Third Quarter Highlights:
- Revenue Growth: Total Revenue
increased 9% year-over-year and was down 2% on a linked quarter
basis at $85.9 million. Year-over-year, Net Interest Income and
Core Fees were up $1.7 million and $5.9 million, respectively. On a
linked quarter basis, a $1.4 million increase in Net Interest
Income was offset by a $0.9 million decline in Core Fees and a $2.3
million reduction in Other Income.
- Deposit and Loan Growth: Average
Total Deposits increased 10% year-over-year to $5.7 billion. On a
linked quarter basis, Average Total Deposits increased 7%, while
Average Total Loans grew 7% year-over-year and 4% linked quarter.
The Average Loan-to-Deposit ratio was 96% at the end of the third
quarter, down from 98% in the third quarter of 2014.
- Assets Under Management: Total
Assets Under Management/Advisory (“AUM”) increased 11%
year-over-year to $27.4 billion, reflecting the acquisition of
Banyan Partners, partially offset by negative net flows and market
action. On a linked quarter basis, AUM were down 8% due to negative
net flows and market action.
- Provision for Loan Loss: The
Company recorded a $2.6 million provision expense driven by strong
commercial loan growth and net charge-offs of $1.6 million.
Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the
“Company” or “BPFH”) today reported third quarter 2015 GAAP Net
Income Attributable to the Company of $13.5 million, compared to
$17.6 million for the second quarter of 2015. Third quarter 2015
diluted earnings per share were $0.16, compared to $0.20 in the
second quarter of 2015, and $0.22 in the third quarter of 2014.
“Performance was mixed across our business segments in the third
quarter," said Clayton G. Deutsch, CEO. "The Private Bank continued
to generate strong growth within our key client segments across all
of our regions while AUM was lower linked quarter due to the impact
of employee transitions at Boston Private Wealth, sector-based
headwinds affecting the Investment Managers and heightened market
volatility, which weighed on all segments of our Wealth Management
business."
Core Fees and Income
Core Fees and Income increased 18% year-over-year to $39.4
million. The increase reflects revenue from Banyan Partners, which
was acquired in October 2014. On a linked quarter basis, Core Fees
and Income decreased 2% reflecting lower levels of Assets Under
Management.
Total Assets Under Management decreased to $27.4 billion in the
third quarter, down 8% from $29.6 billion in the second quarter of
2015. AUM increased 11% year-over-year. The year-over-year increase
includes AUM related to the Banyan Partners acquisition, partially
offset by negative market action and net outflows. The Company
experienced third quarter 2015 AUM net outflows of $751 million, as
compared to second quarter 2015 AUM net outflows of $193 million.
AUM net outflows for the third quarter 2014 were $211 million. AUM
net outflows for the year to date 2015 were $1.3 billion as
compared to net outflows of $194 million for the same period of
2014.
Net Interest Income
Net Interest Income for the third quarter was $46.5 million, up
3% from $45.1 million for the second quarter of 2015. On a
year-over-year basis, Net Interest Income increased 4% from $44.8
million. The current quarter includes $0.3 million of interest
recovered on previous non-accrual loans while the second quarter of
2015 and the third quarter of 2014 include recoveries of $0.1
million and $0.8 million, respectively. Excluding interest
recovered on previous non-accrual loans, Net Interest Income
increased 3% linked quarter and 6% year-over-year.
Net Interest Margin was 2.84% for the third quarter, down six
basis points from 2.90% for the second quarter of 2015. Net
Interest Margin was down nine basis points from 2.93% in the third
quarter of 2014. Excluding interest recovered on previous
nonaccrual loans, Net Interest Margin was down eight basis points
linked quarter and down six basis points year-over-year.
Other Income
Other income was a loss of $37,000 in the third quarter of 2015
compared to $2.3 million in the second quarter of 2015. The linked
quarter decrease in other income reflects the impact of
mark-to-market adjustments on loan swaps, a lower market value
adjustment related to the earnout of the Banyan Partners
acquisition, and lower gains on partnership investments.
Total Operating Expenses
Total Operating Expenses for the third quarter of 2015 were
$61.9 million, down 1% from $62.4 million for the second quarter of
2015. On a year-over-year basis, Total Operating Expenses increased
15% from $54.0 million, primarily due to the impact of the Banyan
Partners acquisition. The third and second quarters of 2015 include
Restructuring Expense of $1.5 million and $0.2 million,
respectively. Excluding Restructuring Expense, Total Operating
Expenses decreased 3% linked quarter and increased 12%
year-over-year.
Provision and Asset Quality
The Company recorded a provision expense of $2.6 million for the
third quarter of 2015, compared to no provision for the second
quarter of 2015. The provision expense was driven by strong
commercial loan growth and $1.6 million of net charge-offs.
Criticized Loans decreased 4% on a linked quarter basis and 10%
year-over-year. Nonaccrual Loans (“Nonaccruals”) increased 3% to
$30.7 million on a linked quarter basis. On a year-over-year basis,
Nonaccruals decreased 8% from $33.5 million. As a percentage of
Total Loans, Nonaccruals were 55 basis points at September 30,
2015, flat from June 30, 2015, and down 9 basis points from
September 30, 2014.
Additional credit metrics are listed below on a linked quarter
and year-over-year basis:
(In millions)
September 30, 2015 June 30, 2015
September 30, 2014 Total Criticized Loans $ 160.9 $
167.3 $ 179.5
Total Loans 30-89 Days Past Due and
Accruing (12)
$ 7.0 $ 4.3 $ 3.6 Total Net Loans (Charged-off)/ Recovered $ (1.6 )
$ 1.0 $ 3.3 Allowance for Loan Losses/ Total Loans 1.41 % 1.43 %
1.44 %
Capital Ratios
Capital ratios are listed below on a linked quarter and
year-over-year basis:
September 30,
2015 June 30, 2015 September 30,
2014 BPFH Ratios: Total Risk-Based Capital * 13.8 %
13.9 % 14.8 % Tier I Risk-Based Capital * 12.6 % 12.7 % 13.5 % Tier
I Leverage Capital * 9.6 % 9.9 % 10.3 % TCE/TA 7.2 % 7.2 % 7.6 %
Tier I Common Equity/ Risk Weighted Assets * 9.7 % 9.8 % 10.1 %
*September 30, 2015 information is presented based on estimated
data.
Dividend PaymentsConcurrent with
the release of third 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 November 6, 2015, and the payment date is November 20, 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 November 16, 2015, and the payment date is
December 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; total operating expense excluding
restructuring; the efficiency ratio (FTE basis); and Net Interest
Income and Net Interest Margin excluding interest recovered on
previous non-accrual loans; 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 Thursday, October 22,
2015, to discuss the financial results, business highlights and
outlook. To access the call:
Dial In #: (888) 317-6003Elite Entry Number: 0566270
Replay Information:Available from October 22, 2015 at 12 noon
until October 29, 2015Dial In #: (877) 344-7529Conference Number:
10073575
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 over $27 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 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; 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)
9/30/2015 6/30/2015
9/30/2014 Assets: Cash and cash
equivalents
$ 43,640 $ 63,099 $ 308,912 Investment
securities available for sale
1,023,255 992,007 724,638
Investment securities held to maturity
121,679 128,258
132,467 Stock in Federal Home Loan Banks
35,518 35,668
32,534 Loans held for sale
7,685 19,512 4,943 Total loans
5,607,472 5,463,250 5,213,491 Less: Allowance for loan
losses
79,246 78,251 75,283
Net loans
5,528,226 5,384,999 5,138,208 Other real
estate owned (“OREO”)
776 929 1,074 Premises and equipment,
net
30,841 31,337 29,473 Goodwill
152,082 152,082
110,180 Intangible assets, net
34,806 36,461 17,475 Fees
receivable
11,308 12,486 11,439 Accrued interest receivable
17,039 16,383 15,018 Deferred income taxes, net
45,438 47,388 48,443 Other assets
128,235
125,330 114,281 Total assets
$
7,180,528 $ 7,045,939 $ 6,689,085
Liabilities: Deposits
$ 5,647,859 $ 5,429,028
$ 5,334,881 Securities sold under agreements to repurchase
35,698 26,660 73,422 Federal funds purchased
60,000
100,000 — Federal Home Loan Bank borrowings
461,899 541,529
371,367 Junior subordinated debentures
106,363 106,363
106,363 Other liabilities
109,695 95,074
106,024 Total liabilities
6,421,514 6,298,654 5,992,057
Redeemable Noncontrolling Interests 18,257 19,200
21,397
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: 83,645,364 shares at September 30, 2015;
83,539,785 shares at June 30, 2015; 80,464,390 shares at September
30, 2014
83,645 83,540 80,464 Additional paid-in capital
598,968 597,424 598,036 Retained earnings/ (accumulated
deficit)
5,960 (1,003 ) (49,573 ) Accumulated other
comprehensive income/ (loss)
1,287 (2,525 )
(1,312 ) Total Company’s shareholders’ equity
737,613 725,189 675,368
Noncontrolling interests
3,144 2,896
263 Total shareholders’ equity
740,757
728,085 675,631 Total liabilities,
redeemable noncontrolling interests and shareholders’ equity
$ 7,180,528 $ 7,045,939 $ 6,689,085
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited) Three Months
Ended Nine Months Ended (In thousands, except share and
per share data)
9/30/2015
6/30/2015 9/30/2014
9/30/2015 9/30/2014 Interest and
dividend income: Loans
$ 48,058 $ 46,663 $ 47,931
$ 142,721 $ 144,541 Taxable investment securities
1,094 1,075 876
3,164 2,242 Non-taxable investment
securities
1,264 1,125 942
3,410 2,760
Mortgage-backed securities
2,681 2,775 1,605
8,070
5,230 Federal funds sold and other
425
282 379
941 978 Total
interest and dividend income
53,522
51,920 51,733
158,306 155,751
Interest expense: Deposits
4,007 3,822 3,603
11,721 10,194 Federal Home Loan Bank borrowings
2,051
2,017 2,354
5,999 7,039 Junior subordinated debentures
979 967 976
2,902 2,896 Repurchase agreements and
other short-term borrowings
12 29
17
54 49 Total interest
expense
7,049 6,835 6,950
20,676 20,178 Net interest income
46,473 45,085 44,783
137,630 135,573 Provision/
(credit) for loan losses
2,600 —
(2,600 )
100 (8,800 ) Net interest income
after provision/ (credit) for loan losses
43,873
45,085 47,383
137,530
144,373
Fees and other income: Investment
management fees
11,360 11,731 12,011
34,805 35,226
Wealth advisory fees
12,515 12,678 12,278
37,868
35,730 Wealth management and trust fees
12,424 13,545 7,251
39,527 21,255 Other banking fee income
2,780 2,031
1,835
6,721 5,192 Gain on sale of loans, net
364 362 183
1,029
1,966
Total core fees and income
39,443 40,347 33,558
119,950 99,369 Gain/ (loss) on sale of
investments, net
5 8 8
21 9 Gain/ (loss) on OREO, net
35 — 150
124 988 Other
(37 )
2,305 53
3,356 510
Total other income
3 2,313 211
3,501 1,507
Operating
expense: Salaries and employee benefits
37,938 39,816
35,855
119,881 106,767 Occupancy and equipment
9,064
9,095 7,346
27,194 22,492 Professional services
2,848
3,214 2,796
9,083 9,165 Marketing and business development
2,008 1,706 1,408
5,062 5,564 Contract services and
data processing
1,600 1,495 1,404
4,532 4,289
Amortization of intangibles
1,655 1,655 1,031
4,912
3,129 FDIC insurance
916 963 857
2,890 2,607
Restructuring
1,504 220 —
1,724 — Other
4,396 4,254 3,302
12,496 9,356 Total operating expense
61,929 62,418 53,999
187,774 163,369 Income before income taxes
21,390 25,327 27,153
73,207 81,880 Income tax expense
8,182 8,000 8,993
24,754 26,464 Net income from continuing
operations
13,208 17,327 18,160
48,453 55,416 Net
income from discontinued operations (1)
1,316
1,546 1,272
4,956 4,650
Net income before attribution to noncontrolling interests
14,524 18,873 19,432
53,409 60,066 Less: Net income
attributable to noncontrolling interests
994
1,263 1,167
3,486 3,428
Net income attributable to the Company $
13,530 $ 17,610 $ 18,265
$
49,923 $ 56,638
Boston Private
Financial Holdings, Inc. Selected Financial Data
(Unaudited) (In thousands, except share and per share data)
Three Months Ended Nine Months Ended PER SHARE
DATA: 9/30/2015 6/30/2015
9/30/2014 9/30/2015
9/30/2014 Calculation of Income for
EPS: Net income attributable to the Company
$
13,530 $ 17,610 $ 18,265
$ 49,923 $ 56,638
Adjustments to Net Income Attributable to the Company to Arrive at
Net Income Attributable to Common Shareholders (2)
154 (1,064 ) (796 )
(1,915 ) (3,052 )
Net Income Attributable
to the Common Shareholders 13,684 16,546 17,469
48,008 53,586 LESS: Amount allocated to participating
securities
(8 ) (33 ) (75 )
(91 ) (328 )
Net Income Attributable
to the Common Shareholders, after allocation to participating
securities $ 13,676 $ 16,513 $
17,394
$ 47,917 $ 53,258
End of Period Common Shares Outstanding 83,645,364
83,539,785 80,464,390
Weighted Average Shares
Outstanding: Weighted average basic shares, including
participating securities
81,204,808 81,074,380 79,222,590
81,088,511 79,175,634 LESS: Participating securities
(100,870 ) (295,818 ) (535,528 )
(287,398
) (750,021 ) PLUS: Dilutive potential common shares
2,265,257 2,259,919 1,923,896
2,216,808 1,899,015
Weighted Average Diluted Shares (3) 83,369,195
83,038,481 80,610,958
83,017,921 80,324,628
Diluted
Total Earnings per Share $ 0.16 $ 0.20 $ 0.22
$ 0.58 $ 0.66
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited) (In thousands,
except per share data)
FINANCIAL DATA:
9/30/2015 6/30/2015
9/30/2014 Book Value Per Common Share
$
8.29 $ 8.14 $ 7.80 Tangible Book Value Per Share (4)
$ 6.05 $ 5.89 $ 6.22 Market Price Per Share
$
11.70 $ 13.41 $ 12.39
ASSETS UNDER MANAGEMENT AND
ADVISORY: Wealth Management and Trust
$ 8,060,000
$ 9,028,000 $ 4,701,000 Investment Managers
9,830,000
10,695,000 10,376,000 Wealth Advisory
9,537,000 9,941,000
9,731,000 Less: Inter-company Relationship
(21,000
) (22,000 ) (22,000 ) Total Assets Under
Management and Advisory
$ 27,406,000 $
29,642,000 $ 24,786,000
BPFH FINANCIAL
RATIOS: Total Equity/ Total Assets
10.32 % 10.33
% 10.10 % Tangible Common Equity/ Tangible Assets (4)
7.24
% 7.17 % 7.62 % Tier I Common Equity/ Risk Weighted Assets
(4)
9.73 % 9.77 % 10.11 % Allowance for Loan Losses/
Total Loans
1.41 % 1.43 % 1.44 % Allowance for Loan
Losses/ Nonaccrual Loans
258 % 262 % 224 % Return on
Average Assets - Three Months Ended (Annualized)
0.75
% 1.02 % 1.10 % Return on Average Common Equity - Three
Months Ended (Annualized) (5)
7.32 % 9.91 % 11.10 %
Return on Average Tangible Common Equity - Three Months Ended
(Annualized) (5)
10.93 % 14.63 % 14.53 % Efficiency
Ratio - Three Months Ended (6)
66.18 % 66.99 % 65.47
%
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: 9/30/15
6/30/15 9/30/14
9/30/15 6/30/15
9/30/14 9/30/15
6/30/15 9/30/14
AVERAGE ASSETS Interest-Earning Assets: Cash and
Investments: Taxable investment securities
$ 340,170
$ 342,259 $ 295,395
$ 1,094 $ 1,075 $ 876
1.29
% 1.26 % 1.19 % Non-taxable investment securities (8)
249,854 242,387 223,499
1,945 1,731 1,449
3.12
% 2.86 % 2.59 % Mortgage-backed securities
526,408
538,688 325,913
2,681 2,775 1,605
2.04 % 2.06
% 1.97 % Federal funds sold and other
213,372
90,616 359,899
425
282 379
0.78
% 1.23 % 0.42 % Total Cash and
Investments
1,329,804 1,213,950
1,204,706
6,145
5,863 4,309
1.85 %
1.93 % 1.43 % Loans (9): Commercial and
Construction (8)
3,043,739 2,874,547 2,841,869
31,195
30,013 31,657
4.01 % 4.13 % 4.36 % Residential
2,208,004 2,160,987 2,071,326
17,083 16,637 16,384
3.09 % 3.08 % 3.16 % Home Equity and Other Consumer
287,102 290,029
244,690
1,982 2,038
1,733
2.74 % 2.82
% 2.81 % Total Loans
5,538,845
5,325,563 5,157,885
50,260 48,688
49,774
3.58 % 3.63 % 3.81
% Total Earning Assets
6,868,649
6,539,513 6,362,591
56,405
54,551 54,083
3.24
% 3.32 % 3.36 % LESS: Allowance
for Loan Losses
78,263 77,938 76,099 Cash and due From Banks
(Non-Interest Bearing)
38,631 41,596 42,080 Other Assets
404,945 410,296
341,953
TOTAL AVERAGE ASSETS $
7,233,962 $ 6,913,467 $
6,670,525
AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING
INTERESTS, AND SHAREHOLDERS' EQUITY Interest-Bearing
Liabilities: Interest-Bearing Deposits: Savings and NOW
$
581,041 $ 589,123 $ 583,547
$ 103 $ 87 $ 110
0.07 % 0.06 % 0.07 % Money Market
2,944,893
2,754,817 2,640,762
2,731 2,551 2,273
0.37 %
0.37 % 0.34 % Certificates of Deposit
593,466
597,617 607,940
1,173 1,184 1,220
0.78 % 0.79 % 0.80 %
Total Interest-Bearing Deposits
4,119,400 3,941,557
3,832,249
4,007 3,822 3,603
0.39 % 0.39 % 0.37
% Junior Subordinated Debentures
106,363 106,363 106,363
979 967 976
3.60 % 3.60 % 3.59 % FHLB
Borrowings and Other
526,697
576,403 534,062
2,063
2,046 2,371
1.53 %
1.40 % 1.74 % Total Interest-Bearing
Liabilities
4,752,460 4,624,323
4,472,674
7,049
6,835 6,950
0.59 %
0.59 % 0.61 % Noninterest Bearing Demand
Deposits
1,623,524 1,443,228 1,404,875 Payables and Other
Liabilities
102,076 97,641
100,106 Total Average Liabilities
6,478,060 6,165,192 5,977,655 Redeemable Noncontrolling
Interests
22,020 22,760 23,584 Average Shareholders' Equity
733,882 725,515
669,286
TOTAL AVERAGE LIABILITIES, REDEEMABLE
NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY $
7,233,962 $ 6,913,467 $
6,670,525 Net Interest Income - on a Fully Taxable Equivalent Basis
(FTE)
$ 49,356 $ 47,716 $ 47,133 LESS: FTE Adjustment
(8)
2,883 2,631
2,350 Net Interest Income (GAAP Basis)
$
46,473 $ 45,085 $ 44,783
Interest Rate Spread
2.65 % 2.73 % 2.75 % Bank only
Net Interest Margin
2.91 % 2.97 % 3.00 % Net Interest
Margin
2.84 % 2.90 % 2.93 %
Boston Private Financial Holdings,
Inc. Selected Financial Data (Unaudited)
Average Balance Interest Income/Expense Average
Yield/Rate (In thousands)
Nine Months Ended Nine
Months Ended Nine Months Ended AVERAGE BALANCE
SHEET: 9/30/15
9/30/14 9/30/15
9/30/14 9/30/15 9/30/14
AVERAGE ASSETS Interest-Earning Assets: Cash and
Investments: Taxable investment securities
$ 334,473
$ 270,914
$ 3,164 $ 2,242
1.27 % 1.10 %
Non-taxable investment securities (8)
240,902 224,061
5,246 4,246
2.90 % 2.53 % Mortgage-backed
securities
527,081 333,252
8,070 5,230
2.04
% 2.09 % Federal funds sold and other
150,611
250,942
941
978
0.90 % 0.52 % Total Cash and
Investments
1,253,067 1,079,169
17,421 12,696
1.86
% 1.57 % Loans (9): Commercial and
Construction (8)
2,924,065 2,844,013
92,575 95,975
4.17 % 4.45 % Residential
2,170,086 2,048,700
50,375 48,537
3.10 % 3.16 % Home Equity and
Other Consumer
285,066 244,421
5,973 5,281
2.80 %
2.89 % Total Loans
5,379,217
5,137,134
148,923
149,793
3.67 % 3.86 % Total Earning
Assets
6,632,284 6,216,303
166,344 162,489
3.33
% 3.46 % LESS: Allowance for Loan Losses
77,751 77,462 Cash and due From Banks (Non-Interest Bearing)
39,547 38,628 Other Assets
409,265
357,896
TOTAL AVERAGE ASSETS $
7,003,345 $ 6,535,365
AVERAGE LIABILITIES,
REDEEMABLE NONCONTROLLING INTERESTS, AND SHAREHOLDERS' EQUITY
Interest-Bearing Liabilities: Interest-Bearing Deposits: Savings
and NOW
$ 589,885 $ 577,012
$ 294 $ 319
0.07 % 0.07 % Money Market
2,837,614 2,547,039
7,877 6,112
0.37 % 0.32 % Certificates of
Deposit
598,456 615,903
3,550 3,763
0.79 %
0.82 % Total Interest-Bearing Deposits
4,025,955
3,739,954
11,721 10,194
0.39 % 0.36 % Junior
Subordinated Debentures
106,363 106,363
2,902 2,896
3.60 % 3.59 % FHLB Borrowings and Other
524,704 522,881
6,053
7,088
1.52 % 1.79
% Total Interest-Bearing Liabilities
4,657,022
4,369,198
20,676
20,178
0.59 % 0.61 % Noninterest
Bearing Demand Deposits
1,498,105 1,385,966 Payables and
Other Liabilities
101,222
104,556 Total Average Liabilities
6,256,349 5,859,720
Redeemable Noncontrolling Interests
22,157 20,795 Average
Shareholders' Equity
724,839
654,850
TOTAL AVERAGE LIABILITIES, REDEEMABLE NONCONTROLLING
INTERESTS, AND SHAREHOLDERS' EQUITY $ 7,003,345
$ 6,535,365 Net Interest Income - on a Fully Taxable
Equivalent Basis (FTE)
$ 145,668 $ 142,311 LESS: FTE
Adjustment (8)
8,038 6,738 Net
Interest Income (GAAP Basis)
$ 137,630
$ 135,573 Interest Rate Spread
2.74 % 2.85 % Bank
only Net Interest Margin
2.98 % 3.10 % Net Interest
Margin
2.91 % 3.03 %
Boston Private Financial Holdings, Inc.
Selected Financial Data (Unaudited) (In thousands)
LOAN DATA (10): 9/30/2015
6/30/2015 9/30/2014 Commercial and Industrial
Loans: New England
$ 827,301 $ 793,897 $ 758,728 San
Francisco Bay
125,093 121,477 124,993 Southern California
84,428 87,038 47,107 Total Commercial
and Industrial Loans
$ 1,036,822 $ 1,002,412 $
930,828 Commercial Real Estate Loans: New England
$
766,253 $ 728,820 $ 712,464 San Francisco Bay
625,145
629,258 628,149 Southern California
512,250
469,337 467,428 Total Commercial Real Estate Loans
$
1,903,648 $ 1,827,415 $ 1,808,041 Construction and Land
Loans: New England
$ 111,280 $ 102,068 $ 82,492 San
Francisco Bay
35,627 45,221 35,668 Southern California
23,504 13,637 12,385 Total Construction
and Land Loans
$ 170,411 $ 160,926 $ 130,545
Residential Loans: New England
$ 1,356,057 $
1,316,705 $ 1,273,544 San Francisco Bay
462,630 466,155
456,355 Southern California
393,199 392,648
367,628 Total Residential Loans
$ 2,211,886 $
2,175,508 $ 2,097,527 Home Equity Loans: New England
$
81,796 $ 85,057 $ 76,142 San Francisco Bay
27,076
30,013 30,060 Southern California
5,915 5,395
3,025 Total Home Equity Loans
$ 114,787 $
120,465 $ 109,227 Other Consumer Loans: New England
$
161,186 $ 164,522 $ 124,449 San Francisco Bay
5,782
6,793 6,738 Southern California
2,950 5,209
6,136 Total Other Consumer Loans
$ 169,918 $
176,524 $ 137,323 Total Loans: New England
$
3,303,873 $ 3,191,069 $ 3,027,819 San Francisco Bay
1,281,353 1,298,917 1,281,963 Southern California
1,022,246 973,264 903,709 Total Loans
$
5,607,472 $ 5,463,250 $ 5,213,491
Boston Private
Financial Holdings, Inc. Selected Financial Data
(Unaudited) (In thousands)
CREDIT QUALITY (10):
9/30/2015
6/30/2015 9/30/2014 Special
Mention Loans: New England
$ 46,924 $ 53,626 $ 45,788
San Francisco Bay
11,087 17,150 24,623 Southern California
12,718 5,659 32,614 Total
Special Mention Loans
$ 70,729 $ 76,435 $
103,025 Accruing Substandard Loans (11): New England
$
16,996 $ 16,666 $ 13,589 San Francisco Bay
20,108
20,396 24,267 Southern California
22,405
24,554 5,331 Total Accruing Substandard Loans
$ 59,509 $ 61,616 $ 43,187 Nonaccruing Loans:
New England
$ 22,815 $ 17,943 $ 16,205 San Francisco
Bay
5,096 9,163 15,133 Southern California
2,816 2,785 2,203 Total Nonaccruing
Loans
$ 30,727 $ 29,891 $ 33,541 Other Real
Estate Owned: New England
$ 191 $ 344 $ 489 San
Francisco Bay
585 585 585 Southern California
— — — Total Other Real Estate Owned
$ 776 $ 929 $ 1,074 Loans 30-89 Days Past Due
and Accruing (12): New England
$ 6,733 $ 3,873 $
1,825 San Francisco Bay
14 110 653 Southern California
227 356 1,145 Total Loans 30-89
Days Past Due and Accruing
$ 6,974 $ 4,339 $
3,623 Loans (Charged-off)/ Recovered, Net for the Three Months
Ended: New England
$ (1,618 ) $ 106 $ 912 San
Francisco Bay
(57 ) 833 465 Southern California
70 49 1,959 Total Net Loans
(Charged-off)/ Recovered
$ (1,605 ) $ 988 $
3,336 Loans (Charged-off)/ Recovered, Net for the Nine Months
Ended: New England
$ (622 ) $ 830 San
Francisco Bay
3,514 3,064 Southern California
416 3,818 Total Net Loans (Charged-off)/
Recovered
$ 3,308 $ 7,712
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)
9/30/2015
6/30/2015
9/30/2014
Total Balance Sheet Assets
$ 7,180,528 $ 7,045,939 $
6,689,085 LESS: Goodwill and Intangible Assets, net
(186,888 ) (188,543 ) (127,655 )
Tangible Assets (non-GAAP)
$ 6,993,640 $ 6,857,396 $
6,561,430 Total Shareholders' Equity
$ 740,757 $
728,085 $ 675,631 LESS: Series D Preferred Stock (non-convertible)
(47,753 ) (47,753 ) (47,753 ) LESS: Goodwill and
Intangible Assets, net
(186,888 )
(188,543 ) (127,655 ) Total adjusting items
(234,641 ) (236,296 ) (175,408 )
Tangible Common Equity (non-GAAP)
$ 506,116 $
491,789 $ 500,223 Total Equity/Total Assets
10.32 % 10.33 % 10.10 % Tangible Common
Equity/Tangible Assets (non-GAAP)
7.24 % 7.17 % 7.62
% Total Risk Weighted Assets *
$ 5,396,783 $
5,278,908 $ 5,000,790 Tier I Common Equity *
$
525,004 $ 515,546 $ 505,474 Tier I Common Equity/ Risk
Weighted Assets
9.73 % 9.77 % 10.11 % End of
Period Shares Outstanding
83,645 83,540 80,464 Book
Value Per Common Share
$ 8.29 $ 8.14 $ 7.80 Tangible
Book Value Per Share (non-GAAP)
$ 6.05 $ 5.89 $ 6.22
* Risk Weighted Assets and Tier I Common Equity for September 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 Nine months
ended (In thousands)
9/30/2015
6/30/2015
9/30/2014
9/30/2015
9/30/2014
Total average shareholders' equity
$ 733,882 $
725,515 $ 669,286 $ 724,839 $ 654,850 LESS: Average Series D
preferred stock (non-convertible)
(47,753 )
(47,753 ) (47,753 ) (47,753 ) (47,753 )
Average common equity (non-GAAP)
686,129
677,762 621,533 677,086
607,097 LESS: Average goodwill and intangible assets,
net
(187,728 ) (189,420 )
(128,178 ) (189,391 ) (129,217 ) Total adjusting
items
(187,728 ) (189,420 )
(128,178 ) (189,391 ) (129,217 ) Average Tangible
Common Equity (non-GAAP)
$ 498,401 $ 488,342
$ 493,355 $ 487,695 $ 477,880
Net income attributable to the Company
$ 13,530 $
17,610 $ 18,265 $ 49,923 $ 56,638 LESS: Dividends on Series D
preferred stock
(869 ) (869 )
(869 ) (2,606 ) (2,606 ) Common net income (non-GAAP)
12,661 16,741 17,396 47,317 54,032 ADD: Amortization of
intangibles, net of tax (35%)
1,076
1,076 670 3,193 2,034
Tangible common net income (non-GAAP)
$ 13,737
$ 17,817 $ 18,066 $ 50,510 $ 56,066
Return on Average Equity - (Annualized)
7.31
% 9.74 % 10.83 % 9.21 % 11.56 % Return on Average Common
Equity - (Annualized) (non-GAAP)
7.32 % 9.91 % 11.10
% 9.34 % 11.90 % Return on Average Tangible Common Equity -
(Annualized) (non-GAAP)
10.93 % 14.63 % 14.53 % 13.85
% 15.69 % (6 ) The Company uses certain non-GAAP financial
measures, such as: pre-tax, pre-provision earnings, total operating
expenses excluding restructuring expense, 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; from GAAP total operating expense to non-GAAP total
operating expense excluding restructuring; and from GAAP efficiency
ratio to Non-GAAP efficiency ratio (FTE basis), excluding
restructuring, are presented below:
Three Months Ended
Nine months ended
(In thousands)
9/30/2015
6/30/2015
9/30/2014
9/30/2015
9/30/2014
Income before income taxes (GAAP)
$ 21,390 $ 25,327 $
27,153
$ 73,207 $ 81,880 ADD BACK: Provision/
(credit) for loan losses
2,600 —
(2,600 )
100 (8,800 ) Pre-tax,
pre-provision earnings (non-GAAP)
$ 23,990 $ 25,327 $
24,553
$ 73,307 $ 73,080 Total operating
expense (GAAP)
$ 61,929 $ 62,418 $ 53,999
$
187,774 $ 163,369 Less: Amortization of intangibles
1,655 1,655 1,031
4,912 3,129 Less: Restructuring
1,504 220 —
1,724 — Total operating expense
(excluding amortization of intangibles and restructuring)
(non-GAAP)
$ 58,770 $ 60,543 $ 52,968
$
181,138 $ 160,240 Total operating expense (excluding
restructuring) (non-GAAP)
60,425 62,198 53,999
186,050 163,369 Net interest income
$
46,473 $ 45,085 $ 44,783
$ 137,630 $ 135,573
Total core fees and income
39,443 40,347 33,558
119,950 99,369 Total other income
3 2,313 211
3,501 1,507 FTE income
2,883
2,631 2,350
8,038
6,738 Total revenue (FTE basis)
$ 88,802 $
90,376 $ 80,902
$ 269,119 $ 243,187 Efficiency Ratio,
before deduction of intangible amortization (GAAP)
72.08
% 71.14 % 68.74 %
71.92 % 69.09 % Efficiency
Ratio, FTE Basis excluding restructuring (non-GAAP)
66.18
% 66.99 % 65.47 %
67.31 % 65.89 % (7 )
The Company uses certain non-GAAP financial measures, such as: net
interest income excluding interest recovered on previous
non-accrual loans and net interest margin excluding interest
recovered on previous non-accrual loans to provide information for
investors to effectively analyze financial trends of ongoing
business activities, and to enhance comparability with peers across
the financial sector. Reconciliations from the Company's
GAAP net interest income to non-GAAP net interest income excluding
interest recovered on previous non-accrual loans; and from GAAP net
interest margin to non-GAAP net interest margin excluding interest
recovered on previous non-accrual loans, are presented below:
Three Months Ended
(In thousands)
9/30/2015
6/30/2015
9/30/2014
Net interest income (GAAP basis)
$ 46,473 $ 45,085 $
44,783 ADD: FTE income
2,883 2,631
2,350 Net interest income, FTE basis
49,356 47,716 47,133 LESS: Interest recovered on previously
non-accrual loans
298 69
789 Net interest income, FTE basis, excluding interest
recovered on previously non-accrual loans (non-GAAP)
49,058 47,647 46,344
Net Interest Margin (FTE basis)
2.84 % 2.90 %
2.93 % Net Interest Margin, FTE basis, excluding interest recovered
on previously non-accrual loans (non-GAAP)
2.82 %
2.90 % 2.88 % (8 ) 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. (9
) Includes Loans Held for Sale and Nonaccrual Loans. (10 )
The concentration of the Private Banking loan data and credit
quality is primarily based on the location of the lender's regional
offices. (11 ) 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. (12 ) In addition to
loans 30-89 days past due and accruing, at September 30, 2015 the
Company had one loan totaling $0.1 million that was more than 90
days past due but still on accrual status. This loan originated in
the New England region. At June 30, 2015 the Company had no loans
that were more than 90 days past due but still on accrual status.
At September 30, 2014, the Company had two loans totaling $0.5
million that were more than 90 days past due but still on accrual
status. These loans originated in the New England region.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151021006494/en/
Boston Private Financial Holdings, Inc.Steven Gaven,
617-912-3793Vice President Corporate Finance and Director of
Investor Relationssgaven@bostonprivate.com
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