First Quarter Highlights:
- Net Interest Income Growth: Net
Interest Income increased 8% year-over-year and increased 4% linked
quarter to $49.9 million.
- Revenue Growth: Total Revenue
increased 2% linked quarter and 1% year-over-year to $87.9
million.
- Deposit and Loan Growth: Average
Total Deposits increased 8% and Average Total Loans grew 6%
year-over-year. On a linked quarter basis, Average Total Deposits
and Average Total Loans decreased 1% to $5.9 billion and $5.6
billion, respectively.
- Assets Under Management: Total
Assets Under Management/Advisory (“AUM”) decreased 11%
year-over-year to $26.8 billion, reflecting negative net flows and
negative market action. On a linked quarter basis, AUM decreased 3%
due to negative net flows partially offset by positive market
action.
- Provision Credit: The Company
recorded a provision credit of $3.1 million due to net recoveries
of $1.1 million and a decline in commercial loans, compared to a
provision credit of $1.7 million for the fourth quarter of
2015.
Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the
“Company” or “BPFH”) today reported first quarter 2016 GAAP Net
Income Attributable to the Company of $18.0 million, compared to
$15.0 million for the fourth quarter of 2015. First quarter 2016
diluted earnings per share were $0.21, compared to $0.17 in the
fourth quarter of 2015 and $0.21 in the first quarter of 2015.
"We are pleased that our Company overall delivered growth in
revenue and earnings," said Clayton G. Deutsch, CEO. "Our Private
Bank produced solid performance, achieving growth goals while
maintaining strong asset quality. At the same time, we continue to
address challenges confronting our fee-based businesses. We remain
focused on client acquisition, deepening relationships with our
existing clients, and driving profitability gains in all of our
businesses."
Core Fees and Income
Core Fees and Income increased 2% linked quarter to $37.7
million reflecting higher Other Banking Fee Income. Year-over-year,
Core Fees and Income are down 6% due primarily to lower levels of
AUM.
AUM decreased to $26.8 billion in the first quarter, down 3%
from $27.6 billion in the fourth quarter of 2015, reflecting
negative net flows partly offset by positive market action. AUM
decreased 11% year-over-year due to negative net flows and negative
market action. The Company experienced first quarter 2016 AUM net
outflows of $761 million, compared to net outflows of $543 million
and $382 million in the fourth quarter and first quarter of 2015,
respectively.
Net Interest Income
Net Interest Income for the first quarter was $49.9 million, up
4% from $48.1 million for the fourth quarter of 2015. On a
year-over-year basis, Net Interest Income increased 8% from $46.1
million. The current quarter includes $1.1 million of interest
recovered on previous nonaccrual loans while the fourth quarter and
first quarter of 2015 includes interest recoveries of $0.3 million
and $1.7 million, respectively. Excluding interest recovered on
previous nonaccrual loans, Net Interest Income increased 1% linked
quarter and 9% year-over-year.
Net Interest Margin was 2.96% for the first quarter, up eight
basis points from 2.88% for the fourth quarter of 2015. Net
Interest Margin was down four basis points from 3.00% for the first
quarter of 2015. Excluding interest recovered on previous
nonaccrual loans, Net Interest Margin was up 4 basis points linked
quarter and up 1 basis point year-over-year to 2.90%.
Total Operating Expenses
Total Operating Expenses for the first quarter of 2016 were
$66.7 million, down 1% from $67.4 million for the fourth quarter of
2015. On a year-over-year basis, Total Operating Expenses increased
5% from $63.4 million, primarily due to higher marketing, occupancy
and restructuring expense. Restructuring Expense in the first
quarter of 2016 was $1.1 million while the fourth quarter of 2015
included Restructuring Expense of $2.0 million.
Provision and Asset Quality
The Company recorded a provision credit of $3.1 million for the
first quarter of 2016, compared to a provision credit of $1.7
million for the fourth quarter of 2015 and $2.5 million for the
first quarter of 2015. The provision credit was driven by net
recoveries of $1.1 million and a decline in commercial loans.
Criticized Loans increased 8% on a linked quarter basis and 2%
year-over-year to $166.9 million. Nonaccrual Loans (“Nonaccruals”)
decreased 8% to $24.4 million on a linked quarter basis. On a
year-over-year basis, Nonaccruals decreased 24% from $32.1 million.
As a percentage of Total Loans, Nonaccruals were 43 basis points at
March 31, 2016, down 3 basis points from December 31, 2015, and
down 18 basis points from March 31, 2015.
Additional credit metrics are listed below:
(In millions)
March 31,
2016 December 31, 2015 September 30,
2015 June 30, 2015 March 31,
2015 Total Criticized Loans $ 166.9 $ 154.1 $ 160.9 $ 167.3
$ 164.1
Total Loans 30-89 Days Past Due and
Accruing (12)
$ 8.3 $ 13.1 $ 7.0 $ 4.3 $ 25.4
Total Net Loans (Charged-off)/
Recovered
$ 1.1 $ 0.9 $ (1.6 ) $ 1.0 $ 3.9
Allowance for Loan Losses/ Total Loans
1.35 % 1.37 % 1.41 % 1.43 % 1.46 %
Capital Ratios
Capital ratios are listed below:
March 31, 2016
December 31, 2015 September 30, 2015
June 30, 2015 March 31, 2015
BPFH Ratios: Total Risk-Based Capital * 14.0 % 13.9 % 13.8 %
13.9 % 14.0 % Tier I Risk-Based Capital * 12.7 % 12.6 % 12.6 % 12.7
% 12.7 % Tier I Leverage Capital * 9.5 % 9.5 % 9.6 % 9.9 % 9.8 %
TCE/TA (4) 7.3 % 7.0 % 7.2 % 7.2 % 7.2 %
Tier I Common Equity/ Risk Weighted Assets
*
9.9 % 9.8 % 9.7 % 9.8 % 9.8 %
*March 31, 2016 information is presented
based on estimated data.
Dividend Payments
Concurrent with the release of first quarter 2016 earnings, the
Board of Directors of the Company declared a cash dividend to
common stock shareholders of $0.10 per share. The record date for
this dividend is May 6, 2016, and the payment date is May 20,
2016.
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 16, 2016, and the payment date is June 15,
2016.
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; total operating expense excluding
restructuring; the efficiency ratio (FTE basis); and Net Interest
Income and Net Interest Margin excluding interest recovered on
previous nonaccrual 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 Call
Management will hold a conference call at 8 a.m. Eastern Time on
Thursday, April 21, 2016, to discuss the financial results,
business highlights and outlook. To access the call:
Dial In #: (888) 317-6003Elite Entry Number: 6883331
Replay Information:Available from April 21, 2016 at 12 noon
until April 28, 2016Dial In #: (877) 344-7529Conference Number:
10083844
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, Florida, Wisconsin, Texas and the
Washington D.C. area. The Company has a $7 billion Private Banking
balance sheet, and manages approximately $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.bostonprivate.com.
Forward-Looking Statements
Certain statements in this press release that are not historical
facts may constitute forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as
amended, and are intended to be covered by the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve risks and uncertainties. These
statements include, among others, statements regarding our
strategy, evaluations of future interest rate trends and liquidity,
prospects for growth in assets, and prospects for overall results
over the long term. You should not place undue reliance on our
forward-looking statements. You should exercise caution in
interpreting and relying on forward-looking statements because they
are subject to significant risks, uncertainties and other factors
which are, in some cases, beyond the Company's control.
Forward-looking statements are based on the current assumptions and
beliefs of management and are only expectations of future results.
The Company's actual results could differ materially from those
projected in the forward-looking statements as a result of, among
other factors, adverse conditions in the capital and debt markets
and the impact of such conditions on the Company's 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)
Mar 31, 2016
Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar
31, 2015
Assets:
Cash and cash equivalents
$ 113,946 $ 238,694 $
43,640 $ 63,099 $ 88,118 Investment securities available for sale
1,151,529 1,084,510 1,023,255 992,007 971,842 Investment
securities held to maturity
111,337 116,352 121,679 128,258
134,978 Stock in Federal Home Loan Banks
34,202 35,181
35,518 35,668 32,761 Loans held for sale
5,383 8,072 7,685
19,512 10,570 Total loans
5,658,181 5,719,212 5,607,472
5,463,250 5,295,013 Less: Allowance for loan losses
76,427 78,500 79,246 78,251
77,263 Net loans
5,581,754 5,640,712
5,528,226 5,384,999 5,217,750 Other real estate owned (“OREO”)
98 776 776 929 929 Premises and equipment, net
31,575
31,036 30,841 31,337 30,999 Goodwill
152,082 152,082 152,082
152,082 152,082 Intangible assets, net
31,422 33,007 34,806
36,461 38,116 Fees receivable
11,041 11,258 11,308 12,486
12,519 Accrued interest receivable
17,590 17,950 17,039
16,383 15,990 Deferred income taxes, net
43,164 51,699
45,438 47,388 45,614 Other assets
128,540
121,179 128,235 125,330 117,504
Total assets
$ 7,413,663 $ 7,542,508 $
7,180,528 $ 7,045,939 $ 6,869,772
Liabilities:
Deposits
$ 5,786,860 $ 6,040,437 $ 5,647,859 $
5,429,028 $ 5,373,407 Securities sold under agreements to
repurchase
63,182 58,215 35,698 26,660 52,237 Federal funds
purchased
40,000 — 60,000 100,000 50,000 Federal Home Loan
Bank borrowings
523,952 461,324 461,899 541,529 450,022
Junior subordinated debentures
106,363 106,363 106,363
106,363 106,363 Other liabilities
114,223
111,468 109,695 95,074 97,773
Total liabilities
6,634,580 6,777,807
6,421,514 6,298,654 6,129,802
Redeemable Noncontrolling Interests
("RNCI")
16,938 18,088 18,257 19,200 19,911
Shareholders’
Equity: Preferred stock, $1.00 par value; authorized: 2,000,000
shares
47,753 47,753 47,753 47,753 47,753 Common stock,
$1.00 par value; authorized: 170,000,000 shares
83,024
83,411 83,645 83,540 83,052 Additional paid-in capital
599,825 600,670 598,968 597,424 604,146 Retained earnings/
(accumulated deficit)
21,740 12,886 5,960 (1,003 ) (18,613 )
Accumulated other comprehensive income/ (loss)
6,687
(1,500 ) 1,287 (2,525 ) 1,120
Total Company’s shareholders’ equity
759,029
743,220 737,613 725,189 717,458
Noncontrolling interests
3,116 3,393
3,144 2,896 2,601 Total
shareholders’ equity
762,145 746,613
740,757 728,085 720,059 Total
liabilities, redeemable noncontrolling interests and shareholders’
equity
$ 7,413,663 $ 7,542,508 $ 7,180,528 $
7,045,939 $ 6,869,772
Boston Private Financial Holdings,
Inc.Selected Financial Data(Unaudited)
Three Months Ended (In thousands, except share and per share
data)
3/31/2016 12/31/2015
9/30/2015 6/30/2015
3/31/2015 Interest and dividend income:
Loans
$ 50,046 $ 49,463 $ 48,058 $ 46,663 $ 48,000
Taxable investment securities
1,594 1,239 1,094 1,075 995
Non-taxable investment securities
1,390 1,348 1,264 1,125
1,021 Mortgage-backed securities
3,065 2,863 2,681 2,775
2,614 Federal funds sold and other
507
449 425 282 234 Total
interest and dividend income
56,602
55,362 53,522 51,920 52,864
Interest expense: Deposits
4,182 4,281 4,007
3,822 3,892 Federal Home Loan Bank borrowings
1,953 1,960
2,051 2,017 1,931 Junior subordinated debentures
578 973 979
967 956 Repurchase agreements and other short-term borrowings
10 8 12 29
13 Total interest expense
6,723
7,222 7,049 6,835 6,792
Net interest income
49,879 48,140 46,473 45,085
46,072 Provision/ (credit) for loan losses
(3,133
) (1,655 ) 2,600 — (2,500
) Net interest income after provision/ (credit) for loan losses
53,012 49,795 43,873
45,085 48,572
Fees and other
income: Investment management fees
10,658 10,889 11,360
11,731 11,714 Wealth advisory fees
12,712 12,569 12,515
12,678 12,675 Wealth management and trust fees
10,916 11,782
12,424 13,545 13,558 Other banking fee income
3,233 1,719
2,780 2,031 1,910 Gain on sale of loans, net
209
178 364 362 303
Total core fees and income
37,728
37,137 39,443 40,347
40,160 Gain/ (loss) on sale of investments, net
1 215
5 8 8 Gain/ (loss) on OREO, net
280 — 35 — 89 Other
13 366 (37 ) 2,305
1,088 Total other income
294 581
3 2,313 1,185
Operating expense: Salaries and employee benefits
42,560 39,520 37,938 39,816 42,127 Occupancy and equipment
9,587 9,989 9,064 9,095 9,035 Professional services
3,515 3,778 2,848 3,214 3,021 Marketing and business
development
2,170 4,001 2,008 1,706 1,348 Contract services
and data processing
1,679 1,505 1,600 1,495 1,437
Amortization of intangibles
1,586 1,799 1,655 1,655 1,602
FDIC insurance
1,020 1,089 916 963 1,011 Restructuring
1,112 2,000 1,504 220 — Other
3,480
3,726 4,396 4,254 3,846
Total operating expense
66,709
67,407 61,929 62,418 63,427
Income before income taxes
24,325 20,106 21,390
25,327 26,490 Income tax expense
7,438
5,638 8,182 8,000 8,572
Net income from continuing operations
16,887 14,468 13,208
17,327 17,918 Net income from discontinued operations (1)
2,065 1,455 1,316
1,546 2,094 Net income before attribution to
noncontrolling interests
18,952 15,923 14,524 18,873 20,012
Less: Net income attributable to noncontrolling interests
911 921 994 1,263
1,229
Net income attributable to the Company
$ 18,041 $ 15,002 $ 13,530 $
17,610 $ 18,783
Boston Private Financial Holdings, Inc.Selected
Financial Data(Unaudited) (In thousands, except share
and per share data)
Three Months Ended PER SHARE
DATA: 3/31/2016 12/31/2015
9/30/2015 6/30/2015
3/31/2015 Calculation of Income for
EPS: Net income attributable to the Company
$
18,041 $ 15,002 $ 13,530 $ 17,610 $ 18,783 Adjustments to
Net Income Attributable to the Company to arrive at Net Income
Attributable to Common Shareholders, treasury stock method(2)
(289 ) (1,182 ) 159
(1,026 ) (963 )
Net Income Attributable to the Common
Shareholders, treasury stock method $ 17,752
$ 13,820 $ 13,689 $ 16,584 $ 17,820
End of Period Common Shares Outstanding
83,023,755 83,410,961 83,645,364 83,539,785 83,051,675
Weighted Average Shares Outstanding: Weighted average
basic shares outstanding
81,301,499 81,134,931 81,103,938
80,778,562 80,514,359 Weighted average diluted shares outstanding
(3)
83,455,763 83,579,050 83,438,413 83,260,383 82,935,928
Diluted Total Earnings per Share $ 0.21
$ 0.17 $ 0.16 $ 0.20 $ 0.21
Boston Private Financial
Holdings, Inc.Selected Financial Data(Unaudited)
(In thousands, except per
share data)
FINANCIAL DATA: 3/31/2016
12/31/2015 9/30/2015
6/30/2015 3/31/2015 Book
Value Per Common Share
$ 8.60 $ 8.38 $ 8.29 $ 8.14 $
8.10 Tangible Book Value Per Share (4)
$ 6.39 $ 6.16
$ 6.05 $ 5.89 $ 5.80 Market Price Per Share
$ 11.45 $
11.34 $ 11.70 $ 13.41 $ 12.15
ASSETS UNDER MANAGEMENT AND
ADVISORY: Wealth Management and Trust
$ 7,137,000
$ 7,976,000 8,060,000 9,028,000 $ 9,305,000 Investment Managers
9,838,000 9,952,000 9,830,000 10,695,000 10,730,000 Wealth
Advisory
9,857,000 9,688,000 9,537,000 9,941,000 10,012,000
Less: Inter-company Relationship
(21,000 )
(21,000 ) (21,000 ) (22,000 ) (22,000 )
Total Assets Under Management and Advisory
$
26,811,000 $ 27,595,000 27,406,000
29,642,000 $ 30,025,000
BPFH
FINANCIAL RATIOS: Total Equity/ Total Assets
10.28
% 9.90 % 10.32 % 10.33 % 10.48 % Tangible Common Equity/
Tangible Assets (4)
7.34 % 6.98 % 7.24 % 7.17 % 7.22
% Tier I Common Equity/ Risk Weighted Assets (4)
9.92
% 9.80 % 9.73 % 9.77 % 9.76 % Allowance for Loan Losses/
Total Loans
1.35 % 1.37 % 1.41 % 1.43 % 1.46 %
Allowance for Loan Losses/ Nonaccrual Loans
314 % 295
% 258 % 262 % 240 % Return on Average Assets - Three Months Ended
(Annualized)
0.99 % 0.81 % 0.74 % 1.02 % 1.11 %
Return on Average Common Equity - Three Months Ended (Annualized)
(5)
9.84 % 8.06 % 7.32 % 9.91 % 10.94 % Return on
Average Tangible Common Equity - Three Months Ended (Annualized)
(5)
14.11 % 11.92 % 10.93 % 14.63 % 16.25 %
Efficiency Ratio - Three Months Ended (6)
70.87 %
71.59 % 66.18 % 66.99 % 68.74 %
DEPOSIT DETAIL:
Demand deposits (noninterest-bearing)
$ 1,609,669 $
1,689,604 $ 1,555,609 $ 1,486,251 $ 1,400,394 NOW
565,394
588,337 489,104 509,625 524,973 Savings
76,019 72,336 74,516
71,626 72,910 Money market
2,959,328 3,105,172 2,938,427
2,772,572 2,752,923 Certificates of deposit
576,450
584,988 590,203 588,954
622,207 Total Deposits
$
5,786,860 $ 6,040,437 $ 5,647,859 $
5,429,028 $ 5,373,407
Boston Private
Financial Holdings, Inc.Selected Financial
Data(Unaudited) (In thousands)
Average
BalanceThree Months Ended Interest
Income/ExpenseThree Months Ended Average
Yield/RateThree Months Ended AVERAGE BALANCE
SHEET:
3/31/16
12/31/15
3/31/15
3/31/16
12/31/15
3/31/15
3/31/16
12/31/15
3/31/15
AVERAGE ASSETS Interest-Earning Assets: Cash and
Investments: Taxable investment securities
$ 392,579
$ 368,573 $ 320,373
$ 1,594 $ 1,239 $ 995
1.63
% 1.35 % 1.24 % Non-taxable investment securities (8)
262,227 258,755 230,251
2,138 2,074 1,571
3.26
% 3.21 % 2.73 % Mortgage-backed securities
564,826
526,987 516,032
3,065 2,863 2,614
2.17 % 2.17
% 2.03 % Federal funds sold and other
185,253
220,618 147,999
507 449 234
1.08 % 0.80 % 0.64 % Total Cash and Investments
1,404,885 1,374,933 1,214,655
7,304 6,625 5,414
2.08 % 1.92 %
1.78 % Loans (9): Commercial and Industrial (8)
1,065,614
1,053,290 933,438
10,920 10,865 11,152
4.05 %
4.04 % 4.78 % Commercial Real Estate
1,859,557 1,897,943
1,786,076
19,797 19,981 19,138
4.21 % 4.12 %
4.29 % Construction and Land
174,867 182,648 132,287
1,648 1,634 1,076
3.73 % 3.50 % 3.25 %
Residential
2,229,680 2,224,614 2,140,525
17,302
17,272 16,656
3.10 % 3.11 % 3.11 % Home Equity
119,349 117,892 115,673
1,082 1,015 1,012
3.65
% 3.41 % 3.55 % Other Consumer
157,508
166,184 162,294
965 967 941
2.47 % 2.31 % 2.35 % Total Loans
5,606,575 5,642,571 5,270,293
51,714 51,734 49,975
3.66 % 3.62
% 3.80 % Total Earning Assets
7,011,460
7,017,504 6,484,948
59,018 58,359
55,389
3.35 % 3.28 % 3.42 % LESS: Allowance
for Loan Losses
80,273 79,389 77,039 Cash and due From Banks
(Non-Interest Bearing)
39,943 39,453 38,062 Other Assets
420,909 411,642 406,799
TOTAL
AVERAGE ASSETS $ 7,392,039 $ 7,389,210 $
6,852,770
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS'
EQUITY Interest-Bearing Liabilities: Interest-Bearing Deposits:
NOW
$ 542,617 $ 512,973 $ 527,604
$ 87
$ 82 $ 77
0.06 % 0.06 % 0.06 % Savings
75,433
73,380 72,091
23 23 26
0.12 % 0.12 % 0.15 %
Money Market
3,055,242 3,063,533 2,812,827
2,902
2,995 2,596
0.38 % 0.39 % 0.37 % Certificates of
Deposit
578,310 593,286 604,404
1,170 1,181 1,193
0.81 % 0.79 %
0.80 %
Total Interest-Bearing Deposits (13)
4,251,602 4,243,172 4,016,926
4,182 4,281 3,892
0.40 % 0.40 % 0.39 % Junior Subordinated Debentures
106,363 106,363 106,363
578 973 956
2.15
% 3.58 % 3.59 % FHLB Borrowings and Other
524,892 491,115 470,392
1,963
1,968 1,944
1.48 % 1.57 % 1.65 % Total
Interest-Bearing Liabilities
4,882,857
4,840,650 4,593,681
6,723 7,222
6,792
0.55 % 0.59 % 0.60 %
Noninterest Bearing Demand Deposits
(13)
1,621,666 1,673,122 1,422,202 Payables and Other Liabilities
110,959 110,951 102,255 Total Average
Liabilities
6,615,482 6,624,723 6,118,138 Redeemable
Noncontrolling Interests
21,157 21,337 22,748 Average
Shareholders' Equity
755,400 743,150
711,884
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS'
EQUITY $ 7,392,039 $ 7,389,210 $ 6,852,770 Net
Interest Income - on a Fully Taxable Equivalent Basis (FTE)
$ 52,295 $ 51,137 $ 48,597 LESS: FTE Adjustment (8)
2,416 2,997 2,525 Net Interest Income
(GAAP Basis)
$ 49,879 $ 48,140 $ 46,072 Interest Rate
Spread
2.80 % 2.69 % 2.82 % Bank only Net Interest
Margin
3.01 % 2.94 % 3.07 % Net Interest Margin
2.96 % 2.88 % 3.00 %
Boston Private Financial Holdings,
Inc.Selected Financial Data(Unaudited) (In
thousands)
LOAN DATA (10):
3/31/2016
12/31/2015
9/30/2015
6/30/2015
3/31/2015
Commercial and Industrial Loans: New England
$
849,615 $ 894,277 $ 827,301 $ 793,897 $ 786,334
San Francisco Bay Area
118,385 122,754 125,093 121,477 122,418 Southern California
101,971 94,524 84,428 87,038
58,086 Total Commercial and Industrial Loans
$
1,069,971 $ 1,111,555 $ 1,036,822 $ 1,002,412 $ 966,838
Commercial Real Estate Loans: New England
$ 816,324 $
799,109 $ 766,253 $ 728,820 $ 684,395
San Francisco Bay Area
611,461 622,123 625,145 629,258 601,305 Southern California
497,734 492,902 512,250 469,337
477,341 Total Commercial Real Estate Loans
$
1,925,519 $ 1,914,134 $ 1,903,648 $ 1,827,415 $ 1,763,041
Construction and Land Loans: New England
$ 106,258 $
106,048 $ 111,280 $ 102,068 $ 91,764
San Francisco Bay Area
35,281 52,876 35,627 45,221 31,012 Southern California
25,135 24,510 23,504 13,637
14,318 Total Construction and Land Loans
$
166,674 $ 183,434 $ 170,411 $ 160,926 $ 137,094 Residential
Loans: New England
$ 1,361,547 $ 1,368,192 $
1,356,057 $ 1,316,705 $ 1,295,955
San Francisco Bay Area
463,645 462,327 462,630 466,155 459,310 Southern California
391,683 399,021 393,199 392,648
387,771 Total Residential Loans
$ 2,216,875 $
2,229,540 $ 2,211,886 $ 2,175,508 $ 2,143,036 Home Equity Loans:
New England
$ 84,693 $ 83,712 $ 81,796 $ 85,057 $
82,716
San Francisco Bay Area
26,134 28,966 27,076 30,013 29,835 Southern California
7,980 7,150 5,915 5,395
3,639 Total Home Equity Loans
$ 118,807 $ 119,828 $
114,787 $ 120,465 $ 116,190 Other Consumer Loans: New England
$ 145,450 $ 152,984 $ 161,186 $ 164,522 $ 156,042
San Francisco Bay Area
8,347 4,530 5,782 6,793 7,245 Southern California
6,538 3,207 2,950 5,209 5,527
Total Other Consumer Loans
$ 160,335 $ 160,721 $
169,918 $ 176,524 $ 168,814 Total Loans: New England
$
3,363,887 $ 3,404,322 $ 3,303,873 $ 3,191,069 $ 3,097,206
San Francisco Bay Area
1,263,253 1,293,576 1,281,353 1,298,917 1,251,125 Southern
California
1,031,041 1,021,314
1,022,246 973,264 946,682 Total Loans
$
5,658,181 $ 5,719,212 $ 5,607,472 $ 5,463,250 $ 5,295,013
Boston Private
Financial Holdings, Inc.Selected Financial
Data(Unaudited) (In thousands)
CREDIT QUALITY
(10):
3/31/2016
12/31/2015
9/30/2015
6/30/2015
3/31/2015
Special Mention Loans: New England
$ 38,927 $ 40,121
$ 46,924 $ 53,626 $ 47,635
San Francisco Bay Area
23,288 15,764 11,087 17,150 16,350 Southern California
24,710 13,326 12,718
5,659 22,161 Total Special Mention Loans
$
86,925 $ 69,211 $ 70,729 $ 76,435 $ 86,146
Accruing Substandard Loans (11): New England
$ 19,157
$ 22,026 $ 16,996 $ 16,666 $ 18,534
San Francisco Bay Area
20,235 19,990 20,108 20,396 21,996 Southern California
16,299 16,398 22,405
24,554 5,472 Total Accruing Substandard Loans
$ 55,691 $ 58,414 $ 59,509 $ 61,616 $
46,002 Nonaccruing Loans: New England
$ 17,988 $
19,572 $ 22,815 $ 17,943 $ 18,271
San Francisco Bay Area
4,369 4,977 5,096 9,163 9,347 Southern California
1,999 2,022 2,816 2,785
4,515 Total Nonaccruing Loans
$ 24,356
$ 26,571 $ 30,727 $ 29,891 $ 32,133 Other Real Estate Owned:
New England
$ 98 $ 191 $ 191 $ 344 $ 344
San Francisco Bay Area
— 585 585 585 585 Southern California
—
— — — — Total Other Real Estate
Owned
$ 98 $ 776 $ 776 $ 929 $ 929
Loans 30-89 Days Past Due and Accruing (12): New England
$
4,723 $ 7,118 $ 6,733 $ 3,873 $ 18,236
San Francisco Bay Area
986 2,806 14 110 3,398 Southern California
2,598 3,170 227 356
3,760 Total Loans 30-89 Days Past Due and Accruing
$
8,307 $ 13,094 $ 6,974 $ 4,339 $ 25,394 Loans
(Charged-off)/ Recovered, Net for the Three Months Ended: New
England
$ (2,146 ) $ 120 $ (1,618 ) $ 106 $
890
San Francisco Bay Area
3,454 703 (57 ) 833 2,738 Southern California
(248 ) 86 70 49
297 Total Net Loans (Charged-off)/ Recovered
$ 1,060
$ 909 $ (1,605 ) $ 988 $ 3,925
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
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 and dividends paid on preferred stock. (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 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, 2015 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)
March 31,
2016
December 31,
2015
September 30,
2015
June 30,
2015
March 31,
2015
Total Balance Sheet Assets
$ 7,413,663 $ 7,542,508 $
7,180,528 $ 7,045,939 $ 6,869,772 LESS: Goodwill and Intangible
Assets, net
(183,504 ) (185,089 )
(186,888 ) (188,543 ) (190,198 ) Tangible
Assets (non-GAAP)
$ 7,230,159 $ 7,357,419 $ 6,993,640
$ 6,857,396 $ 6,679,574 Total Shareholders' Equity
$
762,145 $ 746,613 $ 740,757 $ 728,085 $ 720,059 LESS: Series
D Preferred Stock (non-convertible)
(47,753 ) (47,753
) (47,753 ) (47,753 ) (47,753 ) LESS: Goodwill and Intangible
Assets, net
(183,504 ) (185,089 )
(186,888 ) (188,543 ) (190,198 ) Total
adjusting items
(231,257 ) (232,842 )
(234,641 ) (236,296 ) (237,951 ) Tangible
Common Equity (non-GAAP)
$ 530,888 $ 513,771
$ 506,116 $ 491,789 $ 482,108 Total
Equity/Total Assets
10.28 % 9.90 % 10.32 % 10.33 %
10.48 % Tangible Common Equity/Tangible Assets (non-GAAP)
7.34 % 6.98 % 7.24 % 7.17 % 7.22 % Total Risk
Weighted Assets *
$ 5,412,533 $ 5,449,239 $ 5,397,148
$ 5,278,052 $ 5,159,205 Tier I Common Equity *
$
536,925 $ 534,241 $ 525,004 $ 515,546 $ 503,323 Tier I
Common Equity/ Risk Weighted Assets
9.92 % 9.80 %
9.73 % 9.77 % 9.76 % End of Period Shares Outstanding
83,023,755 83,410,961 83,645,364 83,539,785 83,051,675
Book Value Per Common Share
$ 8.60 $ 8.38 $
8.29 $ 8.14 $ 8.10 Tangible Book Value Per Share (non-GAAP)
$ 6.39 $ 6.16 $ 6.05 $ 5.89 $ 5.80 * Risk Weighted
Assets and Tier I Common Equity for March 31, 2016 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 (In thousands)
March 31,
2016
December 31,
2015
September 30,
2015
June 30,
2015
March 31,
2015
Total average shareholders' equity
$ 755,400 $
743,150 $ 733,882 $ 725,515 $ 711,884 LESS: Average Series D
preferred stock (non-convertible)
(47,753 )
(47,753 ) (47,753 ) (47,753 ) (47,753 )
Average common equity (non-GAAP)
707,647
695,397 686,129 677,762
664,131 LESS: Average goodwill and intangible assets,
net
(184,415 ) (185,983 )
(187,728 ) (189,420 ) (191,053 ) Average Tangible
Common Equity (non-GAAP)
$ 523,232 $ 509,414
$ 498,401 $ 488,342 $ 473,078
Net income attributable to the Company
$ 18,041 $
15,002 $ 13,530 $ 17,610 $ 18,783 LESS: Dividends on Series D
preferred stock
(869 ) (869 )
(869 ) (869 ) (869 ) Common net income (non-GAAP)
17,172 14,133 12,661 16,741 17,914 ADD: Amortization of
intangibles, net of tax (35%)
1,031
1,169 1,076 1,076 1,041
Tangible common net income (non-GAAP)
$ 18,203
$ 15,302 $ 13,737 $ 17,817 $ 18,955
Return on Average Equity - (Annualized)
9.69
% 8.01 % 7.31 % 9.74 % 10.70 % Return on Average Common
Equity - (Annualized) (non-GAAP)
9.84 % 8.06 % 7.32 %
9.91 % 10.94 % Return on Average Tangible Common Equity -
(Annualized) (non-GAAP)
14.11 % 11.92 % 10.93 % 14.63
% 16.25 % (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 (In
thousands)
March 31,
2016
December 31,
2015
September 30,
2015
June 30,
2015
March 31,
2015
Income before income taxes (GAAP)
$ 24,325 $ 20,106 $
21,390 $ 25,327 $ 26,490 ADD BACK: Provision/ (credit) for loan
losses
(3,133 ) (1,655 ) 2,600
— (2,500 ) Pre-tax, pre-provision
earnings (non-GAAP)
$ 21,192 $ 18,451 $ 23,990 $
25,327 $ 23,990 Total operating expense (GAAP)
$
66,709 $ 67,407 $ 61,929 $ 62,418 $ 63,427 Less:
Amortization of intangibles
1,586 1,799 1,655 1,655 1,602
Less: Restructuring
1,112 2,000
1,504 220 — Total
operating expense (excluding amortization of intangibles and
restructuring) (non-GAAP)
$ 64,011 $ 63,608 $ 58,770
$ 60,543 $ 61,825 Total operating expense (excluding restructuring)
(non-GAAP)
65,597 65,407 60,425 62,198 63,427 Net
interest income
$ 49,879 $ 48,140 $ 46,473 $ 45,085 $
46,072 Total core fees and income
37,728 37,137 39,443
40,347 40,160 Total other income
294 581 3 2,313 1,185 FTE
income
2,416 2,997 2,883
2,631 2,525 Total revenue (FTE
basis)
$ 90,317 $ 88,855 $ 88,802 $ 90,376 $ 89,942
Efficiency Ratio, before deduction of intangible amortization
(GAAP)
75.89 % 78.51 % 72.08 % 71.14 % 72.56 %
Efficiency Ratio, FTE Basis excluding restructuring (non-GAAP)
70.87 % 71.59 % 66.18 % 66.99 % 68.74 % (7)
The Company uses certain non-GAAP
financial measures, such as: net interest income excluding interest
recovered on previous nonaccrual loans and net interest margin
excluding interest recovered on previous nonaccrual 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 nonaccrual loans; and from GAAP net
interest margin to non-GAAP net interest margin excluding interest
recovered on previous nonaccrual loans, are presented below:
Three Months Ended (In thousands)
March 31,
2016
December 31,
2015
September 30,
2015
June 30,
2015
March 31,
2015
Net interest income (GAAP basis)
$ 49,879 $ 48,140 $
46,473 $ 45,085 $ 46,072 ADD: FTE income
2,416
2,997 2,883 2,631
2,525 Net interest income, FTE basis
52,295 51,137
49,356 47,716 48,597
LESS: Interest recovered on previously
nonaccrual loans
1,089 255 298
69 1,721
Net interest income, FTE basis, excluding
interest recovered on previously nonaccrual loans (non-GAAP)
51,206 50,882 49,058
47,647 46,876 Net
Interest Margin (FTE basis)
2.96 % 2.88 % 2.84 % 2.90
% 3.00 %
Net Interest Margin, FTE basis, excluding
interest recovered on previously nonaccrual loans (non-GAAP)
2.90 % 2.86 % 2.82 % 2.90 % 2.89 % (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 March 31, 2016, December 31, 2015, June 30, 2015,
and March 31, 2015, the Company had no loans outstanding more than
90 days past due but still on accrual status. 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.
(13)
Average Total Deposits is the sum of
Average Total Interest-Bearing Deposits and Average Noninterest
Bearing Demand Deposits.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160420006223/en/
Adam BromleyVice President Corporate Finance and Director of
Investor RelationsBoston Private Financial Holdings, Inc.(617)
912-4386abromley@bostonprivate.com
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