Equity   720,108       647,646 TOTAL AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY $ 6,886,297     $ 6,468,554 Net Interest Income - on a Fully Taxable Equivalent Basis (FTE) $ 96,312 $ 95,179 LESS: FTE Adjustment (7)   5,155       4,389 Net Interest Income (GAAP Basis) $ 91,157     $ 90,790 Interest Rate Spread 2.78 % 2.91 % Bank only Net Interest Margin 3.02 % 3.16 % Net Interest Margin 2.95 % 3.09 %                 Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited) (In thousands) LOAN DATA (9):   6/30/2015   3/31/2015   6/30/2014 Commercial and Industrial Loans: New England $ 793,897 $ 786,334 $ 715,814 San Francisco Bay 121,477 122,418 119,554 Southern California   87,038   58,086   47,095 Total Commercial and Industrial Loans $ 1,002,412 $ 966,838 $ 882,463 Commercial Real Estate Loans: New England $ 728,820 $ 684,395 $ 717,166 San Francisco Bay 629,258 601,305 626,744 Southern California   469,337   477,341   436,991 Total Commercial Real Estate Loans $ 1,827,415 $ 1,763,041 $ 1,780,901 Construction and Land Loans: New England $ 102,068 $ 91,764 $ 81,453 San Francisco Bay 45,221 31,012 58,042 Southern California   13,637   14,318   10,927 Total Construction and Land Loans $ 160,926 $ 137,094 $ 150,422 Residential Loans: New England $ 1,316,705 $ 1,295,955 $ 1,231,902 San Francisco Bay 466,155 459,310 452,864 Southern California   392,648   387,771   354,306 Total Residential Loans $ 2,175,508 $ 2,143,036 $ 2,039,072 Home Equity Loans: New England $ 85,057 $ 82,716 $ 81,465 San Francisco Bay 30,013 29,835 27,804 Southern California   5,395   3,639   3,235 Total Home Equity Loans $ 120,465 $ 116,190 $ 112,504 Other Consumer Loans: New England $ 164,522 $ 156,042 $ 128,698 San Francisco Bay 6,793 7,245 6,917 Southern California   5,209   5,527   5,074 Total Other Consumer Loans $ 176,524 $ 168,814 $ 140,689 Total Loans: New England $ 3,191,069 $ 3,097,206 $ 2,956,498 San Francisco Bay 1,298,917 1,251,125 1,291,925 Southern California   973,264   946,682   857,628 Total Loans $ 5,463,250 $ 5,295,013 $ 5,106,051               Boston Private Financial Holdings, Inc. Selected Financial Data (Unaudited) (In thousands) CREDIT QUALITY (9):   6/30/2015   3/31/2015   6/30/2014   Special Mention Loans: New England $ 53,626 $ 47,635 $ 55,882 San Francisco Bay 17,150 16,350 24,264 Southern California   5,659   22,161   26,455   Total Special Mention Loans $ 76,435 $ 86,146 $ 106,601   Accruing Substandard Loans (10): New England $ 16,666 $ 18,534 $ 12,849 San Francisco Bay 20,396 21,996 25,838 Southern California   24,554   5,472   1,306   Total Accruing Substandard Loans $ 61,616 $ 46,002 $ 39,993   Nonaccruing Loans: New England $ 17,943 $ 18,271 $ 19,818 San Francisco Bay 9,163 9,347 16,487 Southern California   2,785   4,515   5,315   Total Nonaccruing Loans $ 29,891 $ 32,133 $ 41,620   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 $ 3,873 $ 18,236 $ 3,547 San Francisco Bay 110 3,398 487 Southern California   356   3,760   1,950   Total Loans 30-89 Days Past Due and Accruing $ 4,339 $ 25,394 $ 5,984   Loans (Charged-off)/ Recovered, Net for the Three Months Ended: New England $ 106 $ 890 $ (622 ) San Francisco Bay 833 2,738 1,959 Southern California   49   297   1,605   Total Net Loans (Charged-off)/ Recovered $ 988 $ 3,925 $ 2,942   Loans (Charged-off)/ Recovered, Net for the Six Months Ended: New England $ 996 $ (82 ) San Francisco Bay 3,571 2,599 Southern California   346   1,859   Total Net Loans (Charged-off)/ Recovered $ 4,913 $ 4,376     Boston Private Financial Holdings, Inc.               Selected Financial Data (Unaudited)   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)   6/30/2015     3/31/2015     6/30/2014   Total Balance Sheet Assets $ 7,045,939 $ 6,869,772 $ 6,388,823 LESS: Goodwill and Intangible Assets, net   (188,543 )   (190,198 )   (128,686 ) Tangible Assets (non-GAAP) $ 6,857,396 $ 6,679,574 $ 6,260,137 Total Shareholders' Equity $ 728,085 $ 720,059 $ 662,651 LESS: Series D Preferred Stock (non-convertible) (47,753 ) (47,753 ) (47,753 ) LESS: Goodwill and Intangible Assets, net   (188,543 )   (190,198 )   (128,686 ) Total adjusting items   (236,296 )   (237,951 )   (176,439 ) Tangible Common Equity (non-GAAP) $ 491,789   $ 482,108   $ 486,212   Total Equity/Total Assets 10.33 % 10.48 % 10.37 % Tangible Common Equity/Tangible Assets (non-GAAP) 7.17 % 7.22 % 7.77 %   Total Risk Weighted Assets * $ 5,312,412 $ 5,159,205 $ 4,923,431 Tier I Common Equity * $ 515,546 $ 503,323 $ 491,982 Tier I Common Equity/ Risk Weighted Assets 9.70 % 9.76 % 9.99 %   End of Period Shares Outstanding 83,540 83,052 80,394   Book Value Per Common Share $ 8.14 $ 8.10 $ 7.65 Tangible Book Value Per Share (non-GAAP) $ 5.89 $ 5.80 $ 6.05 * Risk Weighted Assets and Tier I Common Equity for June 30, 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 annualizes income data based on the number of days in the period presented and a 365 day year. The Company calculates Average Common Equity by adjusting Average Equity to exclude Average Preferred Equity. 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 Six months ended (In thousands)   6/30/2015     3/31/2015     6/30/2014     6/30/2015     6/30/2014   Total average shareholders' equity $ 725,515 $ 711,884 $ 654,262 $ 720,108 $ 647,646 LESS: Average Series D preferred stock (non-convertible)   (47,753 )   (47,753 )   (47,753 )   (47,753 )   (47,753 ) Average common equity (non-GAAP)   677,762     664,131     606,509     672,355     599,893   LESS: Average goodwill and intangible assets, net   (189,420 )   (191,053 )   (129,216 )   (190,233 )   (129,742 ) Total adjusting items   (189,420 )   (191,053 )   (129,216 )   (190,233 )   (129,742 ) Average Tangible Common Equity (non-GAAP) $ 488,342   $ 473,078   $ 477,293   $ 482,122   $ 470,151     Net income attributable to the Company $ 17,610 $ 18,783 $ 21,332 $ 36,393 $ 38,373 LESS: Dividends on Series D preferred stock   (869 )   (869 )   (869 )   (1,738 )   (1,738 ) Common net income (non-GAAP) 16,741 17,914 20,463 34,655 36,635 ADD: Amortization of intangibles, net of tax (35%)   1,076     1,041     679     2,117     1,364   Tangible common net income (non-GAAP) $ 17,817   $ 18,955   $ 21,142   $ 36,772   $ 37,999     Return on Average Equity - (Annualized) 9.74 % 10.70 % 13.08 % 10.19 % 11.95 % Return on Average Common Equity - (Annualized) (non-GAAP) 9.91 % 10.94 % 13.53 % 10.39 % 12.32 % Return on Average Tangible Common Equity - (Annualized) (non-GAAP) 14.63 % 16.25 % 17.77 % 15.38 % 16.30 %   (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 Six months ended (In thousands)   6/30/2015     3/31/2015     6/30/2014     6/30/2015     6/30/2014   Income before income taxes (GAAP) $ 25,327 $ 26,490 $ 31,240 $ 51,817 $ 54,727 ADD BACK: Provision/ (credit) for loan losses   —     (2,500 )   (5,000 )   (2,500 )   (6,200 ) Pre-tax, pre-provision earnings (non-GAAP) $ 25,327 $ 23,990 $ 26,240 $ 49,317 $ 48,527   Total operating expense (GAAP) $ 62,418 $ 63,427 $ 54,402 $ 125,845 $ 109,370 Less: Amortization of intangibles 1,655 1,602 1,045 3,257 2,098 Less: Restructuring   220     —     —     220     —   Total operating expense (excluding amortization of intangibles and restructuring) (non-GAAP) $ 60,543 $ 61,825 $ 53,357 $ 122,368 $ 107,272   Net interest income $ 45,085 $ 46,072 $ 46,268 $ 91,157 $ 90,790 Total core fees and income 40,347 40,160 34,147 80,507 65,811 Total other income 2,313 1,185 227 3,498 1,296 FTE income   2,631     2,525     2,221     5,155     4,389   Total revenue (FTE basis) $ 90,376 $ 89,942 $ 82,863 $ 180,317 $ 162,286 Efficiency Ratio, before deduction of intangible amortization (GAAP) 71.14 % 72.56 % 67.46 % 71.84 % 69.27 % Efficiency Ratio, FTE Basis (non-GAAP) 66.99 % 68.74 % 64.39 % 67.86 % 66.10 %   (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.   (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 June 30, 2015 and March 31, 2015 the Company had no loans that were more than 90 days past due but still on accrual status. At June 30, 2014, the Company had two loans totaling $0.1 million that were more than 90 days past due but still on accrual status. These loans originated in the New England region.

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